THE HINDU BUSINESS LINE
Financial Daily
from THE HINDU group of publications

Saturday, August 11, 2001

• AGRI-BUSINESS
• CORPORATE
• FEATURES
• INDUSTRY
• MACRO ECONOMY
• MARKETS
• NEWS
• OPINION
• VARIETY
• INFO-TECH
• CATALYST
• INVESTMENT WORLD
• MONEY & BANKING
• LOGISTICS

• PAGE ONE
• INDEX
• HOME

News | Next | Prev


Sabena to continue Chennai flights

Our Bureau

CHENNAI, Aug. 10

SABENA, the Belgian airline will maintain its tri-weekly services to Chennai, its only destination in India.

This announcement comes in the wake of market speculation that the airline, which was going through a major restructuring process, would be pulling out of India.

Mr Manuel Staerkle, Manager, Sabena, told newspersons that as a part of the new business plan some hard decisions had to be taken, resulting in the withdrawal of services from certain non-profitable routes. Effective winter 2001 services to Tokyo and Was hington will be discontinued, he said.

Mr Staerkle said the airline would be introducing A-330 on all its routes and this aircraft would be used on the Chennai-Brussels sector also. The airline now flies three times a week to Chennai and would like to increase the frequency to at least five t imes a week, he said. The airline is in the process of initiating talks with Air India on this issue.

Over 80 per cent of the passengers flying Sabena are US-bound. Mr Staerkle said that Sabena offered some good connections to the US and to European destinations.

The Swissair group has shelved its plans to become a majority shareholder in Sabena and will continue to retain a minority shareholding of 49.5 per cent. The Belgian Government will remain the major shareholder in Sabena.

Mr Staerkle said the market environment in which Sabena is operating has changed drastically over the last months. The economic downturn, the over capacity in the market, the increasing competition leading to a reduction in yield, higher fuel prices and the unfavourable US dollar exchange rate has forced the airline management to revise its earlier strategy entirely.

The earlier strategy was on to renewing and expanding its fleet, in the framework of the partnership with Swissair. This programme appears unaffordable today. The Brussels home market can hardly absorb on the short term, the large capacity increase. More importantly, traffic growth has come from low yield passengers (transit passengers in the Economy class). The price paid by these passengers does not cover the direct operating costs. This is the reason that the new strategy will focus on a fleet which is better adapted to the market needs.

The new plan also calls for downsizing at least 1,600 positions. Mr Staerkle said that there would no lay-offs in India, and in fact, the airline was planning on expanding its sales and marketing activities here.

Disinvestment is under evaluation for catering, cargo handling, hotels, IT services, Sobelair, the Belgian Fuelling and Services Company and the Sabena Flight Academy.

Related links:
30 pc drop in traffic from Chennai -- Airlines offer `schemes' to make up numbers
Airlines baiting foreign-bound pupils

Comment on this article to BLFeedback@thehindu.co.in

Send this article to Friends by E-Mail


Next: SEBI for restrictions on promotion of NBFCs
Prev: Canada 3000 pact with IA for airport handling
News

Agri-Business | Corporate | Features | Industry | Macro Economy | Markets | News | Opinion | Variety | Info-Tech | Catalyst | Investment World | Money & Banking | Logistics |

Page One | Index | Home


Copyright © 2001 The Hindu Business Line.

Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line.