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Non-Tech : Virgin Express (VIRGY) Richard Branson's European Airline -- Ignore unavailable to you. Want to Upgrade?

To: ms.smartest.person who wrote (52)	11/9/2001 1:56:55 AM
From: ms.smartest.person	Read Replies (1) \| Respond to of 62

UPDATE 1-Belgium's Sabena to suspend operations on Wednesday November 05, 2001 2:09:00 PM ET (Adds analysis, police at airport) By Bart Crols BRUSSELS, Nov 5 (Reuters) - Debt-laden Belgian airline Sabena [SAB.UL] will suspend operations on Wednesday, staff and government sources said on Monday, raising the prospect of the first collapse of a European Union flag carrier, along with thousands of job losses. The demise of Sabena, which has made a profit only once since 1958, would be Belgium's biggest bankruptcy and a blow to national pride at a time when the country holds the European Union's rotating presidency. Sabena's board is to meet on Tuesday and the sources said it is likely to put the parent company into liquidation, leaving DAT, a regional airline subsidiary, to carry on limited flight operations. "There will be no Sabena flights on Wednesday," a staff source told Reuters. He said he did not know how long the suspension would last. A government source confirmed the report. Trade unions said management had told them on Friday there was a big chance that the Sabena holding company, excluding subsidiaries, would be put into liquidation this week since no new investors had been found. With about half of Sabena's 12,000 workers facing the axe, union leaders were due to meet Prime Minister Guy Verhofstadt on Tuesday to discuss a social plan to soften the financial blow. The government posted some 150 extra police officers at Brussels' Zaventem airport on Monday to prevent disgruntled Sabena employees sabotaging airport operations or seizing planes. Unions reacted angrily. COMPANY DECLINES COMMENT Sabena spokesman Wilfried Remans declined comment on the board meeting or the suspension of operations. A Belgian court granted the state-controlled airline two months' bankruptcy protection early last month after struggling co-parent Swissair , which owns the remaining 49.5 percent, failed to come up with a pledged cash injection shortly before its own financial collapse. Both Sabena and Swissair were in trouble well before the September 11 hijacked airliner attacks on the United States plunged the entire industry into crisis. Sabena also fell victim to the European Commission's long-running campaign to stop EU member governments from repeatedly bailing out their national airlines. The Commission approved a 125 million euros bridging loan to Sabena in mid-October but said the money could not be used to restructure the airline. The EU executive has said it will only allow compensation to airlines for losses suffered during the four days when U.S. airspace was closed immediately after the September 11 attacks, plus government assistance with the resulting rises in insurance and security costs. Sabena Chief Executive Officer Christoph Mueller hinted at the liquidation option in a memo to staff last week, saying no investors were likely to want the whole Sabena group. TALKS CONTINUE WITH VIRGIN Mueller stressed that potential investors refused to acquire Sabena's debt of more than $2.1 billion. British entrepreneur Richard Branson met Mueller and Belgium Public Enterprises Minister Rik Daems again on Monday to discuss the possibility of Branson's Brussels-based discount airline Virgin Express (VIRGY) merging with DAT. Daems told reporters after senior ministers discussed the crisis that the talks were "to possibly make DAT viable". "That is very difficult," he added. A source familiar with the situation told Reuters the negotiations were continuing. Delta Air Transport (DAT) flew 37 percent of Sabena's European flights last year and carried 3.3 million out of its nearly 11 million passengers. DAT employs some 1,000 staff, but management told Sabena's unions the number would rise to 2,600 in the new airline. © 2001 Reuters news.moneycentral.msn.com