Sabena goes down with sinking SwissAir ship
Oct 3, 2001 | 5:52 am
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Sabena goes down with sinking SwissAir ship
Airline to Seek Bankruptcy Protection
By RAF CASERT
Associated Press Writer
BRUSSELS, Belgium (AP)--Troubled Belgian airline Sabena SA will seek bankruptcy protection Wednesday after Swissair failed to provide promised financial assistance, the government announced.
Sabena, in which the government has 50.5 percent of shares and Swissair 49.5 percent, was expected to seek court protection to keep flying over the following weeks.
It was either that, or full bankruptcy, said Employment Minister Laurette Onkelinckx. ``There are no other choices,'' she said.
Swissair grounded its fleet Tuesday and kept it grounded Wednesday after it ran out of cash to pay suppliers in a collapse brought on by the U.S. terror attacks.
But the Belgian government was expected to give Sabena temporary credit so the airline can continue operations. The credit will be available for about a month.
``The government can provide some cash,'' said Onkelinckx.
The Belgian government was asking the European Union Commission to determine whether the temporary credit complies with EU rules prohibiting governments from bailing out airlines.
Earlier Wednesday, Sabena reassured customers that its planes would not be immediately grounded.
For the immediate future, ``the financial means are there to guarantee normal activities,'' Sabena chairman Fred Chaffart said.
Also struggling to avert bankruptcy, Swiss flag carrier Swissair said it would not be able to make a promised $123 million payment this week to Sabena. The Belgian government is taking Swissair to court to try to force it to make the payment.
Shares in Swissair, which had left 18,000 passengers stranded Tuesday, resumed trading Wednesday following a two-day pause. The company's stock opened at 78 cents a share, down from the last closing price, $25.37, recorded Friday.
Swissair, whose situation worsened dramatically after the Sept. 11, has been trying to recover from a failed expansion strategy that led to a loss of $1.79 billion in 2000.
Swissair filed for protection from creditors Monday and said its former affiliate Crossair, a financially healthy regional airline, would take over two-thirds of its flights with the backing of two Swiss banks.
The move gives Swissair time to reorganize without being carved up in a bankruptcy court.
AP-NY-10-03-01 0633EDT
By RAF CASERT
Associated Press Writer
BRUSSELS, Belgium (AP)--Troubled Belgian airline Sabena SA will seek bankruptcy protection Wednesday after Swissair failed to provide promised financial assistance, the government announced.
Sabena, in which the government has 50.5 percent of shares and Swissair 49.5 percent, was expected to seek court protection to keep flying over the following weeks.
It was either that, or full bankruptcy, said Employment Minister Laurette Onkelinckx. ``There are no other choices,'' she said.
Swissair grounded its fleet Tuesday and kept it grounded Wednesday after it ran out of cash to pay suppliers in a collapse brought on by the U.S. terror attacks.
But the Belgian government was expected to give Sabena temporary credit so the airline can continue operations. The credit will be available for about a month.
``The government can provide some cash,'' said Onkelinckx.
The Belgian government was asking the European Union Commission to determine whether the temporary credit complies with EU rules prohibiting governments from bailing out airlines.
Earlier Wednesday, Sabena reassured customers that its planes would not be immediately grounded.
For the immediate future, ``the financial means are there to guarantee normal activities,'' Sabena chairman Fred Chaffart said.
Also struggling to avert bankruptcy, Swiss flag carrier Swissair said it would not be able to make a promised $123 million payment this week to Sabena. The Belgian government is taking Swissair to court to try to force it to make the payment.
Shares in Swissair, which had left 18,000 passengers stranded Tuesday, resumed trading Wednesday following a two-day pause. The company's stock opened at 78 cents a share, down from the last closing price, $25.37, recorded Friday.
Swissair, whose situation worsened dramatically after the Sept. 11, has been trying to recover from a failed expansion strategy that led to a loss of $1.79 billion in 2000.
Swissair filed for protection from creditors Monday and said its former affiliate Crossair, a financially healthy regional airline, would take over two-thirds of its flights with the backing of two Swiss banks.
The move gives Swissair time to reorganize without being carved up in a bankruptcy court.
AP-NY-10-03-01 0633EDT
