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Tuesday, 23 January, 2001, 16:55 GMT
Swissair chief steps down
swissair plane
The ousted boss wanted further expansion
The chief executive of SAirGroup, Philippe Bruggisser, resigned on Tuesday after the board of the company put the brakes on a controversial airline expansion policy.

Swissair will make no further investments or acquisitions in the airlines sector for the time being


SAirGroup

The company behind Switzerland's national carrier Swissair said it would "make no further investments or acquisions" in the airlines sector for the time being.

It also announced that it would look at its stakes in other airlines again, especially Belgium's ailing carrier Sabena.

SAirGroup owns a 49% stake in Sabena.

The rest is owned by the Belgian government.

Struggling Sabena

The company said on Tuesday that it wanted the Belgian airline to improve its performance.

Over the weekend, SAirGroup and the Belgian government both agreed an injection of cash in an attempt to bail out Sabena.

But this is subject to an investigation by the European Commission.

Earlier this year, Swissair said it planned to raise its holding in Sabena to 85%, buying out more of the Belgian government's stake.

But at a news conference on Tuesday, SAirGroup said this depended on the Belgian unions accepting its proposals.

If the unions reject them, "Swissair would no longer be willing to make further investments in Sabena," said Eric Honegger, who temporarily took over as chief executive.

Loss-making purchases

SAirGroup - headed by Mr Bruggisser - had embarked on a series of costly purchases of stakes in loss-making regional and national carriers.

Holdings in Sabena, French companies AOM, Air Liberte and Air Littoral, Portuguese and Polish airlines were said to be weighing the company down to a tune of 1.3bn euros (830m).

Swissair has often been cited as a likely candidate for a tie-up with BA, Europe's largest airline.

In 1999, SAirGroup posted sales of 8.49bn euros, of which 4.17bn euros was in air travel.

In trading on Tuesday the company's shares were up 12 swiss francs, or 4.9%, at 257 swiss francs.

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See also:

22 Jan 01 | Business
Sabena rescue faces EU probe
24 Sep 00 | Business
BA turns spotlight on Swissair
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