SN/FR/BRU/CRL controversy

[airazurxtror]

http://www.lalibre.be/economie/actualit ... artez.html

Michael O'Leary :
"I was amused to read that SN Brussels Airlines called the Belgian State to the rescue. But leaders of Brussels Airlines should not find solutions, not subsidies. So my advice is: 'Stop complaining and go. Nothing prevents you from coming to Charleroi or establish your headquarters in Luxembourg or even in Ireland and to pay your taxes there, as we do ".
It is a fact, the Irish tax is more advantageous than the Belgian and nothing forbidden to enjoy it. For the passenger, there will be no difference if Brussels Airlines moved its headquarters to Luxembourg, which is only two hours of Zaventem. But we must stop asking for subsidies to the states. "
Ryanair boss says this is "the very nature of the competition." This is also the European Union.Nobody will miss Brussels Airlines in Zaventem.

[airazurxtror]

Jean-Jacques Cloquet, BSCA boss, in "Le Soir" to-day, page 22.
The recent critics about his airport and Ryanair rather get on his nerves. He says :
Why does Brussels Airlines complain just about Ryanair and not about the other low-cost such as Vueling and easyJet, who compete with them right at BRU ?
Are SN losses entirely and only due to Ryanair ? BRU and CRL have only 24% of their lines in common (33 destinations), of which 19% by Ryanair. Is that enough to unsettle everything ?
It is true that CRL has taken a part of the "business" custom - but not enough to endanger BRU.
As help by the Région Wallonne, we get 20 millions per year : 16 millions for the security and 6 million for the fire service. Everything in total respect of the European rules
We don't own the land and we pay a rent for it. I, too, would have liked to be offered the ground all around at the price of agricultural ground, and then resell it with a 400 million profit... And have a railway link (like the Diabolo) and a highway paid for by the Federal.

[airazurxtror]

André Antoine, minister of the Région Wallonne, in charge of the airports to Viscount Davignon : let Brussels Airlines come to Charleroi !

Asked Thursday morning at the microphone of Bel-RTL, Andre Antoine said he had sent a letter to Etienne Davignon, SN chairman of the board, inviting him to establish his aircraft at Charleroi airport.
"This represents a saving of 29 euros per passenger" said the Walloon minister who had made his calculations.

http://www.lesoir.be/actualite/economie ... 905655.php

[FlightMate]

If SN move to Charleroi, I don't think they will lower their ticket price, but might keep the price difference in their pocket (fair enough, if they can find customers willing to pay the premium on top of Ryanair prices)

But is the runway in CRL long enough to accomodate 330s?

Why not move to Liège, after (or if) TNT ceases to operate there.
Is there a pax terminal they could use?

[chrisflyer]

This is a very interesting and important debate indeed.

It is in my view no coincidence that Etienne Davignon's move came one day after a visit of Christoph Franz (CEO of the Lufthansa Group). LH is no longer in the same comfortable financial position they were in a couple of years ago, and Christoph Franz has been quite candid about the fact that Lufthansa is not a charity for ailing European air carriers. In other words, SN is being asked to substantially lower its operating costs (ergo, staff costs) and improve its financial position. If not, LH will pull the plug. It is as simple as that.

I share the view of BSCA's CEO that the competition from Ryanair is likely not SN's biggest problem. On the other hand, moving to CRL would probably be the final nail in SN's coffin, and it is an unrealistic perspective. CRL is not a business airport, and if SN were to move their, other carriers at BRU would immediately fill the void. SN would lose the business traffic to others at BRU, and in no way could it win the battle with Ryanair at CRL.

What this case exhibits is the very concerning business climate in Belgium caused by a crippling, oversized and inefficient government apparatus. And I am afraid the current government is unable and, what is more worrying, unwilling to do anything about it. The climate needs to be improved dramatically, and labour costs brought down considerably. Otherwise Brussels Airlines will be just one of many victims. Unless it is able to move its HQ elsewhere which it probably should.

[tolipanebas]

Parliamentary initiative to solve competitive handicap of Belgian airlines.

http://www.standaard.be/Artikel/Detail. ... 120328_252

Going through parliament rather than let the government work out a special plan will solve not only the politically controversial issue of agreeing to tailormade exceptions for one sector of our economy only, it will offer a far more solid legal basis as parliament can actually change the law and thus set a new legal basis which can not be fought in courts as a delaying tactic, contrary to any government measure.

Let's see what they have up their sleeves.

