Just weeks after the collapse of the Swissair Group, the Belgian national airline Sabena, in which Swissair has a 49.5 per cent stake, has filed for bankruptcy.
The debt-laden airline filed for bankruptcy on Wednesday, ending a weeks-long battle for survival, and signalling an increasingly bleak outlook for the global aviation industry.
Lawyers for the 78-year old airline, Europe's second oldest, requested the parent company's liquidation at the Brussels commercial court after Sabena chairman Fred Chaffart announced late Tuesday that the board had found no new investors.
"The board of directors was obliged to admit bankruptcy," Chaffart said. "As a result, the court will most certainly have to declare the company bankrupt."
The filing followed the failure of co-owner, the Swissair Group, to come through with a pledged financial aid package of SFr200 million ($123 million).
Sabena was forced to seek the bankruptcy protection after reporting a loss of $122 million in the first half of this year, some $49.2 million more than the previous year's comparable figure. The airline has lost more than $1.5 billion over the past 25 years.
Airline industry analyst Sepp Moser told swissinfo that Swissair may be partly responsible for the demise of Sabena, but we shouldn't forget what a poor record the Belgian airline had for making money long before Swissair came on the scene.
"Sabena was a loss making airline nearly all the time, in all of its more than 70 years of history it made a profit only twice," explained Moser. "Once back in 1958 when there was a world expo in Brussels and the second time was in 1998 when the entire fleet was sold to a leasing company and the income was declared as a profit - during all the other years Sabena was loss making."
Swissair, which has been bogged down in its own financial collapse, does have to shoulder some of the blame, according to Moser.
"Swissair has aggravated the situation by first forcing Sabena onto an absolutely unnatural growth path in the last few years," said Moser. "Secondly it has harmed Sabena by pulling money out of it and exploiting it like a colony."
Certainly the closedown of Sabena will have some impact on the remaining business of Swissair.
"There is still some very close cooperation in the form of the Airline Management Partnership, this is a joint venture company and at one time in its history it operated Swissair and Sabena as one," added Moser. "This Airline Management Partnership is now in the process of being dissolved, but the process is not completed yet, so there are still cooperative areas where Swissair needs Sabena's people."
Sabena and Swissair were in trouble long before September 11, when the hijacked airlines attacks on the United States plunged the entire industry into crisis as demand for air travel dropped around the world.
Hundreds of Sabena staff, who had been handed a piece of paper telling them the board's decision to seek bankruptcy and advising them not to turn up for work, gathered at Zaventem national airport on Wednesday to protest job losses.
Trade unions and the Belgian government negotiated through the night, trying to save at least some of the 12,000 jobs directly at risk from Sabena's failure and to compensate workers laid off.
Meanwhile, the Belgian government said it was still negotiating with Belgian private and institutional investors on plans to continue some of Sabena's activities under its regional subsidiary, Delta Air Transport.
Analysts say bankruptcy could pave the way for new investors to build a slimmed-down version of the airline, operating mainly European flights.
However, new investors are hard to find after the terror attacks in the United States on September 11.
Virgin deal unlikely
Belgium's Virgin Express said on Tuesday it had been in talks with Sabena for months, but it was unhappy with the plans for the creation of a successor airline.
A spokesman said the plan would endanger the future of the company's staff but he added that talks were continuing.
Virgin Express, meanwhile, announced four new destinations from Brussels starting next Monday, including Geneva and Zurich.
swissinfo with agencies
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