Why is there no market for a big airline in Belgium?

Scoezie · Post by **Scoezie** » 28 Dec 2003, 12:47

Hi there!

I have a question. Regulary I hear people say that there is no market for a big airline here in Belgium. They say that the coutry is to small. But look at the Netherlands, there country is also not big (just 5 milj people more then in Belgium) and they have KLM, one of the worlds leading airlines. And look at austria, they have 8milj residents, and they also have a great airline. Austrian Airlines is not that big as KLM but certainly bigger as SNBA. And they are doing well. In the past, with Sabena, we had many losses but the pax were good. I think with a good management, a big airline in Belgium would work. What are your opinions on that?

And do you think SNBA must grow to compete with the other 'great' airlines in Europe or just stay small and doing like they are doing right now

Greetzz
Scoezie

JetB · Post by **JetB** » 28 Dec 2003, 13:36

KLM was not and is not doing so good !.

But I agree a small country can have a big airline, look at Ireland and Ryanair.
But they opened bases all over Europe to grow, Ireland wasn't big enough !.
I like to see Virgin-Express grow like Ryanair, Virgin - Atlantic / Blue / Pacific are growing but the Belgian based airline isn't, why ? I don't know, for some reason there main shareholder does not like this idea !.

SN will grow, but I think a big airline will take them over in time. Great potential to Africa !.

Belgium will never have a AA / Air France / Lufthansa we are to small....

ATC · Post by **ATC** » 28 Dec 2003, 14:18

I agree on the usue that SN will be taken over by a larger international airline. But I think this will not happen in the near future. SN will keep it independence for serveral years.

On the fact that there is or isn't a big market in belgium I have the following opion.
If Belgium doesn't create a aviation-friendly invironment, the general aviation will krimp and not grow.

for example: The Belgian government is discussing "the nightfilights" for more than 2 years now and we haven't come one step closer to a solution.
They (government) say that zaventem is big enough and they are looking for a alternative.
Zaventem has lost more than 25% of its passangers due to the Sabena bankrupt.
The current Brussels (BRU) facilities can handel more than 30 million passangers. There are now only 16 (maybe 17) million and the government looks for a new airport location because BRU is to full.

Foreign international airline companies see this belgium aviation discussion and plan their expansion outside Belgium, for example Ireland.
Countries that stimulate the economic aviation industry.

Me last example:
DHL wants to expand in Brussels (+ 20.000 jobs) and the Belgium government must think it over. OK, they can't expand without a general logic and you must find a balance between ecologics and economics.
But I think if they will stay discussing DHL will go somewere else...

poor belgium...

greatings,
ATC

JetB · Post by **JetB** » 28 Dec 2003, 15:01

A low cost terminal at BRU airport.

Airlines like Easyjet don't fly to BRU because it is to expensive for them. Why ignore this great potential, low fare airlines are going to grow ! maybe it is to protect SN ?.

A low cost terminal can also be a great chance for Virgin to lower there cost structure and finally expand (more job's).

Zorba · Post by **Zorba** » 28 Dec 2003, 15:46

I have an example :

We have the chance now to let DHL grow --> More jobs, bigger airline, etc. But I'm shure that our stupid gouvernment won't take that chance ... DHL has allready given some other airports (Stuttgart, ...) So, lots of chance that they will go away from Brussels ...

So I thik also the gouvernment has something to do with that

Regards,
Rutger

Scoezie · Post by **Scoezie** » 28 Dec 2003, 18:27

But I think the problem is also that we don't blindly fly a belgian carrier. For exemple the Germans fly Lufthansa, the French fly Air France but the belgians don't fly there national carrier. They look more to the costs I think. What reason is there for that problem

Flybe · Post by **Flybe** » 28 Dec 2003, 18:53

I think that a big airline can survive in Belgium, as it can survive anywhere. The internal market in Belgium isn't big, that's for sure. But:

1) Belgians (and dutch people) are at least in the european union the people that travel the most (according to an article in the newspaper HLN some months ago). I don't know the figures about travelling by plane though.

