Sabena - Crisis situation requires crisis management

Sabena Board of Directors met on Monday 17 September under the chairmanship of Mr. Fred Chaffart. While the meeting was originally aimed at reviewing the implementation of the Business Plan, the Board Members spent time to evaluate the negative consequences of the terrorist attack on Sabena’s financial situation. A fall of bookings and higher no shows on all routes since last Tuesday let the Board anticipate a major downturn for the whole airline industry. Ch. Müller presented additional measures to secure the future of the company. The Board endorsed them and urged Management and employee representatives to implement them.

Sabena Management expects that the demand for the whole Airline Industry in the months to come will be significantly lower than planned. The Business Plan already anticipated some cuts in capacity with the closure of Washington and Tokyo routes as of winter season 2001. Nevertheless further flight cancellations on the North Atlantic will have to be considered after the booking situation for the months to come has stabilised. Also bookings in Europe are expected to be lower than foreseen. And further developments of US dollar/EURO exchange rate, fuel price and insurance premiums might affect the financial impact of Sabena.

According to Airline specialists the whole airline industry will suffer a lot from the events of last week coming on top of an economic downturn. In view of the gravity of the situation, the Board is urging Sabena Management and employee representatives to implement immediately the Business Plan.

F. Chaffart summarises the conclusions of the debate within the Board as follows: "Without a full and immediate implementation of the Business Plan the Company will not survive until the end of the year, even with the recapitalisation and additional cuts. More than ever the future of the Company is at stake.’

Preparation of the Extraordinary General Assembly of Shareholders

The Board approved the agenda and the reports for the Extraordinary General Assembly of Shareholders on Tuesday October 3rd. Sabena’s two main shareholders will be invited to subscribe to the first part of the Business Plan funding. The expected equity funding amounts to 220 mio EUR.

At the occasion of this General Assembly the shareholders will be invited to approve a revision of the articles of Sabena bylaws which define the composition of the Board of Directors. This revision includes the designation of one additional Board member, upon joint proposal of the two main shareholders, next to the Chairman. The aim is that both the Chairman and the Managing Director will be, after approval by the shareholders meeting, designated upon joint proposal of the Belgian State and Swissair.