Oh bloody hell. The Belgies are propping up Sabena yet again. As anyone who's read my comments on Swissair will know, this makes me incandescent with rage. Sabena has as much chance of reinventing itself as a low cost European airline in a month as the Guvnor does of starting an airline with a bunch of mouldy old TriStars.
One of the Belgian PM's defences of the rescue is that Brussels is a gateway to Europe, with 20m passengers a year. Last year BRU was the 43rd most busy airport in the world by pax numbers - just ahead of IAD, KIX and SLC. None of those airports require their own dedicated international airline - why shuold BRU?
Here's the latest from the WSJ:
October 3, 2001
Sabena Seeks Bankruptcy Protection,
As Government Offers Bridge Loan
A WALL STREET JOURNAL ONLINE News Roundup
BRUSSELS -- Sabena sought bankruptcy protection Wednesday to keep its planes flying, and the Belgian government gave its flag-carrier cash for one month to try to reinvent itself as a competitive European carrier.
Sabena, one of Europe's oldest airlines, was forced to seek shelter from creditors after co-owner Swissair, on the brink of bankruptcy itself, failed to provide promised financial assistance.
The Belgian government, which holds the majority stake in Sabena, provided a one-month bridge loan and told the company to use the time for a complete overhaul.
"Now, they have one month time to create a new airline company in Belgium," said Belgian Prime Minister Guy Verhofstadt. "In the capital of Europe, a gateway for over 20 million travelers a year, it must be possible to have a competitive company focused on European routes," Mr. Verhofstadt said.
The government loan will compensate for the unexpected loss of financial support from Swissair, which filed for bankruptcy protection earlier this week.
For the immediate future, "the financial means are there to guarantee normal activities," Sabena Chairman Fred Chaffart said.
Swissair Seeks Protection From Creditors, Plans to Restructure Around Regional Unit (Oct. 2)
Sabena Cancels More Flights as Pilots Protest Rescue Package (Oct. 1)
Struggling Sabena in Danger of Collapse, Executives Say (Sept. 18)
The measure, Sabena said, "secures the continuity of the operations and gives time to the management, under control of a commissioner, to put forward recovery measures."
The Belgian government is in contact with European Union regulators to determine whether the temporary credit complies with EU rules prohibiting governments from bailing out ailing companies.
"The European Commission can be flexible in such extraordinary circumstances," said Belgian Privatization Minister Rik Daems. "Nobody could ever have imagined what we are facing now," he said, referring to the sudden withdrawal of financial support by Swissair.
Both airlines have been ailing for years, with the disruption to air travel by the Sept. 11 terror attacks in the U.S. worsening the situation.
The commission has expressed willingness to allow governments to compensate their airlines for the impact of the Sept. 11 attacks, but has been standing firm against new state aid.
Sabena reassured customers that its planes would not be immediately grounded.
For the immediate future, "the financial means are there to guarantee normal activities," Sabena chairman Fred Chaffart said.
Swissair grounded its fleet Tuesday after it ran out of cash to pay suppliers. Struggling to avert bankruptcy, the Swiss flag carrier said it would not be able to make a promised 132-million-euro ($120 million) payment this week to Sabena, which is also in dire financial straits. The Belgian government is taking Swissair to court to try to force it to make the payment.
Over the decades, Sabena has been shored up by government subsidies several times, but EU competition rules now tightly restrict government bailouts. "A possible bridge credit by the Belgian state has to be carefully evaluated, also in view of EU legislation," Mr. Chaffart said.
Also early Wednesday, a referendum among Sabena's 12,000-strong staff showed 57% backed the board's restructuring plan, which calls for the shedding of some 2,000 jobs, eliminating unprofitable routes and selling nonaviation assets.
Sabena pilots, who suspended a four-day-old strike on Tuesday, were also back at work on Wednesday. Mr. Chaffart said the strike, which grounded about a third of Sabena flights, cost the company some 12 million euros.
"It's unacceptable that in this critical situation the representatives of the Belgian Cockpit Association stranded the passengers and the rest of the personnel," Mr. Chaffart said.
Most of his criticism, however, was targeted at Swissair for failing to make its payment to Sabena's recapitalization fund. The payment was a key component of an Aug. 2 compromise reached after Swissair reneged on an earlier promise to increase its stake in the company to 85%.
"Swissair hasn't lived up to any of their commitments. We'll hold them accountable for the situation we're in," he said.
Swissair filed for protection from creditors Monday and said its former affiliate Crossair, a financially healthy regional airline, would take over two-thirds of its flights with the backing of two Swiss banks. The move gives Swissair time to reorganize without being carved up in a bankruptcy court.