The future of Brussels Airlines with Lufthansa

[NCB]

LH didn't take us onboard just to take our pax away and then close us down.
SN must be willing to refocus on what LH sees as important: long haul operations to Africa, European feeding of the long haul network and high yielding origin and destination traffic to/from BRU.
To some people it all sounds as 'back to the roots', to others it does sound like a real culture change, but I am convinced that with the help of STAR-alliance, it will proof a much more successfull strategy than wanting to be just another loss making LCC.
Let's say it this way: I'd prefer working for a new SWISS every day than for yet another SkyEurope and I think so do you!

Makes alot of sense indeed, and I am confident too, that SN is facing a bright future under LH management.
Africa is the way to focus as it sounds from the LF thread, now we must cross fingers and wait for LH to provide any news on spare capacity they can temporarily provide to SN.
I don't know if LH is planning a A350/B787 (would have to be A350 since 787 is fully booked til about 2020) order anytime soon, the only thing I could see until 2015 is about 20 20-year old B744's becoming available and maybe an interim A330 order for SN/OS/LH Italy. Nevertheless, A330 delivery spots are full for at least 2009 and 2010, so I don't know if LH could get any new A330/A340's for delivery around 2012. They'll have to look on the used market if they want them sooner but with high interest rates due to credit crunch and high lease rates on A330's due to B787 delays, it won't be easy.

Thank you for your assessment on Kiev and St. Petersburg, although I think that a new route needs time to establish, it is also a fact that a low profits, limited cash reserve airline could not afford such a luxury.

[Conti764]

Like I've said before to people who were dreaming about restarting old prestigious routes to JFK and the likes, this is not the way SN should go and LH knows this...

SN's focus should always stay on Africa and even with Star Alliance, it's SN's major focus market. For years companies only had one reason to fly to BRU and it was the O&D-market between their hubs and Brussels/Belgium and the catchment area around it. Only companies which had a codeshare agreement with SN had a second reason to fly to BRU: convenient links with Africa. Nowadays, companies within Star Alliance and some non-alliance airlines have a second reason to fly to BRU: indeed, the convenient links with Africa, which is still an underserved market with a huge potential. I'm not saying NH, SQ, NZ and the likes are all going to fly several 77W's into BRU a day, but they do have a reason to (re)start operations to BRU on a moderate scale in the beginning and expand in the future.

In time, I do see the necessity for SN to develop a more expanded network to Africa with daily connections to those airports which can sustain enough traffic to do so and, favorably direct connections. They kan keep triangular flights between second tier locations in Africa. When SN has a nice product and service to offer to the clients of their partner airlines, they will start flying to BRU. The 787 f.e. is a nice aircraft for airports like BRU. Enough range and no too much capacity to fly from many airports around the world.

The point of an airline alliance is to streamline operations, co-operate where possible or necessary to have a profit as high as possible for each member, which means SN shouldn't focus on flying to North-America or Asia, since these regions can be covered with their alliance partners. Only when a destination is not being served by their partner airlines (BOS is a good example in N-A) or when there is enough traffic but their partner can not deliver the capacity (f.e. when CO couldn't provide a second flight to EWR even tough traffic would be there), SN could explore these markets.

[kiwiandrew]

Like I've said before to people who were dreaming about restarting old prestigious routes to JFK and the likes, this is not the way SN should go and LH knows this...

SN's focus should always stay on Africa and even with Star Alliance, it's SN's major focus market. The point of an airline alliance is to streamline operations, co-operate where possible or necessary to have a profit as high as possible for each member, which means SN shouldn't focus on flying to North-America or Asia, since these regions can be covered with their alliance partners.

I quite agree , alliances allow a carrier to focus on areas it can excel in without having to try to be 'all things to all people' . Yes , it is nice to look at the dots on the map that 'your' airline serves , but if there are too many dots and not enough paying pax to connect them then the airline is not going to survive . Just as SN will feed pax onto their partners who can operate certain routes more effectively , so , in turn , those partners will feed pax onto SN on routes where they are the logical carrier .

[fretn]

I understand and aknowledge that they need to expand in Africa, the black continent has been on the rise for several years now, and businesses are really starting to kick off. But i also think that at LH they know that a "flag" carrier who only flies to Africa is quite dissapointing, so I think that LH will probably add a handfull of other international routes, i'm thinking of Boston, New York, Dubai, and the orient (China?, i t has some great business opportunities). However let's first of all see what time brings us, but i have solid faith in LH that they'll manage to turn Bru. Air. into a class carrier.

