|
SAirGroup racks up loss
|
 |
April 2, 2001: 8:55 a.m. ET
Swiss airline group posts worst loss in its history; rethinks strategy
|
LONDON (CNN) - SAirGroup, parent of flag-carrier Swissair, said on Monday it amassed huge losses in 2000 from unprofitable investments in regional airlines.
The Zurich, Switzerland-based company made a net loss of 2.9 billion Swiss francs ($1.7 billion), or 235.7 francs a share, from a profit of 273 million francs, or 24.52 francs a share, a year ago.
 The loss was far bigger than the 2.5 billion francs analysts had penciled in.
The Swiss company, which ejected its chief executive and chairman on January 23, now plans to offload stakes in the various international airlines, reversing an expansionist policy. It will also sell its hotel business.
The company had planned to build an airline alliance, called Qualiflyer, around Swissair through the acquisition of stakes in regional carriers. That policy proved to be costly as losses soared.
SAirGroup said the 2000 loss was the "worst year in the history" of the group. The company also blamed rising fuel cost for exacerbating its losses.
"The group has stretched its financial and managerial resources to the limit," Chairman and Chief Executive Mario Corti, the former Nestle finance director appointed on March 16, said.
Shares in SAirGroup, which have fallen more than 31 percent this year, were suspended in Zurich. The stock fell 8.3 percent on Friday.
"The group intends to realign its overall business strategy to lay a sound foundation on which to substantially enhance its revenue and earnings performance," the company said.
Belgian airline Sabena, in which SAirGroup has a 49.9 percent stake, made a loss of  325 million ($286 million). The future of the airline will be decided in the next few months, the company said.
Among other holdings, French airlines AOM, Air Liberte and Air Littoral made a combined loss of 600 million Swiss francs, before unspecified restructuring costs and value adjustments.
SAir said the three airlines were draining of 80 million francs a month and it would stop funding Air Littoral immediately. The fate of the other two will be decided by April 25.
LOT Polish Airlines and South African Airways made a profit, SAirGroup said.
Germany's LTU Group, which made a loss of 224 million, is expected to breakeven by 2003. The group also signed a memorandum of understanding with a new investor for its 49 percent stake in Volare of Italy. 
|
|
|
|
|
 |
|
