Social plan under negotiation at SABENA

In September 2001, management and staff representatives at SABENA have started negotiations on implementing a'business plan' that was approved by the Belgo-Swiss airline's board of directors on 7 August. The plan provides for the loss of 1,400 jobs to enable the company to return to profitability by 2005. The pilots called a 24-hour strike on 6 September.

In September 2001, management and staff representatives at SABENA have started negotiations on implementing the 'business plan' that was approved by the troubled Belgo-Swiss airline's board of directors on 7 August (BE0108359F). In particular, the plan provides for the loss of 1,400 jobs to enable the company to return to profitability by 2005.

'Let's be quite clear about this. We're on the verge of bankruptcy,' the SABENA president and chief executive, Christoph Müller, told the press on 8 August, the day after the 'business plan' was approved by the board of directors. 'If this plan is not put into practice,' he went on, 'we will move straight away to winding the firm up, especially as we can no longer expect any injection of capital from our shareholders.' During the first half of 2001, SABENA posted a loss of BEF 5.6 billion.

As soon as the plan was announced, SABENA staff launched a series of spontaneous industrial actions, including stoppages in various company services and the cancellation of dozens of flights. The 'business plan' will be accompanied by the disposal of several SABENA subsidiaries: catering, handling and maintenance (SABENA Technics); information technology (Atraxis); hotels and charter flights (Sobelair); the Belgian Fuelling and Services Company (BFSC); and the SABENA Flight Academy (SFA). The plan also aims to refocus SABENA activities in Europe and Africa, and several destinations that are not deemed profitable will be dropped; in the long term, SABENA will abandon flights to Tokyo and Washington. The airline intends to concentrate on business clients, and has decided to reduce the size of its fleet and purchase smaller aircraft in future.

Lastly, the recovery plan includes a 'social plan' that is unusually painful, as the fixed objectives include cutting 1,421 (full-time equivalent) jobs, the majority of them among cabin crew, and a 10% productivity increase. Despite Mr Müller's undertaking to avoid any compulsory redundancies, the unions have protested strongly about the perceived inadequacy of SABENA's recapitalisation plan and uncertainties over the 'business plan'. The most vehement response so far has come from the union representing SABENA group pilots, the Belgian Cockpit Association (BeCA). 'Of the BEF 40 billion needed, we're getting only BEF 17 billion for recapitalisation,' said the BeCA vice-president, Joël Gans. 'The remaining BEF 23 billion will have to come from the sale of assets and higher productivity. Half of the plan is therefore based on assumptions that no one can check out.' The pilots are not satisfied with the guarantees they have received from management and, with management refusing to promise to comply with some collective agreements, they called a 24-hour strike on 6 September.

The other trade unions - the Confederation of Christian Trade Unions (Confédération des Syndicats Chrétiens/Algemeen Christelijk Vakverbond, CSC/ACV), the Belgian General Federation of Labour (Fédération Générale du Travail de Belgique/Algemeen Belgisch Vakverbond, FGTB/ABVV) and the Federation of Liberal Trade Unions of Belgium (Centrale Générale des Syndicats Libéraux de Belgique/Algemene Centrale der Liberale Vakbonden van België, CGSLB/ACLVB) - chose not to take part in the strike on the grounds that the consultation and information phase is not yet over. Mr Müller said that he intended to complete negotiations with the unions by the end of September 2001, as this will make it possible to free up the first tranche of capital that has been reinjected into the company.

The principle of this recapitalisation was settled in mid-July when SABENA's two shareholders, the Belgian state (50.5%) and the Swissair Group (49.5%), agreed to inject about EUR 430 million (BEF 17.3 million) into the Belgian company in four tranches over a period of two years; Swissair will contribute 60% (EUR 258 million). In exchange, the Swiss company has secured the annulment of a contract signed on 25 January whereby it agreed to increase its holding in SABENA to 85%. According to Mr Müller, this financial 'oxygen bottle' will make it possible to find half the resources needed to turn SABENA round. The other half (about EUR 500 million) will have to be identified by the 2001-5 'business plan'.