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Sabena board makes restructuring conditional on union approval

Sabena says the bailout is necessary for its survival

(swissinfo.ch)

The board of directors of Belgium's national airline, Sabena, have approved plans to restructure the loss-making carrier, provided an agreement can be reached with trade unions.

The airline, which is 51 per cent controlled by the Belgian government and 49 per cent by Switzerland's SAirGroup, announced plans for a restructuring programme last October designed to slash costs, including cutting 500 jobs, in order to restore profitability.

Trade union representatives, who met with Sabena management on Monday, said they were optimistic about reaching an agreement.

"We are ready to negotiate to save the company," said Inge Vervotte of the Christian Democrat Union. "We will come together and we will have a plan."

The Belgian government announced on Saturday that it had reached an agreement in principle to contribute 100 million euros (SFr153 million) to a re-capitalisation plan for the loss-making carrier.

Under the plan the SAirGroup would contribute 150 million euros (SFr230 million), raising its stake in Sabena to 85 per cent. However, the proposals are still subject to the approval of the European Commission.

The Commission said it would scrutinise the planned re-capitalisation to make sure it did not breach EU competition rules, which do not allow governments to prop up failing businesses.

A European Commission spokesman, Gilles Gantelet, said it was too early to say whether the Commission foresaw any problems with the re-capitalisation package.

Gantelet also noted that SAirGroup would not be able to take control of Sabena until a series of seven bilateral accords between the EU and Switzerland had been ratified by all 15 EU member states.

swissinfo with agencies


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