Brussels Airlines new plan

[airazurxtror]

I am fed up with that "level playing field" argument.
This is not the Bisounours world - it's the world of business.
In business, last time I checked, it's about endeavouring to have the upper hand, to put the competitors at a disavantage and eliminate them if at all possible.
It's always the loser that is crying for a level playing field - of course, and why not ? It's a good argument to try and get the competitor off balance.
Fair play has nothing to do there.

[Inquirer]

Not only Flemish politicians say CRL is oversubsidised and thus market distorting:

http://www.rtbf.be/info/belgique/detail ... id=7893186

Things are definitely moving for the better, since politicians apparently can look beyond the "us" vs. "them" way of thinking and look at all the facts in an unbiased and holistic way in their search for a fair environment.

[crlhub]

Once again the Wal govt is..shareholder of Brussels airlines...it more than compensates...where is the flemish money in SN??Still waiting for ten years now.

[RoMax]

Once again the Wal govt is..shareholder of Brussels airlines...it more than compensates...where is the flemish money in SN??Still waiting for ten years now.

Oh yes, and the shareholders of SN invested a fortune in them, isn't it...no it isn't (most of the capital even came from selling Sabena-slots and selling the fleet to lease it back afterwards and other 'creative' things like that). The Walloon government is a very small shareholder, that helped SN to start-up, but just like most other shareholders they didn't want to invest too much further in the company. (the lack of investments in the previous 10 years is one of the reasons for the current problems, besides mismanagement and things like that).
So that doesn't compensate the millions SN loses due to unfair competition with RYR (it doesn't matter if CRL or the government pays it or not, it's about RYR paying it or not, why shouldn't RYR pay for things other airlines at BRU do have to pay for...)

Flemish money on the other hand was invested in Brussels Airport (also a small SN-shareholder, remember). It's not that BRU helped SN in the past 10 years, but at least they are starting to do it now (under pressure of SN/LH and of course politics). I still want to see the first effort of the Walloon government to support SN (except for that marginal share they took during the launch).

[Pocahontas]

4% is the share of the Walloon gov. in Bru Air. Correct me if I'm wrong.

[fcw]

the shareholders of SN invested a fortune in them, isn't it...no it isn't (most of the capital even came from selling Sabena-slots and selling the fleet to lease it back afterwards and other 'creative' things like that). So that doesn't compensate the millions SN loses due to unfair competition with RYR (it doesn't matter if CRL or the government pays it or not, it's about RYR paying it or not, why shouldn't RYR pay for things other airlines at BRU do have to pay for...

So that is what you call a level playing field: steal (sorry buy for 1€) assets from a company and then sell them for millions to pretend you are making a benefit??
Flying in and out of BRU comes with extra price, passengers and airlines have to realise that, it has nothing to do with level playing field. A coffee on a sqare in Charleoi is a lot cheaper than on the Brussels Grand Place, is that FR disturbing the level playing field as well?

[RoMax]

So that is what you call a level playing field: steal (sorry buy for 1€) assets from a company and then sell them for millions to pretend you are making a benefit??
Flying in and out of BRU comes with extra price, passengers and airlines have to realise that, it has nothing to do with level playing field. A coffee on a sqare in Charleoi is a lot cheaper than on the Brussels Grand Place, is that FR disturbing the level playing field as well?

That's clearly not what I said (did I ever say that share thing had anything to do with the level playing field?). I said the Walloon Government didn't do anything at all with their share and didn't invest a lot in SN at all (as someone else pretended like their share is enough to compensate for things happening at CRL).
And of course flying at BRU comes at an extra price. I don't deny that. But WHY does the Walloon government have to pay things RYR should pay themself (as airlines do at BRU)? Same counts for OST, ANR, LGG btw. To help them developing and developing the local job market, while ruining the core of the Belgian aviation in BRU?

I'm not defending Flanders or the Federal government against Wallonia overhere. There is just a total lack of good aviation strategy in Belgium. Flanders, Wallonia and Belgium (the federal government) don't work together and they should. The Belgian market is way to small to just do what you want while saying you don't affect the other. The current policy is all about developing your own region, but that doesn't work for a small market like Belgium in a global sector like aviation. And either what you try to say, but there is just no level playing field, not in Wallonia, not in Flanders (compared to BRU).

[Acid-drop]

Not only Flemish politicians say CRL is oversubsidised and thus market distorting:

http://www.rtbf.be/info/belgique/detail ... id=7893186

Things are definitely moving for the better, since politicians apparently can look beyond the "us" vs. "them" way of thinking and look at all the facts in an unbiased and holistic way in their search for a fair environment.

That is unusual enough to be highlighted indeed.
On the other hand, we expect nothing different from a federal minister

[Acid-drop]

May i also remind everyone that talking about charleroi is useless.
We live in europe now, already many years...
So unless you want to attack hahn, eindhoven, maastricht and lille also, this is pretty useless.
The main risk is to destroy your own country jobs, and you know that this would impact all of us.

[RoMax]

I don't think it has been mentioned yet, but Lufthansa moved one of their people to SN again. After Peter Kranich joined the management of SN in June 2012 (when there were movements in the key management positions of the airline and Gustin became the only ceo)as COO (chief operating officer) . Now also Lars Redeligx joined SN as CCO (chief commercial officer) replacing Erik Follet (which only served this position for a few months since June 2012, SN looks at other carreer perspectifs together with Follet).

Until Lars joined SN this month, he was Vice President Revenue Management & Distribution with Lufthansa Passage (serving this position since 2007). In the past years he played a key role in the development of an integrated sales force on the LH Group level, he played a key role in the development of joint-ventures with other airlines he was also active in the development of a new methodical income/revenue management structure within the LH Group. Especially his knowledge in revenue management and sales management is of high value for SN, said Gustin.

