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Monday, 24 December, 2001, 06:20 GMT
Virgin in Belgian airline tie-up
Virgin jet
Virgin competed with Sabena on short-haul flights
Richard Branson's low-cost airline Virgin Express is in talks over a link-up with Delta Air Transport, the successor to failed Belgian carrier Sabena.

A Virgin spokesman said it was discussing "a commercial agreement" with Delta Air Transport (DAT), but denied press reports of a full scale merger.

A deal would give Virgin Express, part of Sir Richard Branson's Virgin empire, a role in what will effectively be Belgium's new national airline.

The Sunday Times had reported that a green light for a merger had been given by a group of Belgian investors who on Friday acquired debt-laden DAT from Sabena's receivers for a symbolic one euro.

Salvage operation

Virgin Express launched an unsuccessful bid to take over part of Sabena's operations after the Belgian airline went bankrupt last month.

The failed carrier was one of Virgin Express's key competitors.

DAT's new owners, led by former European Union industry commissioner Etienne Davignon, were recruited by the Belgian government to put together a viable new airline from the remnants of Sabena.

Talks with Virgin Express over a possible merger, aimed at shoring up the new airline's financial position, began earlier this month.

DAT's new owners were ordered by Sabena's receivers to restructure the smaller airline's 100m euro debt as a condition of the buy-out going ahead.

Sabena collapse

DAT, a Sabena subsidiary operating mostly on short-haul routes, made a profit this year, and did not file for bankruptcy at the same time as its parent company.

Sabena collapsed last month after its major shareholder Swissair went bankrupt in the wake of the 11 September attacks.

The heavily-indebted airline, which was part-owned by the Belgian government, had been depending on a promised cash injection from Swissair to survive.

See also:

07 Nov 01 | Business
Belgium creates new airline
07 Nov 01 | Business
Belgian national airline bankrupt
07 Nov 01 | Business
Sabena: From pioneer to failure
01 Mar 01 | Business
Aeroflot targets Virgin take-over
11 Oct 01 | Business
Virgin lines up bid for Sabena
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