The beleaguered SAirGroup, the parent company of Swissair and Crossair, has announced a net loss of SFr2.885 billion ($1.67 billion) for the year 2000 - the worst in its history.This content was published on April 2, 2001 - 10:58
A company statement on Monday blamed the group's investments in Belgian, French and German airlines for most of the huge losses.
It said the group intended to realign its overall business strategy to lay the ground to "substantially enhance" its revenue and earnings performance.
It added that the most urgent concern was to reduce the risks to which the group's airline investments were currently exposed as "quickly and substantially" as possible.
The company is on Monday due to unveil its future strategy. The Swiss stock exchange announced that it had agreed to suspend trading in SAirGroup shares for the day. On Friday, the share price tumbled by 8.3 per cent to SFr177.50.
The group's descent from flagship firm to financial fiasco has been headline news since January, when the chief executive, Philippe Bruggisser, departed abruptly.
The statement said the Belgian airline, Sabena, in which the group has a 49.5 per cent stake, suffered losses of SFr497 million last year.
The French airlines, AOM, Air Liberté and Air Littoral, made a combined loss of SFr344 million, while Germany's LTU was SFr340.48 million in the red. On a more positive note, two other airlines in which SAirGroup has a stake - LOT Polish Airlines and South African Airways - recorded black ink results last year.
Swissair had an earnings before interest and taxes (EBIT) loss of SFr195 million, the statement said, noting that fuel costs alone had increased sharply to SFr270 million, 56 per cent higher than the previous year.
The statement said that the losses made by the group's airline investments, value adjustments to loans and provisions established for restructuring costs, asset impairments and contractual obligations had a combined negative impact of SFr3.725 billion on the net result.
In stark contrast to the airline business, the airline-related businesses of the group reported encouraging results. SAirLogistics posted a record operating revenue of SFr1.712 billion, 27 per cent higher than the previous year, while its EBIT reached SFr99 million.
The weekly "Sonntagszeitung" and "SonntagsBlick" newspapers reported on Sunday that the new SAirGroup chairman and chief executive, Mario Corti, would announce a cash injection of at least SFr1 billion from a banking consortium led by Credit Suisse.
Corti, who is chief financial officer of food giant Nestlé, took over the helm of the troubled SAirGroup two weeks ago. He is the only member of the SAirGroup board not to have stepped down following the board's mass resignation last month.
Critics have accused the board of abdicating its responsibilities by leaving en masse and there has been an outcry at news that the former chairman, Eric Honegger, would receive a SFr5 million payoff.
Analysts expect the SAirGroup will have to drop its aim of heading an alliance of airlines and eventually join either the "oneworld" alliance led by American Airlines and British Airways or Lufthansa's Star alliance.
Corti has made it clear he wants to drop the unpopular SAirGroup name and return to the more universally recognised Swissair. There has also been speculation that he intends to sell-off airline-related companies, including the Gate Gourmet airline caterers and the Swissôtel hotel chain.
SAirGroup made a profit of SFr273 million in 1999.
swissinfo with agencies
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