Are GRU / GIG a major opportunity for SN and BRU ?

[travellover]

Inbev, brazilian economy booming, south american hub ... Is GRU really considered by SN for the mid-term ? Maybe a missed opportunity ? High yields ? What about cargo ? GOL, TAM, SN european network. Which players could enter the dance ? Another strategy knowing that AFI transfert pax don't enter into account in case of a GRU connection. Any enlightenment are welcome, thanks.

[Flanker2]

Not in a first step but in a second step as there are other priorities, I think that GRU and GIG are a must-do.
It wouldn't be profitable from the first day, but I see there an investment that will yield a return.
I don't see them as madness like SFO, a lost cause like BOS and ORD, or like a loss of time and precious resources like JFK and IAD.

So yes, you can already file them in the "lost opportunities" section, as SN will never fly there before it's dead.
Luchtzak Airlines, anyone?

[Passenger]

Is GRU really considered by SN for the mid-term?

Yes, I'm sure they consider every destination Sabena ever had and every other destinations that exist. Not with a "to do list", but with real figures like VFR, tourism, business, visa, actual traffic, yields, etc.

Inbev, brazilian economy booming, ...

Bloomberg says "forget it":
http://www.bloomberg.com/news/2013-12-0 ... tment.html

[Acid-drop]

There are very good connections from AMS already, hard competition

[crew1990]

I see more TAM going to BRU with a SN code sharing on it then SN going to Brazil.

It look like the prorities for the moment for the long haul are first Africa and North America, then later if they want to expand they would look for some destination in Asia and only after this they would start some flight to South America.

This is the way I see the futur of SN even if for sure Brazil have some great potential!

[Passenger]

There are very good connections from AMS already, hard competition

And Iberia has the language advantage - often the key factor for VFR traffic.

[MD-11forever]

And Iberia has the language advantage - often the key factor for VFR traffic.

Not really, in Brazil they speak Portuguese, not Spanish.

[cnc]

Luchtzak Airlines, anyone?

you get the money and for all i care you can be CEO, i'll handle operations

[Passenger]

And Iberia has the language advantage - often the key factor for VFR traffic.

Not really, in Brazil they speak Portuguese, not Spanish.

Iberia has a language advantage. Many Portugese speaking passengers also speak Spanish - and I think that quite some IB crew also speak Portugese. For elderly people - like manu ot the VFR's - that counts (Sabena had that experience with Japan).

[Unilitha2]

When you such a small player as SN is right now you better focus and specialize one single and core market that you can serve properly and defend as well upon which you can build your brand recognition. For SN this is Africa, nothing new they should go full speed ahead on that continent before being thrown away by Turkish, or simply bigger European carriers.

Flying to/from US was also to feed their AFI flights. From Brazil you dont have that opportunity or at least it wont last long before South American carrier start flying direct to Africa. In Brazil SN does not have any specific competitive advantage on other European rivals. TAP has the language and historical ties, IB, KLM, AF, BA and LH all have a wider network and can surely offer more frequency beside the fact that onboard these airlines you dont get to have the safety briefing in 4 languages

As long as LH will not decide to fully back up SN by giving up some heavies SN will be at risk to lose market share slowly but surely.

[Air Key West]

MD-11forever wrote:

Passenger wrote: And Iberia has the language advantage - often the key factor for VFR traffic.


Not really, in Brazil they speak Portuguese, not Spanish.
Iberia has a language advantage. Many Portugese speaking passengers also speak Spanish - and I think that quite some IB crew also speak Portugese. For elderly people - like manu ot the VFR's - that counts (Sabena had that experience with Japan).

Sorry, but it's wrong to believe that many Portuguese speaking pax also speak Spanish. They will understand quite a bit, but that's where it ends. What you're saying is comparable to saying : many Flemish or Dutch pax also speak German.

TAP has the language and historical ties,

TAP (not Iberia) is the European reference airline to Brazil

SN will never fly there before it's dead.

Unfortunately, you're probably right.
SN is a reactive, not a pro-active airline (for all kinds of reasons already mentioned in other threads).

