Brussels Airlines future and financial perspective

[nordikcam]

I do not know where to post that but I flew today YYZ BRU with OO-SFU...and 100/100 load factor ! It seems this line works wel. A lot of people from US and Canada to Dakar and to Yaoundé !! Good job ! Nice and good service and food...very correct ! Friendly !

Moderator, feel fre to post where it could be ! Sorry !

[sn26567]

Part of post by DeltaWiskey in another topic:

I also have the impression that YYZ has been a strong performer so for, It's got consistently high load factors all summer (doesn't say anything about yield though).

[sn26567]

In Africa, Brussels Airlines will have to sustain competition not only with Air France, but also with KLM. The latter is already bigger than SN at Kigali. Now it also wants to fly to two other SN strongholds: Freetown and Monrovia.

https://www.aviation24.be/airlines/klm-roy ... -monrovia/

We expect a strong reaction from Brussels Airlines! To the Dutch Antilles for example...

[sn-remember]

Concerning kl starting rob and fna ... Its a come back for kl which briefly served fna some 20 yrs ago (3 wkly dc10 IIRC)
I wonder why sn are not more proeminent on their traditional markets .. they are still too timid IMO and therefore offering kl too much opportunity to invade their turf.
When kl opened kgl a couple of yrs ago, I was feeling frustrated bcs obviously sn was not exploiting the destination at full potential. And kl soon outperformed sn on a historical route.
SN are still not aggressive enough although there is "some" improvement .. They should thrive to "own" a market.
And no SN would not dare to venture to cur/aua, the market is more than well served at rock bottom fares from ams with a choice of 2 airlines. However a seasonal flight operated by EW might work provided feeding from secundary markets including Germany is granted ...
Leisure destinations is not where the future of SN lies except if it brings added value to their global network.

[sean1982]

In order to be "agressive" you need A LOT of money. Agressive means, lowering your fares below market price for a long enough period untill you push your competitor out of the market. SN doesnt have the funds nor the aircraft to do so.

[LJ]

Concerning kl starting rob and fna ... Its a come back for kl which briefly served fna some 20 yrs ago (3 wkly dc10 IIRC

No, it was the A310 which did the final flights to ROB and FNA (and CKY).

To me this flight has not much to do with SN not being aggressive but more with it's part of the Africa strategy of AF/KL/DL whereby they divide destinations. Wouldn't be surpirsed if this flight will be codeshared with DL. Moreover, I doubt that UA and SN cooperate the way AF/KL/DL do (and DL did serve ROB for a few years).

[sn-remember]

With kl opening fna, skyteam has now a daily operation there. There is some point for kl to complement af's operation in sierra-leone. At the same time they restart rob (dropped by af) wile profiting from the huge UK connection panel KL has to offer from ams. Since BA didn't find it worth reentering this marketto this day , kl very opportunistically takes the lead. Well done KL.
About the uk connectivity, I think sn should do more and consider opening lgw and ltn

[AIRMARSHAL]

and LCY !!!

[sn-remember]

And while we are at it, ORY would be nice too.
These additions as some others could help consolidate sn l:h ntwk (meaning going daily to most destinations) and open new markets.

[Passenger]

Concerning kl starting rob and fna ... Its a come back for kl which briefly served fna some 20 yrs ago (3 wkly dc10 IIRC)
I wonder why sn are not more proeminent on their traditional markets .. they are still too timid IMO and therefore offering kl too much opportunity to invade their turf.
When kl opened kgl a couple of yrs ago, I was feeling frustrated bcs obviously sn was not exploiting the destination at full potential. And kl soon outperformed sn on a historical route.
SN are still not aggressive enough although there is "some" improvement .. They should thrive to "own" a market.
And no SN would not dare to venture to cur/aua, the market is more than well served at rock bottom fares from ams with a choice of 2 airlines. However a seasonal flight operated by EW might work provided feeding from secundary markets including Germany is granted ...
Leisure destinations is not where the future of SN lies except if it brings added value to their global network.

KLM will fly triangle Amsterdam-Freetown-Monrovia-Amsterdam, three times a week, A330-200.

No airline can prevent KLM to start this routing. Not one airline would spend money to prevent them from doing so, not even cash machine Ryanair. It would only delay the start.

