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Fri, Nov 09, 2001 - Page 21 News List

Lufthansa benefits from Sabena failure

AIR CARRIERS Top airlines in Europe are predicted to gain from the business collapse of the Belgian flag carrier

BLOOMBERG , FRANKFURT

"This is a very emotional moment for most of them, but operations at the airport are not disrupted today," he said in an interview. "The situation is quite serene and calm."

Belgian companies and regional governments said today they will put up 200 million euros to create a European commuter airline to take the place of Sabena.

Twelve investors including Fortis, Belgium's biggest financial-services company, and Dexia SA, the largest municipal lender, will provide 155 million euros. Belgium's three regional governments will contribute the rest.

Public Enterprise Minister Rik Daems called the project "a full-fledged private initiative."

European regulators, who approved emergency aid for Sabena, could kill the new airline if they rule it is too reliant on government money.

The new airline will follow the model used last month when Swissair was bailed out by the Swiss government and businesses and Crossair took over two-thirds of its flights. The core will be Delta Air Transport SA, Sabena's profitable short-haul subsidiary, which along with other units was not affected by the bankruptcy declaration.

Sabena's takeoff and landing slots have already been transferred to DAT, which operated 37 percent of Sabena's European flights and has a fleet of 32 aircraft, according to court papers.

The Belgian carrier lost 325 million euros in 2000 on revenue of 2.4 billion euros. The carrier, which owns eight of the 80 planes in its fleet, has about 2.5 billion euros of debt.

Swissair triggered Sabena's downfall last month by skipping a promised contribution of 132 million euros, the first installment of a 430 million-euro recovery package that was to be co-financed by the Belgian government. The Zurich-based carrier filed for protection from creditors a month ago after racking up more than US$10 billion in debts.

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