[shockcooling]

http://www.lalibre.be/economie/actualite/article/729205/o-leary-arretez-de-vous-plaindre-et-partez.html

Michael O'Leary :
"I was amused to read that SN Brussels Airlines called the Belgian State to the rescue. But leaders of Brussels Airlines should not find solutions, not subsidies. So my advice is: 'Stop complaining and go. Nothing prevents you from coming to Charleroi or establish your headquarters in Luxembourg or even in Ireland and to pay your taxes there, as we do ".
It is a fact, the Irish tax is more advantageous than the Belgian and nothing forbidden to enjoy it. For the passenger, there will be no difference if Brussels Airlines moved its headquarters to Luxembourg, which is only two hours of Zaventem. But we must stop asking for subsidies to the states. "
Ryanair boss says this is "the very nature of the competition." This is also the European Union.Nobody will miss Brussels Airlines in Zaventem.

He twists the facts a bit, as mentioned many times, BruAir is not asking the state to rescue them or ask for money, ofcourse it would be nice, but it's not what they're asking here...

And how silly are those remarks of moving some operations to CRL, if that happens and really works, someday CRL need to rethink their costs for infrastructure, etc., loose their subsidies, subsequently increase tax and chase away customers like Wizzair and FR because CRL becomes too expensive...happened at other airports before.

btw, pure out of interest; but for all people earning a foreign salary and live and Belgium (pilots and cabincrew), where do they pay their taxes, wasn't there a rule of how many days per year you should stay away to avoid paying some part in Belgium? So I guess the people based at CRL and living in Belgium, must pay some sort of local tax, no?

[BrightCedars]

btw, pure out of interest; but for all people earning a foreign salary and live and Belgium (pilots and cabincrew), where do they pay their taxes, wasn't there a rule of how many days per year you should stay away to avoid paying some part in Belgium? So I guess the people based at CRL and living in Belgium, must pay some sort of local tax, no?

You mean the 6 month + 1 day rule to define your tax domicile.
Yes it would be Belgium for the crew that choose to live around CRL, but that only affects what country they pay taxes to, not what rules apply to their salary calculation regarding social charges, etc. It's the individual's side of the story, while SN's problem is the employer's side.
In Belgium a company would pay e.g. 140% of what you get as pre-tax salary and you get in general 80-50% of that depending how much you are taxed based on how much you earn and what your family situation is.
In the case or Ireland or Luxembourg it's probably closer to 110% to give you that same pre-tax salary.

[Squelsh]

Michael O'Leary :
"Nothing prevents you from coming to Charleroi...
.
André Antoine, minister of the Région Wallonne, in charge of the airports to Viscount Davignon : let Brussels Airlines come to Charleroi !

(..)
And how silly are those remarks of moving some operations to CRL, if that happens

.
It won't. Look in 2004, with the invitations/lobbying for DHL to move their night ops to LGG
.
l'histoire se répète, same sh!t, different day.

[airazurxtror]

And how silly are those remarks of moving some operations to CRL

Not silly, but most probably made "tongue in cheek" :
"You think all your losses stem from the conditions made by CRL to Ryanair ? Come to CRL, enjoy the same conditions as Ryanair, and we'll see if it solves your problem. You don't come to CRL ? Then, shut up !".

[Flanker]

btw, pure out of interest; but for all people earning a foreign salary and live and Belgium (pilots and cabincrew), where do they pay their taxes, wasn't there a rule of how many days per year you should stay away to avoid paying some part in Belgium? So I guess the people based at CRL and living in Belgium, must pay some sort of local tax, no?

The 6 months rule does not apply to flight and cabin crew but to expat workers, that's the general rule but several countries like the UK have closed that loophole.
With Ryanair, a majority of crew are "self-employed", working for Ryanair through intermediary agencies.

In principle, social taxes are due in the country of residence, as opposed to personal taxes, which are due in the country where the employment takes place.

In Belgium a company would pay e.g. 140% of what you get as pre-tax salary and you get in general 80-50% of that depending how much you are taxed based on how much you earn and what your family situation is.
In the case or Ireland or Luxembourg it's probably closer to 110% to give you that same pre-tax salary.

Very true and might I add, corporate taxes are also lower.

What this case exhibits is the very concerning business climate in Belgium caused by a crippling, oversized and inefficient government apparatus. And I am afraid the current government is unable and, what is more worrying, unwilling to do anything about it. The climate needs to be improved dramatically, and labour costs brought down considerably. Otherwise Brussels Airlines will be just one of many victims. Unless it is able to move its HQ elsewhere which it probably should.

I wonder why everybody in Belgium doesn't stand up against it?
The inefficiencies are one thing but most importantly it's the way they spend the money.
The real estate investments are ridiculously big and bring no apparent benefits, the air force is huge for such a small country and once again, they prefer to punish the working people rather than to offer incentives to work. So then who would want to work?

[Acid-drop]

Bru is the biggest asset of sn.
they say 85% of their african pax are from a connection, so no bru, no business.... or less business. because we all know we can easily split the destinations between business/hub and tourism destinations. so yes, sn could use crl, but only for a limited amount of flight. but of course the price should be lower then.
but we also know that this country is not run from fact and business cases.

It won't. Look in 2004, with the invitations/lobbying for DHL to move their night ops to LGG
.
l'histoire se répète, same sh!t, different day.

indeed amazing to repeat history so often in this ridiculous country.
and im sure its not the last time.
the options are there, let the manager choose and let him fail, that life.

[B.Inventive]

The fact mr. O Leary even commented on this issue, means he IS concerned this 'argument' might cause his company a small or large problem later on. Otherwise this man has far more interesting things to do than adress the o so wonderful belgian press....

[fcw]

btw, pure out of interest; but for all people earning a foreign salary and live and Belgium (pilots and cabincrew), where do they pay their taxes, wasn't there a rule of how many days per year you should stay away to avoid paying some part in Belgium? So I guess the people based at CRL and living in Belgium, must pay some sort of local tax, no?

The 6 months rule does not apply to flight and cabin crew but to expat workers, that's the general rule but several countries like the UK have closed that loophole.
With Ryanair, a majority of crew are "self-employed", working for Ryanair through intermediary agencies.

In principle, social taxes are due in the country of residence, as opposed to personal taxes, which are due in the country where the employment takes place.

Not true Flanker, in fact it is the opposite.
Taxes: payable according double tax convention between the country of residence of employer and employee. eg. Pilot working for EZY in Paris, but living in Belgium will soon pay taxes in Belgium. The six month rule is no applicable to crew.
Social security: payable in the country of residence of the employer. eg: FR pilot working for FR, based in Italy and living in Belgium will pay social security in Ireland. He will benefit from the Belgian social security like you and me, but every penny will be claimed back from the Irish.
In the near future social security will be due in the country where the pilot is based.
Almost all new tax conventions make pilots taxable in their country of residence.
So moving HQ is useless for BruAIr.

[FlightMate]

What abut AF pilots living in belgium?
Or cargolux?

could you provide the source of your information? I just looked at the conventions, and it still states that personnal taxes are due in the country where the management effectively is based.

[Conti764]

or less business. because we all know we can easily split the destinations between business/hub and tourism destinations. so yes, sn could use crl, but only for a limited amount of flight. but of course the price should be lower then.

I tend to disagree. A split operation works for a company like JAF, who depends mostly on its own leisure pax, who have their flight as a part of a total holiday package. Even on some mainly tourist destinations, SN still has at least some business oriented pax and for those selected flights they could use CRL but then again, it ain't worth the hassle of a split hub operation.

No, the best thing for SN to do, is to stay at BRU. And if the government can't (won't?) give incentives to SN to increase their margins, BAC (which after all still is a private company) can do something for their home carrier. No SN means far less traffic for BRU and degrading the airport from a hub or a focus city for some airlines to merely a feeder airport for KLM, AF, LH, BA and the likes.

And more to the point, I find the remarks made by MOL ridiculous. He blames SN for asking state aid while a large chunk of his business model is based on receiving discounts from mostly second grade airport miles away from the city FR serves. CRL now has a pretty nice terminal and is really on par with the majority of European airports, but in a not so distant past it was an ugly and old airport. And whether you like it or not, the Walloon government giving €15 for each passenger at CRL is state aid as well.

To be clear, I have nothing against FR or the way CRL is giving incentives to a succesful airline creating jobs and economic welfare in a region which was heavily struck with past economic declines, but MOL shouldn't be so hypocrit about it when SN is lobbying the state to intervene in what truly is an unfair competition.

[Inquirer]

The fact mr. O Leary even commented on this issue, means he IS concerned this 'argument' might cause his company a small or large problem later on. Otherwise this man has far more interesting things to do than adress the o so wonderful belgian press....

Ryanair has definitely been pushed into the defensive as of lately.
Even if everything is 100% legal, it isn't very fair and I think O Leary fears all this media attention will cause some fall out for him and his airline.

Why?

- Politicians from Fremish Brabant have been very active in adopting this topic as it is a dream come true for them; something which they can really thrive on: the defense of tens of thousands of jobs at BRU.

- Also, let's not forget this government is very eager for more money, yet out of ideas where to get it from, so if they are suddenly tipped off about a place where they can still pluck millions in taxes which they can claim are nothing but taxes others have been paying for years too already, they will not hesitate long and will have everybody's sympathy.

