Herman De Wulf/BRUSSELS
Belgium's national airline Sabena, in which SAirGroup has a 49.5% holding rising later this year to 85%, reported losses for last year of BFr13 billion ($290 million), the largest in its 77 year history.
Even record passenger figures showing an 11% rise to nearly 11 million contributed to the problems. Load factors dropped marginally from 62% in 1999 to 61.2% as a result of the rapid addition of capacity.
The increase in passenger figures failed to address the major problem of poor yields, as 82.4% of passengers flew economy class. Overall turnover last year reached BFr98.2 billion against BFr89.8 billion in 1999.
Sabena president and chief executive Christopher Müller has questioned the wisdom of continuing hub and spoke operations from a high cost location like Brussels. "Costs have overtaken revenue", the airline concedes, "mainly because of the rising cost of fuel, the unfavourable dollar exchange rate, low yield, too many economy passengers, insufficient load factors and overcapacity on too many destinations".
Müller warns that 2001 will be another "difficult year". However, he is confident that Sabena will return to profitability by 2005. The airline is already working on a new business plan that will be announced at the end of the month supplementing a major cost cutting programme already underway.
Source: Flight International
