Sabena files for bankruptcy as Belgian airline's staff walk out

Seventy-eight years of aviation history ground to a chaotic halt yesterday as the Belgian national airline Sabena said it would file for bankruptcy as staff protests left thousands of passengers stranded.

Seventy-eight years of aviation history ground to a chaotic halt yesterday as the Belgian national airline Sabena said it would file for bankruptcy as staff protests left thousands of passengers stranded.

Even before the company's chairman, Fred Chaffart, declared last night that Sabena would go into liquidation, many of its 12,000 employees had walked off the job. A court is today expected to rule on its future. With catering, cleaning, luggage and check-in staff all involved in wildcat strikes, the airline was forced to cancel most of its afternoon flights. There will be no Sabena flights today.

Extra police were drafted into Zaventem airport at Brussels to control the protests, and the airport authority appealed to Sabena travellers to stay away. Those who tried to call the airline were greeted with a recorded message in French and Dutch saying that the office was closed because of industrial action.

The crisis in the aviation industry following 11 September has been felt across Europe and yesterday the Scandinavian airline SAS warned of a full-year loss and said it would cut 13 per cent of its staff. It aims to lay off 2,500 people on top of an earlier plan to cut 800 to 1,100 jobs.

SAS's problems pale into insignificance, however, compared with the plight of Sabena. For the Belgian government, which owns a 50.5 per cent stake, the demise of its flag carrier is a political humiliation. Even before 11 September, which provoked a slump in business for major carriers, Sabena was on the verge of financial ruin.

Rescue plans revolve around the transfer of part of Sabena's assets to Delta Air Transport, one of the airline's subsidiaries which would survive bankruptcy. Sabena's charter offshoot, Sobelair, and its technical department could also escape largely unscathed.

But any revamped airline which emerges will probably axe all long-haul routes and may shed 9,000 workers. Even then, it will need to attract investors, whose reluctance to inject cash was underlined yesterday by the reticence of one potential backer, Virgin Express, which already code-shares with Sabena on some routes.

Virgin Express issued a statement saying it was unhappy with the plans for the creation of a successor airline that "would endanger the future of our personnel". Virgin Express faces the dilemma of waiting for the demise of Sabena before trying to pick up some routes, or negotiate an agreement with the Belgian government.

Meanwhile, the Belgian government's hands are tied both by Belgian legal requirements and by its commitments to the European Commission, which has used internal market rules to excludenew state aid.

Sabena's bankruptcywill be the end of a tradition of Belgian commercial aviation that began in 1923. Although it built up a strong network of routes in Europe and Africa, Sabena suffered from labour unrest and high costs, and accumulated more than 2bn euros (£1.2bn) of debt.

After 11 September Sabena was brought to its knees by the bankruptcy of its co-owner Swissair, which reneged on a deal to inject fresh capital. Simultaneously its revenues have been hit by low-cost rivals.