A Belgian court has declared the national airline, Sabena, bankrupt, marking the end of an airline that began flying 78 year ago. The repercussions of Sabena's failure will be felt throughout the European airline industry.
Sabena's crisis began last month, shortly after its partner, Swissair, collapsed and was unable to provide the Belgian airline with more than $120 million in promised capital. Both carriers had been in financial trouble, and the September 11 attacks in the United States made things worse. But things haven't been good for Sabena in a long while.
In the last forty years, Sabena had only made a profit one year and has an estimated debt of some $2 billion. Gilles Gauntelet, the European Commission's spokesman on transportation issues, says Sabena is not an isolated case.
"Sabena is the first national carrier in Europe which is going to bankruptcy and certainly it's a first step for more general movement in the European Union in which there will be a reduction of the numbers of national, or flag carriers, as there were understood before," he said.
Shortly after Sabena's demise became official, Belgian Prime Minister Guy Verhofstadt announced the creation of a new airline that will have no connections to the government. He says the new carrier will have an initial capital of about $180 million, most of it from Belgian banks and other private businesses.
The new operation will use some of Sabena's facilities as a basis for the restructuring. Under a best-case scenario, Sabena officials say this move could save 6,000 of the 12,000 existing jobs at Sabena. Other analysts say fewer jobs will be rescued.
Sabena's last flight was from Africa, arriving in Brussels early on Wednesday from Benin and Ivory Coast. It was the first airline to fly to Africa, starting in 1925, with a flight to what is now Kinshasa.