Swissair-Sabena row defused

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Swissair Group and the Belgian government have reached an agreement over the future of loss-making Belgian carrier Sabena. The two co-owners will pour Eur430m ($367m) into the airline over the next two years, with Swissair providing 60% of the funds. The agreement removes Swissair's previous obligation to increase its shareholding in Sabena from 49.5% to 85%.

Swissair chairman and ceo Mario Corti commented: "With the payments phased over two years, the strain on our cashflow is reduced. This will further stabilise our financial situation and we are looking forward to continuing our successful commercial operation with Sabena."

Belgian minister of telecommunications and public enterprises and participations Rik Daems said: "I am pleased that the agreement we have reached provides Sabena with the necessary funding to execute its business plan 2001-2005. I therefore hold the Sabena management and its Board of Directors to their firm commitment to convert Sabena into a long term profitable company."

The first instalment of funding for Sabena is due in October 2001.