It's becoming increasingly clear that we will not find any investors willing to invest in the whole of Sabena

Christoph Mueller, Sabena

The airline is likely to survive, at the cost of about half the 12,000-strong workforce's jobs, if Sabena goes ahead with a plan to become a regional carrier, but there may be little choice, he said.

"It's becoming increasingly clear that we will not find any investors willing to invest in the whole of Sabena," wrote Christoph Mueller in a letter to employees.

Swissair crisis

The latest crisis to hit Swissair erupted when it emerged that two key subsidiaries, Atraxis and the SR Technics aircraft maintence unit, could both collapse by the end of November.

Richard Branson's Virgin Express may buy part of Sabena

The two units were not among the five Swissair subsidies included in the national airline's bankruptcy filing so were unable to protect themselves from their creditors.

But at the same time, they were unable to get payments owed by Swissair.

Swiss national Treasurer Peter Siegenthaler made it clear the government would not put up any more money to keep Swissair flying.

Instead, he gave the banks and the cantons of Zurich, Basel and Geneva 24 hours to find a solution.

Breathing space

But he has retreated from his hard-line stance, perhaps because serious negotiations appear to be taking place.

The cantons have demanded at least a week to find buyers for Atraxis, SR Technics and the Swissport ground handling unit.

Announcing it had relented on the emergency credit payout, the Swiss cabinet office said it had been briefed on a rescue for SR Technics.

Buyers in view

Under the plan, Crossair would take over 70% of the maintenance unit, without which Swissair's planes cannot fly.

Baggage-handling firm Atraxis is in "very intensive" talks with potential buyers, according to Atraxis board member Stefan Leser.

He declined to name them, though sector-watchers view Lufthansa and IBM as the most likely candidates.

Lufthansa shares dive

Lufthansa has not said how much it is prepared to pay for Atraxis, which needs up to 50m Swiss francs by mid-November.

Lufthansa's Jurgen Weber says it's heading for a loss

But worried investors promptly punished Lufthansa's shares, sending them down more than 4% in early morning trading on the Frankfurt Stock Exchange.

The share price fall was also partially due to reported remarks from Lufthansa chief executive Jurgen Weber, who said the airline could slip into the red this year.

Mr Weber is touring China with German chancellor Gehardt Schroeder.

Christmas misery

Meanwhile, employees at troubled German tour operator LTU said they were prepared to accept a cut in wages in order to help save their company.

The troubles besetting LTU stem from Swissair's 49.5% stake in the firm.

Since its bankruptcy filing, Swissair has not been able to meet its financial obligations to LTU.

Staff have accepted paycuts of between 5% and 10% and a two-year pay freeze in order to save the firm, a spokesman for the employees' council said.

Wolfgang Becker said staff are ready to forego their Christmas bonus as part of a plan to trim LTU's costs by 25.5m euros ($23m).