Brussels Airlines future and financial perspective

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Yuqu12
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Re: Brussels Airlines future and financial perspective

Post by Yuqu12 »

brusselsairlinesfan wrote:Will LH give a clear answer/position towards SN by the end of the month? Or are they gonna postpone their decision again?
It is already quite a few years that LH doesn't give a clear answer and that they are postponing their decision. I think/hope that they postpone it once more so that SN can keep on growing at their own pace so that LH has to think twice about the fact that they want to integrate SN in EW...

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Conti764
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Re: Brussels Airlines future and financial perspective

Post by Conti764 »

Stij wrote:
Then again, the Belgian shareholders have their eyes on an exit scenario... and LH knows this...

Cheers,

Stij
Maybe things have changed now they see SN's growth rate... And they might be waiting for other, better opportunities to come than LH...?

Stij
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Re: Brussels Airlines future and financial perspective

Post by Stij »

Conti764 wrote:Maybe things have changed now they see SN's growth rate... And they might be waiting for other, better opportunities to come than LH...?
Don't know enough about the current shareholders strategy (if they already agree among themselves), but it's definitely not considered as "core" and I don't believe they had fun over the last 14 years...

And waiting for better opportunities... form whom with LH owning 45%???

Thinking about it... the Belgian shareholders have a non financial interest in keeping SN as it is and avoiding it to be integrated into Eurowings: It's the reason they started with this enterprise in the first place: link BRU to the business cities of Europe so they could continue operating out of Brussels and I believe our beloved fat cats don't like Eurowings cattle class.

PjVangerven
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Re: Brussels Airlines future and financial perspective

Post by PjVangerven »

It might be a long shot..., but is the rest a rules that European airlines have to be European owned? If not, why wouldn''t any of the Gulf carriers or United airlines be interested in creating a European hub by buying SN?

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Yuqu12
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Re: Brussels Airlines future and financial perspective

Post by Yuqu12 »

PjVangerven wrote:It might be a long shot..., but is the rest a rules that European airlines have to be European owned? If not, why wouldn''t any of the Gulf carriers or United airlines be interested in creating a European hub by buying SN?
I don't think this has to be: Airberlin is also partly owned by Etihad or Emirates (don't quote me on that one) and I think Alitalia has a similar construction.

Stij
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Re: Brussels Airlines future and financial perspective

Post by Stij »

>50% has to be EU...

PjVangerven
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Re: Brussels Airlines future and financial perspective

Post by PjVangerven »

Stij wrote:>50% has to be EU...
Thanks for the fast response! Too bad imo. The funds of American or Gulf carriers could make SN a true success story. Hopefully LH will think twice before giving up the Brussels brand.
Last edited by PjVangerven on 14 Sep 2016, 16:21, edited 1 time in total.

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sn26567
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Re: Brussels Airlines future and financial perspective

Post by sn26567 »

PjVangerven wrote:Hopefully LH will think twice before giving updaten the Brussels brand.
Could you please translate into English? ;)
André
ex Sabena #26567

Flanker2
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Re: Brussels Airlines future and financial perspective

Post by Flanker2 »

The funds of American or Gulf carriers could make SN a true success story.
I don't think so.
1. American carriers will never invest in a European carrier.
2. Gulf carriers? QR pulled a trojan horse on Cargolux. QR pulled out of Cargolux a few years ago and are starting to compete very heavily against them using the 5th freedom that they negotiated during the Cargolux stake acquisition. AZ is still a money black hole and I doubt that their result will be much better than last year. Even at current fuel prices, they can't break even. A profit is only a wishful mirage. AB is almost bankrupt.


In principle, the majority shareholders can make LH back out of SN.
It will be interesting to see how it plays out, but it's also interesting to see more and more Luchtzak members question if a full LH take-over is still the best scenario.
In practice, SN is a state airline and the Belgian government is behind the whole project.
The Belgian state probably wants to see SN developping as a separate Belgian entity with all the risk taken by a foreign shareholder. This would explain why they forgave the huge start-up loans annd why they gave the first stake almost for nothing.
LH sees in SN an affordable and low-cost platform to expand its Eurowings operation. They can't see it as a separate airline that they'll invest in. If this scenario unfolds, the Belgian government sees no difference between SN and Ryanair or Vueling.

In my opinion, we'll see extension after extension until the options expire (in 2019?) and LH will do nothing if not enter in BRU with EW on SN's most profitable routes. This is a real risk on routes like GVA and SXF.

convair
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Re: Brussels Airlines future and financial perspective

Post by convair »

Flanker2 wrote:
In principle, the majority shareholders can make LH back out of SN.
Are you sure about that? An option to buy is an option to buy; there usually are time frame conditions and financial conditions but the prospective "buyer" would tend to resist any other conditions. There might be other ones in the LH/SN original deal but I don't remember these were published, so we are mostly speculating here (which is OK since it is one of the purposes of this forum anyway).

This doesn't mean that LH will not take into account the wishes of the exi(s)ting shareholder, of SN's management and employees, as well as marketing/commercial considerations, but in the end, their own decision will prevail.

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Yuqu12
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Re: Brussels Airlines future and financial perspective

Post by Yuqu12 »

convair wrote:
Flanker2 wrote:
In principle, the majority shareholders can make LH back out of SN.
Are you sure about that? An option to buy is an option to buy; there usually are time frame conditions and financial conditions but the prospective "buyer" would tend to resist any other conditions. There might be other ones in the LH/SN original deal but I don't remember these were published, so we are mostly speculating here (which is OK since it is one of the purposes of this forum anyway).

This doesn't mean that LH will not take into account the wishes of the exi(s)ting shareholder, of SN's management and employees, as well as marketing/commercial considerations, but in the end, their own decision will prevail.
Imo, the majority shareholders can't force LH to back out, but if they really don't want them to take over they just can stop LH give the possibility to expand their option to buy the other 55% and don't agree with the scenario of SN to fade into EW

convair
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Re: Brussels Airlines future and financial perspective

Post by convair »

Yuqu12 wrote:
convair wrote:
Flanker2 wrote:
In principle, the majority shareholders can make LH back out of SN.
Are you sure about that? An option to buy is an option to buy; there usually are time frame conditions and financial conditions but the prospective "buyer" would tend to resist any other conditions. There might be other ones in the LH/SN original deal but I don't remember these were published, so we are mostly speculating here (which is OK since it is one of the purposes of this forum anyway).

This doesn't mean that LH will not take into account the wishes of the exi(s)ting shareholder, of SN's management and employees, as well as marketing/commercial considerations, but in the end, their own decision will prevail.
Imo, the majority shareholders can't force LH to back out, but if they really don't want them to take over they just can stop LH give the possibility to expand their option to buy the other 55% and don't agree with the scenario of SN to fade into EW
When LH asks for an estension of its option, it doesn't need to specify what their plans are, only give a plausible reason for it; then the shareholder can say yes or no. If they say no, end of the story but they bear the consequence, i.e. a stand-alone or an other buyer.

DeltaWiskey
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Re: Brussels Airlines future and financial perspective

Post by DeltaWiskey »

Earlier this week, Brussels Airlines threw a party for all their employees, to thank everyone for their hard work during the busy summer holidays and to celebrate the new destination, Mumbai. The CEO said in his speech, among other things, that the ambition is to carry 10 million guests in 2018!

brusselsairlinesfan
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Re: Brussels Airlines future and financial perspective

Post by brusselsairlinesfan »

DeltaWiskey wrote:Earlier this week, Brussels Airlines threw a party for all their employees, to thank everyone for their hard work during the busy summer holidays and to celebrate the new destination, Mumbai. The CEO said in his speech, among other things, that the ambition is to carry 10 million guests in 2018!
Wow... this pretty ambitious! That would (almost) mean double-digit growth all over 2017/2018!

OO-ITR
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Re: Brussels Airlines future and financial perspective

Post by OO-ITR »

brusselsairlinesfan wrote:
DeltaWiskey wrote:Earlier this week, Brussels Airlines threw a party for all their employees, to thank everyone for their hard work during the busy summer holidays and to celebrate the new destination, Mumbai. The CEO said in his speech, among other things, that the ambition is to carry 10 million guests in 2018!
Wow... this pretty ambitious! That would (almost) mean double-digit growth all over 2017/2018!
double digit? they had 7.5 mio pax in 2015...

convair
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Re: Brussels Airlines future and financial perspective

Post by convair »

Assuming they reach 8 Mios In 2016, a 10 % increase In 2017 and 2018 will bring them to 9.66 Mios.

nordikcam
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Re: Brussels Airlines future and financial perspective

Post by nordikcam »

convair wrote:Assuming they reach 8 Mios In 2016, a 10 % increase In 2017 and 2018 will bring them to 9.66 Mios.
8Mios in 2016 I guess it will be difficult knowing the attaks in march...but around 7,7 could be a very remarkable growth...at the end of august they completely recovered vs 2015.

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Re: Brussels Airlines future and financial perspective

Post by sn-remember »

Flanker2 wrote: QR pulled a trojan horse on Cargolux. QR pulled out of Cargolux a few years ago and are starting to compete very heavily against them using the 5th freedom that they negotiated during the Cargolux stake acquisition.
True. But competition is a good thing and the Cargolux group (CV, C8, and soon to launch chinese venture) is well established major player in the global cargo market and set to remain so.
Flanker2 wrote:AZ is still a money black hole and I doubt that their result will be much better than last year. Even at current fuel prices, they can't break even. A profit is only a wishful mirage. AB is almost bankrupt..
I think EY are doing a great job. There are still efforts to do but both AZ and AB are on a right track to profitability. I am not among the believers that AZ or AB are doomed to fail as some (like MOL) like to boast around.
Flanker2 wrote: In principle, the majority shareholders can make LH back out of SN.
It will be interesting to see how it plays out, but it's also interesting to see more and more Luchtzak members question if a full LH take-over is still the best scenario.
In practice, SN is a state airline and the Belgian government is behind the whole project.
The Belgian state probably wants to see SN developping as a separate Belgian entity with all the risk taken by a foreign shareholder.
While I understand seeking a serious and competent investor is a priority, they shoud meanwhile take care of their business responsibility and make the airline thrive. TAP comes to my mind as a similar case, although the portuguese government IMO did a better job. I know TP results are still in the red but prospects look now brighter ...
Flanker2 wrote:LH sees in SN an affordable and low-cost platform to expand its Eurowings operation. They can't see it as a separate airline that they'll invest in. If this scenario unfolds, the Belgian government sees no difference between SN and Ryanair or Vueling.
That's the fundamental question .. What's the difference (real and percieved) between SN and EW ? This would need a real investigation, its Gustin's job to do this homework. I've no clear cut answer myself ...
Flanker2 wrote:In my opinion, we'll see extension after extension until the options expire (in 2019?) and LH will do nothing if not enter in BRU with EW on SN's most profitable routes. This is a real risk on routes like GVA and SXF.
GVA and SXF are open markets like the rest. If a EW product is deemed more robust .. they should go for it. My concern is the l/h business sn operates out of bru. Can it prosper and develop under the ew brand ? Let's rename them "brussels wings" and see the market response ? I am sure most pax will not even notice ...

Flanker2
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Re: Brussels Airlines future and financial perspective

Post by Flanker2 »

That's the fundamental question .. What's the difference (real and percieved) between SN and EW ? This would need a real investigation, its Gustin's job to do this homework. I've no clear cut answer myself ...
I think that EW is the product of a huge misconception about LCC's by Lufthansa.
It's not easy to explain, but I think that they see that Ryanair have many bases scattered all over Europe and they think that that is how a pan-European LCC becomes successful. They are thinking "build it and they will come".
What they don't see is that each FR base is a separate point-to-point network. For instance, how many destinations does Raynair serve out of CRL with their 14 based aircraft? A huge amount, even more than SN out of BRU.
They don't serve all destinations with high frequency and many destinations are served out of other bases.
Ryanair also make sure to announce the new routes clearly so that people can know about them!

EW is doing random routes, some one-stop, some direct. The prices are too high on either of them.
In addition, they are not marketing those routes the way they should.
As an example, in Early October a 4 hour AMS-SXF via STR is 240 Euro's return on the cheaper dates. How are they going to compete with U2's direct flights at 120 Euro's?
That is not going to work.
Then the next big problem is the marketing. No one knows that Eurowings is operating from their nearby airport, and even if they know, thy don't know where they operate to because they are not carrying out a structured marketing effort.

In addition, the EW longhaul routes are also point-to-point.
Point-to-point long haul routes are low density by definition and require feeding to be successful.

I think that Spohr has built his nomination around EW and is trying too hard without the competence to do it.
The reality is that EW has become a huge mess, like entangled ropes.
EW has to go back to the drawing board and has to establish the bases one by one with clear communiation towards the local customer base at both ends. Otherwise, they won't last long.

Compared to that, SN has an established customer base who knows where SN fly to and what the fares are.
Dumping SN into Eurowings will have the effect of confusing the customer base.
It will be like dumping a well-structured spider nest into a honey jar: the spider nest will disappear into the gooey honey.

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sn26567
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Re: Brussels Airlines future and financial perspective

Post by sn26567 »

The European Union probes Brussels Airlines-TAP Portugal codeshare

European Union regulators have formally raised antitrust concerns over a codeshare between Brussels Airlines and TAP Portugal, but have dropped a similar probe against Lufthansa and Turkish Airlines.

The EU inquiry into the Brussels Airlines and TAP Portugal codeshare on flights between Brussels and Lisbon was started in February 2011. On Oct. 27, the European Commission said it has issued a statement of objections to the airlines.

We are concerned that in this particular case Brussels Airlines and TAP Portugal may have used their codeshare to restrict competition and harm passengers’ interests,” EU Commissioner in charge of competition policy Margrethe Vestager said.

The probe relates to the first three years of a codeshare signed in 2009, under which Brussels Airlines and TAP Portugal sold unlimited seats on one another’s flights between Brussels and Lisbon.

Prior to the 2009 agreement, the two airlines were the only competitors on the route. The European Commission said that, under the codeshare, Brussels Airlines and TAP Portugal discussed and implemented a capacity reduction and aligned prices on the route.

The Commission takes the preliminary view that this combination of practices breaches EU rules that prohibit anti-competitive agreements. The Commission’s preliminary conclusion is that these practices eliminated competition on prices and capacity between the two airlines on the Brussels-Lisbon route and led to higher prices and less choice for consumers,” the Commission said.

The statement of objections is a preliminary view and not a final ruling. The airlines will now be given the opportunity to respond.

Full story: http://atwonline.com/airports-routes/eu ... -codeshare
Commission Statement: https://www.aviation24.be/airlines/brussel ... bon-route/
André
ex Sabena #26567

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