Low-cost operator seen as only saviour of flag carrier's European network as parent prepares for bankruptcy

Virgin Express may form an airline to succeed Belgian national carrier Sabena, which is expected to be declared bankrupt by the Brussels Court of Commerce on15 November.

Sabena management has failed to find new investors for the airline, or buyers for its profitable subsidiaries. As Belgian law prohibits wage cuts after a takeover, rescue efforts are centred on Sabena's Delta Air Transport (DAT) regional airline subsidiary, which pays 35% lower salaries than the parent airline.

In a letter to Sabena employees, chief executive Christophe Müller announced: "A new airline will be formed around DAT to maintain European and a limited number of long-haul services."

Industry sources suggest that Virgin Express may buy all or part of DAT to avoid the Sabena subsidiary losing its air operator certificate and slots, of which Sabena transferred a number to DAT in late October.

Virgin Express and Sabena have declined to comment on the talks, but sources suggest that Virgin plans to take over Sabena's European network, and serve it with DAT's 30 Avro RJ85/100s plus some Airbus A319s or Boeing 737-300s.

In addition, some profitable long-haul routes, including Boston, Kinshasa and New York would be maintained using up to five of Sabena's Airbus A330s.

Müller has also warned staff that "the new airline will need around 6,000 employees", which would involve around 50% of Sabena's 12,000 employees facing redundancy.

Sabena secretary-general Patrick du Bois published a letter in Belgian newspapers appealing to the country's businesses to invest in indigenous commercial aviation. Businessman Victor Hasson - former president and chief executive of bankrupt Belgian charter airline City Bird - has offered to provide BFr1 billion ($22 million) to the airline. Du Bois warned Sabena "cannot afford bankruptcy" as it is unable to finance employees' severance payments.

This responsibility would normally fall on a special fund, set up and financed by Belgian industry, but the fund itself could not afford the BFr7.2 billion expense without levying large additional charges. The Belgian Government may be forced to bear the cost.

Müller has until 7 November to present a rescue plan to the Court of Commerce.

Source: Flight International