Sabena's push to cut costs has put it on course to break even in 1998 and return to profitability in 1999, says chief executive Paul Reutlinger.
The expected recovery follows record losses of Bfr8.8 billion ($24.6 million) in 1996, caused partly by the Belgian flag carrier's restructuring programme.
Reutlinger expects an improvement in 1997, with losses budgeted at Bfr1 billion. Costs are under control, says the chief executive, at Bfr28.60 per kilometre flown.
Sabena's codeshare agreements with low-cost airlines Virgin Express and VLM have resulted in them taking over some of Sabena's loss-making short-haul routes, a move which has seen costs being reduced and operations returned to profitability. Although the agreement with Virgin Express has allowed Sabena to save Bfr394 million, Reutlinger claims that there are no plans to extend its codesharing policy, enabling good relations to be retained with Sabena pilots' union, ABPNL.
Reutlinger concedes that Sabena is losing high-yield business-class passenger to competition on Virgin Express routes, "-but the numbers lost are made good by an increase in economy-class passengers", he says.
Sabena plans to reduce costs by Bfr4.7 billion by the end of 1998. Of these, Bfr2 billion will come from a reduction in salaries, and another Bfr2.7 billion via more efficient management. Reutlinger is negotiating with the Government to be allowed to pay Sabena pilots in Switzerland, which would reduce local social charges.
Source: Flight International
