British Airways 'in talks' over rescue for Sabena
By Peter Chapman
British Airways has emerged as the latest possible saviour for stricken Belgian flag carrier Sabena.
European Voice has learned from industry sources that BA has been holding secret talks over a possible rescue package for the airline, which could cease operating within six weeks unless it finds an investor to take over whole or part of the company.
Asked to respond to claims it was considering a bid for Sabena, BA spokeswoman Louise Evans said: "We are neither confirming it nor denying it."
Earlier this month European Voice exclusively revealed that low-cost carrier Virgin Express was in discussions with Sabena over the purchase of some of its operations. Virgin spokesman Will Whitehorn said chairman David Hoare and chief executive Neil Burrows were in Brussels from Monday to Wednesday this week for talks with Sabena management. "We are looking to see if a new business can be created out of the old one that actually works," he said.
The executives were clearly looking "most closely at short-haul European destinations" but the "team at Virgin Express are not ruling anything out", he added.
Sabena, which has won EU approval for a 125-million euro loan to keep the company airborne, was reported yesterday (24 October) to be facing an order for bankruptcy in the Brussels Commercial Court.
But Sabena spokesman Wilfried Remans insisted the company had been granted protection from creditors until 30 November. In the meantime, he said, the race was on to find partners willing to set up a new airline to replace the existing operation. "We are establishing a new airline, that is the objective, but I cannot say anything until things are confirmed," he added. Sabena was granted bankruptcy protection for two months after its part-owner Swissair failed to deliver a promised cash injection, due to its own financial woes. A condition of the protection was that Sabena should present creditors a restructuring plan by 15 November.
Since then Sabena's other part-owner, the Belgian state, has been granted EU approval for an emergency bridging loan to keep the airline in business. In a separate development, British Airways confirmed that it had resumed discussions with Dutch carrier KLM over a possible merger.
© Copyright 2001 The Economist Newspaper Limited. All rights reserved.