[Conti764]

I understand and aknowledge that they need to expand in Africa, the black continent has been on the rise for several years now, and businesses are really starting to kick off. But i also think that at LH they know that a "flag" carrier who only flies to Africa is quite dissapointing, so I think that LH will probably add a handfull of other international routes, i'm thinking of Boston, New York, Dubai, and the orient (China?, i t has some great business opportunities). However let's first of all see what time brings us, but i have solid faith in LH that they'll manage to turn Bru. Air. into a class carrier.

I don't think Dubai would be a good option for SN. For years, EY mostly deployed their two class, leased 332's to BRU which indicates there is not much premium traffic between AUH and BRU. The reason why EY performs relatively well on the route though is for the same reason why EK growed so fast for years: they are strategically located to have a big hub and spoke market and pax ex-BRU use EY to go beyond AUH. SN from BRU wouldn't have such advantage since the only major market SN serves from BRU is Africa and the Gulf carriers are doing good to Africa on their own.

I have recenly red about the US government asking QR to open Doha - Brussels to have a direct link between NATO headquarters in Brussels and their biggest foreign base in Qatar. This would be an option for SN to fly since they have the extra advantage of being in an alliance with three US carriers thus providing extra links from and to the US via Brussels (currently QR flies to IAD, JFK and IAH and no US carrier flies to DOH) and a connection between the NATO and Qatar. The US government would guarantee them of a major 'governmental' contract to fill large parts of the plane with both pax and ‘soft’ military and diplomatic cargo, it might be a money maker because of the US government.

I don’t think the Gulf would be a good option for SN to fly to. Every other European airline that flies to the Gulf relies on their own network and even then mostly the majors fly to the Gulf. It is better for SN to use LH or LX to fly to the Gulf region.

When we look at the US, BOS would be a good option since it has always been a money maker for SN. Unlike Sabena, Brussels Airlines will be in a big alliance and can rely on this alliance to operate more premium US destinations, not served by a US alliance partner, but maybe by a rivalling alliance. ATL could be an option to battle DL, as is MSP to battle NW, these kind of destinations could be switched with (seasonal) service to MIA and LAS. DEN (nr 5 US airport) is a UA hub and PHX (nr. 9 US airport) is a US hub, so thse might work as well. For ORD and IAD and maybe LAX and/or SFO I’d rely on UA, for the NYC region and IAH on CO.
But above all, USA – Europe is a very competitive market so SN can only do these destinations if they get support from Star Alliance and I’m pretty sure the new boss in town will only give a go ahead if there is enough traffic for these destinations. In that case I doubt if it will ever go through.

Asia is a different story. Both Japan and China are huge markets which could sustain enough traffic to BRU, but these countries are already served by airlines from those countries. However, SN could work together with these companies to offer as much as possible flights. The next word fair will be held in Shanghai and the Belgian pavilion will be a big eyecatcher so we might expect some extra Chinese tourism to Brussels, Belgium and Europe.

With both Air China and ANA SN could work out a realy nice network market between Brussels and these countries.

Maybe SQ and TG will fly from Singapore and Bangkok and then we’ve had it.

Remains Africa and SN should really stay focussed on this market with as much as possible destinations and frequency to have something nice to offer to their partners so they either have a reason to fly to BRU or support an SN flight to BRU from their hubs.

[tolipanebas]

SN should really stay focussed on Africa with as much as possible destinations and frequency to have something nice to offer to their partners so they either have a reason to fly to BRU or support an SN flight to BRU from their hubs.

You hit it spot on, my friend!
Ever since LH announced they were interested in taking over SN, people have been daydreaming about SN starting to serve the 5 continents again (Oh, let's go to back to SIN, BKK, HKG and PVG.... all cities with millions of inhabitants!), with LH feeding their BRU hub, but this is a foolish idea for many reasons.

