Lufthansa acquiring Brussels Airlines

[Buzz]

Drop all flights to un-important destinations like Faro, Cagliari, Catania...

Why would they do that? if they are consitently not profitable, then BruAir would drop them anyway, and if they are profitable, why drop them? If there is a point to point market, they will fly the route.

[euroflyer]

Mr Davignon stated in an interview that BruAir doesn't need LH to survive as they have 300 mio in cash.
Why would anyone sell 45% (ie 135mio) to LH for 65mio???

Come on, this cannot be so hard to understand You might have 300 mio Euro in cash (which probably means available on your bank accounts), BUT at the same time you can have a debt of any possible figure because you still have to pay for services or goods you already have had delivered

The value of anything is determined by all the assets existing (incl. "cash") MINUS all the debts existing (ok, this is the very very easy version, I know this myself, I have studied my economics, but it should be sufficient as an answer to this post )

[JOVAN]

My guess:

Europe:
Germany, PL, CH, P, Scandinavia,... streamlining of all flights....more regular flights to those countries, connecting better to long-hauls where LH,TP,LX.. are strong;
More flights to German cities like Stuttgart, Hannover;
Drop all flights to un-important destinations like Faro, Cagliari, Catania...
Probably BRU will become gateway to Africa (except North, and South..). More A330's, more destinations.
Maybe, with LH's help, SN will get more frequencies to Moscow, St. Pete (SN is not able to ger clearance for a second flight to DME .....)
Asian airlines: maybe a few flights a week to BKK with TG; nothing more as LH has already taken the Belgian market for business people to Asia (40 ex-BRU passengers to PEK via FRA yesterday, mostly business people with Gold or Silver LH cards; this people will stick with LH).
North America: one or two more destinations with UA maybe, replacing AA on ORD-route for instance.
The gain for BRU will come from increased HUB-function for Africa, and who knows more intra-European connections.
LH and *A is the best thing that could happen to BRU and SN.
Now lets hope that some old crocodiles at SN and Zombies at BRU will disappear soon,
and give BRU what it desserves: a European Top-10 airport.

Jovan, I'm afraid with this poor recipe BRU will never be a European Top-10 airport.

It is very conservative indeed, but do you see all of a sudden SQ, NH, TG, OZ, CA appearing at BRU ?
And AC, SA ???

Growth should come from this type of airlines, and from closer collaboration with other European *A members.

LH is very reliable and powerful.

But they have MUC, FRA,.. and ZRH (+VIE ?) will probably develop faster than BRU as a HUB.

Only a real HUB function can tilt BRU over the 20mio PAX mark, and guarantee further growth.
(rather than attracting more LCC's and building a special terminal for them)

SN was never able to do it , LH's expertise is most welcome.

[Conti764]

It is very conservative indeed, but do you see all of a sudden SQ, NH, TG, OZ, CA appearing at BRU ?
And AC, SA ???

Growth should come from this type of airlines, and from closer collaboration with other European *A members.

LH is very reliable and powerful.

But they have MUC, FRA,.. and ZRH (+VIE ?) will probably develop faster than BRU as a HUB.

Only a real HUB function can tilt BRU over the 20mio PAX mark, and guarantee further growth.
(rather than attracting more LCC's and building a special terminal for them)

SN was never able to do it , LH's expertise is most welcome.

Give it some time. They won't start flying to BRU next week of course, but over some time, they will find BRU again.

And your remark about the LC terminal. They will open it to leisure companies as well. So JAF, TC and their partners are free to use the LC infrastructure as well. All of a sudden, the entire LC concept gets a lot more attractive for BRU.

[Moons / A]

One person who isn't excited about this story is Prof. Paul De Grauwe. He talks about the making of a monopoly by LH in the European market. Eliminating competition and driving up the prices which is a 'conspiracy' against the consumers. He hopes that our government (but this is too weak in his opinion) our at least the EC will stop this acquisition. To answer my question above about the routes and fleet ; he thinks that Belgian travellers will have to travel to FRA or MUC first in order to get to their final destination which makes us less mobile in a sense.

[sn26567]

To answer my question above about the routes and fleet ; he thinks that Belgian travellers will have to travel to FRA or MUC first in order to get to their final destination which makes us less mobile in a sense.

If there is a profitable point-to-point market, SN will continue serving it. It would be ridiculous to abandon it to the competition.

[sn26567]

"De Tijd" this morning announces that SN Airholding will pay a super-dividend of 40 million euros to its current shareholders. That is about two thirds of the 65 million euros that Lufthansa will be paying for a stake of 45% in SN Airholding!

"De Tijd" also reminds that Lufthansa paid only 217 million euros to acquire SWISS. If everything goes as expected, they will pay more for the much smaller Brussels Airlines.

A good deal for the investors who put their money in an almost hopeless adventure in 2002, under pressure from the Royal Palace and the Government.

[Atlantis]

Give the whole operation some time. It's way too soon the dream about A340-600, B747-8 and A380 for SN like we could read on different topics.

The most difficult exercise has still to come: new African destinations, increasing of frequencies for current routes to Africa, how many extra long hauls for SN? What about the European routes? Flying to FRA or MUC to reach an other destination is not attractive for pax and will search an other solution. More routes or less European routes and which aircraft will it fly, that will be the longest part of the whole operation. We will see probably the first signs at the beginning of the new summer season but not drastically.

[brussels airlines]

Well there is one big difference between SN and swiss: -SN is making profits, swiss wasn't.

[Gliderpilot]

The deal for the acquisition of Swiss wasn't such a 'cheap' and easy one. There were a lot of 'rules' for LH they had to comply with. IIRC, if LH could make Swiss profitable within a year after the "acquisition" they got a (big) bonus of the previous shareholders of Swiss (and thats probably why it was 'cheap', or made it look cheap). LH did invest a large amount of money in Swiss. But now LH gets their money back, I think Swiss is now even more profitable than LH is.
Feel free to correct me or give additional information.

I'm really looking forward to see future aircraft orders for the "LH group" (mainly LH, LX, SN), they have about 64 RJ85/RJ100 to replace, and what will be the replacement of the A330s (-> B787 or A350?), although that WB order might still be a few (3-5) years down the road.

[Prevangor]

^^^^
Gliderpilot, you arewright. 21MAR2008 Lufthansa pays around 172 million euros for SWISS out-performance option to former share holders.

http://konzern.lufthansa.com/en/html/pr ... 08/HOM&s=0

[regi]

Yes André, precise remark. I would not have given a cent to them in those days.
They took the risk and it payed off.
I wonder which letters that the unions are preparing , they probably do also want a part of it.

[airazurxtror]

If I remember well, Lufthansa was to buy the remaining 55 % of Brussels Airlines some two years after having bought the firts 45 %.
I have perhaps missed a chapter of the story, but has the deal already been clinched ?

[RoMax]

If I remember well, Lufthansa was to buy the remaining 55 % of Brussels Airlines some two years after having bought the firts 45 %.
I have perhaps missed a chapter of the story, but has the deal already been clinched ?

LH has an option to take over the remaining 55% in April 2011. So I assume we have to wait some more months before we know if LH will do it in 2011 or later.