Sabena successor set up

Angry Sabena workers staged protests

BRUSSELS, Belgium -- Belgian Prime Minister Guy Verhofstadt has announced the formation of a new airline to take over from Sabena, which has been declared bankrupt.

It will be formed from Sabena's subsidiary Delta Air Transport (DAT) and could save around half of the carrier's 12,000 jobs.

Verhofstadt said the government had raised $180 million in private capital from companies and Belgian banks, and from three regional investment companies.

The names of the investors have not been revealed though they do not include Richard Branson's Virgin Express which had been in talks with Sabena on Tuesday.

Belgian media reported that the banks Fortis and KBC and the energy company Electrabel were involved in backing the new carrier

VIDEO As Sabena files for liquidation, employees mark the event with protests. Paula Hancocks reports. (November 7) Play video (QuickTime, Real or Windows Media)   EXTRA INFORMATION Key facts:Sabena    MORE STORIES • Timeline: Europe's airlines in trouble  • Which European airlines will survive?  • Options for stranded air passengers    AUDIO CNN's Paula Hancocks: "Staff bitter towards management" 834 KB / 77 sec WAV sound    QUICKVOTE Should governments bail out failing national airline carriers? Yes No View Results

Verhofstadt also said the Belgian government would have no connection with the new airline.

It had a 50.5 percent stake in Sabena and had come under heavy criticism from staff when its bankruptcy -- the first of a European flag carrier -- was announced on Tuesday night.

They believe the government could have done more to save the company.

The new airline could start flying in the next few days if it wins approval from a court-appointed administrator, a government official said.

The airline to be created from Sabena subsidiary Delta Air Transport (DAT) would need permission from the trustee who would oversee Sabena's assets, Charles D'Arenberg, chief of staff for Public Entreprises Minister Rik Daems, told Reuters.

The Belgian Commercial Court declared Sabena bankrupt on Wednesday, clearing the way for the government to create the airline out of short-haul subsidiary DAT.

Daems told a news conference the new airline would fly European routes, as well as offer two routes to the United States and some to Africa. He added he expected between 5,000-6,000 jobs to be lost from the bankruptcy.

Airline workers mounted angry protests on Wednesday. Around 1,000 groundstaff, technical workers and pilots staff defied orders to stay at home and held mass meetings at Brussels' Zavantem international airport.

CNN's Paula Hancocks said they were bitter at the Sabena management and angry that no members of the Sabena board had turned up to address them.

She said they resented the fact that they had heard they had lost their jobs only in a company memo.

Later the 1,000 workers marched on Belgium's employment ministry.

Hancocks added that television screens at the airport were carrying messages like: "Wanted -- Verhofstadt" showing the anger directed again the Belgian Prime MInister.

"We have lived through a terrible horror movie for a year. The country is down, it's finished with Sabena," passenger services assistant Ronald op de Beeck told Reuters.

Sabena collapsed owing $2.1 billion, a situation worsened by the effects of the terror attacks in the United States on September 11.

Airline staff were shocked and angry

But its fate was sealed by the demise last month of co-parent Swissair, which owns 49.5 percent of its stock.

Swissair, hit by its own cash crunch, failed to come through with a promised injection of $123 million in fresh capital.

Before filing for bankruptcy early Wednesday, Sabena transferred all its 1,000 takeoff and landing slots at Zavantem to subsidiary DAT.

Sabena was using about half of the slots at the airport before flight operations ceased on Wednesday.

Airport officials said DAT would have to use the slots within a month or be forced to return them to the operator.

The decision to file for bankruptcy marked an end to years of restructuring for the carrier and was a blow to Belgian pride at a time when the country holds the European Union's rotating presidency.

"This is an economic and social disaster for Belgium," said Employment Minister Laurette Onkelinx, comparing Sabena's fall with the closure of the coal mines and the collapse of the steel industry in the 1970s and 1980s.

"We cannot escape a debate about responsibility," Onkelinx told RTBF radio, adding: "Despite its signed agreement, Swissair did not respect the terms of the capital injection, which would have saved Sabena."

"It's a very sad day for Belgium," said Filip Van Rossem, of the Belgium Cockpit Association, which represents pilots. "It could all have been avoided if there was a different kind of management."