First, there isn't enough O&D traffic between BRU and most of the 'exotic' places I've been reading about, so the SN planes would have to be filled with a lot of connecting pax (80% or more!). Now, that's a huge volume LH (and their STAR partners) needs to bring to BRU to make any such route work.
Secondly, tickets would have to be sold at rock bottom prices, since SN can never offer such high frequencies on any such routes compared to other mega carriers serving the same market (BA, AF, EK, QR), so the total lack of flexibility would have to be reflected in a very low ticket price.
Finally, if the LH group decides to add a route aimed at connecting pax from a network perspective, it would be wise to give the route to the hub best connected for such a flight, so as to bring as much connecting pax in as possible. For most 'exotic' routes, FRA or MUC are far better connected than BRU right now, which is why LH (or LX if it is the route with a lot of premium traffic) will always be the preferred network carriers from a group perspective, with SN and OS as niche network carriers.

What SN must do is expand in AFI, because it has estabished itself as a very good and reliable niche player there, it has a huge expertise in flying to very primitive places (don't underestimate the complexity of serving an airport which has only a couple of hours of electricity a day!) and it is already well connected with those countries from where it will draw most of its connecting pax (FR, IT, UK) on those future flights to AFI. If they do that, they will already have enough room for growth for the first few years and while they do so, they will also stimulate organic growth throughout the rest of their European network and manage to seduce partner airlines to start service to BRU to benefit from the many links SN offers them towards AFI...
Going from 4 times weekly to daily on ABJ (just an exemple) may not seem so exiting to many as opening own flights to NYC, but I can assure you UA, CO and LH will far more like the first idea and will help SN fill the plane far more, resulting in much higher yields!

A network needs to be built up gradually, carefully and intelligently.
Just adding the best sounding dots first is about the most stupid think any airline can do and yield always has to come first when you need to fill the route with connecting pax. With yields being at least twice as high on AFI then on the North Atlantic, it will be a long way before SN 'wastes' any metal on routes other than to AFI, especially given the fact they can still grow a lot there!

[itami]

Ever since LH announced they were interested in taking over SN, people have been daydreaming about SN starting to serve the 5 continents again (Oh, let's go to back to SIN, BKK, HKG and PVG.... all cities with millions of inhabitants!), with LH feeding their BRU hub, but this is a foolish idea for many reasons.

But there's an alternative : SN might codeshare with the *A members serving those big destinations. They shouldn't rely exclusively on LH for feeding their BRU hub.

[kiwiandrew]

Going from 4 times weekly to daily on ABJ (just an exemple) may not seem so exiting to many as opening own flights to NYC, but I can assure you UA, CO and LH will far more like the first idea and will help SN fill the plane far more, resulting in much higher yields!

Thank you Tolipanebas , if there was such a thing as a "respected user" list on this site I would add you to my list .

I recall reading a few years ago a quote from an airline executive likening the airline industry to sex , I cant remember his exact words but it was along the lines of " when your libido takes over all rational thought stops , in the airline industry the same thing happens when you let your ego take over " , the original Braniff Airlines were the classic example , buying planes and starting flights to absolutely everywhere regardless of whether the traffic or the yield existed , their irrational expansion caused a lot of excitement followed by a very swift collapse .

When I was a child I confess I used to stick pins in a globe and tie threads between them to build up my 'dream' airline networks , but the truth is that if I had been in charge of an airline it would have been bankrupt within days ( that still doesnt stop me from dreaming up wonderful networks with improbable destinations in my head - I dont want to take all the fun away )

[tolipanebas]

But there's an alternative : SN might codeshare with the *A members serving those big destinations. They shouldn't rely exclusively on LH for feeding their BRU hub.

Correct and for that SN must make their BRU hub as attractive as possible, meaning building further on what they are good: AFI. The more African destinations SN can offer its future STAR partners, the better and the more easily they will be persuaded to open a link to BRU.

I don't think and of the STAR partnesr will jump for joy if they hear SN starts to serve NYC for instance, but they may be more pleased to see more of the AFI routes go daily and/or non-stop as multiple stop legs are not really liked, especially not by pax who are already connecting.

In a first phase though, I think we won't see any long haul STAR partner open a new route to BRU, simply because the hub in BRU is too small, so SN will naturally have to rely on LH/LX/OS and the American partners already serving BRU, but as they grow in AFI and become more attractive, they will manage to persuade ANA, Thai and SQ to consider BRU...

[kiwiandrew]

I would be interested in peoples opinions about SN getting A330-200s either to compliment or to entirely replace the -300s ( 3 of the current -300s are around 15-16 years old so should be needing replacement within a few years anyway ) .

Currently a lot of the African flights are multi-sector , using a larger number of slightly smaller aircraft might permit these services to be 'de-coupled' providing higher frequencies and more nonstop services , which should permit an increase in yields at the front end of the aircraft.

The downside of course is that the CASM would be higher than for -300s and crewing costs would increase as more sectors would be flown . I guess also in markets where the bilaterals are restricted by frequency rather than capacity such as LAD ( I think ) this would also be a disadvantage .

Opinions please ?

[fretn]

As someone has already mentioned, bru air could follow the example of air canada, and configure some A319 for medium to long range, they have the legs to make it to practically any place in sahara africa, equip them with PTV's and some decent legroom and you might have a good shot at markets in northwest africa.

@ Kiwiandrew, you are right although they are A330's they too are getting older. Plus they need some A330-200 for distant markets.

[fretn]

But there's an alternative : SN might codeshare with the *A members serving those big destinations. They shouldn't rely exclusively on LH for feeding their BRU hub.

Correct and for that SN must make their BRU hub as attractive as possible, meaning building further on what they are good: AFI. The more African destinations SN can offer its future STAR partners, the better and the more easily they will be persuaded to open a link to BRU.

I don't think and of the STAR partnesr will jump for joy if they hear SN starts to serve NYC for instance, but they may be more pleased to see more of the AFI routes go daily and/or non-stop as multiple stop legs are not really liked, especially not by pax who are already connecting.

In a first phase though, I think we won't see any long haul STAR partner open a new route to BRU, simply because the hub in BRU is too small, so SN will naturally have to rely on LH/LX/OS and the American partners already serving BRU, but as they grow in AFI and become more attractive, they will manage to persuade ANA, Thai and SQ to consider BRU...

Imagine SQ at Brussels, i'd love to see a SQ 777 at Brussels.

[fcw]

Nice to see so many dreamers here.
BruAir was and still is balancing on the edge of bankruptcy! Surviving is the only concern for the moment.
LH will consider carefully every investment, downsizing is very probable, lossmaking routes which are of no intrest to LH will be cut.
What we might see though is LH metal flying MUC-BRU-SFO, DUS-BRU-BOS, FRA-BRU-FIH,... an ideal way to use their surplus of metal and crew by creating a siccor hub in BRU.

[LX-LGX]

Nice to see so many dreamers here.

BruAir was and still is balancing on the edge of bankruptcy! Surviving is the only concern for the moment.

Once again a post that proofs that the number of bad informed people and/or people with bad faith overclasses the number of dreamers here.

fcw, please inform yourself before posting nonsense like "on the edge of bankruptcy".

- the operational result for Brussels Airlines, 01/01/2008 -> 31/12/2008 indeed was in red: -2.042.094 euro (compared to +24.286.382 euro for 2007) and the final result for 2008 was -6.799.792 euro (compared to +25.624.283 euro for 2007);

- most important figure on the balance sheet: own assetts: +109.303.028 euro (up from +99.554.199 euro in 2007);

- financial back-up ("geldbeleggingen"): +234.138.702 euro (equals that from 2007);

- cash situation on 31/12/2008: +18.661.865 euro (was +12.667.811 euro on 31/12/2007).

(results confirmed by Deloitte)

[Air Key West]

As tolipanebas rightly pointed out, SN (LH)'s prirority should and will probably be to focus on Africa. These are SN's money making routes and the first concern should be to provide a solid financial basis for the airline through concentrating on profit making operations.
I also think that frequencies to Africa should be increased as much as traffic rights allow, since business travellers (who bring in a lot of money) want flexibility, i.e. being able to travel any day they want without having to adapt their work schedules to airline schedules. When business is finished earlier than expected, you want to be able to fly back earlier.
As regards Transatlantic travel, we'll assume b.air is already negotiating flight schedules with the three American Star Alliance partners so that their flights arrive and leave BRU at times which offer good connections with SN's operations (especially to Africa).
Unlike a few other guests on this forum, I am still of the opinion that a second daily nonstop flight to/from ORD is needed for Star Alliance in addition to the current AA (oneworld) flight. I was a bit surprised UA will be trying out an ORD LHR BRU operation and not a nonstop ORD BRU, but maybe that will come later.
To outdo AA (oneworld) and DL (Skyteam), a second NYC flight would probably not be a bad idea ; approximately BRU EWR (in co-operation with CO) 2000 - 2200 hours and back 2355 - 1400 hours.
An evening flight to NYC would certainly attract a considerable numbers of business pax.
And probably last in SN's first move on the transatlantic market would come BOS and maube YUL.
But all the above is already a lot for an airline which currently only has four long haul aircraft.
I am wondering if due to the current recession some airlines have cancelled or postponed aircraft orders, which could make aircraft available sooner than if an order is placed in the coming months and the SN (LH)has to stand in the normal "queue". In other words, could SN/LH buy or lease aircraft that some airlines do not want anymore and, consequently, get them earlier than when placing a regular order ? Any experts on this on the forum ?

