Sabena president Paul Reutlinger has revealed the heaviest losses in the Belgian airline's history and admits that its performance remains under review by main shareholder Swissair.
The group's total net loss climbed to BFr8.8 billion ($248 million) in 1996, although close to half of the figure came from cash being used to underwrite Reutlinger's restructuring measures, including the heavy outlay on early-retirement costs.
The airline's losses from operations reached BFr4.2 billion, reflecting the fall-out from the damaging strike at the start of 1996, which had a lingering impact on passenger bookings.
Sabena's mounting losses have eaten away at the group's capital and it will now be obliged under Belgian law to ask its shareholders - Swissair (which owns 49.5%) and the Belgian Government - if they wish to dissolve the company.
Reutlinger says that this special meeting, due on 24 April, should only be a formality. He believes that Sabena results will improve substantially this year and is still on course to reach the Swissair target of break-even by 1998.
Swissair will review Sabena's performance over the first half of this year, however, and Reutlinger concedes that, if forecasts are not being met, then "-we will have to think of a different scenario".
The airline's load factors dipped to 59% in 1996 as capacity ran ahead of a weak 3% growth in passenger numbers, but traffic has been picking up so far this year, and there are plans to expand at the Brussels hub. The number of destinations will rise, from 60 to 70.
Source: Flight International
