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BBC News Online: Business


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
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.


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


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