Sabena files for bankruptcy

The government has offered Sabena special assistance

The Belgian airline Sabena has filed for bankruptcy protection after failing to secure financial assistance from part-owner Swissair.

According to the Belgian government, which owns 50.5% of the airline against Swissair's 49.5%, the airline would go bankrupt without legal protection from its creditors.

For the immediate future, "financial means are there to guarantee normal activities" said Sabena chairman Fred Chaffart, but bankruptcy protection was sought to provide Sabena with a breathing space.

Belgian prime minister Guy Verhofstadt said that the government would provide a one month bridging loan to the company to help it create a new airline in Belgium.

Both airlines are fighting for their lives

A relaunched airline would focus on short-haul European destinations, Mr Verhofstadt said.

Government aid for Sabena could be waved through under certain circumstances under European Commission rules.

Other airline operators have objected to government support for troubled airlines, arguing that such backing would distort competition and give rescued carriers unfair advantages.

Restructuring

On Tuesday night, Sabena's workers overruled pilots' opposition to a restructuring plan that will lead to severe job cuts.

Mr Mueller's plan was approved by Sabena's workers

The pilots' resistance to some job cuts was beaten back as the workers grew to realise that all jobs at Sabena would be at risk if the carrier goes bust.

The ailing airline's rescue plan was hammered out during the night, just hours after Swissair acknowledged it was itself close to bankruptcy, washed its hands of its 49.5% stake in Sabena and halted all its flights, leaving thousands of passengers stranded.

Sabena, which had been relying on support from Swissair to dig itself out of a very deep financial hole, would cut 1,400 jobs as part of the rescue plan.

Continuing operations

In a referendum, 57.12% of Sabena's staff voted for a restructuring plan worked out by chief operating officer Christoph Mueller.

Sabena's pilots are loath to accept job losses

Following an overnight crisis meeting, Mr Chaffard said the management "will take all necessary measures to ensure the continuation of operations and guarantee the interests of every financier".

Meanwhile, the Belgian government has threatened to take Swissair to court.

Sabena itself may follow suit.

Resignation

Sabena grounded more than one-quarter of its flights on 1 October as a pilots' strike went into a fourth day in protest against plans to restructure the ailing Belgian airline.

The Belgian Cockpit Association, which represents 900 staff at Sabena, has called for the chief executive to resign and for the airline to abandon plans to cut 2,000 out of 12,000 jobs.

If the pilots' demands are not met, they may push ahead with the strike.

Meanwhile, London City Airport said it had detained one of Sabena's aircraft.

Charles Buchanan, the airport's head of business development, said: "We have detained one aircraft pending clarification of their financial situation,"

The airline owed money for airport services, Mr Buchanan said.

British airport operator BAA said it had delayed a Sabena plane at its Glasgow airport earlier on Wednesday but the aircraft had now departed.