SN Hopes Virgin Express Deal By Year End

[Avro]

SN Brussels said earlier the final talks had suffered a delay due to unexpected difficulties in resolving some formalities.

That isn't a big surprise to me

It would indeed be interesting if someone has the entire article.

Chris

[blackhawk]

some extra news:

* Due to the delays, a decission concerning the renewal of the SNBA fleet is deferred until the end of the year.

* The charterflights made by SN out of Paris, Toulouse, Rijsel(Lille) and Geneva produced € 4.15 million of cash in the first six months.

[TWA]

Both airlines would continue to operate separately.

I don't like this part, it doesn't make any sence to me!!!!!

TWA

[sn26567]

Why not, TWA? Several airline companies (e.g. SAS, United, Delta, ...) are already operating full service and low cost airlines. There is a market for both types of operations, why not under the same umbrella?

[Captain]

I don't like this part, it doesn't make any sence to me!!!!!
TWA[/quote]

TWA, I honestly think that both brands can co-exist. It's been succesfully done before and not just with airlines. i.e General Motors (Chevrolet, Pontiac, GMC, Saab, etc...).

The way it's probably going to happen: Virgin Express will be the low cost arm and SN Brussels will focus on popular routes as well as long-haul travel. Both companies will be centrally managed thus avoiding competition between them and conflicting decision/strategies. If these airlines merge and together make a profit and can expand it makes entire sense. This would probably help in the expansion of Brussels Airport to how it was a few years ago.

Captain

[Buzz]

There are some examples of how it didn't work however:
BA & Go
USAirways & MetroJet (or something)
UNITED & ? (was it express by United?)
...

I do think however this marriage could work real good if they keep the companies striktly seperate, because then VEX stays the real LCC, and you don't have the problems SONG & TED have: the mainline pay rates etc...

My conclusion: it could work, but only if they keep them seperate ...

[Flybe]

More news in Trends of 22/07/04. There is an interview with Peter Davies. One of the problems is that Virgin Express, that would gain 29,9% of the shares of the new holding, has an amount of -28,3 million of own resources. The company survives because of a loan of 34 million euro with one of the companies of the imperium of Richard Branson. That loan is due to be paid back... in 2005. SNBA has own resources of 93,9 million euro.

Greets,

Pieter

[tolipanebas]

I think we can all easily see why SN isn't too keen to merge with VEX under the present conditions...

When SN merges with VEX and buys out Branson in 2005, it means the merged company (SN Airholding) would only have 65,6 million euro left, of which roughly 19,7 (30%) would belong to the ex VEX shareholders!

Not a bad deal for a virtual bankrupt airline to go from MINUS 28,3 million euro to plus 19,7 million euro (or even 65,5 million euro if you want so) and have 30% of the shares/votes.

Rumour has it the SN is really shocked by what a mess they found at VEX financial departments and is now carefully auditing all accounts of VEX (remember this is the second big financial surprise: the first one was when SN found out the internet booking engine of VEX 'forgot' to bill millions of tickets pax booked throught their site in 2001-2002), and in the mean time the auditors have suggested to SN's shareholders to renegotiate VEX share in any future merged company (max 15%) IF the merger would make sense after all... in short, it is not even certain anymore!

[sn26567]

Must be a blow for the ego of Sir Richard!

[blackhawk]

thanks at Oo-VEX: http://www.trends.be/CMArticles/ShowRel ... ionID=1233