The beleaguered French airline, Air Liberté-AOM has filed for bankruptcy after last ditch attempts to solve its financial crisis failed. Swissair Group, which has a 49.5 per cent stake, said the move would strengthen its financial positionThis content was published on June 15, 2001 - 17:11
The company said 11th hour meetings until Friday morning could not find a solution to keep the airline going in its current state and it had sought protection from its creditors before a commercial court in Creteil, a Paris suburb.
The loss-making carrier, technically majority-owned by France's Marine-Wendel, said it had sufficient funds to continue operations for the start of the peak holiday period at the end of June.
Commenting on the move in France, the Swissair Group said that while the bankruptcy proceedings were "regrettable", they represented the removal of a major element of financial uncertainty for the group.
A statement said that as a result, the overall financial position of the Swissair Group would be strengthened.
The statement added that the Swissair Group had on several occasions said it was prepared to pay two thirds of a restructuring package of SFr700 million ($395.93 million) if the Marine-Wendel company as the majority shareholder took over the remaining third of the costs.
However, Marine-Wendel said it was not prepared to pay the further costs.
The president and chief executive of the Swissair Group, Mario Corti, said everything had been done to try to secure the future of the airline but the efforts were to no avail.
"Ultimately, the Swissair Group has to safeguard the interests of its own shareholders and, therefore, made the decision earlier this year not to pursue the unacceptable option of financing operating losses for an indefinite period," he said.
In a related development, Europe's second-largest discount airline, easyJet, said on Friday it was interested in buying parts of Air Liberté-AOM to boost its presence at Paris Orly airport.
British-based easyJet said it was keen to establish Orly as a major European operating base and bring low-cost flights to the French market and was seeking takeoff and landing slots, as well as staff.
A spokesman said the company was interested in buying Air Liberté - AOM's 30 flight slots at Orly. A deal could save hundreds of jobs, he added.
However, the spokesman declined to say how much easyJet was prepared to pay for the assets and said the company was not prepared to take on any of Air Liberté-AOM debts.
swissinfo with agencies
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