- Finally, it would set a nice exemple for the public opinion in Flanders too, because the widespread idea here has been the government lead by Di Rupo is dominated by French speaking parties which simply want to shift all of the bills to us in Flanders, all while their people in Wallonia are kept benefiting big time from our money. Making a high profile airline from CRL which has been cuddled almost to dead by politicians from Wallonia in the past as well as its well-paid employees live up to the same fiscal standards as all those in Flanders, will thus be a very welcome case to disprove the above popular perception.

Need I find more reasons????

With Ryanair, a majority of crew are "self-employed", working for Ryanair through intermediary agencies.
In principle, social taxes are due in the country of residence, as opposed to personal taxes, which are due in the country where the employment takes place

I think this is going to be one of the first targets indeed.

Fake self-employed have been a big issue for years, yet at Ryan Air things have been complicated because of them being foreign based (although flying from CRL), yet it is not beyond imagination a full scale inquiry is now launched to get access to those foreign tax declarations to see if indeed those people are self-employed just as they claim. One of the criteria is that you must have also other significant customers then, yet I doubt very much pilots and cabin crew also fly professionally at other airlines when they aren't flying for Ryan Air? O leary seems to know the answer already, hence his somewhat frustrated reaction which basically came down to: 'why don't you stop digging, it's much better to join us'.

This can potentially cost him millions in social security contributions per year, you know? Not to mention the fines and the recovered contributions of the past years! No wonder he came to Brussels to give a press conference, even though he didn't have much to say... not one of his best days, for sure.

Seems like B.Air has played this one rather well, IMHO: rather than ask for subsidies straight out, they merely have pointed out Ryan Air isn't paying nearly as much to society as they are: more needn't be done with a tax addicted government in place and O leary doesn't seem to know very well how to respond to it as his own beloved arguement of unfair competition is now thrown to him and what's more... it seems to stick.

[fcw]

What abut AF pilots living in belgium?
Or cargolux?

could you provide the source of your information? I just looked at the conventions, and it still states that personnal taxes are due in the country where the management effectively is based.

AF pilots work in France for a French copany so social security in France. Taxes: French-Belgian tax treaty makes them taxable in France (if France doesn't tax them for whatever reason they become taxable in Belgium) The tax agreement also stipulates they are due city/council tax in the city the live in Belgium calculated as if their salary was Belgian.
Same for Cargolux, but no council tax.
BA pilots living in Belgium will pay taxes in Belgium from 10/01/2013 onwards. ("salaries, wages and similar remuneration derived by a resident of a Contracting State in respect of an employment exercised aboard a ship or aircraft engaged in the transportation of supplies or personnel to a location where offshore activities are being carried on, or in respect of an employment exercised aboard a tugboat or anchor handling vessel in connection with such activities, shall be taxable only in that Contracting State.”)

[fcw]

With Ryanair, a majority of crew are "self-employed", working for Ryanair through intermediary agencies.
In principle, social taxes are due in the country of residence, as opposed to personal taxes, which are due in the country where the employment takes place

I think this is going to be one of the first targets indeed.

Fake self-employed have been a big issue for years, yet at Ryan Air things have been complicated because of them being foreign based (although flying from CRL), yet it is not beyond imagination a full scale inquiry is now launched to get access to those foreign tax declarations to see if indeed those people are self-employed just as they claim. One of the criteria is that you must have also other significant customers then, yet I doubt very much pilots and cabin crew also fly professionally at other airlines when they aren't flying for Ryan Air? O leary seems to know the answer already, hence his somewhat frustrated reaction which basically came down to: 'why don't you stop digging, it's much better to join us'.

This can potentially cost him millions in social security contributions per year, you know? Not to mention the fines and the recovered contributions of the past years! No wonder he came to Brussels to give a press conference, even though he didn't have much to say... not one of his best days, for sure.

This has already been investigated and I can tell you ( ), you won"t find a single FR pilot whose sole activity is flying for Ryanair.

[airazurxtror]

Much is spoken bout the interest of Brussels Aiport, of Brussels Airlines, of their personnel - not much of the customer, the "average Joë".
Well, the wish and the interest of that average Joë (like me) is to keep Ryanair(and the other LCC's) in Belgium, in order to fly at low cost or at least to have a choice of carriers.
Some are still imbued with the monopoly nostalgy of the Sabena good old times : wake up, it's over. Now, there is competition for airlines same as for any industry - just yesterday, Carsid shut for good its blast-furnace because it is not competitive,