Herman de Wulf/BRUSSELS
SABENA PRESIDENT Paul Reutlinger has laid out details of the new cost-cutting targets and fleet rationalisation being demanded by new partner Swissair in a bid to bring the Belgian carrier back to profitability by 1998.
Reutlinger says that Sabena needs to shave BFr2 billion ($63 million) from labour costs through a mix of increased productivity and new working conditions. A deal with the unions is due to be thrashed out by the end of October.
He repeats warnings that, if these savings cannot be agreed, the airline could be forced to reduce salaries by 15%, or lose 1,700 people from the workforce.
Three of Sabena's unions have agreed to talk, although a fourth has rejected the plans. It was bitter union action, which forced out Sabena's previous president, Pierre Godfroid, and led to Swissair's appointment of Reutlinger.
A further BFr2.7 billion in savings is to come from operational improvements. One immediate goal is to halve unit costs and raise load factors to 57% in Europe and 67% on intercontinental services.
Development of the hub-and-spoke concept will continue at Brussels, but with a tightening of costs and stronger ties forged with new partners Swissair, Delta Airlines and Austrian Airlines. Plans have also been revived to give Sabena a dedicated terminal at Brussels.
Rationalisation of the long-haul fleet will see the phasing out of the carrier's two McDonnell Douglas DC-10s and three Airbus A310s, leaving Sabena with three Boeing 747s and the four Airbus A340s returning from Air France.
One study is looking at transferring the fleet of 23 new Aero International (Regional) RJ85 regional jets - now being acquired by commuter subsidiary Delta Air Transport (DAT), and their crews - to Swissair subsidiary Crossair in Switzerland and having DAT wet-lease them back. This would result in a saving of BFr200 million from lower taxation in Switzerland. DAT is standardising its fleet with 737s and RJ85s.
Sabena Technics, the airline's maintenance subsidiary, will focus on niche work, including Boeing 727 and 737 overhaul, but is likely to lose its wide-body business. Another option under consideration is relocation to a lower cost European country.
Sabena's catering operation is to be integrated with Swissair's fast-expanding Gate Gourmet business, while the declining airfreight operation may also come under the wing of its Swiss partner, unless performance improves.
The overall financial target set by Swissair is to improve Sabena's return on capital to 4% by 1998, rising to 8% by the year 2000.
Source: Flight International
