View Full Version : City Bird Goes Belly-Up
flugpants
4th Oct 2001, 18:26
It has finally happened - City Bird has officially gone bust. "The Flying Dream" is over. Best wishes to all those affected by this latest tragedy.
Best that the rest of us keep our heads down and get on with it! :(
The court convened in Brussels and the "Procureur du Roi/Procureur des
Konings" requested that the judicial agreement (concordat/concordaat) be
revoked because of the lack of guarantuee resulting from the position taken
by Thomas COOK.
The bankrupcy of CityBird has therefore been pronounced by the court.
Ofcourse they're not SABENA with a helping hand from the government
renegator
4th Oct 2001, 20:39
Now that SN has filed for bankruptcy protection, CTB is finished, who will be left in BRU after all? As far as I know SLR belongs t0 70% to SN what happens there? Call me naive, but you simply can´t clos every airline operation out of that ugly airport.. can you?
Anyone with more on Belgium?
springbok449
4th Oct 2001, 21:09
My thoughts and deepest sympathy goes to all of my friends who are involved with the job losses involved.
Feel sorry for all the personnel involved.
But as far as the company directors are concerned my feelings are quite different. One such director is Mr.Gutelman who now swiftly goes through his second airline bakruptcy in ten years: first TEA in 1991, now City Bird in 2001.
'Bis repetita placent'.
The Courts will decide whether he was fraudulent or just unfortunate yet again(?).
But one thing is for sure: he should not get a third chance, neither directly, nor indirectly with someone else acting on his behalf.
Let City Bird's liquidator be warned! He should not accept any take over of City bird assets that may lead to a third scam!
Gutelman or his companies now owe billions of dollars to a multitude of creditors, but he keeps his smile...
The Guvnor
5th Oct 2001, 03:52
Silversurfer - Sobelair has been sold to TUI/Prussag.
One of the prinicpal causes of CityBird going into bankruptcy was the unilateral cancellation of a contract by Sabena for the lease of two MD11s. This cost them 2,5bn BFR (US$56.54m) in annual revenues and they had to pay Boeing Capital 3.5bn BFR (US$79.15m) as part of the early termination settlement as a result.
As a result of this, in 2000 it had a net loss of €62 million on revenues of €48.4 million!
Rather ironic really - whilst SN is whinging about being badly treated by SR, they are doing exactly the same to their competition!
In response to some comments of Guvnor:
Press reports today refer to the Sabena - City Bird MD11 lease as a 'very highly priced transaction'. Seems only right that Sabena's new management did put an end to that transaction after Reutlinger's demise. SN voluntarily paid termination damages which City Bird at the time publicly referred to as being 'fair'.
Without these damages City Bird might have been even worse of in view of Sabena's Chapter 11 filing earlier this week: in other words, CTB would have had to file for bakruptcy irrespective of the fact whether or not their expensive MD11 leases to Sabena had continued.
On a slightly different note, it seems weird against the background of such highly priced MD11 lease transaction, that Mr. Hasson, CTB's MD, when facing journalists yesterday following bankruptcy, brutally leashed out at Thomas Cook, the would be buyer of CTB, calling them gangsters and thieves...
Some introspection sometimes helps!
OO-AOG
5th Oct 2001, 14:01
Guv
You have to admit that the leasing fees paid by SAB to CTB for both MD11s...were incredibly high, the early cancellation of the contract was due of the struggling situation of SN that had no other choice to terminate the leases of 2 aircrafts not required anymore on the restructured network.
Also, CTB's introduction of a code-share (with CAL) flight to FIH in direct competition with SAB was not a clever idea, and I guess SAB had therefore not any problem with their conscious while ending the MD11 contract. SN is not really to blame here I think...
renegator
5th Oct 2001, 16:23
Hi GUV,
thanks for the input, in the meantime however other sources confirm talks but no result between Preussag and Sobelair.
Sorry to say, but from a distance SLR with SN salary structure seems to be not that attractive to buy in this situation. Especially as there seem to be not too much interest from others..
rgds,
silversurfer
:confused: