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The Birth of Commercial Air Transport in Belgium (1919-1923)

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Introduction 1   TOP

Together with the Dutch KLM, Belgium's airline company Sabena (Société Anonyme Belge d'Exploitation de la Navigation Aérienne) looks back on a history spanning more than three quarters of a century. It was founded in 1923 and has been in operation ever since, without having changed its name. Very few of the world's airline companies can boast such a past. In most other West- European countries - Great Britain, France, Germany, Italy, etc. - commercial aviation's business history is a far more complex matter 2. Since the end of the First World War, many airline companies were founded in these countries, almost all of them having disappeared since. Indeed, several mergers and some restructuring were necessary to create a viable entrepreneurial framework. In contrast, in both Belgium and The Netherlands, a stable business structure emerged from the outset. In Belgium, "Sabena" and "commercial air transport" are almost synonymous, at least until recently. Clearly, these peculiarities need to be explained.
Both the relationship between private initiative and State action and the tension between competition and monopoly are key elements in this problem. Looking at the Belgian case 3, we will focus on precisely these aspects. How prominent were private interests in the development of Belgian commercial air transport? What was the precise nature of these interests? Which economic sectors did they represent and how did they behave? How and why did public authorities enter this field? Did the State act on its own initiative, or did it merely react to situations arising outside its reach? How precisely did private interests and public authorities come to interact, if ever they did? What were the economic and financial results of these early initiatives? These questions are not specific to Belgium. But by examining the Belgian evolution from this
general point of view, we hope to produce some evidence for a comparative study of the origins of commercial air transport in the Western world. The study of small countries like Belgium is indeed relevant, for a restrictive focus on large nations as the US, Great Britain, France, or Germany fails to reveal the whole story, regardless of their relative importance. It is not just a matter of completing a large puzzle by adding just one little piece, for historical knowledge is essentially about grasping processes, not accumulating facts. And mere size tells us little about the qualitative importance of the mechanisms at work. This consideration makes it all the more regrettable that Belgian commercial aviation history has not yet been the object of one single scientific study 4.

The Origins of Aviation in Belgium (1908-1918)  TOP

With a few exceptions (e.g. the development of the helicopter 5), Belgium's contribution to the creation of aeronautics is not particularly outstanding. Belgian aviation propagandists often complained that their country was lagging behind some of its neighbours. "La Belgique semble trop rester spectatrice, alors qu'elle devrait, de par son traditionnel esprit d'initiative (...) passer au rang de créatrice" 6. The first successful powered flight in this country was completed by a foreign pioneer, Henry Farman (in Ghent, on 30 May 1908) 7, although several Belgians also took to the air soon thereafter. By June 1914, about one hundred Belgians had obtained an official pilot's license, flying individually or in meetings and contests. Some of them even established a few of the numerous records and premières so typical of these early years of aviation. Many Belgians also constructed their own aeroplanes. According to a recent estimate, more than one hundred Belgians built original aircraft 8. But none of these machines ever went into serial production, so that in pre-war Belgium, aircraft production remained a craftsmanlike inventor's activity. In 1912, the President of the recently founded Chambre Syndicale des Locomotions Aériennes, Albert Vleminckx, denounced "la stagnation de l'effort belge dans la poussée de (cette) industrie nouvelle". According to him, this was because of the lack of support by private capital and public authorities. "C'est dans l'indifférence du capital, des pouvoirs publics et des autorités militaires qu'il faut chercher la cause de l'impuissance de l'effort belge en matière de construction aéronautique" 9.
"L'indifférence du capital" : this is an interesting diagnosis. Indeed, before World War I, Belgian big business seemed uninterested by the nascent aeronautics. As we shall see, things were to be entirely different once the war was over. Both public authorities and the army, for their part, were not completely absent from the aeronautical scene. In 1910, the Belgian army showed the first signs of interest for aeronautics. The following year, a military flying school was created and in 1913 a "Compagnie des Aviateurs" was organized by Royal Decree. In 1914, it was equipped with 27 Farman planes, flown by 43 military pilots. Yet another sign of official interest in aeronautics is worth mentioning, given its importance for later developments in Belgian commercial air transport. Early on, Belgian authorities wanted to develop aviation in their colony, the Congo. By Royal Decree of 25 February 1911 , a commission was established by the Ministry of Colonies to study the possibilities of using the aeroplane in the extensive Belgian territories in Central Africa 10. Belgium's young King Albert I, always very interested in the latest technological developments, supported and possibly even inspired these plans. After some preliminary studies, the commission concluded that hydroplanes would best be suited to the difficult tropical conditions 11. A first experiment was to be undertaken from Léopoldville (now Kinshasa), up the Congo river. While the plan was not put into practice before World War I, it was harbinger of things to come, as we shall see 12.
Just as in most other countries, the First World War boosted Belgian interest in aviation. From August 1914 to the end of 1918, Belgium was almost completely occupied by German forces. The Belgian army continued fighting alongside the Allies, holding on to the few square kilometres of national soil that had not been invaded. The Belgians produced a considerable military effort, not least in aeronautics. To give but one example : in 1917, the Belgian Air Force 13 consisted of 139 aeroplanes (up from 27 on the eve of war) 14. But contrary to the other belligerent countries, the German occupation precluded the development of a Belgian aeronautical industry. However, a small Belgian enterprise constructing aeroplanes called "Jéro", run by the Antwerp brothers Bollekens, had established itself behind the front line, in French territory. It produced, under license, a few dozen Farman aeroplanes for the Belgian Air Force. For reasons remaining unclear, the technical services of the Aviation Militaire decided in 1917 to build and repair the military aeroplanes themselves, breaking the contract that existed between the Belgian State and this factory. Consequently, Jéro was forced to close down, leaving Belgium with almost no aeronautical construction plant. Some critics asserted that the head of these technical services, commander Georges Nélis (also the first licensed military pilot in Belgium), had taken this decision to eliminate a possible future rival, because he himself wanted to become the head of an aviation construction plant. Future research may throw some light on this episode, which is definitely more than anecdotal, given the role Nélis was to play in post-war aeronautical developments. We will come back to this later 15.
Finally, significant developments also took place in the Congo, where the Belgians had used hydroplanes on Lake Tanganyika during the military campaigns against the German troops in Central and East Africa 16. When commander Albert De Bueger and Lieutenant Tony Orta returned to the Belgian front after their successful African operations with hydroplanes, "(...) le Roi Albert se fit remettre un rapport sur les possibilités d'une aviation commerciale au Congo" 17. As we shall see, this wartime African experiment stimulated Belgium's growing interest for the use of aviation in the colony.
In Belgium, as in other countries, the war's legacy was of paramount importance for aviation. The Belgian army disposed of a huge stock of flying machines, including many captured German aeroplanes, and aeronautical ground infrastructure had been expanded by the military efforts. Many enterprising young men, demobilized Air Force pilots and technicians, were looking for job opportunities. National feelings were invigorated both in political and economic circles, for Belgian interests had to be defended in all fields and at any cost. Finally, more than ever, the country's existence seemed to depend on the maintenance of a strong military apparatus, with a prominent role for aviation, the "weapon of the future". This was repeated time and again in Parliament. Such a context paved the way for initiatives with a view to creating a commercial aviation in Belgium.

