BRAZZAVILLE, Republic of Congo (AP)
African leaders surrendered control of financially crippled carrier Air Afrique, handing Air France the largest single share in the company in exchange for a $69 million bailout.
Under Tuesday's deal, the 11 African nations reduce their stake from 68 percent to between 22 percent and 28 percent. Air France which had held 12 percent, boosts its holdings to 35 percent. Private investors hold the remainder.
Ivory Coast President Laurent Gbagbo announced the bailout after a closed door meeting of African leaders late Tuesday.
"From now on we have to organize our company so that it is a real commercial enterprise that can compete with other companies not only in African skies, but also in other skies,'' Gbagbo said before the meeting.
The airline will keep its original name and logo and is expected to hold Air Afrique's landing rights across West Africa - perhaps its most valuable remaining asset.
A statement issued after the meeting said Air Afrique's current schedule of flights will remain unchanged. The company plans to reorganize its services in the future, but no details were released.
Senegal's President Abdoulaye Wade said after the daylong meeting that the newly organized company will keep its existing personnel, and he said Air France planned to hire 500 new employees.
Air France made no immediate comment.
Long considered an African success story, Air Afrique was founded in 1961 by newly independent French colonies in West and Central Africa and was widely seen as a sign of post-colonial Africa taking charge. But mismanagement and aircraft purchases in the 1990s eventually left the company in debt.
The airline now owes millions of dollars, is technically bankrupt under the laws of its home base in Ivory Coast, and has been hard-pressed by creditors pushing to repossess its planes.
Its survival was doubtful without a multimillion-dollar cash bailout.
Earlier this year, Jeffrey Erickson, an American former TWA chief executive officer, was brought in by the company's African shareholders to restructure the airline. But employees resisted his cost-cutting moves with strikes and other protests.
The statement issued after Tuesday's meeting said Erickson would be relieved of his position after his Aug. 31 mandate expired. His replacement was not announced.
[ 15 August 2001: Message edited by: PaperTiger ]
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