UDPATE 1-Virgin Express pulls rug on Sabena
November 06, 2001 10:41:00 AM ET
(Adds Virgin Express MD on fleet increase)
By Bart Crols
BRUSSELS, Nov 6 (Reuters) - Brussels-based discount airline Virgin Express (VIGY) said on Tuesday it had failed to reach an agreement with Sabena [SAB.UL], effectively dashing hopes that it might save the ailing Belgian national carrier from collapse.
"In the absence of an agreement with Sabena we now believe that it will be in the best interest of the travelling public for Virgin Express to pursue (an) independent plan," it said in a statement, adding it would add extra flights of its own.
Virgin Express stock climbed 5.32 percent to 4.95 euros, after reaching a day high of 5.04 euros in Brussels.
"The plan presented to us by Sabena, in our view, could put the future of our staff at risk," said Virgin Express. "We therefore do not believe it to be workable."
Virgin Express, which had been expected to create a new airline with Sabena's short-haul subsidiary, Delta Air Transport (DAT), said it was still willing to listen to any other proposals from Sabena or the Belgian government, Sabena's majority shareholder.
"We made it very clear in our press release that the door is open on our side and I have no reason to believe that the door is not open on their side as well," Virgin Express Managing Director Neil Burrows told Reuters.
"I would be surprised if we don't talk at some stage later today," he added.
Virgin, which shares Brussels' Zaventum airport as a hub with Sabena, said it would start flying new routes to Geneva, Zurich, Stockholm, and Gothenburg beginning November 12 and launch 15 more routes in the coming months.
Burrows also said he plans to increase the size of its fleet to 30 planes in the next year.
"It is our ambition to increase our fleet up to 30 planes in the next year providing opportunities remain in the market," he added.
The expansion comes soon after a massive restructuring at Virgin Express, which led to the carrier abandoning loss-making routes, closing its Irish operations, stopping a charter operation, and halving its fleet to 13 Boeing B-737 planes.
Sabena operates 87 planes, of which 32 short-haul planes.
Virgin said last month it had posted a 3.0 million pre-tax profit in the third quarter of 2001 and remained on course to break even in the full year.
Virgin, 59-percent owned by British entrepreneur Richard Branson's Virgin Express Holdings, had first expressed interest in buying some of Sabena's assets on October 17.
Sabena union leaders said Belgian Prime Minister Guy Verhofstadt had told them that the government will propose the debt-laden airline be declared bankrupt when the board meets later on Tuesday. REUTERS
© 2001 Reuters
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