Sabena Files for Asset Liquidation

Debt-ridden Sabena said Tuesday it plans to seek a court declaration that it is bankrupt, the final chapter for one of Europe’s oldest airlines.

The carrier, 50.5% owned by the Belgian government, grounded most of its flights Tuesday afternoon as its staff began to walk off the job in anticipation of the filing.

Sabena sought protection from creditors last month, and the court gave it until Thursday to develop a recovery plan.

But private investors were unwilling to shore up Sabena ahead of a bankruptcy filing that would begin the process of liquidating the airline.

“The Sabena board is forced to file for bankruptcy,” said Sabena Chairman Fred Chaffart, adding he expected a commercial court to act quickly. Sabena lawyers are expected to go to court today, officials said.

Investors could step in to create a slimmed-down airline based on Sabena affiliate DAT, which has not been affected by the bankruptcy proceedings.

Chaffart said chances were “very high” that a new regional carrier could emerge out of the folding of Sabena, saving “thousands of jobs” for Sabena’s 12,000-worker staff.

He said “with Belgian investors, financial institutions and Virgin Express there are plans to restart a smaller but adequate company, centering on Europe,” possibly with some profitable lines in Africa.

The collapse of 78-year-old Sabena comes amid a global airline crisis that has already brought Swissair, the other main shareholder with 49.5%, to the brink of bankruptcy, depriving Sabena of vital capital.

In other more grim news Tuesday, Scandinavian airline SAS said it would shed an additional 2,500 jobs, 13% of its work force, as it posted a third-quarter loss, and British Airways posted a 73% drop in quarterly operating profits.

Virgin Express said Tuesday it had been in talks with Sabena for months, yet it was unhappy with the current plans for the creation of a successor airline. The Belgian government offered a one-month bridge loan worth $113 million when Sabena sought protection from creditors last month and would like to use that to start the successor airline. The European Commission has said such funds cannot be used as seed money.

In chaotic scenes at the airport, where hundreds of Sabena staff protested, the airline was forced to cancel almost all afternoon flights. There will be no flights today, Chaffart said.