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Thursday, 9 August, 2001, 20:58 GMT 21:58 UK
Sabena flies into jobs storm
Sabena president and CEO Christophe Mueller
Sabena chief Christophe Mueller braves striking workers in Brussels
Troubled Belgian airline Sabena sent shares in part-owner Swissair spiralling downwards on Thursday after a second day of industrial action.


Without this plan there is no survival, we will go straight to concordat (bankruptcy protection)

Christophe Mueller, Sabena chief executive
Swissair owns a 49.5% stake in the Belgian flag carrier, with the remainder being owned by the Belgian government.

Sabena's European flights were cancelled as workers protested at job cuts.

Their worst fears were confirmed when Sabena said it was cutting 1,600 jobs as part of a restructuring programme.

The news came as Sabena announced a net first-half loss of 138.9m euros (86.9m), 55.3m euros more than in the same period a year ago.

Bail-out

Last month Swissair and the Belgian government agreed a deal to bail out the loss-making carrier, which was hovering on the brink of bankruptcy, with a 430m euro cash injection.

But Sabena chairman Fred Chaffart said on Thursday this was the "strict minimum" needed to rescue the company.

Swissair shares lost 5.4% after the Sabena results were announced.

Sabena said it planned to reduce its medium-haul fleet by seven planes, with the possibility of rebuilding it progressively from April 2002.

'Get modest'

The airline said it would cancel loss-making routes to Tokyo and Washington beginning in late 2001, as well as flights to six European destinations, including Belfast and Verona.

It will also halt flights to Beirut.

It also plans to sell its catering, cargo handling and maintenance business.

Chief executive Christophe Mueller said: "Without this plan there is no survival, we will go straight to concordat (bankruptcy protection).

"If all of this is implemented, we will face profitability in 2005."

Mr Mueller said Sabena had to "get modest again" and stop trying to compete with the likes of Air France and British Airways.

A strike by Sabena workers has caused chaos at Brussels airport for the past two days.

Name change?

Sabena management spent Thursday explaining the restructuring plan to unions, which said they were reviewing the plans and consulting their members.

Sabena agreed last month to free Swissair from its obligation to raise its stake in Sabena to 85%.

The Belgian flag carrier said it will concentrate on attracting customers willing to pay higher prices in exchange for more flexible reservations options, such as business travellers.

And it did not rule out a change of name as part of a re-oriented marketing strategy.

See also:

17 Jul 01 | Business
Rescue deal for Sabena
11 Jun 01 | Business
Swissair dives on bankruptcy talk
26 Apr 01 | Business
New finance boosts Swissair
25 Apr 01 | Business
SAir boss faces angry shareholders
12 Apr 01 | Business
Swissair faces criminal probe
03 Apr 01 | Business
Swissair shares nosedive 29%
12 Mar 01 | Business
SAirGroup shares nosedive
19 Feb 01 | Business
Rescue deal for Sabena
22 Jan 01 | Business
Sabena rescue faces EU probe
03 Jul 01 | Business
Battling Sabena owners 'go to court'
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