SN/FR/BRU/CRL controversy

[Flanker]

Let's say the things such as they are.
Staff costs are not the problem at SN!

How much do SN spend in direct human resources?
At an average cost of 40.000 per year over 3000 employees, it's around 120 million.
In 2012, even if SN reduced all salaries to 0,00 they wouldn't break even.

The salaries SN pays are of the lowest in Western Europe.
The office and ground ops staff are paid peanuts and so are most of middle management people.
Cabin crews, we know the story and pilots have one of the lowest gross salaries in Europe!
Moreover, SN has one of the lower staff per pax ratio in the world!!!

However, if SN can have BRU reduce its taxes by 20 euro per passenger, over 3 million departing passengers it makes a difference of 60 million. There the debate is not about the subsidies CRL gets, but about how BRU is ripping off its pax and airlines. So once BRU stops ripping off everyone, we can start talking about the incentives to CRL.

So all this crew level playing field talk is not even worth the neuronal exercise.
Gustin and Daving Kong only have themselves to blame for their airline's failure, end of discussion.

SN's decline is to blame to
-Amateur marketing team, immature low quality advertising, bad positioning
-overcapacity in a low yielding market in 2011/2012
-use of inefficient RJ85/RJ100 platforms in a high fuel price environment
-Inefficient network design in Africa, high yield but high cost
-Excessive long-term investments in an unstable, uncertain short-term environment
-Excessive use of contracted personnel and contracted services, maybe someone's' filling their pockets with it?
-Inefficient maintenance organisation, expensive procurement contracts
-Inefficient handling partner that leads to loss of customers
-Expensive airport charges
-Lack of initiatives and entrepreneurship, for example like Hannover, who would have thought that that route would work? Why dont' they try more of those? Why JFK, why not Lubumbashi instead?
-Strange route decisions, such as ATH, JFK
-Inefficient overall organisation, aged processes copy-pasted from Sabena and not reviewed since
-Aged and uncomfortable product, old and yellow cabins on Avro, slimseats on Airbus
-Top management with no prior successful aviation experience
-Passive shareholders, including LH

I could go on and on and on...

If because of Daving kong and co's whining, FR loses incentives and my FR fares to my regular business and leisure destinations go up drastically, be it in a scenario where SN survives or in one where it doesn't, I will myself start a mass-movement against the government's high tax policies. The low FR rates are what help me balance the high taxes I pay, so I would be really pissed.

[DeltaWiskey]

How much do SN spend in direct human resources?

I just recruited a technician for our company, the minimum legal wage for him is €14/hr (he is just over 40), iow his gross salary is almost €28k a year. Add the taxes (RSZ, 13month, holiday money,...), that makes the total cost for our company for this person over €41k a year.
(This is the minimum cost for a 40y old laborer, the lowest function in our company, he didn't even finish high school.)

You don't tell me €40k is the average salary cost at SN, no way!

Flanker, seriously, get your numbers right...

[Flanker]

Flanker wrote:
How much do SN spend in direct human resources?

I just recruited a technician for our company, the minimum legal wage for him is €14/hr (he is just over 40), iow his gross salary is almost €28k a year. Add the taxes (RSZ, 13month, holiday money,...), that makes the total cost for our company for this person over €41k a year.
(This is the minimum cost for a 40y old laborer, the lowest function in our company, he didn't even finish high school.)

You don't tell me €40k is the average salary cost at SN, no way!

Flanker, seriously, get your numbers right...

Wait a minute, first tell me if you recruited this person for SN or for another company.
I will respond to your comment after that.

[cnc]

something else to keep in mind is that sabena had a succesful ground handling division that was making money, brussels airlines has not and has to pay a lot of money at BRU to get handling services

[DeltaWiskey]

Our/my company, isn't that clear? I'm not Etienne Davignon, so it isn't SN.

[FlightMate]

Just a thought...

Why do you think EasyJet decided to register its plane in the UK?
I suppose they could have had the same advantages as Ryanair is they went in Ireland.
And their business model is much more similar to Ryanair s than SN is.

And concerning SN: Minister Wathelet says it will never help SN if its problems are due to bad management (choice of routes, planes, bad edging, etc...), and not due to unfair competition.

[tolipanebas]

How much do SN spend in direct human resources?
At an average cost of 40.000 per year over 3000 employees, it's around 120 million.

Last year, SN Airholding booked €167M in employment costs according to their official statement.

