UDPATE 1-Belgian DAT prospectors to get biz plan next week
November 27, 2001 7:14:00 PM ET
(Releads with business plan, Etienne Davignon comments)
By Gilles Castonguay
BRUSSELS, Nov 27 (Reuters) - One of Belgium's top business leaders, trying to raise money to create a successor to the country's defunct national airline Sabena [SAB.UL], said on Tuesday he would present a business plan to interested investors next week.
"Some elements of the business plan have already been presented, but the complete plan will be shown at the beginning of next week," Etienne Davignon told reporters on the sidelines of an event promoting corporate social responsibility.
Davignon, who along with Maurice Lippens was recruited by the government to raise 200 million euros among Belgium's biggest companies, has been talking with discount carrier Virgin Express (VIRGY) about a possible alliance with Delta Air Transport (DAT), a former Sabena unit.
Davignon, chairman of holding Societe General and Lippens, co-chairman at financial services group Fortis , have until Dec. 9 to present a bid for DAT to the trustees of Sabena's assets.
DAT, Sabena's former short-haul subisidiary, went back into the air two weeks ago with a 125 million euro government bridge loan to cover the cost of its operations as Davignon and Lippens looked at how best to use it to create a new national airline.
Although many companies have shown interest in investing in a new airline, they have declined to commit themselves before seeing a business plan.
DAT and Virgin Express, which share Brussels airport as a hub, have already signed a code-sharing deal on several routes.
DAT has nevertheless extended a price war begun last week in an effort to fill half of its seats by next month.
"It's only a strategy we follow week-to-week and there will come an end to this," DAT Commercial Director Etienne De Nil told Reuters earlier in the day.
"We don't want to participate in a fight with other low cost carriers," he said, referring to Irish no-frills airline Ryanair , which has offered tickets at cut-rate prices to gain market share. "It's the continuation of the strategy to launch a new airline."
DAT is offering return flights within Europe at 150 euros after last week's ticket sale at 50 euros each.
Virgin Express, majority owned by British entrepreneur Richard Branson's Virgin Travel unit, has responded in kind.
De Nil said DAT was raised its load factor to more than 30 percent from 10 percent after the first week of operations.
"If we reach a load factor of 50 percent in December, after 25 days of operations we will already have advanced a lot."
Sabena went bankrupt on Nov. 7 after collapsed co-parent Swissair reneged on a commitment to inject more cash into the ailing airline.
The Belgian government and Sabena said on Saturday they would sue the collapsed Swiss aviation group for damages and other costs estimated at 2 billion euros.
Sabena's liquidation has put 12,000 jobs at risk.
(Additional reporting by Bart Crols) REUTERS
© 2001 Reuters
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