Major social plan at Bru.air by June 2012

[papysn]

dixit the french language economical newspaper l'Echo,there could be a major social cut at Bruair this june with between 400 and 900 job loss...

[papysn]

Also they are planning a downsizing of the european loss making destination and fleet (-10 aircraft if i remember good).

They finish this article with the terrible sentence "it'll be for june,if it's not too late..."

Regards.

K.

[convair]

Dark days ahead for SN's employees I'm afraid. Very sad...

Re the fleet, they still have 5 737 and 6 RJ85 in operation according to Airfleets. If these go, SN will have a more homogenous S/M haul fleet which should hopefully be a step in the right direction.

[airazurxtror]

They finish this article with the terrible sentence "it'll be for june,if it's not too late..."
.

Is it really as bad as that ? Hard to believe !

[sn26567]

A friend journalist sent me the article of Patrick Anspach in L'Echo. I cannot reproduce it for copyright reasons, but here are some of the main ideas:

Belgium has high social costs and cannot change its legislation overnight. But Brussels Airlines has financial problems that must be solved immediately. Reducing social charges might not be sufficient. Thus, restructuring the company might be the only solution. Many people think that Chairman Davignon is preparing such a restructuration in June (i.e. after the social elections to avoid some problems).

Analysts consider that 22 European unprofitable routes should be cut, even when taking into account their contribution to long-haul traffic. That would mean a reduction of the fleet by 10 aircraft, meaning 200 flight crew and 440 ground staff, thus a minimum of 640 people. Other experts consider that some 900 staff would have to go, out of 3,500.

Furthermore, 2012 is a year of heavy investments. Launching the JFK route will cost a lot, and the fixed costs could not be covered with only one daily flight, especially since competition is heavy on the North Atlantic. The long-haul fleet is being renovated at a cost of 30 million euros, but will there be any business class high-yield passengers to offset those costs?

Finally, what will Lufthansa's attitude? The German company lost 13 million euros last year and gets rid of loss-making subsidiaries, starting with BMI. Austrian Airlines could follow. The call option on Brussels Airlinesn is still pending and will probably not be exercised this year. Will it be in 2014 if SN keeps losing money? A restructuration is absolutely necessary. Let's hope that June will not be too late.

[sn26567]

BREAKING: Brussels Airlines has reacted by saying that no social plan has been announced whatsoever and that the information from L'Echo is pure speculation.

[papysn]

Hi,

Where did you got that information,i don't see any source for it?

K.

[sn26567]

The original article in the web edition of L'Echo is available only to subscribers. I received it from a journalist who has access to it.

Here is the link: http://www.lecho.be/nieuws/archief/Brus ... 20airlines

[BrightCedars]

I've posted in the thread on SN's financial perspective that there are press releases today by LH relating to devaluating SN's value in their books. Check that thread.

[papysn]

Hi
To:sn26567
My question was about the source of the BREAKING you posted about Bru air reaction...where did you find this reaction?

K.

[airazurxtror]

Yes, I have found nowhere that SN reaction, I would be most interested to read it.

[RoMax]

Yes, I have found nowhere that SN reaction, I would be most interested to read it.

Twitter, he asked about it on their twitter page and they responded on it that it was pure speculation of the press. At least, that's where I found it.

[sn26567]

To:sn26567
My question was about the source of the BREAKING you posted about Bru air reaction...where did you find this reaction?

Personal message from Brussels Airlines to me on Twitter, indeed. Thanks Mr_Boeing!

[airazurxtror]

There was thus no official denial to the article in "L'Echo". Rather strange. "Who says nothing, agrees" ?

[cathay belgium]

Hi,

When something was written in DeMorgen,deTijd,deStandaard,or many other newspapers they should have do..
indeed..
But when a rumour is spread only in one paper I don't see much of an issue, I see an issue with the newspaper ..
thinking a respected Dutch newspaper and the news of their prince Friso... for ex.

Guess giving less attention to it,is better than announce/deny something and give also a word to all other papers to write about ... you see.. in any way how they react you can create your own conclusions.. like you did already.. so silence is here the better option until it is in more newspapers..

CX-B

[DeltaWiskey]

Where there is smoke, there is fire, as they say in dutch. I know some people who got recently fired at SN, so it sounds plausible to me.

How often is something denied by a company, only to have it announced a few months later? When something is officially denied, I am not the first one to accept it.

[HighInTheSky]

Where there is smoke, there is fire, as they say in dutch. I know some people who got recently fired at SN, so it sounds plausible to me.

Indeed, and the smoke is building up as it seems...

I was informed yesterday that our management is seriously thinking about quitting the own check-in and boarding and to go back to a handling agent in Brussels...

