Hope fades for Sabena's successor

Will Sabena's planes fly again?

The future of Belgium's airline industry has been thrown into uncertainty once again.

Plans to create a national airline to replace the bankrupt Sabena have been jeopardised.

A new low-cost carrier was going to be built around Sabena's regional subsidiary, Delta Air Transport (DAT).

But a court has ruled that bankruptcy protection cannot be extended to Sabena's in-house bank - Sabena Interservice Center (SIC) - which would have provided about one third of the money needed to create the new airline.

Without bankruptcy protection, the 109 m euros (£66.5m; $96m) owed to SIC by DAT will not be erased, threatening the viability of the project.

Bolt out of the blue

A 200m euro private investment plan announced last week to keep DAT flying was dependent on the debt being cancelled.

The court decision came as a shock to most businessmen and lawyers involved.

"This came as a complete surprise," SIC vice-president Baudouin de Vaucleroy said, explaining that nearly all of SIC's creditor backed the plan.

"The creditors are, after all, the best placed to assess what is in their own best interest," SIC's lawyer Jean-Marie Nelissen said.

Sabena Interservice Centre is mulling whether to appeal against the decision.

Finance hope

But financiers behind the launch of DAT denied that the court decision would affect their plans.

"It is not more difficult for us to negotiate with the creditors with or without bankruptcy protection," said Etienne Davignon, one of two financiers rounding up investors for the airline.

He was confident that Sabena creditors would not call in the cash they were owed, so allowing the funds to flow to DAT.

"We are already in contact with the creditors... we are optimistic that we will end up with an agreement," Mr Davignon added.

Embarrassing failure

The bankruptcy of the 78-year-old Sabena was seen as a national embarrassment.

It was the first European national flag carrier to go bust, and was already in dire financial straits before the 11 September terrorist attacks.

Both the government and several leading captains of industry had been keen to back the creation of a new airline.

And Sir Richard Branson was also considering a link-up between his Virgin Express airline and the new Belgian carrier.