[cathay belgium]

Hi,

Fcw you damn dreambraker!

but I think you're opinion is most likely the most real one

BruAir was and still is balancing on the edge of bankruptcy! Surviving is the only concern for the moment.
LH will consider carefully every investment, downsizing is very probable, lossmaking routes which are of no intrest to LH will be cut.
What we might see though is LH metal flying MUC-BRU-SFO, DUS-BRU-BOS, FRA-BRU-FIH,... an ideal way to use their surplus of metal and crew by creating a siccor hub in BRU.

If you're right at this point the future of SN looks more as a hostile take-over!
So BRU becomes just a stop of LH planes flying to AFI!
What kind of new planes are we gonna see then?
B744,A332,A343 in LH liveries stopping at BRU so SN just can feed their planes and start
with operation LH Brussels gaining the AFI -advantages of SN just until...
SN will get some CRJ,A320,A319 or older 737 for renewal our RJ's/VEX 737's !!
*A partner planes for feeding LH'AFI's ? CO to BOS???

What the difference of LH/Swiss then?
LH abuses SN , Swiss just killed us!

Hoping you're not right but be prepared for the worst then

The future will tell

LX-LGW !, I doesn't understand a thing of the figures , I think 100.000 is a lot of money but just peanuts
in the airline industry!
But if the figures were so good,why just a hurry for LH?
The takeover went so quick !!

LX-LGW I don't know any answers but I try to be a dreamer but at these times dreaming is nice
but reality and history can effects our mind to more negative / realistic toughts.

CX-B

[fcw]

LX, if your figures are correct BruAir must have won the lottery or did you "forgot" the debts?
I know from a credit insurer that BruAir is on their avoid list, so they must have other or more figures than you do!

[Conti764]

But there's an alternative : SN might codeshare with the *A members serving those big destinations. They shouldn't rely exclusively on LH for feeding their BRU hub.

Yes, but those companies won't start service to BRU just because SN asks them to. They need a good reason to do so and that reason is very convenient connections to Africa, preferabbely with direct flights. Only then *Alliance airlines (and maybe even other airlines if *A allows them) will (re)start BRU. Only when SN established a big and profitable African operation they could start to explore other destinations (exceptions apart to airports which prove profitable on their own in the current situation) and only streamlined with the ops of other *Alliance companies, which is the whole point of an alliance.

I see three kinds of service to Africa:

• Daily, direct flights to key locations (f.e. FIH) with 332/333/343(?)
  X weekly direct flights to major locations with 332
  X weekly triangular flights to secondary locations with 333

But in this story there is also a responsability for BRU. If they really want their home carrier to develop into a respectable international carrier, a new terminal should be build. This terminal should be very transfer friendly (following the same concept of the A-pier, but then with an international configuration). Of course, this terminal shouldn't have have to be opened next year, but they at least should be looking into it, which I hop they do.

Future looks bright for SN, but they should step in the same trap Sabena did, years ago.

[Conti764]

Imagine SQ at Brussels, i'd love to see a SQ 777 at Brussels.

I'm sure it will happen again, it wil just take some time I guess.

[Conti764]

Opinions please ?

With the current material on the market, SN's ideal long haul fleet would be a mix of Airbus A330-200, A330-300 and maybe A340-XXX to serve the biggest markets for SN. The 333's still have their value to SN, but I hope they'll get some younger ones. Maybe like someone said, for the thinner markets, A320's or A321's might be an option, too.