Well, the loan of 100 million combined with this (apperently important) shift in the key management positions make me believe SN is not going anyware soon (and that LH really believes in a future for SN). The fact that this happens so fast after they agreed on the savings plan, the loan and the long haul expansion makes me believe LH really pushed for more power in SN's key management (I assume this was already included in the agreement about the savings plan and the loan).

http://www.infotravel.be/artikel.php?aid=7397

[Pleasonton]

Published today in "De Tijd" sorry in Dutch:

http://www.tijd.be/nieuws/ondernemingen ... newsticker

[Inquirer]

The article doesn't give much details beyond what is reported in the title, but if the amount of debt that got swapped against future profit sharing is significant, this hints at one thing: they are cleaning up the balance sheet in view of a full take-over by Lufthansa, most likely as soon as the airline turns a profit, in order to avoid any negative influences on the consolidated Lufthansa balance sheet.

[tolipanebas]

FWIW: more than 2/3rds got wiped off...

[Inquirer]

FWIW: more than 2/3rds got wiped off...

Not that I doubt you, but is there any source? I read the article and it says the amount is unknown?

[RoMax]

http://trends.knack.be/economie/nieuws/ ... 778081.htm

[Flanker2]

So SN received a huge bail-out from the government of 42 millions.
Is this still legal? Are governments allowed to invest money into airlines like this?
Why should money from my pocket go into bailing out a high fares airline that is in great part into foreign hands?

The loan that SN has with the government was around 125 millions.
LH pushed the government to get part of this (42 mil) liquidated in exchange for a shares participation to 12.5%.

Level playing field? I don't think so.

http://trends.knack.be/economie/nieuws/ ... 778081.htm

This smells like another Ford Genk, Arcelor Mittal, GM Antwerp, VW Foret.
Get the money from the Belgian government, then unbolt the machines and ship the production elsewhere.

[cnc]

Why should money from my pocket go into bailing out a high fares airline that is in great part into foreign hands?

why should money of my pocket go into FR?
atleast with this they secure a lot of jobs so what is your problem exactly?
oh wait you prefere to keep giving money to substitute lowcost airlines and airports and pay for more unemployment (SN gone = lots of jobs gone at BRU) as long as you have the good thought yet an other full service carrier is gone

[Flanker2]

Dear CNC, there is a difference between subsidising a low-cost airline that sells fares of 50 euo's and a high fare airlines that sells fares at 300 euro's, isn't there? FR serves the middle class while SN serves the bureaucrats and aristocrats. FR also creates jobs, etc...

With that argument, the government should also start investing in Abelag and Flying Group.

Moreover, do these 40 millions guarantee those jobs?
What's to stop LH from moving the African network to FRA as they see fit and close BRU some day?
When it will come down to it, if LH has to choose between making Passage profitable and keeping SN alive, I don't expect them to remember about those 2500 jobs and 42 millions in subsidies.

If LH see a future for SN, they should invest in it themselves. I don't see why the government should invest 42 millions when even LH doesn't see the point in investing heavily in SN. Where are the 10 extra widebodies that SN needs? Give them that and SN will be profitable.
What about the 20 millions of annual subsidies that they will be getting?

If Belgium is so keen on subsidising airlines, why did they let Sabena go bust in the first place?
Are they going to subsidise everything again for a few years and let everything go bust again?

[RoMax]

What's the problem actually? Yes the risk for the FPM increases as SN has to be profitable to see their money back. The FPM is not only there to make profits, it's mainly intended to help stimulating the Belgian economy and the Belgian job market. The loan of 125 million (151,4 million with interests included) was given to SN back in 2001 (this was originaly an EU approved loan for Sabena, but instead they choose to give it to the successor of Sabena), by the end of 2011, SN Airholding still had 92,5 million that had to be paid back.
So yes, they could have been waiting for that amount of money or they could agree on an arrangement with SN Airholding/Lufthansa to make them financialy more attractive for a take-over (after all, the ONLY way SN will survive on long term). This would never have happened without the approved reorganisation and the commitment of LH, because only thanks to the recent developments, the chances are high(er) that SN will return to profit. Making it a relative good deal for the FPM as they'll still see some money probably and they took a step in making the company more attractive for Lufthansa and by that helping to secure thousands of jobs at SN, Brussels Airport and 'suppliers'.

We all know you don't believe in the LH/SN story and despite all the things you say "SN should do this, should do that" you basicly always say the same: "I hope they go bankrupt very fast, so that I can claim that I was right" and also despite everything SN, the government (or related business) and LH do: "it's not enough, are they stupid?!, they'll go bankrupt, what a stupid decision, oh are they getting subsidies now?! what a shame, LH is and will never be committed to SN,...". Basicly it's always the same. But at least you like Christophe Allard, at least one SN manager you like eh

[tolipanebas]

What's the problem actually? Yes the risk for the FPM increases as SN has to be profitable to see their money back

Id say its exctly the opposite?

The present debt was guaranteed unrepayable for SN.
The creditors held a nice firm contract for sure, but they couldn't claim the money, or they'd risk having to a write off the money: Quite ridiculous to even have such things on the balance sheet....
However, they have now obtained drawing rights on future profits the company generates and those are not as imaginary as one may think, you know?
I'd say that is a significant revaluation of the liabilities held, hence I can tell you most creditors signed up for the rollover scheme, not just the FPM...
Once the balance sheet of SN Airholding is deposited at the NBB, you'll be able to see just now much of the outstanding debt has been rolled over and how much is only left...

BTW- this debt cancelation scheme is a copy paste of what happened at Austrian...
In fact, the entire turn around plan at SN is pretty much a copy paste of that of Austrian, so if you are looking for guidance, look to what happened at VIE.