Shares in the SAirGroup plunged more than 21 per cent on Tuesday as markets reacted to record losses totalling SFr2.9 billion ($1.67 billion) for the year 2000.This content was published on April 3, 2001 - 20:34
Trading in the company's shares had been suspended on Monday as the markets awaited the long expected bad news but the share price went into a tailspin when trading resumed.
Shares fell to a six year low of SFr125 during the trading session before rallying slightly to close at SFr140.
The new chairman and chief executive, Mario Corti, said on Monday that the group urgently needed a change of strategy, adding that its expansion policy of buying stakes in foreign airlines had failed.
The company has blamed the group's investments in Belgian, French and German airlines for most of the huge losses.
Corti said a consortium of Swiss banks, including Switzerland's UBS and Credit Suisse, was being put together to provide extra capital.
He announced that the French airline, Air Littoral, would be sold off, while the future of the group's controlling stakes in two other French airlines, AOM and Air Liberté, would be decided at the shareholders' annual meeting on April 25.
Corti said the French airlines alone were causing a "cash drain" of SFr80 million a month. "This is no way acceptable. Immediate action is required," he told the more than 400 journalists who attended the long-awaited conference.
A decision on the future of the group's 49.5 per cent stake in the Belgian airline Sabena is to be taken this summer.
The SAirGroup intends to sell nearly half of its SFr1.5 billion investment in real estate and is in advanced negotiations for the sale of its Swissôtel hotel chain.
The group has said that its most urgent concern is to reduce the risks to which the group's airline investments were currently exposed as "quickly and substantially" as possible.
Analysts expect the SAirGroup to drop its aim of heading an alliance of airlines and eventually to 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.
swissinfo with agencies
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