IF this would be true, that would mean that 300+ people would have to go

On a slightly positive note, Flightcare will be almost forced to take over these people directly to be able to cope with the extra work.

Uncertain times ahead!

[airazurxtror]

But when a rumour is spread only in one paper I don't see much of an issue, I see an issue with the newspaper ..

That newspaper is "L'Echo", a specialized newspaper which is usually kept very well informed by its financial and economic sources.
Anyway, why don't we just wait and see ?
The SN situation will be clearer after the summer.

[sn26567]

That newspaper is "L'Echo", a specialized newspaper which is usually kept very well informed by its financial and economic sources.

And their aviation journalist Patrick Anspach, who wrote the last article, is one of he most knowlegeable people about aviation in Belgium. I meet him at every press conference on aviation.

[tolipanebas]

That newspaper is "L'Echo", a specialized newspaper which is usually kept very well informed by its financial and economic sources.

And their aviation journalist Patrick Anspach, who wrote the last article, is one of he most knowlegeable people about aviation in Belgium. I meet him at every press conference on aviation.

That may all be very true, but that doesn't mean all they write is always right, is it?

Let's look at some basic facts:

Firstly, L'echo is still referring to last years result of SN as an 'expected loss of xx million', whereas the exact figure is readily deductible from the LH annual report published more than a month ago. It may not differ substantially nor matter all that much to you, but especially for a financial newspaper I'd expect them to be far more professional and use exact figures as soon as they are available. They are, but they seem to be unknown to them more than one month after publication: to me it shows they are thus lagging behind on facts a bit....

Secondly, it seems l'echo and its journalist have only now discovered that SN are not only going to simplify their medium haul fleet, but are also going to seriously reduce its total size. As pointed out already, this reduction in medium haul planes is something which has been ongoing throughout the year already and is more than half completed by now, with 8 of the 14 RJ85s and 4 of the 8 737s already gone and replaced by a smaller number of A319/A320! Once again, something like this just shows they are indeed lagging behind on facts.

Thirdly, the rest of the article is based on talk with anonymous 'experts' and 'analysts' which are clearly pushing their own personal solution, rather than inform us on that of SN, which -I hope you agree- ultimately is the only one that really matters.

I agree that one possible solution is to simply cut all loss making routes and sack almost 1,000 people as a direct consequence: this is most definitely the quickest way to restore immediate profitability at SN even. Something like this is also the only possible solution when there is real urgency involved as you don't have the luxury to bother about any long term strategy any longer. However, this is not the plan of SN, as was reconfirmed by the CEO very recently (after the article appeared and with a clear reference to it even).

SN has opted not to just shrink the airline back to profitability (as Anspach clearly advocates), but rather has decided to strategically reorientate towards flying much more long haul routes (FINALLY!) as an alternative way to improve both its financial results as well as being of much more use to its partners than under Anspach's plan: the first phase of this plan is now fully underway with the insourcing of the DLA/NSI flights from LX, the increase in non-stops on FIH and the launch of JFK, with a similar further expansion on long haul planned for next year too.

Obviously, such a strategic reorientation takes much more time to implement than a simple 'one big cut-to-profitability plan' and it is only possible if you have sufficient cash to bridge the 2 year period needed for it to take effect, something which SN luckily has, contrary to what you can often read here and so they have decided on this alternative approach already in December last year and have confirmed sticking to it very recently. One may always be sceptical about such reassurances, but frankly everything we see so far, seems to confirm this indeed.

During the implementation period and as part of the plan, some leisure routes are indeed going to be closed as they are loss making (during winter) and of no strategic importance and this will happen when the remainder of the RJs and 737s still around today are phased out, yet as you can see in the topic about the winter 2012 routes already loaded in the GDS, the cut is nowhere near what was written in l'echo.

This winter there will indeed be a surplus of staff (albeit much smaller than what Anspach guessed because far less routes are going to be closed than he suggested), yet this surplus is not going to exist for very long due to the subsequent expansions planned on long haul: sacking hundreds of trained and qualified people only to rehire most of them a couple of months later doesn't make much sense, especially not in Belgium, so other solutions will have to be found to bridge this period.

FWIW, SN had a proposal in place until our government felt the need to unilaterally turn upside down the entire carreer perspective of flight crews during their recent pension reform (hence the public frustration), yet it seems Di Rupo is about ready to announce somewhat of a U turn on this matter: if confirmed, that would be a very good thing as this reopens relatively smooth ways to bridge the gap and to proceed with turn around of SN into an airline focussed much more on long haul than it is today, although much of the details obviously need to be ironed out still, but none of it then comes close to what is mentioned in the article.

Let's just say the article reflects the personal ideas and beliefs of the author, much more than it reflects any real knowledge of what is being implemented.