Colin Baker LONDON
As the merry-go-round at senior management level at SAirGroup continues, attention is turning to the potential cost to the Swiss group if it decides to ditch Sabena and its French airline interests.
A figure of SFr2.5 billion ($1.45 billion) has been mentioned in the Swiss press, and analysts say that although no foundation was provided for this figure, an exit strategy will be expensive. "The question is what will it do to their liquidity," says Chris Avery, analyst at JPMorgan. The group has a 49% share in Belgian flag carrier Sabena, and a similar-sized interest in French regionals AOM, Air Liberte and Air Littoral.
Sabena is already said to be preparing for life after SAir. The chances of attracting new investment are seen as slim. Other measures could see the ending of the carrier's agreement with Virgin Express, which operates on behalf of Sabena to London Heathrow, Barcelona and Rome. This could have dire consequences for Virgin Express.
Meanwhile, there are rumours that Lufthansa is interested in Air Littoral, which would at least provide some much needed cash.
SAir is due to give some indication of its future strategy alongside its financial results in early April, where analysts hope to see moves unlocking shareholder value by splitting up the group. SAir's profitable in-flight catering, hotel and ground handling interests are seen as prime candidates for at least a partial flotation. The financial results, meanwhile, are widely expected to be dire.
SAir has been in turmoil ever since the resignation of chief executive Philippe Bruggisser in January. This was followed by the appointment of former Crossair president Moritz Suter as chief executive of SAirLines, and his resignation six weeks later. Suter's departure was said to be due to differences with members of the SAirGroup board.
Ironically, nine of the 10 board members resigned shortly after, including group chairman Dr Eric Honegger, who along with Bruggisser was associated with the Qualiflyer alliance strategy based around second-tier European carriers. The one remaining member,Dr Mario Corti, replaced Honegger and has assumed day-to-day running of the group. Corti, who was chief financial officer at Swiss food group Nestlé, is widely respected in the financial community. "He is extremely, extremely good," says one analyst.
Meanwhile, speculation over Suter's replacement is rife, although the post is widely seen as a poisoned chalice. Christoph Müller, president of Sabena, is being tipped as favourite and is said to be on good terms with Corti. Recently resigned South African Airways chief executive Coleman Andrews is an outside shot, although he has said he is likely to join a US venture capital firm. Former Air France chairman Christian Blanc is also said to be in the frame.
Following Corti's appointment, some industry observers see the appointment of a senior Swiss industrialist from outside the airline industry as anotherpossibility.
Source: Airline Business
