The lure of valuable slots at Paris/Orly has attracted four potential suitors for troubled Air Liberté after the carrier entered receivership on 26 September. AOM, Air France Europe, TAT and Virgin Express have all expressed interest and reopened the debate about the French government's competition policy.
Saddled with debts of FFr1.5 billion ($290 million), Air Liberté has until March to implement a rescue plan to avoid liquidation after its president, Lotfi Belhassine, called in the receivers. Provisional measures include axing some international and domestic routes and reducing its fleet of A300s, A310s and DC-10s. The unions have agreed to give up two months' salary to raise FFr60 million of the Fr100 million savings required but only 'as a last resort in the context of a realistic rescue plan with strict guarantees for staff', says Christian Liaudet of the pilots' union, SNPL.
AOM, owned by state bank Crédit Lyonnais, may also yet launch a bid if the carrier's chairman, Alexandre Couvelaire, can circumvent state aid restrictions placed on the bank, which received a US$4 billion bail-out last year. He is looking to bid for 51 per cent of the airline, allowing AOM, backed by privately owned Euralair, to take over Air Liberté and its 8 per cent share of slots at Orly.
This move would circumvent demands from British Airways, whose French affiliate TAT is assessing Air Liberté's assets, that the European Commission should block any sale to AOM. BA argues under the current ownership structure this would constitute illegal use of state aid.
BA views the AOM plan as an attempt by French authorities to prevent it from competing from Orly. 'We have an understanding that France wants to keep Orly slots in French hands,' argues one BA official. Previous attempts by TAT to buy AOM were rebuffed but its stance is backed by Bertrand d'Yvoire of Consultair who says 'AOM does not have the financial means nor the rights' to buy Air Liberté. He says TAT is in an 'excellent position' to bid for Air Liberté, with 'the resources and a reason to make the acquisition'.
Air France is not in a position to bid for Air Liberté under the terms of its state aid approval, but its subsidiary Air France Europe can as it is not covered by the Brussels ruling. Unions at Air France Europe are pressing its management to save Air Liberté and its 1,800 jobs. Slots could then be redistributed among other airlines to prevent the carrier from gaining a dominant position, says Jean-Louis Le Barailloc of Air France Europe union Spit. The nationality of any future 'partner' does not concern Belhassine, however, providing they 'guarantee that our jobs and operations continue'.
Virgin Express has also entered the fray as another possible bidder. 'We will be taking a look to see if there is anything there,' says chief executive Jonathan Ornstein.
Meanwhile, BA concluded a deal over the border in Germany with another French airline in early October when Nantes-based Regional Airlines' acquired the turboprop operations of the UK carrier's affiliate Deutsche BA. The French carrier plans to form a German subsidiary, Deutsche Regional Airlines, to operate the network from January 1997 using five Saab 2000s. The BA subsidiary says the routes were 'no longer profitable and not reaching significant critical mass' and intends to focus on its core jet operations.
Lois Jones
Source: Airline Business
