SAirGroup warns of major shake-up ahead

SAirGroup's Eric Honegger said the company's strategy had to be "corrected" Keystone Archive

Employees of the SAirGroup, which owns Swissair, have been warned that they will have to face many changes in the near future because of the difficulties facing the group.

This content was published on February 13, 2001 - 12:01

The warning of a "huge challenge" for all staff as the company redefines its corporate strategy was made by the SAirGroup's chief personnel officer, Matthias Mölleney.

Writing in this month's SAirGroup staff newspaper, Mölleney was reacting to the departure of group chief executive Philippe Bruggisser on January 23.

A statement issued at the time said the group and Bruggisser had "mutually agreed" that the CEO would leave his post with immediate effect.

However, in a farewell commentary in the newspaper, Bruggisser writes that he was dismissed by the board of directors.

Mölleney said many employees were "speechless, confused and uncertain" about the future: "...many are also disappointed or even angry. And that's right, we have to make space for all those emotions," he told staff.

Also writing to group staff, the chairman of the board and CEO ad interim, Eric Honegger, said the risks involved with share holdings in foreign airlines had become too great. The strategy had to be "corrected", he said.

He stressed that group strategy would continue to rest on the two pillars of the airline business and airline-related businesses.

"The Board of Directors did not want to transfer the execution of this change to Philippe Bruggisser, who was so much the identification figure for the current strategy," he said.

The group newspaper "SAirGroup News" also made the point that there was not one word of thanks addressed to Bruggisser at the news conference announcing his departure, which begged the question: "Did he really do everything wrong?"

Honegger replied that this was not the case. "Unfortunately, in the heat of the moment at the press conference, we missed out on thanking him, and I would like to take this opportunity to do that now," he said.

He said that the group would "certainly not" sell Swissair or regional airline Crossair.

The future of the group's strategy regarding the Belgian carrier Sabena, in which it has a 49.5 per cent stake, hangs in the balance. The original SAirGroup plan was to increase its stake to 85 per cent but there is speculation it could pull out if unions do not accept restructuring plans, involving the loss of hundreds of jobs.

A decision on a joint cash injection by the SAirGroup and the Belgian government, which is still the majority shareholder, is expected on February 23. The shareholders postponed such a decision in Brussels on February 8.

However, Honegger has warned that the crisis facing Sabena must be resolved soon. "The contractual obligation between the Belgian government and the SAirGroup regarding the re-capitalisation of Sabena expires on February 27. The SAirGroup is not prepared to extend this deadline."

The issue has also apparently entered the political arena, with one report suggesting that if the SAirGroup pulls the plug on Sabena, the Belgian government might not approve a set of bilateral agreements reached between Switzerland and the European Union, one of which covers air transport.

Honegger has also dismissed media speculation that the SAirGroup is on the brink of ruin.

"That is out of the question," he told "News". "Three SAirGroup divisions are complete success stories: SAirRelations, SAirServices and SAirLogistics. We only have problems in the SAirlines divisions, and there chiefly in Belgium and France."

He added though that "if we don't fill the holes created by our (airline) participations, then it could become dangerous at some point."

by Robert Brookes

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