Private Capital Takes an Initiative : SNETA (1919) TOP

Popular histories of Belgian aviation always recount the same romanticized story. In 1919, a young, talented and "visionary" officer, Georges Nélis (1886- 1929) - the same Nélis mentioned earlier - published a brochure advocating the creation of a national civil aeronautical business in Belgium 18. His plea was successful in convincing some patriots to make his plans into reality, or so the story goes 19. In fact, the truth is both more complicated and less romantic. Some high-ranking personalities did not have to wait for Nélis' booklet in order to consider the commercial use of aviation, and these personalities had one thing in common - their involvement in colonial affairs. Indeed, one of these prominent figures was none other than King Albert I himself. In Belgian political life, the king's role is quite limited. But throughout the 19th century, the successive sovereigns had taken some personal initiatives in matters such as foreign affairs, without being backed by their ministers. Some of these initiatives were of far-reaching importance. In 1885 Leopold II, Albert's predecessor, had created a "personal" colonial empire in the Congo. After the takeover of his Congo Free State by the Belgian State in 1908, the kings maintained a tradition of strong personal involvement in colonial affairs. The creation of a "Fonds Special" must be seen in this context. It consisted of financial means, put at the King's disposal as a compensation for handing over his African possessions. He could draw on this fund to finance projects that would enhance the economic and social well-being of the colony 20. King Albert used this fund, amongst other purposes, to develop aviation in the Belgian Congo (other financial means of the Fonds Spécial had, for example, been used to help the catholic missions). Prior military applications of aviation in East Central Africa had convinced him that this new technology could be useful in the colony. A Royal Decree of 26 June 1919 created CENAC, the "Comité d'Etudes pour la Navigation Aérienne au Congo", financed by the Fonds Spécial. Its task was to experiment with the possibilities of commercial air transport in the colony 21. But CENAC did not undertake this task alone. To do so, it concluded an agreement with a recently founded private society, SNETA.
This brings us to the other high-ranking personalities interested in commercial aviation - the fine fleur of Belgian banking. To fully understand the significance of this, we have to go into the specific characteristics of the Belgian banking system 22. In this country, banks were of a mixed type. Next to collecting deposits, they had also developed strong ties with industrial and service enterprises, by granting investment credit and by managing huge share portfolios. The banking system, led by institutions such as the Société Générale de Belgique (SGB) and the Banque de Bruxelles, had become the backbone of the Belgian economy, controlling the country's main industrial and commercial sectors. The banks had even more influence in the Congo. Large-scale mining and agriculture, as well as transportation networks, were in the hands of a few colonial holding societies belonging to Belgium's top financial groups. These private companies had developed a special relationship with public authorities and the colonial state strongly supported these teeming economic activities. It did so in many ways, by granting subsidies, guaranteeing interests, and buying shares in many important enterprises. Indeed, in some cases the State was a majority shareholder, but even then, management activities remained in the hands of representatives of the private (minority) shareholders, most notably the Société Générale, the powerful mixed bank which had created an impressive economic empire in the Congo. As we shall see, this system was to inspire the promoters of commercial air transport. Even before the end of the war, in August 1918, Robert Thy s and Nicolas Cito, two leading figures of the group of the Banque d'Outremer, a bank specialized in overseas and colonial business, set up a plan to develop aeronautical activities in the colony 23. As soon as peace was established, the Banque d'Outremer took the initiative on 25 March 1919 by creating a "Syndicat National pour l'Etude des Transports Aériens" (sneta), together with the main Belgian banks. A few months later, on 11 November 1919, this syndicate was transformed into a société anonyme (limited liability company) for legal reasons (concluding conventions with other companies and with public authorities made it necessary to adopt a juridical personality). Le SNETA thus became la SNETA ("Société Nationale pour l'Etude des Transports Aériens"), with a capital of 735,000 BEF (in the following pages, we will be using either the term "Syndicat" or "Société", according to the period in which the mentioned facts are taking place: before or after 11 November 1919). When the latter was founded, the four main Belgian banks, the Banque d'Outremer, the Société Générale, the Banque de Bruxelles and the Banque de Paris et des Pays-Bas, each took 200 of the 1,470 shares, worth 500 BEF each. The remaining 670 shares were divided between six smaller banks (amongst them those of the private bankers Philippson and Lambert), the colonial holding CCCI (cf. footnote 23) and three private individuals 24. This capital was raised several times afterwards (in 1923, it amounted to 7,000,000 BEF) 25, but always with a similar share distribution pattern. After the take-over of the Banque d'Outremer by the SGB in 1928, the influence of this latter company was of course enhanced. SNETA's leading figure was Albert Marchai (1879-1963), a former army officer who had served in the Congo Free State, before becoming an engineer and obtaining high positions in the Banque d'Outremer (1919) and in several other important colonial societies. SNETA was subject to some criticism, most notably by the King and some (unnamed) high-ranking officials. They criticized the fact that only a few big banks were involved in the initiative. The enterprise defended itself by stressing that it was not bent on immediate profit. "Dans ces conditions, il a été jugé nécessaire d'écarter les participants qui auraient cru voir dans la création du Syndicat un placement de fonds et de limiter les participations aux principales banques du Pays" 26, so the argument ran : a surprising, almost altruistic attitude, quite unusual for banking institutions. Moreover, SNETA promised that (possible) future aeronautical companies would really be open to every investor. Nevertheless, it reorganized its statutes in such a way that other personalities or groups interested in the development of commercial air business could also join the enterprise. "M. Nélis, se faisant l'écho des objections dans l'entourage du Roi et dans certains milieux officiels au caractère trop exclusivement financier du Syndicat, demande qu'il soit donné à celui-ci, par son acte constitutif, un caractère plus général et plus nettement national en admettant le principe de participations nouvelles par augmentation de capital, et en faisant apparaître plus clairement le caractère désintéressé du concours financier des fondateurs et du but poursuivi par l'oeuvre" 27. After this, some private individuals entered the SNETA capital (most notably Jules de Laminne, whom we will meet soon, and Adhémar de la Hault, an active propagandist of aeronautics in Belgium and director of Belgium's leading aeronautical journal, La Conquête de l'Air), but the enterprise remained predominantly a bankers' affair. Please note that Nélis (author of the above mentioned brochure), while still in the army, was already on SNETA's payroll, and this right from its start. He was to become SNETA's and Sabena's director. Nevertheless, he certainly wasn't the initiator or the leading man of sneta, as popular histories assert. During the war, Nélis had had contacts with the King, who had encouraged him to develop his ideas on the development of post-war aviation in Belgium 28.

Once it officially addressed itself to the Prime Minister, the recently founded enterprise did its best to forestall the criticism it had been subjected to. It pointed out that important national interests were at stake and it stressed its own disinterestedness. Belgium could not be left out of the nascent air transport business, and only a powerful group such as the present one was able to produce sound results, so the SNETA stated. "Le Syndicat ne poursuit pas un but de lucre. Il représente les Banques les plus importantes du pays qui considèrent unanimement que la Belgique doit se réserver l'exploitation de son domaine aérien tant dans la métropole que dans la colonie (...). C'est vous dire, Monsieur le Premier Ministre, que les promoteurs désirent donner à leur oeuvre un caractère nettement national et, à ce titre, sollicitent l'appui moral du Gouvernement et du Roi" 29. As its name indicated, the enterprise's mission was to "study" the possibilities of commercial air transport, aeroplane construction and other aeronautical applications (e.g. aerial photography). In a later stage, SNETA could create one or more companies dealing with such lucrative aeronautical activities. But was "studying" to be a purely theoretical activity, or was it to imply some kind of practical experiment (SNETA's statutes mentioned "(des) études, comportant au besoin (my emphasis) des essais industriels de toutes espèces")? Leading SNETA personalities noticed that other individuals or companies were already planning commercial applications of aeronautics (see below). In their opinion, "le Syndicat devrait le plus tôt possible faire preuve d'une activité réelle en effectuant des essais industriels (...) ou tout au moins en s 'intéressant dans les essais tentés par d'autres" 30. So sneta immediately took concrete steps in three different directions : the creation of a national aeronautical construction industry; the organization of air transport in the Congo; and the organization of commercial air services in Belgium itself. But for all these projects, SNETA needed far more than the mere "moral" support mentioned in its letter to the Prime Minister. Some kind of more tangible public aid was in fact indispensable, as we will now see.

