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Approaching_the_minimums
3rd Oct 2001, 17:54
It took them a while, but here we are!


Brussels, October 03, 2001

In order to secure operations as well as the interests of every creditor, Sabena asked for judicial composition

In order to secure operations as well as the interests of every creditor, Sabena asked for judicial composition

The Board of Directors of Sabena gathered yesterday to review the financial situation of Sabena at the light of the decision of Swissair not to participate to the funding of the Business Plan. Consequently, and according to the EU regulation, the Belgian State is not allowed to participate to the foreseen equity funding.

The Board of Directors asked the Belgian State to grant Sabena a bridge credit with regard to the adaptation of the Business Plan to the new circumstances.

Sabena has the necessary cash to guarantee normal activities for the time being. But in order to secure future operations as well as the interest of every creditor, the Company has filed today a petition for Judicial Composition to the Brussels Trade Court.

Judicial Composition is a precautionary measure putting a company in difficulty temporarily under shelter of its creditors. It secures the continuity of the operations and gives time to the Management, under control of a Commissioner, to put forward recovery measures. For employees, it means the continuity of the work relationship.

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My sympathies to all those involved (including myself) in this ongoing thriller. Hope someone soon realises that is not just a company with profitability problems. IMHO, this is a very good airline going bust because of mismanagement! :(

anthonyvickery
3rd Oct 2001, 18:07
.......nothing to do with the pilots going on strike then?

J-Class
3rd Oct 2001, 18:23
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.

Pointer
4th Oct 2001, 12:58
canis lupus arctica:

O yes you have 40% un-employment and 60% politicians falling over each other in theyre persuit to Cover theyre A**

and blaming it on tragedies off all sort!

The Guvnor
4th Oct 2001, 13:41
The biggest problem SN has is that none of their people are forward thinking - everyone seems to live in the past!

Example: BeCA's obsession with proving themselves right about SAirGroup's 'mismanagement' - so much so that they claim that the strikes were to highlight that. Given that SAirGroup was going to be providing the additional funding as full and final settlement of its obligations and then detach SN, it had no further interest in the company. Even SN's CEO, Christoph Muller, was reappointed by the Belgian government and severed all of his links with SAirGroup.

So who the ***** CARES about what happened in the past? It's over, it's done, it's finished. Look to the future people - unless you do, it's going to be a perilously short one! :rolleyes: :mad: :rolleyes:

The latest bit of insanity from Brussels is that the Belgian government and SN are suing SAirGroup for the 200 million that was supposed to have arrived on Monday and didn't - and which of course means that the Belgian government isn't permitted to pump further capital in either.

Don't these people have any understanding of bankruptcy law? SN is just another unsecured creditor and as such will get its share of any payout if and when SAirGroup is finally liquidated. A cross-border lawsuit is expensive and the only people who gain are the lawyers!

To me, the only viable part of the whole mess is DAT which can be easily seperated off and sold. KLM and Air France (which has an extensive African network) coupled with some of the UK carriers and especially Ryanair will take over SN's few remaining passengers seamlessly. As Arctic Wolf pointed out, take away NATO and the EU and you don't have a lot!

Hopefully this will now cause the Belgian government to wake up and smell the coffee as well - and do a complete overhaul of their social security, union and other legislation which makes them the least popular country in Europe for inward investment - despite the presence of the EU and NATO!

swede-basher
4th Oct 2001, 13:42
BLEKE, I think your posting more than demonstrates why they shouldn't. It's time to turn the life support off, rigormortis has set in.

BLEKE
4th Oct 2001, 14:30
Thank you Swede ,so you believe that people should lose their jobs do you?people like me who went in to work on days off to fly during the strike and do not support the BECA one bit.

