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Aviation History
1991
1991 - 0070.PDF
OPERATIONS: AIR TRANSPORT SWA deal fails as Sabena reorganises BY DAVID LEARMOUNT Fear of a 31 December, 1990, no-turning-back deadline, combined with Sabena's acute need to reorganise to stem mounting losses, has forced the cancellation of the contract be tween the Belgian carrier, Brit ish Airways and KLM to form Sabena World Airlines (SWA). The proposed creation of a Brussels-hubbed airline, serving 75 European cities, has been delayed for months. Amid wran gling over European Commis sion approval, Sabena's financial troubles have been mounting. New Belgian Government rules, to become effective this year, have reduced existing Sa bena rights of service monopoly and Brussels Airport slots, H affecting SWAs potential domi nance of the hub. A third, progressively more influential factor, is the emer gence of the large Belgian char ter carrier, Trans European Air ways, as a possible partner for Sabena. Both non-Belgian SWA part ners, British Airways and KLM, are each withdrawing part of their planned 20% holdings paid for so far; Sabena was to hold 60% of SWA's shares. Under the terms of the deal, the airlines had up until the end of year to pull out without incur ring large financial penalties. BA chief executive Sir Colin Marshall describes the about- turn as "a business decision", explaining: "We regret that the SWA venture is unable to pro ceed as originally conceived". Neither of the minority part ners sees the SWA concept as dead. KLM explains that Sa bena's need for capital to sur vive, let alone invest in a major new venture, has led to the current situation: "Sabena has recently decided to subject itself to a deep internal analysis with a view to re-orienting its struc ture and strategy. In the process it is giving high priority to far-reaching recapitalisation." Referring to the plans for SWA, KLM says: "This may possibly lead to delays in their implem entation by several years". Sabena's new chairman, Pi erre Godfroid, has been told by the Belgian Government (its major shareholder with direct holdings of 53%) to submit plans for the airline's re organisation and recapitalisa tion by the end of January. The carrier is expected to announce 1990 losses of up to $150 mil lion to add to its existing Gov ernment debt of about $375 million. Godfroid is now seeking pri vate investors in a market which is reluctant to put cash into airlines; so although he is said to be hoping for Belgian invest ment, talks are also being held with interests abroad — includ ing American Airlines. ThfrBA and KLM investments in SWA, about $65 million each, le/t debt-saddled majority partner Sabena to raise the mas sive capital necessary to acquire the new airline's fleet. The Belgian Government has told Godfroid it will provide some cash aid, but only to complete the investment pack age which Godfroid has been told to attract. Georges Gutelman, chairman and owner of Trans European Airways (TEA), which has been lobbying the European Com mission skilfully against the ori ginal SWA deal, is emerging as a possible investor in Sabena. He is setting some conditions, however. The first is that BA and KLM must have no involve ment; also, his investment "must be safe", a demand which implies the Government back ing and cash injection must be significant. Some Belgian members of parliament believe a combina tion of Sabena's fleet with TEA's would provide the SWA answer, while the partnership would solve Sabena's problem with re capitalisation. "Such a move would create a strong airline, maintaining a Belgian image," says Gutelman. The TEA fleet of 36 aircraft is relatively young with 22 Boeing 737-300s on order. • ZAMBIA OPERATES 757 FREIGHTER Zambia Airways has become the second non-American Boeing 757 freighter operator. It has leased the aircraft from Ansett Worldwide Aviation for general cargo work in Africa, Europe and the Middle East. The 757 accommodates up to 15 containers or pallets on the main deck plus bulk lower-hold cargo. A maximum load of almost 39,700kg can be carried over 4,000km. The first non-US 757F is flown by Ethiopian Airlines. FLIGHT INTERNATIONAL 9 - 15 January, 1991 Compass prices swing upwards A ustralia's deregulation new comer Compass Airlines has succumbed to fuel price pressure and is raising its base fare by 7.5% at the same time that Ansett and Australian Air lines are offering discounts of up to 61% to fill seats in a 'January sale'. Compass says the rise re aligns it with the majors, who increased fares in November by 7.5%, citing fuel costs as the reason. Compass has re-aligned fares at the previous 50% (off- peak) and 80% (normal) of the other carriers. The airline has reacted to the discounts by offering day- before-travel 'seat clearance' tickets through travel agents. The 60% discount offer main tains the company's lowest-fare stance. Vice-president — mar keting Alex Klujin says Com pass is winning 86% network load factors and is 'happy' with its yield. Unexpectedly high loads have been acheived on its long-haul Sydney-Perth opera tions, but it is below projection on Sydney-Melbourne sales. Klujin responded by halving Sydney-Melbourne flights and upping the Perth services. •
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