SNETA and Aeronautical Construction  TOP

Let us first turn to the aeronautical construction project. At first sight, this might appear peripheral to our subject, air transport. Nevertheless, this aspect cannot be ignored, because it was an essential part of the banks' global strategy. SNETA's patrons wanted to create a group of interdependent aeronautical enterprises, fully controlled by them, and with no competitors. Unfortunately for them, a potential competitor was appearing even before SNETA could initiate its own plans. Baron Fernand de Macar, offspring of a prestigious family which had been in industrial and financial big business for generations, was planning to create a "Société Générale Aéronautique" (which also appears to have been interested in airline services). Baron de Macar's plans were supported by Fernand Jacobs, president of the Aéro-Club de Belgique, Belgium's national aeronautical propaganda association, and, more important, by an influential politician, the former (and future) Catholic Prime Minister Charles de Broqueville. The SNETA bosses did their best "pour faire échouer les demandes de Mr. de Macar" 31. They pointed out to the government that de
Macar's ties with "foreign interests" (he was also a representative of Farman) were incompatible with the management of an enterprise in a modern sector of such strategic and national importance as aeronautics. All foreign influence had to be excluded, they argued. Fernand de Macar himself could be convinced of dropping his plans. Instead, he accepted a high office in the "national" enterprise SNETA was about to create 32. After having "bribed" this potential competitor, SNETA could realize its plans.
To do so, the support of the authorities was indispensable. Negotiations took place in the beginning of 1920. In March of that year, the Ministry of Defence officially recognized "le but d'utilité nationale" pursued by SNETA and its projected daughter enterprise. In September 1920 a convention was signed between both parties. For a period of five years, the Belgian Air Force would entrust this enterprise with a certain minimum amount of aircraft maintenance and orders. In sneta's opinion, it was impossible to set up this business without such a guarantee. Consequently, the "Société Anonyme Belge de Constructions Aéronautiques" (SABCA) was created on 16 December 1920. Three of the five million bef capital belonged to SNETA. Steps were taken to maintain this new enterprise in Belgian hands 33. In the 1920s, SABCA was the only important aircraft construction company in Belgium, apart from several craftsmanlike enterprises. It mainly built foreign machines under license, but did hardly anything to create an original Belgian aeroplane.
Both the State's exclusivity contract with SABCA and this company's policy met with severe criticism. Some years later, in 1922, SNETA could congratulate itself on "l'amélioration de l'opinion et de l'attitude des milieux gouvernementaux et militaires à l'endroit des conventions intervenues entre l'Etat et la SABCA" 34. But displeasure nevertheless persisted concerning the quality and price of SABCA's products. Indeed, the firm's privileged position was even repeatedly attacked in Parliament. In the early 1930s, the Ministry of Defence finally decided to sever its close links with SABCA, and bought new military aeroplanes from the British constructor Fairey, which promptly built a construction plant in Belgium, thereby severely damaging SABCA's near-monopoly situation. The latter company faced a heavy crisis and was nearly shut down, though it nevertheless survives to this day, even if its original masters have long since changed. All this, of course, belongs to the history of the Belgian aeronautical industry, which we cannot examine here. But it had to be mentioned because SABCA was to play an important part in Sabena's early history, as we shall see.

