Buster the Bear
14th Jan 2003, 14:42
France calls for Air Lib compromise deal
Jean-Pierre Raffarin, the French prime minister, on Monday sidestepped making a final decision on the future of Air Lib, France's struggling second airline, by calling for arbitration to seek a last-ditch solution to the company's crisis.
The move came as Imca, the Dutch group, presented details of its proposed rescue of Air Lib, which has struggled to recover from the slump in air travel since the September 11 terrorist attacks in the US Erik de Vlieger, Imca's chief executive, said it was ready to invest between €20m ($21m) and €50m. He also said the Dutch government had written to Paris, vouching for the credibility of the group, which has interests ranging from construction to publishing. However, the French transport ministry said on Monday Imca's proposals were "not acceptable" as they would further increase the state's exposure to Air Lib.
In a final effort to broker a deal, the ministry called on a commercial court to appoint an independent arbitrator to work towards a compromise acceptable to all sides. A first draft of Air Lib's bail-out plan was rejected last month. If the revised proposals suffer the same fate the company would be forced to repay its €120m debts, almost certainly triggering
Bankruptcy. Imca's plan is conditional on the government opening up new lines to Africa, the submission of the plan to authorities in Brussels and the renewal of the company's operating licence, which expires on January 31.
Air Lib, sold by British Airways to a Swissair-led consortium in 2000, survived through last years French elections with the support of the former Socialist administration, which was anxious to preserve the airline's 3,200 jobs. Mr Raffarin's centre-right government granted Air Lib a further reprieve after it emerged from the elections by extending both the airline's operating licence and the repayment deadline on its debts.
At stake is the potentially attractive low-cost airline market within France and between Paris and other European destinations. Low-cost airlines such as EasyJet, Buzz and Ryanair have been hungrily eyeing Air Lib's valuable Paris take-off and landing slots at the main Paris airports of Charles de Gaulle and Orly. But the French government is understood to be against any solution to Air Lib's crisis that could spark increased competition in the domestic market and threaten the lucrative source of income for Air France, the state-controlled airline.
Jean-Pierre Raffarin, the French prime minister, on Monday sidestepped making a final decision on the future of Air Lib, France's struggling second airline, by calling for arbitration to seek a last-ditch solution to the company's crisis.
The move came as Imca, the Dutch group, presented details of its proposed rescue of Air Lib, which has struggled to recover from the slump in air travel since the September 11 terrorist attacks in the US Erik de Vlieger, Imca's chief executive, said it was ready to invest between €20m ($21m) and €50m. He also said the Dutch government had written to Paris, vouching for the credibility of the group, which has interests ranging from construction to publishing. However, the French transport ministry said on Monday Imca's proposals were "not acceptable" as they would further increase the state's exposure to Air Lib.
In a final effort to broker a deal, the ministry called on a commercial court to appoint an independent arbitrator to work towards a compromise acceptable to all sides. A first draft of Air Lib's bail-out plan was rejected last month. If the revised proposals suffer the same fate the company would be forced to repay its €120m debts, almost certainly triggering
Bankruptcy. Imca's plan is conditional on the government opening up new lines to Africa, the submission of the plan to authorities in Brussels and the renewal of the company's operating licence, which expires on January 31.
Air Lib, sold by British Airways to a Swissair-led consortium in 2000, survived through last years French elections with the support of the former Socialist administration, which was anxious to preserve the airline's 3,200 jobs. Mr Raffarin's centre-right government granted Air Lib a further reprieve after it emerged from the elections by extending both the airline's operating licence and the repayment deadline on its debts.
At stake is the potentially attractive low-cost airline market within France and between Paris and other European destinations. Low-cost airlines such as EasyJet, Buzz and Ryanair have been hungrily eyeing Air Lib's valuable Paris take-off and landing slots at the main Paris airports of Charles de Gaulle and Orly. But the French government is understood to be against any solution to Air Lib's crisis that could spark increased competition in the domestic market and threaten the lucrative source of income for Air France, the state-controlled airline.