Sabena's future "in doubt"

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The future of loss-making Belgian carrier Sabena was said to be "in doubt" today as the Belgian government rejected a plan from fellow shareholder Swissair Group for a joint contribution of emergency funds. Swissair suggested that the two co-owners provide Sabena with Eu305m ($260.7m) to allow the airline to continue operating. It insisted this deal would discharge Swissair's responsibilities toward Sabena and remove its obligation under an earlier agreement to increase its stake in the carrier to 85%.

The Belgian state, which owns 50.5% of Sabena, is insisting that Swissair honour its prior commitments and has rejected the new proposals. But Swissair Group chairman and ceo Mario Corti commented: "Swissair Group is not willing to finance loss-making airlines indefinitely. Without our plan being accepted, the future of Sabena now looks increasingly in doubt."

Swissair itself has debt problems and underwent sweeping changes to its management earlier this year. The company's retail subsidiary, The Nuance Group, has dismissed rumours it will be sold and insisted it remained core to Swissair's activities.