SNETA and the Origins of Commercial Air Transport in the Congo TOP

The second focus of SNETA's development strategy was directed on the Congo. The Minister of Colonies, Louis Franck, however, was not very enthusiastic about this approach. He had declared that "à première vue (...) le transport aérien au Congo n'est que d'un intérêt relatif' 35. But we already know that Albert I was an ardent supporter of colonial aviation. In fact, his interest in the matter even antedated SNETA's creation. His objections to the enterprise's exclusively financial composition was one of the reasons why it immediately had changed its statutes (cf. supra). This could pave the way for an agreement with the King's "Fonds Spécial". The latter could become one of the Syndicate's participants; a representative of the sovereign could even join SNETA's managing board. But this project did not work out. "Le Roi désirerait faire un accord immédiat avec le Syndicat étant entendu toutefois que les essais faits avec le Fonds Spécial du Roi constitueraient un département distinct de l'activité du Syndicat et que Sa Majesté en conserverait la direction et le bénéfice moral". SNETA's reaction to this was clearly negative : "Le projet (...) laissant au Fonds Spécial du Roi l'entière direction des essais et exigeant une forte majorité dans la future société qui serait fondée est jugée inacceptable" 36. This private enterprise would of course be glad to enjoy the Fund's support in order to finance some costly aviation experiments in the colony, but it could not accept the status of minority partner, certainly not in the future business. The King thereupon decided to create the already-mentioned CENAC, which was entrusted to Colonel Roland Van Crombrugge, the commander of the Air Force (who was to become the head of the newly created Civil Aeronautics Administration in December 1919 and, later still, one of Sabena's leading figures). But further negotiations led to an agreement on 14 August 1919 and a convention on 9 April 1920, concluded between CENAC and SNETA 37. The latter was to become the "entrepreneur", the executive agent of CENAC's aviation trials in the Congo. With the exception of some personnel charges, all its expenses were to be paid by the CENAC (itself financed by the Fonds Spécial), but SNETA was not be to remunerated for its services as such. Its only "profit" would consist of the aeronautical know-how (both technical and financial) resulting from these experiments. Moreover, it would take part in the foundation of the definitive commercial enterprise that might be created afterwards.
CENAC and King Albert drew on the conclusions of the 1911 commission (see above); i.e. the extensive Congolese waterways seemed to offer the best support for the development of aviation in the colony. So it charged SNETA with the organization of an airline between Léopoldville (now Kinshasa) and Stanleyville (now Kisangani) along the Congo river (1750 km). This mission was far from easy. 12 Lévy-Lepen hydroplanes, bought from French military stocks, were placed at SNETA's disposal. But these aeroplanes were defective and had to be repaired first. Ground infrastructure had to be built all along the river. The transport of parts, building materials and of the aeroplanes themselves met with many problems. Few specialized people were willing to work in such difficult (and badly paid) conditions (in May 1920 SNETA's personnel in the Congo even went on strike, claiming better wages). On 13 May 1921, an accident took the life of two pilots and a flight engineer. Bureaucratic problems could not be avoided either, e.g. it took a long time to conclude an agreement with the colonial administration concerning the air mail tariffs 38. SNETA complained of the slowness of official services. Because of all this, it was not paid on time, which further endangered the experiment's continuation. SNETA addressed itself to CENAC in unambiguous terms : "(...) il ne saurait être question que la SNETA engage la moindre partie de ses trop faibles moyens dans des essais au Congo" 39. But finally, after some test flights on 9 and 22 February 1920, the first section (Kinshasa-N'Gombe) was officially flown in on 1 April 1920 (seven months after the mission's departure from Europe). It nevertheless took several additional months (and more incidents) to complete the first Congolese airline. The last section, Lisala-Stanleyville, was only inaugurated on 1 July 1921 40.
This air service, named the "Ligne Aérienne Roi Albert" (LARA), was something of a première in aviation history. It was the first colonial airline exploited on a regular and commercial basis, and indeed one of the first regular air transport operations in the world. Belgian national feelings were of course flattered : "L'initiative est jusqu'ores unique sur le vaste continent africain et le mérite d'avoir réalisé la première ligne régulière de transport par avions dans les tropiques revient à la Belgique et fait honneur au Roi" 41. LARA was often presented as a success 42. Travel between Léopoldville and Stanleyville normally took eighteen days; the aeroplane could do this in "only" three days (15 hours of flight). Two monthly flights were organized in each direction. By June 1922 LARA (operated by a staff of 30 Europeans and 275 Congolese), had flown for about 1000 hours, carrying 95 passengers and over 2000 kg of mail. But reality was not all that bright. Various incidents upset the airline's regularity. Moreover, the experiment had cost a lot of money. Originally, expenses had been estimated at 2 million BEF, but by the end of 1921, they had already risen to more than 4,4 million. Moreover, this try-out period had proven decisively that income (especially that resulting from official mail transport) would be utterly insufficient to cover costs 43. Colonial aviation was definitely unthinkable without important public subsidies. Finally, it was soon recognized that CENAC's basic choice - airways had to follow waterways -, was not viable. Technically, the hydroplanes caused a lot of problems 44 and economically, it was rather absurd to establish an air connection between cities already linked by the relatively easy river transport, where the saving of time was not a vital factor. The Ministry of Colonies admitted that maintaining this air service "ne se justifie ni politiquement ni commercialement". It was better to abandon it altogether, its main task - "trying things out" - having been fulfilled. "La Ligne a prouvé que l'aviation est possible dans la Colonie et n'y présente pas de difficultés plus grandes que celles rencontrées dans les pays d'Europe" 45. The King himself admitted that his first idea had been a wrong one 46. LARA was wound up in June 1922 and CENAC was dissolved the next year.
SNETA itself was in favour of abandoning the experiment. "Il serait absolument onéreux de continuer l'exploitation sur les bases actuelles avec un matériel usé et un personnel incertain de l'avenir", it wrote in January 1922 47. For months already, this private enterprise had something else in mind. It wanted to fly on different routes, and on a different basis. Many big colonial enterprises had their business in the Kasaï and the Katanga provinces. They had asked for an airline service between Léopoldville or Boma (at that time still the capital of the Belgian Congo) and these economically important regions 48. SNETA, being an expression of the same interest groups, was in favour of such a link. It also wanted to change the terms on which the first colonial airline had been operated. LARA was the product of a complex public initiative. The King's Fonds Spécial had entrusted an official commission (CENAC) with a mission, which had been executed by a private company, that had not even been paid. Even before completing the LARA route, SNETA had produced the blueprint for a definitive air transport company in the Congo. It had submitted this plan to the Minister of Colonies, with the agreement of CENAC's president Colonel Van Crombrugge (who, as we saw, was to become a leading figure of Sabena some years later ...).
SNETA proposed the creation of a "Société Africaine de Navigation Aérienne" (SANA) 49. This company would obtain a monopoly on air transport in the colony for thirty years. It is not clear whether or not public authorities would participate in SANA. While one document does not mention the issue, another one clearly states that the Fonds Spécial (or the Colony itself) would receive a certain number of shares, as a compensation for transferring aeroplanes, technical materials, etc., to the new company. In any case, private capital would retain majority control, as SNETA committed itself to acquiring at least 51 % of the shares. Moreover, guarantees were provided to keep SANA in Belgian hands (for instance by introducing ministerial approval to the sale or transfer of shares). Once again, economic nationalism had a powerful influence in air transport decision making. Finally, SANA would be granted important public subsidies. During the first ten years, a complex State premium system would cover any deficits incurred in the operation. These subsidies would also guarantee a six percent interest to the shareholders.
At that stage, it seemed as if commercial aviation in Congo would be entrusted to a specific enterprise, dominated by private capital, and subsidized by the authorities. But things turned out differently. Negotiations with the Minister of Colonies dragged on for months. The latter still displayed no enthusiasm for commercial aviation in the Congo ("(il) n'envisage l'utilisation de l'aviation au Congo qu'au point de vue militaire") and could not accept an interest guarantee to private shareholders by the Colony. Moreover, he wished to set a fixed subsidy, which could not be exceeded 50. In the end, these discussions were discontinued. A separate "Congolese" air transport company was just not feasible. But in the meantime, air transport operations had developed in Belgium itself. There also, SNETA was looking for an agreement with the State. Therefore, the Congolese project had to be integrated into the Belgian one.