An escalation for 2012 will likely give a figure of about 175M this year, or about 50% more than guessed.

[Flanker]

Last year, SN Airholding booked €167M in employment costs according to their official statement.

An escalation for 2012 will likely give a figure of about 175M this year, or about 50% more than guessed.

You and deltawhiskey are totally right that it's more than 120 million.
But then again it's not 3000 employees either, it's more like 3500.

If you want numbers up to the comma, you better hire an analyst or pay me.
120M or 150M or 170M doesn't change the point at all.

The debate is about reducing charges on 25% (crews vs total personnel) of that 170M basis, by 20%.
Do the math. 170 x 25% x 20% = 8.5M and I didn't even use my calculator.
This is in line with my numbers of 5m saving for flight crews.

All this chit chat about 5 to 10M savings?
What about the other 70M (2011), 100M -> ∞ (2012) of the losses?

I just recruited a technician for our company, the minimum legal wage for him is €14/hr (he is just over 40), iow his gross salary is almost €28k a year. Add the taxes (RSZ, 13month, holiday money,...), that makes the total cost for our company for this person over €41k a year.
(This is the minimum cost for a 40y old laborer, the lowest function in our company, he didn't even finish high school.)

14 euro's an hour?
Half of the SN mechanics don't make that much as basic salary, but they probably get around those figures with additional allowances.
Count out most basic office staff, cabin crew, ground staff and low management. Only few of them make close to 14 euro's an hour, all the rest earn less even with allowances.

There you have 80% of the company making 14 euro's or less an hour.
The top salaries will have much influence on the numbers, though.

If you look at it, I was in the right arena.
150M / 3300 employees (2010 number) = 45.000 euro's.
It's probably the top salaries pushing it up, you can never know by how much.

Semantics, the point is made that this tax debate is an attempt to defer the attention from the real issues. I suggest that we stop wasting kilobytes on small details that don't have any impact on the discussion at hand.

Being on the extreme defensive for so many years has backfired... and now it's the government and Ryanair's fault? Please.

Wathelet, secretary of transport:

"Indien het een gevolg is van het feit dat ze te weinig klanten hebben, omdat ze de brandstofkost verkeerd hebben ingeschat, dat ze hun verbindingen slecht hebben uitgekozen, dan zal de overheid in geen geval te hulp schieten", stelt hij.

If SN's financial issues are caused by the fact that they have too little passengers, or because they miscalculated their fuel costs or because they wrongly chose their routes, then the government will not help them in any case

http://www.hln.be/hln/nl/942/Economie/a ... heer.dhtml


Hey but didn't SN receive subsidies too?
They have a big regional loan running, probably at favorable rates, plus the regions had invested some capital at the beginning.

[DeltaWiskey]

Where do you get those numbers, Flanker?

From their balance sheet of 2010, you can see SN has spent 159,65 million in employment cost for 2227,9 full time equivalents. That means €67,6k per person. Well, so far the official number, take it or leave it.

Go ahead with your own invented numbers if you want to prove you are right, but we all know you're not...

[Flanker]

So once again tell me what difference does it make in the discussion whether the tax savings will be 5% of 120 million or even 5% of 300 million? Right, the difference is that you wasted so much time to prove me wrong, visiting balance sheets etc, while I sucked the numbers out of my thumb to give a plausible dimensional idea.

You can go on wasting your time with that.
By the way, no one said that the 3000 some employees were full time. A lot of SN staff don't work 38 hours a week.
Even more by the way, as I said, by my estimates 80% (oh wel excuse me if it's 72,654%) of the staff have a salary below 14 euro's an hour, so the average salary will depend on those 20% top salaries.

Aren't you supposed to be running your business instead of proving other people wrong in an irrelevant way around here? I offer you a candy for pointing out to my shocking mistake

[Stubru]

For around 5milion pax BA pays 5x€27 = €135million and FR receives 5x€15 = €75million being a difference of €210million.
On top of that comes the salary issue.
No bussinessplan can make up for that.

[cnc]

For around 5milion pax BA pays 5x€27 = €135million and FR receives 5x€15 = €75million being a difference of €210million.
On top of that comes the salary issue.
No bussinessplan can make up for that.

guess you mean SN and not britisch airways? anyway SN doesn't pay €27, the passenger does.

[Stubru]

The passenger has to pay it to SN first.
It's a difference of €42 to start with, pax just compare fares on europe.