So please sn-remember, don't blame Brussels Airlines for: 1) not being more promiment on their traditional markets, 2) for being too timid, 3) for not exploiting at full potential, 4) for nog being aggressive enough. Competition simply is part of the business.

[Duke]

So please sn-remember, don't blame Brussels Airlines for: 1) not being more promiment on their traditional markets, 2) for being too timid, 3) for not exploiting at full potential, 4) for nog being aggressive enough. Competition simply is part of the business.

But still I can't understand why it seems so difficult to expand.
What's the risk if you can lease one or two extra aircraft at "normal rates", when you know you have an almost certain number of passangers and more or less high yields, given the lack of competitors on the route?
Offering daily frequencies on the most busy routes will improve the attractivity of the connection, so improve the number of passengers?
Or is my reasoning too simple?

Regards,

Duke

[SkyTourist]

Bernard Gustin in Trends (article in Dutch: http://trends.knack.be/economie/bedrijv ... 78493.html): Brussels Airlines have no shrinkage scenario

- Brussels Airlines had in recent years brisk growth plans, supported by Lufthansa.It led in recent months to intense speculation in the Belgian media: the merger with low-cost subsidiary Eurowings (flights in Europe and distant holiday destinations); lucrative intercontinental flights, with many services for passengers, by Lufthansa itself.

- Brussels Airlines does more than what Eurowings offers: intercontinental fleet from 4 (2008) to 10 (2017) aircraft; strong in Africa, flights to North America (New York, Toronto and Washington) and to Mumbai in 2017.

- Gustin is quite optimistic about further growth opportunities for Brussels Airlines: "That decision is not taken by management, but by the shareholders. But there is in Brussels a market for those intercontinental destinations. Zaventem has in the Lufthansa Group the greatest potential of travelers of all hub airports. Much more than Frankfurt, Vienna and Zurich. And as long as there is a market for these intercontinental passengers, Lufthansa is willing to further develop the airline. Under what name it will happen is not decided yet. "

- On the profit: 2016 has not been a good year due to the terrorist attacks (calculated loss of 80 to 100 million euros), unclear how much the insurers will cover; Gustin maintains the initially planned projections for 2018 sales of 1.5 billion euros, 10 million passengers and a net profit of 50 million euros, at an assumed oil price of $ 100 per barrel.

- On the fleet renewal: from 2018 gradual renewal of the entire long-haul fleet, expecting within the Lufthansa Group cheaper prices for the aircraft.

- On Star Alliance: instant access to partners at Lufthansa or Air Canada. "That would never happen if we were an independent airline. Moreover, we fly the route to Toronto. " Without Star Alliance this destination would be flown by a Canadian airline.

[sn-remember]

No airline can prevent KLM to start this routing. Not one airline would spend money to prevent them from doing so, not even cash machine Ryanair. It would only delay the start.

Maybe you missed my point ? Indeed no airline can prevent competition but it's possible to make competition more difficult.
Exemple : SN wanted to keep NBO but was NOT successfull doing so. KL on the other hand succeeds developing a flourishing business in Kenya. Both carriers enjoyed a long fruitful past on the route and in EastAfrica as a whole. We know KL entered into the capital of KQ long ago, cementing a key business tie in Kenya, promoted as the corner stone of their massive presence in East Africa.
So what I mean is that success is the result of a long standing vision and intelligent investments. KL managed to become ubiquitous in Kenya and East africa despite a stagnation in Kenya's economy and aggressive competition from ET,TK, EK and QR.
On this same market, SN is limited to a single daily flight, nbo was dropped as was dar and jro loooong before.
Concerning the ex-ebola coast, the market is much more limited although taking up.
What I mean is that competition has winners and losers and the key thing in management is (broadly speaking) to thrive being among the winners. The strategies to get there consist of (not exhaustive)
1. Recognise key markets
2. Invest in route promotion, brand recognition, partnerships.
3. Consolidate through destination cluster and high frequencies
4. Maximise feeding through own operation and partner's.
5. Develop a long term policy.
6. Develop a good product, a good service, a good reputation

So please sn-remember, don't blame Brussels Airlines for: 1) not being more promiment on their traditional markets, 2) for being too timid, 3) for not exploiting at full potential, 4) for nog being aggressive enough. Competition simply is part of the business.

And why would/should 'nt I blame sn for some of the reasons mentioned ? They are no icon you know ...
But don't get me wrong, I am not overly critical of them, I think they are doing things better than a couple of years ago.