Mishandled
4th Oct 2001, 15:05
BLEKE, and where do you think that Swissair is going to get the money to pay Sabena? Please contact Mario Corti at Swissair Group, Balsberg, 8058-Zurich, Switzerland. He would love to know. There are jobs at stake in Switzerland you know, and if Swissair hadnt misguidedly got involved with SN in the first place, Sabena would have been in the same mess, only sooner.

flyblue
4th Oct 2001, 17:01
Mishandled,
too bad that SR gave the death kiss everywhere it "got involved", as you say.
The company I worked for (not Sabena), before SR "got involved" was doing very well. Unlike after SR put it in the hands of incompetents. Astonished employees watched wondering what could be the cunning plan behind stupid decisions.
So, if you need information about money, ask Mr Bruggiser, he should know from his brand new armchair how to reassemble a swiss clock after he dismantled it.

swede-basher
4th Oct 2001, 17:52
Bleke, I am sorry that you are directly affected, truely I am, but it is only when the outmoded, mismanaged dinosaurs of the past are allowed to die that this will improve. There will have to be some pain, the fact that Sabena could not make it's way in the world prior to the 11th was all too apparent. The sooner it is killed off the sooner a viable replacement might be found and the sooner you may get some form of job security. Continual bailing out is not the answer.

[ 04 October 2001: Message edited by: swede-basher ]

Delboy
4th Oct 2001, 20:51
Swede-basher is right, Bleke. The jobs will start again, and this time you may find yourself working for a company that makes a profit. It is the only way. If governments can bail out airlines, why not small and medium sized businesses that fall on hard times. They all deserve their jobs as well.
I know what redundancy feels like. I was a victim in the early nineties. I would not wish it on anyone. But it is not the end of the World. With the help of my wife and children, we pulled through and now I am working for a company which makes a profit. It is a good feeling. That is not to say that I am complacent. I recently did an exercise, in which I worked out how long we could survive if my income dried up tomorrow.
So to you, Bleke, and to all those other poor souls who think their World has caved in on them, take heart, you will soon be back on the merry-go-round.

The Guvnor
5th Oct 2001, 10:50
From today's ATW Online. If the EU decides that the credit from the Belgian government does constitute state air, the Belgians will be required to withdraw it and it will be all over for Sabena. Given the circumstances, it is highly probable that this may well be the case.

Sabena remains on a "cash only" basis with most suppliers and few bookings are being made.

EC investigating Sabena aid
Dateline: Friday October 05, 2001

European Commission asked the Belgian government for information on the 125 million ($115 million) bridge loan it granted Sabena and for details on the airline's restructuring plan so it could come to a decision "as soon as possible" on whether the loan could qualify as "rescue aid."

The EC added that it did not believe the situations of Sabena or of Swissair to be linked directly to the problems experienced by the airline sector after the terrorist attacks on the US. An ad hoc working group is to present a paper to the EC next Wednesday on the economic effects of the attacks on the airline industry.

The Belgian government said that while it was a "very difficult exercise," it remained hopeful the EC would approve the loan under special rules for the rescue and restructuring of companies in difficulties.

In a statement, Sabena said that its activities continue normally, adding that on
Wednesday, "besides misunderstandings in six UK airports, where flights had to be delayed or even cancelled in order to explain Sabena's situation, no other incidents affected the flight schedule."

redfield
6th Oct 2001, 22:43
The last I heard was that Sabena have been given enough funds to keep flying for a further two months. As far as Wednesday was concerned, the "misunderstandings" were caused mostly by fuel companies jumping the gun and refusing to fuel SN aircraft without cash or credit card payments being made up front. If Sabena and Swissair do unltimately cease operations, who'll use the half-built terminals at BRU and ZRH??? :eek:

SOPS
7th Oct 2001, 00:10
Can i get one please? My airline has to make a profit all alone, pay its staff all alone, pay taxes and handling charges all alone, but not Sabena or its crews. The whole place has never made a profit in living memory, its standards of service stink, and the pilots are on strike while the airline sinks,and then they have no idea about the real world,and yet again they get a hand out from the government. I suppose if this is not enough the pilots will strike again, asking for more.And when all that is gone they will strike again, asking for more.
The rest of us have to live in the real world, compete, be profitable and survive.

But, hey, lets all go on strike
Now there is a great idea, Go on strike, government bails you out, other airlines in EU without government bailout fold, SABENA can take over, with there well oiled, low cost operation, they can take on the World..I will wait in hope

crewrest
7th Oct 2001, 03:28
SOPS, I agree with you 100%

My airline isn't going to get any state aid and if I went on strike it would topple.

Profit twice in 88 years sums it up really.