EurWORK European Observatory of Working Life

Jobs losses as Sobelair declared bankrupt

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Country: 
Belgium
Author: 
Pierre-François Lovens

Download article in original language : BE0402301NFR.DOC

Sobelair, a Belgian charter airline, was declared bankrupt in January 2004, two years after the failure of the national airline, Sabena, of which it had been a subsidiary. Administrators are attempting to find a serious candidate to take over Sobelair as a going concern, but its 480 employees have been made redundant.

On 19 January 2004, the Brussels Commerce Tribunal (Tribunal de commerce de Bruxelles/Rechtbank van Koophandel te Brussel) declared Sobelair, a charter airline company, bankrupt. The verdict of the Belgian business magazine Trends-Tendances was that: 'Sobelair had everything needed to succeed, but because of amateurish management, this bloodless company has been consigned to the cemetery, which is already overflowing with defunct Belgian airlines.'

On 7 January, the company had filed for an agreement with its creditors (or 'concordat'), a formula under Belgian law which would have allowed Sobelair to protection itself from its creditors while it worked out a restructuring plan. The Brussels Tribunal, however, refused this request, since it considered that the company did not have the necessary funds to be able to carry on its activity over the short term. Two legal administrators were appointed immediately by the Tribunal.

The bankruptcy of Sobelair occurred a little more than two years after that of Sabena, its former parent company (BE0109362N). After 75 years of existence, the disappearance of the national carrier had been a traumatic experience. Having narrowly escaped the Sabena bankruptcy, Sobelair was taken over in June 2002 by Belgian World Airlines (BWA), a company controlled by a Belgian entrepreneur, Aldo Vastapane. Prior to the declaration of bankruptcy, Sobelair had a fleet of 12 aircraft and employed around 480 people, who have now been made redundant. It flew to some 70 destinations in Europe and around the Mediterranean, and also operated services to Africa, Central America and the Caribbean.

Weakened financially (largely because of pay costs which were higher than its competitors), the company had recently attempted to find a buyer. However, negotiations with, amongst others, the Belgian charter airline Birdy and SN Brussels Airlines, the new airline which rose from the ashes of Sabena, failed.

Mr Vastapane, who has been accused of having joined the ranks of 'Belgian aviation gravediggers' by employees, said that he was 'surprised and sad' at Sobelair being declared bankrupt. At the beginning of February 2004, Mr Vastapane and his lawyers were considering lodging an appeal against the Tribunal's bankruptcy ruling, stating: 'We cannot understand why we have been declared bankrupt when we do not owe a penny to anyone and we still have about EUR 2 million in hand.'

The administrators of Sobelair have received several apparently serious offers from potential buyers. According to one of them, Joris De Smet: 'We do not intend making the company fly for four or five months for no reason. Our job is to carry on flying so as to assure a smooth transition with a possible buyer.' Moreover, the air traffic authorities will only agree to extend Sobelair’s flight licence for a few weeks if there is a serious chance of finding a buyer.

Several potential buyers had shown an interest before the bankruptcy decision, including TUI Belgium (Sobelair's biggest customer through the tour operator Jetair, which accounted for 70% of turnover). However, in the turmoil following the Tribunal decision, TUI announced that it was no longer interested in taking over Sobelair, intending to set up its own charter airline in April.

Even before the bankruptcy ruling, Sobelair employees expressed fears that the creditors’ agreement arrangement would be used to sell off the company's fleet. Following the ruling, two of these aeroplanes will serve as security for the payment of the redundancy pay to the workers, who were dismissed on 22 January. The air transport section of the the Public Services Christian Union (Centrale Chrétienne des Services Publics-Transport aérien/Christelijke Centrale van de Openbare Diensten-Luchtvervoer, CCSP-Transport aérien/CCOD-Luchtvervoer) considers that, like Sabena, Sobelair has been the victim of bad management and a conflict of interest between potential buyers, customers, creditors and the owner. 'In this struggle, the interests of the company and its employees played a secondary role. Some 430 workers have been put on the street,' said the CCSP.

The Sobelair bankruptcy will also have consequences for other companies in the Belgian air transport sector. Temporary staff lay-off measures were requested from the beginning of January at BGS, which provides ground services at Brussels airport. In addition, a collective redundancy procedure (BE0311303T) has been entered into at Sabena Technics, which was responsible for the maintenance of the Sobelair aircraft. Nearly 150 jobs are threatened.