SNETA and the Birth of Commercial Airlines in Belgium  TOP

Immediately after the war, non-military applications of aviation developed quite rapidly. Official mail was already transported daily to Paris and to Bochum by the Belgian Air Force51. But regular, commercial air links between the main European capitals were soon to come. J.B. Richard (the Handley Page representative in Belgium) and Jules de Laminne (who did the same job for Farman, and was, moreover, a prestigious individual, being one of Belgium's aviation pioneers 52), had already been in contact with the Belgian government, asking for an authorisation to organize commercial air services in Belgium through the companies they represented 53. Another (unnamed) Belgian intended to create a Dutch-Belgian enterprise exploiting a commercial air service between Brussels and The Netherlands 54. On 12 February 1919 (even before SNETA's creation), a Farman Goliath made a first, occasional flight between Paris and Brussels, carrying a few passengers, amongst them several journalists and Jules de Laminne, the Belgian Farman representative we just mentioned 55. The British proposal aimed at establishing a commercial air service between London and Brussels. By Royal Decree of 11 March 1919 (two weeks before the official creation of SNETA), Belgian authorities had established a Comité Consultatif de l'Aéronautique, "chargé de toutes les questions générales se rapportant à la navigation aérienne dans ses applications civiles et aux relations de celle-ci avec les applications militaires" 56. The British proposal was examined by this commission (headed by the omnipresent Colonel Van Crombrugge) ... which rejected it : "(...) le Comité (...) n'est pas d'avis de donner des autorisations même provisoires à des firmes anglaises pour établir des lignes régulières entre la Belgique et l'Angleterre dans la crainte qu'on ne consacre en leur faveur un privilège dont elles pourraient se prévaloir dans la suite, et qui serait contraire aux intérêts de nos nationaux" 57.
In other words : Belgian officials were advocating aeronautical protectionism. SNETA, which had been created meanwhile, certainly had something to do about this attitude. We saw that this private company was afraid that others would take the lead; therefore, it wanted to undertake its own experiments as soon as possible. This could not be done without State support. In internal preliminary studies and, afterwards, in effective negotiations with public authorities, the enterprise asked for an option on the Air Force's unused stocks of captured aeroplane, access to and command of ground infrastructure, and exclusive concession contracts for air mail 58. SNETA's demands were complied with. It obtained its first aeroplanes from the military authorities and was allowed to use the military airfield of Haren-Evere, near Brussels, which had been established by the German troops during occupation. Afterwards, SNETA bought several other machines, about 40 aeroplanes in all, between 1920 and 1922. Originally, its fleet consisted of three Bréguet XIV, three DH 9, three Rumpler; when SNETA stopped its operations in 1922 (see below), it had at its disposal 14 aeroplanes (1 DH 4, 4 DH 9, 1 Farman F 60 "Goliath", 3 Rumpler C IV, 4 Blériot Spad 33, and 1 Ansaldo A/300C) 59. On 14 November 1919, the company started with vols de vulgarisation, to familiarize the Belgian public with flight 60. Far more important was the organization of regular services between Brussels and the neighbouring capitals. Negotiations took place with several British and French air transport companies
61. In the summer of 1919, provisional agreements were reached with Handley Page (HP) and the Compagnie des Messageries Aériennes (CMA). From I June 1919, CMA flew from Paris to Brussels (and vice versa) 62 and from 23 September 1919, HP did so from London to Brussels (and vice versa) 63. SNETA acted only as a local agent for these companies.
The Belgian company had thought it wise to postpone its own active participation in the operation of these airlines. First, it wanted to complete its own fleet and ground infrastructure. It also wanted to conclude a solid financial agreement with the Belgian authorities 64. After long negotiations, such an agreement was finally reached : an official airmail rate was established and SNETA obtained important public subsidies (more on these later). Consequently, SNETA started its own operations by providing half of the service to Paris on 2 August 1920 and half of the service to London on 6 September 1920 (the other half of these services being provided by the Messageries Aériennes and Handley Page respectively) 65. Like all British companies, HP temporarily ceased its operation and withdrew from this agreement in March 1921. From 1 April 1921, SNETA alone provided for the London route. SNETA leaders were aware that important developments were also taking place in Germany and The Netherlands, where "une société très puissante d'aviation" was created, the Koninklijke Luchtvaartmaatschappij (KLM). Brussels had to develop into a nodal point of European air transport, a strategic consideration of utmost importance for the whole of Belgian aviation history, until today. "(...) il est indispensable pour éviter que les lignes aériennes Ouest-Est et Sud-Nord principales de l'Europe évitent la Belgique de se tenir au courant de ce qui se passe en Hollande et en Allemagne" 66. Consequently, the Paris-Brussels route was extended towards Amsterdam (with a stop in Rotterdam) from 1 May 1921, after having reached an agreement with the KLM 67. The Paris-Brussels- Amsterdam service was exploited jointly by CMA and SNETA, KLM acting as local agent in Holland. The first flight was on 11 April, the official inauguration taking place in Amsterdam on 14 April 68. There was a stop at Rotterdam. The collaboration with CMA lasted until October 1921. Afterwards, the line was exploited in collaboration with Farman. From July to September 1921, the SNETA flight to London added a stop in Ostend. Negotiations were undertaken to fly to German and Danish destinations as well, but these talks were never finalized and the SNETA experiment came to an end before any extension could materialize.
Indeed, the company's bosses had drawn their conclusions quite soon that in the present situation, commercial aviation was not a profitable business. Table 1 gives an overview of SNETA's operations 69.





SNETA's beginnings were rather discouraging. From August to December 1920, the company only carried a few hundred passengers and load factor was far from adequate, representing only 24 %. "Le peu de succès obtenu par nos essais, pendant l'exercice écoulé (1919-1920), doit être attribué à l'élévation trop grande des tarifs et non à la crainte du public quant aux risques du transport aérien", so SNETA concluded 70. In spite of all subsidies and other forms of public support, SNETA's first financial year (11 November 1919 to 31 December 1920) had ended in deficit (income : 833.246 BEF; expenditures : 952,759 bef)71. Moreover, important banking credits were necessary to buy aeroplanes.
In 1921 the company lowered its fares by two thirds, but these were still very high, for example 400 BEF for a return ticket Brussels-London (see table) 72. By way of comparison : in 1921, the average weekly salary of a skilled metal worker was 127 BEF, that of an unskilled textile worker 70 BEF 73. In other words : in the beginnings of commercial aviation, a flight to London (and back) cost about one and a half month's wages for the latter category. Nowadays, flying from the Belgian to the British capital and back with the cheapest airline company (3,700 BEF) costs less than one fifth of the Belgian legally provided subsistence level income (being 20,916 BEF for an unmarried individual and 27,888 BEF for a married couple) 74. Compared with train fares, the aeroplane was not really competitive : a one-way train ticket to Paris (first class) cost 65 BEF 75. But this kind of fare level was the practice in commercial aviation right up to the beginning of the Second World War.
Maybe the fare reduction helped to improve results : in 1921, both the number of passengers and load factor were rising. Nevertheless, it was clear by now that in Belgium, as in all other countries, private capital could not run commercial aviation on its own. By early 1922, sneta's net debts amounted to about 750,000 BEF (the company's total capital was 4 million) 76. One way or another, State help seemed indispensable. "Les études théoriques basées sur l'emploi du matériel de guerre avaient fait croire au début qu'il pouvait, moyennant chargement plein, procurer aux entreprises de transport aérien des résultats financiers heureux. Les essais pratiques effectués par nous en 1920

ainsi que ceux que l'on a réalisés sur une plus grande échelle dans d'autres pays, avaient infirmé ces spéculations théoriques" 77. But what form would this public involvement take? Only a few months after the start of its own operations, SNETA was already examining this problem. Almost fortuitously, an unfortunate incident hastened the end of the SNETA airlines. On 27 September 1921, a heavy fire ravaged its ground installations, destroying part of the fleet. The London service (which SNETA was operating alone since April 1921, as we saw before) was immediately wound up, because the company's management decided not to replace the lost aeroplanes; the insurance compensations were used to repay part of SNETA's banking debts, "(vu) la nécessité de pouvoir présenter une situation aussi peu défavorable que possible à ceux qui seront sollicités de financer la combinaison à l'étude avec l'Etat" 78. For some time, SNETA continued to fly on the only remaining route (between Paris and Amsterdam), but finally, it stopped altogether on 1 June 1922 79.