[DeltaWiskey]

- On the fleet renewal: from 2018 gradual renewal of the entire long-haul fleet, expecting within the Lufthansa Group cheaper prices for the aircraft.

It's likely that the decision about new aircraft may be taken/announced only next year, March at the latest. One of the reasons may very well be the lease rates (credit rates) when SN is a 45% or 100% subsidiary of the LH Group.

Regarding the fleet renewal, it is not going to be an aggressive roll over (I think it was mentioned that 6 or 7 leases will end in 2018-19), but a more conservarive one at a rate of +- 2 a year, between 2018 and 2023. I believe the A330-900 is the frontrunner at the moment (and the gap only inreases if you take oil at $100/bbl in 2018 into account).

[sn26567]

Cityjet is recruiting Sukhoi Superjet SSJ100 pilots for a "new Brussels base", but no cabin crew. Could the Irish airline be flying the Russian plane for Brussels Airlines in 2017?

Because I don't see Cityjet opening a Brussels base for itself....

[airbuske]

Cityjet is recruiting Sukhoi Superjet SSJ100 pilots for a "new Brussels base", but no cabin crew. Could the Irish airline be flying the Russian plane for Brussels Airlines in 2017?

Because I don't see Cityjet opening a Brussels base for itself....

The SSJ is able to land in BMA

[nordikcam]

Inside the topic " Brussels Airlines will fly to Yerevan as 31 of March" the luchtzak member TOLIPANEBAS said 27 of september 2016 confirming Yerevan..."that there is more to come still..."

Maybe CityJet flying some destinations for SN with the SSJ100...

[RoMax]

I mentioned it in the SN fleet renewal topic a few days ago, questionning if it's coincidence (I doubt it) that CityJet is hiring pilots for a SSJ BRU base...a carrier that is looking for clients to operate under wet-lease agreements (like they already have with SAS and Stobart Air) at the same time as SN is preparing for the last phase of the RJ100 replacement, still requiring those 4-5 wet-lease 100-seaters (CityJet's SSJ's have 98).

[skumfiduse]

I mentioned it in the SN fleet renewal topic a few days ago, questionning if it's coincidence (I doubt it) that CityJet is hiring pilots for a SSJ BRU base...a carrier that is looking for clients to operate under wet-lease agreements (like they already have with SAS and Stobart Air) at the same time as SN is preparing for the last phase of the RJ100 replacement, still requiring those 4-5 wet-lease 100-seaters (CityJet's SSJ's have 98).

I don't think it is all just coincidence. Airbus A319s is too much of capacity to a number of destinations/flights. SN doesn't operate the Dash 8 on flights with more than 1h00 flight time (exception is Billund with 1h30).

Question is what will happen with the Dash 8 & Embraer 145 leases? If they are about to expire as well in 2017, Brussels Airlines might be evaluating various options.

If Cityjet's plan is to support Brussels Airlines, I'd say we could see up to 10 SSJ's in Brussels. This as a replacement for Avro & expiring wet-lease aircraft, capacity for additional frequencies to existing destinations and launching new destinations.

Malta & Estonia will hold the Presidency of the EU Council in 2017. Brussels Airlines did serve Riga when Latvia held the Presidency in 2015. I can imagine SN wants a piece of the Maltese & Estonian cake.

[RoMax]

I don't think it is all just coincidence. Airbus A319s is too much of capacity to a number of destinations/flights. SN doesn't operate the Dash 8 on flights with more than 1h00 flight time (exception is Billund with 1h30).

Indeed. SN confirmed on multiple occassions that they look at a number of about 5 100-seaters under wet-lease as a part of the RJ100 replacement.

Question is what will happen with the Dash 8 & Embraer 145 leases? If they are about to expire as well in 2017, Brussels Airlines might be evaluating various options.

There are still some routes for which even a 100-seater is too big, so I assume at least some smaller aircraft will remain in the fleet under wet-lease.

If Cityjet's plan is to support Brussels Airlines, I'd say we could see up to 10 SSJ's in Brussels. This as a replacement for Avro & expiring wet-lease aircraft, capacity for additional frequencies to existing destinations and launching new destinations.

Let's start with about 5 That's the number they always talk about regarding the wet-leased 100-seaters (or was it 4?).