2) much more important: everything depends on a hub effect then. I mean, the internal market isn't big enough to support a large airline, and although many businessmen and diplomats come to brussels, i think that the big airlines get their strenght mainly out of transfers through their hub. Most obvious example for SNBA: pax from Paris and the USA to Africa... That's how you can get big.

Of course this doesn't mean yet that your airline will be profitable, that depends very much on the management!

Also you have to specify what you mean by big airline => Cargo or Pax?

Nightflights are mostly important for cargo and charters, i guess that normal pax airlines care less about it. Belgium for sure doesn't create an aviation-friendly environement, but i guess for now most airlines don't care too much about it yet.

SNBA has the potential to become a big player (if it isn't swallowed big another big player before), but it has to have time to grow "slowly" (they aren't growing so slowly now, at least nog with their european network).

Big airlines can survive anywhere, but indeed especially to startup i think it is a huge advantage to have a big domestic market. Especially in the beginning it makes it much easier.

Pieter

JetB · Post by **JetB** » 28 Dec 2003, 19:03

There is no problem, big country = big airline.

How many investors did it take to give SNBA the green light ! for such a small company !.
So where are you going to fiend the money for a big powerful Belgian airline ?.

You have to ask yourself , do we need a big Belgian airline ?
We had one before, they didn't make money. It was only costing the taxpayers for so many years.

A318 · Post by **A318** » 28 Dec 2003, 19:37

Scoezie wrote:But I think the problem is also that we don't blindly fly a belgian carrier. For exemple the Germans fly Lufthansa, the French fly Air France but the belgians don't fly there national carrier. They look more to the costs I think. What reason is there for that problem

Scoezie, I don't agree with you on this point.
I fly a lot to South America and if you should see how many German and English groups are on those flights you would be amazed.
I can assure you that 70% of the pax on those flights are not dutch.
You see I say nothing about the french because they only fly Air France since that is the only good airline (in their eyes ofcourse) same like a Citroen, Peugeot or Renault is the only good car in the world.
I think Belgium is now too late to be a big player in europe and if they want to survive they have to join a alliance really fast before it is too late. Ofcourse the option from a takeover could be possible also but I think SNBA is better of with joining a alliance.

Greetz,

Erwin

zillox · Post by **zillox** » 28 Dec 2003, 21:57

We had sabena. It was a goverment company.

If it was a private company it would be a big different. I think you can see why!

BobClaes wrote:There is no problem, big country = big airline.

How many investors did it take to give SNBA the green light ! for such a small company !.
So where are you going to fiend the money for a big powerful Belgian airline ?.

You have to ask yourself , do we need a big Belgian airline ?
We had one before, they didn't make money. It was only costing the taxpayers for so many years.

Avro · Post by **Avro** » 28 Dec 2003, 22:03

If I remember it well, Sabena had quite a good loadfactor.
Add to that the managment of SNBA and you have a great company which makes a lot of profit.

I hope that SNBA will be able to grow a lot before to join an alliance. I just don't want them to be eaten by a big company. Otherwise there will never be a big company in BRU again.

Ciao
Chris 8)

Zorba · Post by **Zorba** » 28 Dec 2003, 22:27

SN BA is doing well these times

I also hope they continue to grow

I realy adore SN BA (and their new color sheme

)

Regards!
Rutger

Freiheit · Post by **Freiheit** » 28 Dec 2003, 23:50

Scoezie wrote:But I think the problem is also that we don't blindly fly a belgian carrier. For exemple the Germans fly Lufthansa, the French fly Air France but the belgians don't fly there national carrier. They look more to the costs I think. What reason is there for that problem

Many Germans do not blindly fly Lufthansa. I currently live in Germany, and many are not too satisfied with Lufthansa. If there is competition, many are inclined to try the competitor. Problem: for many direct flights, Lufthansa has a monopoly in their airports. Germans are becoming more and more price-sensitive. I think it is no coincidence SN BA set its BRU MUC prices 10€-15€ lower for direct flights. (I know the goal of the flights is completely different, as Lufthansa uses this connection as supply for its hubs.)

