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Bruggisser departure means end to SAirGroup expansion strategy

SAirGroup chairman, Eric Honegger (right), is to take over as interim chief executive

(Keystone)

The SAirGroup says it is to halt all new investment and acquisitions in the airline industry, following the resignation of Philippe Bruggisser as chief executive.

The company, which controls the national flag carrier Swissair, has been trying to improve its market position in recent years with a series of alliances with other airlines, and by acquiring stakes in loss-making carriers such as Belgium's Sabena.

Bruggisser, who stepped down on Tuesday, has been criticised for his policy of buying stakes in second and third tier airlines.

SAirGroup spokesman, Urs Peter Naef, told swissinfo that "The board of directors is going to decide in the next couple of weeks how the strategy we've had in place for the last couple of years will change. Mr Bruggisser stood clearly for this strategy and the board and he probably saw no future together."

SAirGroup's profits were hit hard not only by the poor investment record but also by the soaring cost of fuel over last year. In its last results - reported in August - first-half profits for 2000 dropped to SFr3 million ($1.84 million) from SFr87 million the previous year.

It was not immediately clear whether the company's new direction would affect a rescue package for Sabena being negotiated with the Belgian government.

However at a press conference in Zurich on Tuesday, SAirGroup's new interim chief executive, Eric Honegger, said the company would not invest in Sabena unless the carrier's labour unions back a re-organisation plan agreed between the Belgian government and SAirGroup.

SAirGroup has a 49.5 per cent stake in Sabena, and agreed in principle last week to increase its stake to 85 per cent as part of a re-capitalisation plan.

SAirGroup said it would retain its overall strategy of having two main "pillars" - airlines and airline-related companies, such as hotels and airport caterers.

The group added that it intends to "substantially upgrade the appeal of Swissair, Crossair and Sabena" and that it intends to "place a great deal of emphasis on the quality of passenger service".

Moritz Suter, who is chief executive of the regional airline, Crossair, will manage the group's SAirlines division, which includes Swissair, Sabena, Crossair.

SAirGroup's share price rose by more than three per cent in afternoon trading after falling by 2.4 per cent on Monday on news of the Sabena negotiations.

swissinfo with agencies


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