The Foundation of Sabena  TOP

Indeed, SNETA's main task was now to negotiate, not to fly. The State had to be convinced to step into some new construction that would be "profitable" to both private capital and public authorities. Of course, the notion of "profitability" was to have a different meaning for either party. SNETA approached the government with the "defence" argument. In the future, military air power was to be an all-important factor. This was repeated time and again, even in Parliament. But the maintenance of an important Air Force was very expensive, so SNETA's argument ran. The State would be better off to subsidize a private commercial company, whose aeroplanes could be mobilized in case of war. This reasoning was not specific to Belgium : everywhere in Europe, civil and military aeronautics were still regarded as closely intertwined and eminently interchangeable. But SNETA drew a clear conclusion from this : "II résulte du fait que l'Etat insiste pour que la Société utilise un matériel fortement surabondant aux besoins normaux d'une exploitation industrielle qu'une garantie d'intérêt aux capitaux à investir par SNETA devient indispensable [my emphasis]" 80. Even before SNETA was created, this had been a key element in the bankers' aeronautical plans 81.
But the ensuing negotiations with the State were far from easy. The Minister of Defence, whose responsibilities included both military and civil aviation, was not very satisfied with the SNETA experiment. This private company had obtained important subsidies. Originally, these were calculated on the number of flight hours and on the number of kilometres flown. This system did not encourage the pursuit of better load factors and was, moreover, very costly for the State : in one year, public authorities had spent about 1,6 million BEF. On 15 September 1921, the Minister of Defence had decided to alter this system. Henceforth, subsidies were to be based on company income 82. This meant a reduction of the subsidies paid to the sneta, much to the company's dissatisfaction 83. Moreover, official authorities found that SNETA's bookkeeping was far from clear and that control mechanisms were not adequate 84. Public authorities had this negative experience in mind when it came to negotiations with the private promoters of aviation. Obviously, the State did not consider SNETA's proposal as very "profitable". The government was not keen on subsidizing a SNETA-like, wholly private company that would escape any serious control. The interest guarantee asked for by the SNETA shareholders, was particularly unacceptable. "Le ministre de la Défense Nationale se refuse définitivement à admettre que l'Etat puisse accorder une garantie d'intérêts au capital actions" 85.
Negotiations were on the verge of breakdown. Some SNETA administrators, also prominent bankers, reacted negatively (see the text in annex 1). If the State refused to guarantee a certain interest, air transport was not profitable for private investors. It did not intend to risk a single centime in such a risky business. As aviation was only of (military) interest to the State, public authorities should take their responsibilities. Strategically, it had been wrong for the private capitalists to "ask" for State support. They should not make any further move and should even, if necessary, withdraw altogether from commercial air transport if the authorities refused to act first. Bankers' philanthropy certainly had its limits. But other SNETA managers were of a different opinion. They thought it preferable not to burn the bridges with the public authorities. Private capital had to accept the State's refusal to guarantee a minimum interest. Under these circumstances, the future air transport company would not involve benefits for private investors (viz. the SNETA and the Belgian bankers from whom it depended). Nevertheless, several reasons made it worth while stepping into air transport (see the text cited in annex 2). SNETA's past efforts would not be lost, and the private sector still would be in the vanguard when air transport, in some future, would become profitable. Moreover, by helping to create a new air transport company, SNETA could solve its own financial problems. Selling its fleet and plant to the new company would help to repay SNETA's debts. Finally, the existence of such a company was essential to the success of SABCA, the aeronautical construction society recently founded by SNETA. The transport company would be an important client for this nascent industry. Indeed, as we shall see, the privileged link between those two companies was to play an essential part in Sabena's history. In 1922, different factors converged to shape Belgium's commercial air transport enterprise. From the State's point of view, Belgium could not be absent from the international aeronautical scene. A civil air transport company was seen as the best way to maintain an important military air potential. This was the chief argument put forward in Government discussions for supporting the new company 86. But public authorities did not want to do this blindfolded. They refused to support it at any price (that is why the interest guarantee was rejected) and wanted some sort of control of the future company. From the point of view of private capital, a (hopefully temporary) financial sacrifice could be accepted to create a company which was an important part in a broader investment strategy. Most important was to come to terms with the State, which was indispensable in many respects. Even in SNETA's very first plans, some sort of State participation in the future air transport company was considered 87. But private capital's future management of the company should in no way be hampered by public interventionism. Finally, from the colonial point of view, the aeronautical developments in the colony had shown that a separate Congolese air transport company was not feasible. European and African skies had to be flown by one and the same company.
Consequently, the State and SNETA finally agreed on the following terms : 1) public authorities and private capital would both contribute to the capital of the new commercial air transport company; 2) the latter would manage the business, but the former would have ultimate decision power; 3) the company would receive significant public financial support, but private shareholders would not obtain a guaranteed return on their investment (at least not in the beginning); 4) the company would be both "Belgian" and "Congolese". These are precisely the main characteristics of the "Société Anonyme Belge d'Exploitation de la Navigation Aérienne", which, for the rest of the century (... and maybe longer !), was going to carry the Belgian flag around the world's skies under the more convenient acronym "Sabena" 88.
This company was a rather hybrid creation. It became a kind of puzzle for lawyers, who had some difficulties defining its precise nature 89. Strictly speaking, it was a private limited liability company (a société anonyme, as indicated in its own name), created on 23 May 1923 for a period of thirty years. But first, Parliament had to authorize the Government's participation in the company's capital. This law, enacted on 26 April 1923, approved Sabena's statutes which, consequently, could only be changed by the voting of a new law. Many studies are incorrect in stating that this law "created" Sabena : it only approved of a complex combination of public and private interests in a private company, which was founded a month later. Sabena's capital consisted of 6 million BEF, representing 1 2,000 privileged shares (worth 500 BEF each) and 24,000 dividend shares (without nominal value). Three million BEF were brought in by the Belgian State and the colony of the Belgian Congo (the former buying 5,800 privileged shares, the latter 200), while the private company SNETA paid for the remaining 3 million BEF (obtaining the other 6,000 privileged shares). Besides this, the Belgian State and the Colony obtained 17,000 out of the 24,000 dividend shares, the remaining ones being attributed to SNETA (all this in compensation for the partners' respective contributions in the form of past experience, studies, authorizations, different sorts of support, etc.).
At the General Assembly of shareholders, the public sector thus had a clear majority, i.e. 23,000 votes on a total 36,000. But notwithstanding this, the private shareholders {in casu the SNETA) could designate eight of the twelve members of the Board ("Conseil d'Administration"), the four others being appointed by public authorities (two by the Minister of Defence, one by the Minister of Finance, and one by the Minister of Colonies). Moreover, according to the statutes, Sabena's president and managing director ("administrateur délégué") both had to be chosen within the group representing the private shareholders. Therefore the running of the company would be left entirely to the latter, although they were in a minority in the general assembly of shareholders. To compensate for the managing prominence of the private shareholders, the public representatives in the Board had the right of veto. Also the Colony and the Minister of Defence each designated two "delegates" attending the Board's meetings, but only in a consultative capacity.
This situation was unusual. Sabena was a private company, with a public shareholders' majority, but with a private management ... which was impossible without important public support ! This support was rather complex. First of all, the public authorities allocated several privileges to the new company. The Belgian State gave a preferential right to the exclusive concession of mail services in Belgium to Sabena, both on the internal and international lines. Theoretically, this concession did not exist for the other forms of air transport. Another - hypothetical - company could, quite legally, carry passengers and freight. The situation was different in the Colony, where Sabena had received the exclusive concession of all governmental transport of mail, passengers and freight on the lines effectively operated by the company. Sabena also received access to the existing or future ground installations in Belgium, but had to pay for this right. Should another (once again, rather hypothetical) company be created, then the authorities could put at its disposal half of these ground installations. In the Congo, the colonial authorities had to provide for all necessary ground infrastructure (which remained their property). Sabena had free access to it, but had to pay for its maintenance. The privileged position of Sabena was the only issue discussed during the (very short) parliamentary debate prior to the voting of the law of 23 April 1923. The socialist representative Victor Ernest criticized the so-called "monopoly" given to the company. Minister of Defence Devèze rejected these allegations, referring to the above mentioned stipulations 90.
Besides all this, financial support remained indispensable. Once again, there was a different system for the European and colonial branches of the company. Without going into detail, the Colony subsidized Sabena's transported ton-kilometres according to a certain tariff (with a guaranteed minimum of 1,5 million bef), while the Belgian State covered the deficit incurred in the European services, up to a certain maximum amount (2,4 million BEF for 1923; 3,1 million for each of the four following years). If ever, in some unforeseeable future, Sabena was to turn a profit, these subsidies were to be reimbursed. But in the meantime, the public subsidies did not include the payment of dividends to the private shareholders. Finally, the State guaranteed the re-payment of all loans the company had contracted in order to buy new aeroplanes. In return for all this public support, Sabena's pilots and aeroplanes could be mobilized by the Belgian Army in case of war.