Jumbolino · Post by **Jumbolino** » 28 Dec 2003, 23:57

First
@Scoezie Austrian Airlines isn´t doing well, I think the next strike and it´s time to say good bye (well I would enjoy this day)
and it´s also not true that all germans fly LH, all Suisse Swiss or all Austrians OS.
Look at me

I´m from Austria and had approx now 192 flights in my life
and - 4 with OS

(one reason might be that htey are too expensive another from INN it´s a lot cheaper and easier to fly from MUC, of course I had a lot of LH flights ...)
meanwhile I think all frequent flyer (well, I mean not grandma which you cannot put in an airliner which name she had never heard before) choose the best package - this will often be a LCC, but also SNBA is QUITE GOOD because you get a lot more for your money than on other carrier (for expample KLM is quite weak, and OS, LX not to talk about pay the same or even more for your tkt than on SNBA and then you have to PAY for drinks and food - on ECO ....), meanwhile LH in this case is also good(but only if you buy in advance, online and have a GERMAN adress in your profile - I enjoy that meanwhile Brusselsis interested in this LH behaviour, but I rent out the adress of my agency in MUC - which isn´t anymore - I´ll type into the LEJ adress of my bestfriend for getting the good fares

and I think belgium has a market for a "big" airline let SNBA grow slightly - they do a good job - but market for a big airline and not for XYZ USA flights (I think it´s a good decision of them not to fly to the US themselves, Russia is a growing market - much more better

Jumbolino

airDD · Post by **airDD** » 29 Dec 2003, 08:30

Problem with Belgium is that there are not enough big international companies headquartered in Brussels to support many business class PAX. Also the cost of business is too high in Belgium to effectively compete.
VEX tried to set up a base in Ireland with cheaper costs but Belgian unions had it closed.

It is too late to set up a new big carrier in Europe; there are already too many. Look at KLM "giving" up.

airDD

Avro · Post by **Avro** » 29 Dec 2003, 12:03

Problem with Belgium is that there are not enough big international companies headquartered in Brussels to support many business class PAX.

I totally agree. The big problem is we have no Asia flights at all.
It would help BRU a lot (I think) if we would get at least one of those Asia flights each day.

Look at KLM "giving" up.

My motto:

Never give up, you never know

Ciao
Chris
8)

Flybe · Post by **Flybe** » 29 Dec 2003, 20:52

So where are you going to fiend the money for a big powerful Belgian airline ?

In these modern times, investments are rarely bound by national borders. Just look at the topic some time ago by Belgian investors investing in a French airline... Especially for big investments, national borders are less and less taken into account.

I think Belgium is now too late to be a big player in europe

It is NEVER too late. Big companies go up and down, just as small compnaies sometimes get very big. Yes, some compnaies tend to stay very strong for long, but that is just their biggest problem. Bureaucracy in the company takes over, cost go up and they get "slow" and not innovative anymore. Just look at all the problems that the big american airlines have now... There will be always chances for small companies (in whatever sector they are) to grow and challenge already big players.

We had sabena. It was a goverment company.

Indeed, biggest problem of sabena was that it was governemental owned... Big company doesn't always mean healthy company. If it are governemental companies, i would even say: Big = Big losses

Problem with Belgium is that there are not enough big international companies headquartered in Brussels to support many business class PAX.

I tend to disaggree with this. Some time ago, i had a lecture from someone within the brussels governement, and she gave figures about Brussels. Did you know that in 2002 (and the years before also) Brussels held the second place worldwide when it comes to congresses! (first place was Washington) Those people come from over the whole world, and have to get here somehow! Also i have numbers about the amount of international companies in Brussels and the amount that even have there European seat here. Quite high number if i recall well. I have the exact numbers at my apartment in Brussels, but as i'm home studying for the exams, i can't give them now. Around the 6th of january i go back to Brussels, if you want i can then give you all the exact numbers. But in my opinion Brussels is very important for business men.

This is what partially keeps the airport alive now Sabena is gone (the number of pax traveling to here almost didn't change, only the transfers fell away, look on the site of BIAC for that). Of course also the cargo helps the airport.

Only thing is that people tend to focus too much on pax traveling to/from Brussels in my opinion. Don't underestimate the power of the transfer passengers! This is what i think that makes airlines big!

Greets,

Pieter