[tolipanebas]

Where do you get those numbers, Flanker?
From their balance sheet of 2010, you can see SN has spent 159,65 million in employment cost for 2227,9 full time equivalents. That means €67,6k per person. Well, so far the official number, take it or leave it.
Go ahead with your own invented numbers if you want to prove you are right, but we all know you're not...

Indeed, the ballpark numbers of dear flanker are striding off more and more as you start looking into them, but then that's a recurrent problem with him. He's very good at presenting the wildest theoretical solutions, yet the moment he has to implement them into a workable plan somehow, he always runs into problems with today's reality: it really is a recurrent problem of his, be it A320 operations to central Africa, turboprop operations on EU routes or anything else really.

So once again tell me what difference does it make in the discussion whether the tax savings will be 5% of 120 million or even 5% of 300 million?

Well, let's summarize:
budget for employment costs UNDERESTEMATED by 45%
Number of FTE OVERESTIMATED by 45%
topped up with excuses and more excuses in order to back away from the figures first presented, to the point where one has to wonder just what those figures and thus conclusions drawn from them really still mean, yet people should not bother pointing out all of your factual errors???

Oh, one more thing: at SN, 45% of staff are flight crew, not 25% like you've said, but who cares right?

Mind you, I agree focussing on employment costs alone isn't enough, but it is outright stupid to pretend that it doesn't matter at all either, like you are.

I sucked the numbers out of my thumb to give a plausible dimensional idea.

All very nice, yet if you know this business nearly as good as you pretend, it takes exactly the same effort sucking out more or less correct figures, rather than figures which hardly come close to the real world figures...

Aren't you supposed to be running your business instead of proving other people wrong in an irrelevant way around here?

Hear, hear!

[sn-remember]

Being on the extreme defensive for so many years has backfired... and now it's the government and Ryanair's fault? Please.

It's indeed plain common sense v
You can't have your cake and eat it.
At least they thought it was a cake dismantling the Sabena l/h legacy and never bothering to correct this major blunder.
Do they merit to survive ??? I sometimes ask myself ...

[sean1982]

It's actually very simple, after years and years of decline of the flemish airports and the inability of the responsible governments to do something about it, suddenly now they realise they've come to a critical point. And now it is the fault of the walloon government who have doen a very good job in setting out an economical plan for their airports? This is the perfect example of how this country is NOT working.

10 years ago politicians in the federal government were laughing about a little irish airline that was flying 2 times a day to DUB with a battered old 737-200 and now suddenly they are the pinnacle of EVERYTHING that is going wrong in Zaventem? Don't make me laugh please. If there is one group of people to blame for this, then it is the politicians who have done NOTHING for years to help BRU (or ANR and OST as well)

[Acid-drop]

The situation is different. Flanders is investing in what they believe is the most important for their economy : the harbors.
Wallonia is doing the same : the airport.
This is an aviation enthusiast forum, so you want them to invest in aviation, but they are very successful at NOT doing it.

[sean1982]

ok fine, but then stop whining about it. Suppose you haven't read this?

http://www.destandaard.be/artikel/detail.aspx?artikelid=RB3OAE8B

[DeltaWiskey]

So once again tell me what difference does it make in the discussion whether the tax savings will be 5% of 120 million or even 5% of 300 million? Right, the difference is that you wasted so much time to prove me wrong, visiting balance sheets etc, while I sucked the numbers out of my thumb to give a plausible dimensional idea.

You can go on wasting your time with that.
By the way, no one said that the 3000 some employees were full time. A lot of SN staff don't work 38 hours a week.
Even more by the way, as I said, by my estimates 80% (oh wel excuse me if it's 72,654%) of the staff have a salary below 14 euro's an hour, so the average salary will depend on those 20% top salaries.

Aren't you supposed to be running your business instead of proving other people wrong in an irrelevant way around here? I offer you a candy for pointing out to my shocking mistake

You come to this forum trash-talking about everything. Saying you have tons of experience, you know the markets, making us believe you are the big man with the $50 billion solution.

The truth is, you know nothing about business nor aviation. Absolutely nothing. You come here to this forum because you get here attention with your ridiculous ideas, attention you wouldn't get in your career/life.
Well, you are a pathetic figure...

I came here with the idea to discuss here in a civilized manner, but apparently that isn't possible.

[convair]

@DeltaWiskey

You're almost there: it's a 50 billion EUROS solution. There should be a new topic on this forum; it could be called:

The Quest for the Holy Grail, the Flanker 50 billion euros solution