Epilogue : the Main Features of Sabena's Activity in the 1920s and 1930s  TOP

Was this elaborate compromise between the State and private capital going to work? The answer to this question cannot be clear-cut. The fact that Sabena still exists today seems to indicate that this complex combination was indeed viable. But this conclusion overlooks the many problems that the Belgian company has encountered, as well as the many changes that have taken place in its organization and management since 1923. These developments cannot be discussed here in detail 91, but it is possible to sketch the main features of Sabena's history up to the Second World War.
Sabena started very modestly. The company's first flight, on 2 July 1923, was to London 92. This was only an occasional service, and in 1924 the company's first real (and only) service linked Amsterdam and Basel, via Rotterdam, Brussels and Strasbourg. In 1926 London was back on Sabena's program, but from September of that year, the company temporarily stopped all its European services. From 1927, it resumed its operations, extending the London-Brussels line to Köln (1928) and flying to several German towns in the next few years (Düsseldorf, Essen, Hamburg in 1928; Bremen, 1929). Evidently, the Belgian company was not a familiar sight in European airports. By contrast, its Congolese activities were far more impressive. In 1928, Sabena was flying a colonial network totalling 3,845 kilometres. Boma, at the mouth of the Congo, was linked to Léopoldville (now Kinshasa). The latter city had an south-eastward air connection with Elisabethville (now Lubumbashi), capital of the rich mining province Katanga via the Kasaïan town Luebo, and, up north, with Coquilhatville (now Mbandaka). From Luebo, side routes connected to the Kasaïan towns Luluabourg (now Kananga), Lusambo and Tshikapa (diamond centre) 93. Clearly, in the 1920s, Sabena was more active in Congo than in Europe. An internal company note even stated that "la Sabena-Europe doit être essentiellement l'école et la réserve de la Sabena- Congo" 94.
Things changed during the next decade. The economic crisis that swept the world in the early 1930s was heavily felt in the colony. Several colonial air routes were given up. And only in 1935 was the company able to establish the long-awaited regular air link between Brussels and Léopoldville (the first successful flight between Belgium and the Congo had taken place ten years earlier, in 1925). But now, Sabena's European network was growing steadily. The service to Hamburg was extended to Copenhagen and Malmö in 1931 (the Baltic Air Express). Dortmund and Berlin were flown in the following year. The second half of the 1930s saw the opening of several new destinations, such as Paris and Lille (1935), Stockholm (1936), Frankfurt, Prague, Nürnberg and München (1937) and finally Vienna (1938). The following table shows that Sabena's real "take off' took place only in the second half of the 1930s. This was mainly because of the extension of the European network and to the establishment of Belgium's own "imperial air route" to the Congo.


Table 2. Operations of Sabena (1924-1939)


Sabena's performances were indeed better in the 1930s, but this did not mean that the Belgian company was on the road to profit. Utilization rates, although rising when compared to the 1920s, were still rather low. Commercial aviation was far from a profitable business, as is shown by table 3.
Table 3. Financial statistics of Sabena (1923-1939)

Although public aid represented a diminishing percentage of total income towards the end of the 1930s, Sabena was obviously not viable without public subsidies. This is far from being only a Belgian shortcoming. On the contrary, State support was an essential part of early airline companies all over the world. The interesting questions would be : how was this public aid organized? How important was this aid, compared to the subsidies enjoyed by other companies? Is there a link between the qualitative and quantitative aspects of public aid on the one hand and the performance of the airline companies on the other? Such a comparative approach is impossible within the limits of this study. But the available evidence suggests that the financial support given by the Belgian State to "its" commercial aviation was significantly less than that given by some other European States 97. This may help to explain Sabena's relatively modest performance compared to that of other airline companies. In 1938 the Belgian company transported 2,5 million T/km, while KLM was at 7,5 million, Air France at 9 million, Imperial Airways and Deutsche Luft Hansa both at 13 million 98. When making such comparisons, one nevertheless has to remember that Belgium was much smaller than its neighbours (except for The Netherlands) and that its colonial empire was smaller.
Of course, it would be too simplistic to postulate a direct link between size and performance of the companies and the mere amount of subsidies they enjoyed. Qualitative elements also matter, such as the way in which the companies are run, the precise nature of public-private relationship, management autonomy and creativity, geographical and political constraints, etc. . This makes a comparative study all the more difficult. Once again, we will do no more than provide some hints as to how these aspects evolved within Sabena. As we saw, the Belgian airline company resulted from a complex compromise between the State and private capital. At first sight, this compromise seems to have been a viable one. Only in 1960 were its basic terms changed. By the law of 23 June 1960, the Belgian State took over the majority of Sabena's shares. Private capital's involvement was reduced to a mere 10 % of the company's stock. At that moment, the Belgian carrier was one of the last important European airline companies with such an considerable participation of private capital (namely just under 50 %). But it would be wrong to infer from this that everything worked out well between the public and the private partner. On the contrary, Sabena's history is ridden with conflicts and tensions between the State and the private shareholders (who, as we saw, managed the company). A very plausible hypothesis would be that this particular situation weighed heavily on Sabena's performance. Let us illustrate this by a few essential facts.
In the 1920s, the situation changed much to the private investors' satisfaction. By the law of 25 May 1929, the State awarded a 6% interest guarantee to the shareholders. SNETA's original wishes were fulfilled at last. Not surprisingly, this measure was taken when the Minister of Transport was Maurice Lippens, who was a leading personality of the colonial holding society CCCI, one of sneta's shareholders ... But some years later, a heavy crisis shook the very foundations on which Sabena was built. As we saw, the banks which had created SNETA wanted to establish an integrated structure of aeronautical firms. Therefore, SNETA had created SABCA, the aeronautical construction company in 1920. When the former founded Sabena with the help of the State in 1923, very close links were established between the three companies. To give but one example : Albert Marchai, president of SNETA, was also president of SABCA and of Sabena (moreover, SABCA itself became a shareholder of the airline company, after having bought some shares from SNETA in 1929). Management policy was inevitably influenced by this intertwinement. The airline company placed heavy orders with SABCA, which built foreign aeroplanes under license. In the early 1930s, it came to be known that Sabena could have acquired these planes at a much lower price if it had bought them directly from the foreign constructor. SNETA seemed to abuse the State support given to Sabena, to make some easy profits through its other daughter, SABCA. This caused a scandal. Some prominent Sabena personalities were prosecuted. Together with other top people of the airline company, Albert Marchai was convicted in 1934. He had to leave the Sabena presidency, but remained in charge of SNETA. Although the latter was still the former's shareholder, the close ties between both societies (and with SABCA) were somewhat loosened.
This affair soured the relationship between Sabena's public and private shareholders. During the rest of the 1930s (and even after the Second World War), public officials thought about turning the Belgian airline company into a State enterprise. These plans were never realized. When SNETA was dissolved in 1949 99, other enterprises linked to the powerful bank Société Générale became Sabena's private shareholders, until the company finally came into public hands in 1960, as mentioned earlier.

