HERMAN DE WULF / BRUSSELS
Commuter carrier Delta Air Transport (DAT) looks to be heading for trouble itself just weeks after having survived the bankruptcy of parent airline, Sabena.
The financiers Viscount Etienne Davignon and Count Maurice Lippens, who promised to provide Bfr8 billion ($177 million) to build DAT into a new Belgian airline, now believe this will be insufficient. They have suggested that the Belgian authorities convert a Bfr5 billion refundable bridging credit into DAT shares.
However, the Belgian government has refused to invest in a new airline. Instead, Belgian regional governments may provide DAT with Bfr181 million. But even that is uncertain - the Flemish regional prime minister, Patrick Dewael, has made clear his government's reluctance to get involved.
DAT owes Bfr4.53 billion to SIC, a holding company formed by Sabena in the 1970s to oversee the group's various activities. However, SIC itself is facing bankruptcy. It has until 13 December to produce a business plan and prove to the Brussels court of commerce that it can pay its debts. If it fails to do so, it will lose its protection from its creditors, and all Sabena's surviving subsidiaries - DAT, Sabena Flight Academy, Sabena Technics and Sobelair - will be doomed. SIC has already failed to meet one deadline to produce the plan by 30 November but the court extended that for two weeks. Together, the subsidiaries which survived Sabena's bankruptcy owe SIC a total of Bfr 21.94 billion. At the end of October SIC reserves were Bfr1.2 billion.
For DAT to survive, so must SIC; and for that to happen the holding company must convince the court that its creditors, led by DAT, can repay their debts.
DAT's prospects look poor. Despite selling heavily discounted tickets, load factors are still only 40% - an improvement from the earlier figure of 10% but not enough to stop the airline operating at a loss.
The Bfr5 billion bridging credit is rapidly dwindling, and it has already postponed the launch of long-haul services with former Sabena Airbus A330s to Boston, Kinshasa and New York, which were scheduled to begin on 25 November.
Source: Flight International
