The Belgian airline, Sabena, in which Switzerland's SAirGroup holds a 49.5 per cent stake, has announced major job cuts and reduced services to try to get back into profit.
Sabena said on Thursday it will cut up to 500 jobs and end service on long haul routes from Brussels to both Johannesburg, South Africa and Newark, New Jersey.
The airline said it expects to post an operating loss of $123 million dollars for this year and that the forecasts for 2001 do not look any better.
Sabena has already grounded several Airbus A340 aircraft to try to stem the losses.
Despite the poor financial situation at the Brussels-based airline, SAirGroup announced earlier this year it was increasing its stake in Sabena to 85 per cent from its current 49.5 per cent, subject to regulatory approval.
Sabena said internal and external reasons accounted for the deterioration in the group's financial situation.
The airline blamed the problem on high fuel prices, the high United States dollar and strong competition, as well as the high costs of renewing and updating its fleet and rising labour costs.
Sabena posted a first half operating loss of $50 million, down from an operating profit of $333 milllion in the same period last year.
swissinfo with agencies