Conclusion  TOP

The peculiar relationship between the public and the private sector was at the same time an asset and a liability for commercial aviation in Belgium. It was an asset because two very powerful facets of Belgian society had cooperated and, therefore, guaranteed a certain stability to the airline company. Sabena's private shareholder, SNETA, had been created and was run by the big Belgian banks, which were the backbone of the national economy and had important political leverage. Private financial groups and public authorities had developed a kind of collaborative tradition, especially in the Congo. By supplying capital, by guaranteeing interest, by granting subsidies, etc., the State supported private initiative and even made it possible. But very rarely did the State intervene in the management of these enterprises, regardless of how important its subsidies or participation may have been. This system was used when the banks became interested in the nascent aviation business. This shows, coincidentally, that the Belgian mixed banks were not as conservative as they are sometimes thought to be. The creation of SNETA shows precisely that they were looking for investment opportunities in new, promising activities. But evidently, commercial air transport was not to produce profits in a near future. Therefore, the banks turned to their traditional protective system. Sheltered by the State, private capital was to run an enterprise making modest but riskless profits. Because of the economic, social and political weight of the financial institutions, other private initiatives had no chance of developing. Other capitalists lacked size, influence and/or the audacity to challenge the mixed banks' position. In this sense, the new company enjoyed not a de jure, but a de facto monopoly.
From the State's point of view, this situation had some advantages. Public authorities thought that maintaining a Belgian aviation company was a matter of national interest (from a political, economic and military point of view). Given the existing tradition of State support to ambitious private initiatives, Sabena seemed a good option, even a bargain. Public authorities would be relieved from financing the whole enterprise by themselves (the private shareholders would take part of the financial burden on their shoulders); moreover, they would not be saddled with the difficult problems of managing a commercial enterprise. The private partners were far better suited for this, it was thought. Nevertheless, the State refused to give a blank cheque to the banks and therefore opted for majority public participation in the enterprise.
But this kind of cooperation between the public and the private sector was, at the same time, a liability for the airline company. Gradually, distrust grew between both partners. During the 1930s, the "Congolese" system of supporting powerful private groups with public money was heavily criticized. Questionable management practices at the Sabena-SABCA-SNETA top caused supplementary trouble. The State had serious doubts regarding the way in which the airline company was run, even after the worst malpractices had been eliminated. On the other hand, the private shareholders complained, at the same time or alternatively, about the numerous interferences of public authorities and their paralysing inertia. The budgetary anaemia of both the Belgian State and the Colony also played a role. Therefore, subsidies were often given parsimoniously and/or with delay. This sometimes brought Sabena on the verge of breakdown, for instance at the end of 1937, when the company nearly had to close down through lack of funds. Increasing the company's capital was also out of the question, for neither the State, nor the private investors were able or willing to do so. This helps to explain one of Sabena's basic liabilities, i.e. the narrowness of its capital, which impeded any real expansive policy and, moreover, saddled the company with heavy debts. This situation persisted well into the post-Second World War period, provoking many other financial crises. In the end, Sabena managed to navigate safely through this heavy turbulence - while at the same time growing faster than any other European carrier between 1945 to 1960 100. The grounding of the Lufthansa until the early 1950s and the choice of Brussels as the centre of the EEC certainly contributed to this growth, but more research is needed to fully explain this evolution.

Annex 1  TOP

Arguments of some SNETA administrators against stepping into a commercial air transport company if the State refused to grant the interest guarantee requested.
The following excerpt of the original minutes of SNETA's board is quite revealing, all the more since these words have been omitted from the official minutes:
"M. William Thys, appuyé par le Baron Henri Lambert, estime que la situation de la SNETA vis-à-vis de l'Etat est faussée par le fait qu'elle semble résulter de ce que les propositions initiales ont été faites par la Société dans le but d'obtenir l'aide de l'Etat pour la sortir d'une situation financière difficile alors que, logiquement, elles auraient dû venir du Gouvernement qui est le seul intéressé à la création de l'organisme en projet, car l'unique intérêt des transports aériens en Belgique consiste actuellement dans la création d'une réserve de l'aviation militaire. Ce problème est d'ordre gouvernemental et général et ne saurait être résolu aux frais des actionnaires de la SNETA. Celle-ci doit simplement se tenir à la disposition du Ministre pour examiner les propositions qu'il ferait sur la base du principe essentiel posé ci-dessus, s'il estime que le personnel réuni et spécialisé par la SNETA et l'expérience acquise par elle peuvent rendre service à l'Etat. M. William Thys rappelle, à l'appui de cette thèse, que les banques actionnaires de la SNETA ont consenti au début et à fonds perdus une certaine mise pour la formation de son capital dans le but d'étudier la possibilité du succès économique de l'aviation marchande, que ces études sont actuellement terminées et qu'elles concluent à l'impossibilité d'une exploitation rémunératrice du transport aérien en Europe dans les conditions actuelles. Il s'ensuit que (...) les actionnaires ne désirent pas [originally : plus] consacrer de fonds supplémentaires à l'organisation des transports aériens en Europe si ces fonds doivent rester exposés et si l'on ne peut leur assurer une rémunération prochaine".
Source : AGR, FF, 25/8, PV de la SNETA, 11 April 1922 (original version).

Annex 2

Arguments of SNETA management in favour of creating a commercial air transport company even without the interest guarantee requested.
"(...) si la Sabena apparaît comme une affaire sans intérêt financier immédiat, les raisons suivantes justifient la création de cette société :
a)    Le capital de la Sabena, réduit au minimum possible, serait préservé par les conventions avec l'Etat de telle sorte que le sacrifice qui serait demandé aux actionnaires se limiterait à l'intérêt des dividendes des actions privilégiées dont le paiement serait différé.
b)    II serait possible de continuer et de développer l'activité de l'aviation civile en Belgique et au Congo en conservant la position acquise, après plus de trois années d'effort, par les fondateurs de la SNETA.
c)    II serait possible de couvrir, par des dividendes améliorés de la SABCA, les pertes subies par la SNETA qui ne seraient pas compensées par l'intervention espérée de l'Etat.
d)    II serait possible d'apurer la situation financière de la SNETA, et notamment de rembourser les banques créditrices de cette société pour environ 375.000 Fr., par la réalisation de son actif.
e)    L'on procurerait à la SABCA une clientèle des plus intéressantes avec la possibilité de hâter le moment où cette société pourra renoncer à ses conventions avec l'Etat basées sur le contrat américain. L'estimation de cette clientèle pendant les prochaines années est exposée au Conseil.
f)    L'affaire proposée présente un intérêt colonial considérable en matière administrative, économique et militaire.
g)    L'affaire proposée répond à des nécessités d'ordre militaire en Belgique. Son intérêt national s'affirme impérieusement en ce moment où les grandes puissances font un effort considérable pour s'assurer la maîtrise de l'air.
Pour expliquer le paragraphe d) ci-dessus, le Président expose ensuite, confidentiellement, de quelle façon la situation financière de la sneta pourrait être apurée grâce à la création de la Sabena, création qui est la condition de cette opération, si l'on veut qu'elle soit réalisée de la manière la plus favorable aux intérêts des actionnaires de la SNETA".
Source : AGR, FF, 25/5, PV de la SNETA, 12 October 1922.

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