Here is the latest update of the SR/SN situation
Friday February 23, 5:45 am Eastern Time
SAir stumps up Sabena cash but divorce possible
By Marcel Michelson
ZURICH, Feb 23 (Reuters) - SAirGroup could dump its 49.5 percent stake in Belgian airline Sabena in the mid-term, but for now the Swiss group and the Belgian state will approve a capital rise to secure the survival of their ailing joint venture.
In a letter to staff, obtained by Reuters on Friday, SAirGroup Chairman and Chief Executive Eric Honegger said the company was stumping up its 150 million euro ($136.2 million) part of a 250 million euro capital increase to Sabena to create the ``minimum condition for a survival of Sabena.''
However, he said he had made contact with the Belgian government, which holds the majority in Sabena, to discuss the future of the Swissair/Sabena partnership.
``A withdrawal from our commitments to Sabena in the mid-term is a possible solution,'' Honegger said.
A spokeswoman for Belgium's Public Enterprises Minister Rick Daems had no comment on the statement ahead of a board meeting of Sabena later on Friday.
SAirGroup , parent of the Swissair airline as well as the Gate Gourmet catering and Swissotel hotels units, is undergoing a strategic revision, hoping to stem a cash outflow to ailing airline subsidiaries hit by skyrocketing fuel costs.
SABENA IS CLOSEST FOREIGN PARTNER OF SWISSAIR
Sabena was once the jewel of the Qualiflyer alliance of 11 airlines led by Swissair. SAirGroup still has an option to raise its stake to 85 percent, and the two airlines have merged many central services in their Airline Management Partners venture.
``I am of course aware that the future of AMP also needs to be discussed in this context. (Airline division) SAirlines head Moritz Suter and Christoph Mueller of Sabena are working on that,'' Honegger said in the letter.
The SAirGroup board said in a statement after a meeting on Thursday evening that the two airlines needed more independence.
``Current considerations have shown that both Swissair and Sabena require a substantial amount of independence to pursue their respective strategic options,'' it said.
The Tages Anzeiger newspaper said SAirGroup wanted to dump Sabena in order to tempt its transatlantic partner AMR Corp , parent of American Airlines, to take a stake in Swissair. A spokesman for SAirGroup declined to comment on the report.
``We are studying all options and I cannot say what the outcome of the strategic review will be,'' the spokesman said.
More details about SAirGroup's strategy are expected at an April 2 news conference when SAirGroup will announce its 2000 results, which are likely to show a loss due to restructuring charges.
Industry analysts expect SAirGroup to forge closer ties with American Airlines or the Oneworld alliance between American and British Airways Plc
CHAIRMAN CAN'T SAY YET WHICH ALLIANCE TO JOIN
``Only after we have created clarity and the necessary measures to solve our acute problems in France, Belgium and Germany have been implemented...can take strategic decisions. Only then are we ready to join an alliance,'' Honegger said in his letter to staff.
Other alliances include the Star alliance led by Deutsche Lufthansa AG , and SkyTeam of Air France SA and Delta Air Lines Inc. KLM Royal Dutch Airlines NV is on the prowl for an alliance after its Wings link with Northwest Airlines Corp failed to take form.
SAirGroup earlier this month withdrew its candidacy for a large minority stake in Portuguese airline TAP-Air Portugal
It has given three French affiliates under holding group Marine-Wendel -- loss-making Air Liberte, AOM and Air Littoral -- a month to draw up survival plans.