BBC NEWS Americas Africa Europe Middle East South Asia Asia Pacific Arabic Spanish Russian Chinese Welsh

 You are in: Business
Front Page 
UK Politics 
Market Data 
Your Money 
Business Basics 
Talking Point 
In Depth 

Commonwealth Games 2002

BBC Sport

BBC Weather

Wednesday, 7 November, 2001, 11:53 GMT
Sabena: From pioneer to failure
Sabena aircraft
Belgium's national airline Sabena has become the first European flag carrier to go bankrupt. BBC News Online profiles one of Europe's oldest airlines.

"An economic and social disaster for Belgium" is how the Belgian employment minister Laurette Onkelinx described the decision by Sabena to file for bankruptcy.

Not only is it the first failure of a European flag carrier, but it is also Belgium's biggest corporate failure.

But Ms Onkelinx is unlikely to be the last government minister to mourn the loss of a national airline given the current bleak outlook for the global aviation industry.

Poor profit history

Sabena, like many other airlines, was already in trouble before the 11 September attacks as it struggled to adapt to the increasingly competitive environment in the industry.

Sabena airlines poster
Sebena is one of Europe's oldest airlines
The airline has only once made a profit since 1958, and at the point of bankruptcy, it had debts estimated at around $2bn (1.4bn).

Sabena employed 12,000 people, and it is feared many more jobs could be at risk in firms that depend on the airline for business.

Rapid expansion

Sabena was Europe's second oldest airline, having been set up in 1923.

The name Sabena stands for the Societe Anonyme Belge d'Exploitation de la Navigation Aerienne (Belgian Company for the Exploitation of Air Navigation).

At first it concentrated on linking Brussels with other main European cities, but soon expanded to offer services to the Belgian Congo, now the Democratic Republic of Congo.

It launched transatlantic services in 1947, and in 1953 became the first airline in the world to offer a scheduled helicopter service to major European cities.

Failed restructuring

The 1980s and 90s saw successive attempts to restructure the airline as it struggled to come to terms with the liberalisation which spread through the industry.

In the 1990s Sabena was converted into a private limited company, and in 1995 it signed a deal with Swissair for the two airlines to collaborate more closely.

This led to Swissair taking a 49.5% stake in Sabena, with the remaining 50.5% held by the government.

And in April 2000 Swissair announced plans to increase this stake to 85%.

But Swissair's own financial problems meant this never happened, and its failure to inject more funds into the Belgian airline helped to trigger the eventual collapse of Sabena.

See also:

06 Nov 01 | Business
Sabena cancels flights
01 Nov 01 | Business
Swissair rescue hopes brighten
17 Oct 01 | Business
Sabena rescue gets EU blessing
17 Oct 01 | Business
Europe says no to airline aid
15 Oct 01 | Business
France offers state aid to airlines
12 Oct 01 | Business
Airlines ask EU for more aid
10 Oct 01 | Business
Full EU statement on airline aid
04 Oct 01 | Business
EU complains over Swissair aid
23 Sep 01 | Business
Airlines receive $15bn aid boost
12 Oct 01 | Business
Round-up: Aviation in crisis
Internet links:

The BBC is not responsible for the content of external internet sites

Links to more Business stories are at the foot of the page.

E-mail this story to a friend

Links to more Business stories