Posts: 11619
Joined: Mon Nov 13, 2000 4:06 am

Sabena To Go Bankrupt Any Second Now

Sat Feb 03, 2001 2:10 am

Oh well. What will happen to poor old SABENA BELGIAN WORLD AIRLINES?? Crisis crisis crisis. I do feel sorry for it actually.

More turbulence for Sabena
By Dan Bilefsky in Brussels and Mark Odell in London
Published: February 1 2001 19:01GMT | Last Updated: February 1 2001 19:23GMT

Further doubts were cast over the future of Sabena, Belgium's struggling national flag carrier, on Thursday after the company warned it would run out of money by the end of the month unless urgent action was taken to cut costs.

The warning by Christoph Muller, chief executive, came as a new war of words erupted between management and the unions over a radical E354m ($328m) restructuring plan, which is central to a E750m ($712.5m) rescue package put together to ensure the company's survival.

The Belgian Cockpit Association, which represents Sabena 's 1,110 pilots, said the plan, which would require the shedding of up to 700 jobs, was "totally unacceptable." Of those possible lay-offs, about 30 pilots jobs are at stake.

Sabena's two main shareholders, the Belgian state with 50.5 per cent and Switzerland's SAirGroup with 49.5 per cent, last week agreed to inject E250m in fresh capital as part of the rescue package.

However, the proposed cash injection is contingent on trade unions agreeing to the cost-cutting programme that also includes the closure of unprofitable routes and the sale of some aircraft. . The unions have until next Thursday to approve the plan or face the prospect of SAirGroup abandoning Sabena altogether.

The SAirGroup has a long-standing commitment to raise its holding in Sabena to 85 per cent by the end of 2001. But following the departure of the Swiss group's chief executive, Philippe Bruggiser, last week the company is reviewing all its airline investments.

In a separate move on Thursday, SAirGroup announced it was abadoning plans to take a 34 per cent stake in TAP Air Portugal.

Sabena's pilots union insisted it would not accept any job cuts and pinned the blame for the company's financial troubles on poor management. It added that the February 8 deadline had put unneccessary time pressure on the negotiations. However, Mr Muller emphasised that the restructuring plan was the "strict minimum" the company needed to do in order to survive.

The pilots union said that an independent audit by the US-based International Pilot Services Corporation showed that management was behind the company's financial difficulties. It underlined that Sabena had made the mistake of expanding too aggressively, while financing its growth with short-term debt.

Sabena reported its first major profit in four decades in 1998 before slipping back into the red. It has warned that operating losses in 2001 would be as high as BFr15.7bn (E363, $343m), but this would shrink to about BF1.3bn if the restructuring plan is implemented.

Anyone can fly, only the best Soar.
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Joined: Mon Dec 11, 2000 1:24 am

RE: Sabena To Go Bankrupt Any Second Now

Sat Feb 03, 2001 2:16 am

I've worked there. SN's trade-unions are completly stupid and crazy. I hope thy will survive. a limo but with wings
Posts: 10221
Joined: Mon Dec 04, 2000 6:38 pm

RE: Sabena To Go Bankrupt Any Second Now

Sat Feb 03, 2001 3:17 am

I see unions like this all the time. They don't seem to understand that it's either loose some jobs now, or all jobs later.

Labor rights are particularly high in Belgium as well, as I recall.

The only thing you should feel when shooting a terrorist: Recoil.