[RoMax]

Don't think Brazil is the holy grail. Yes it's an increasingly important market, but economic growth in Brazil has been dissapointing for quite some time now. TAM's performance is way below the expections and the same goes for some other Brazilian airlines. While they seem to be performing well, they do have their issues and these are not small.
While the Europe-Brazil market keeps growing, this growth is being taken away by BA, IB, KL, AF, LH, TP, ... and it would be extremely different for SN to get their share of that market. It's not like GRU is another JFK which has besides its huge competition also a very large proven market.

[quixoticguide]

São Paulo is a great city and Brazil is a great country but GRU/GIG as SN destination is a bad idea.

[crlhub]

TP is market leader from BRU via LIS you can fly to a lot of big Brazilian cities(9 if I'm not wrong?).The Brazilian community in BE fly or TP or IB(often a bit cheaper).A vast majority of them come from GYN.
A 1 million strong city nor very far from Brasilia.
Solvay also have big operations in Brazil.A few brazilian banks in LUX,but easier for these very high yield pax to fly from LUX/LIS/PAR.They were flying with Varig in the past.
Otherwise we got VASP and PZ from BRU,but it never worked in terms of revenues.Sabena used to fly twice a week(not enough)to GRU,but very little success(with an md11 from citybird).
GRU is mainly business oriented or for VFR.GIG is mainly for tourists but there is still a potential for a very high yield market,but problem,almost nobody knows Brussels Airlines.
Brazilan tourists for Europe,mainly firstimers from the new middle class,choose to visit LON,PAR,LIS,MAD and ROM for their first contact with Europe.
EZE is even worst than Brazil due to the economic situation and they are pretty well served by the 'majors'.
Santiago is too small.Caracas,Lima etc forget it.South America is not an easy market for a relatively small
airlines.
Sun beach cities from de Nordeste(shorter trip)FOR,REC,Natal,Maceio and mainly Salvador have a good potential for leisure packages trips(all inclusive)but not business at all,but this would be more for JAF or Thomas cook,when people will be tired of Cancun,Cuba and Dom.Rep.

nb:I lived a few years in Brazil,I confirm Brazilian will catch some Spanish,but not even 5% do really speak it(even in te south).But spanish speakin South American don't understand Brazilian Portuguese or only with the hands...and a big smile.

[Flanker2]

almost nobody knows Brussels Airlines.

That's a good excuse.

Almost no one knows LX, yet misteriously these 2 dots GIG/GRU appear along with EZE on LX's map.
It's not always all data and numbers, otherwise most of Ryanair's routes wouldn't work. When you start a new route, it's also about gut feeling.

If we want an example of amazing and unexplicable market potential, look at Vietnam, where airlines are growing and growing and growing and growing in the past 5 years. How is it possible that Vietnam airlines established in a poor country without any significant industrial weight growing at 5%, is able to have twice the revenue of SN and make money, double their revenue in 3 years, while not being able to get aircraft fast enough to sustain the growth?

Also, I don't think that that from the Sabena/Varig/VASP era is of much use. Brazil's international development is quite recent, as is the development in most of South America.

[Passenger]

Geen erger blinden dan zij die niet willen zien.

The Brazilian economy is not doing good, and the World Cup soccer will not help it (at the contrary). The reason why the country doesn't crashes is because they have the BRICS support. Official data on the economy indeed suggest the economy is booming (just like the Belgian prime minister now tells our crisis is over). So the IMF confirms the prognosis, based upon optimistic figures from the Brazilian government. However, non-official sources are more realistic: trees don't grow into heaven.

http://www.imf.org/external/pubs/ft/weo/2014/update/01/

http://www.bloomberg.com/news/2013-12-0 ... tment.html

http://www.economist.com/blogs/americas ... f7a640fd8a

Therefore, for the zillionth time: every possible destination that exists and/or that Sabena ever flew is considered within Brussels Airlines on a regularly basis, by teamwork, and with real figures that most of you don't know and don't have access to, although they're needed to conclude that GRU is or is not a viable route. Reports from the local Belgian chamber of commerce, offline traffic, tourism reports, comments from Belgian touroperators and business travel agency groups, competition performance, cargo figures and yield, figures and yields from Sabena, reports from AEA & IATA, etc. Against these hardware, software like "...SN is a reactive, not a pro-active airline..." look rather poor as argument.

[Air Key West]

The Brazilian economy is not doing good

According to the sources you quote, GDP growth in Brazil for 2014 is expected at 2.5 % (1.2 % for euro zone countries). Economic growth figures for Brazil in the past years were at a level that couldn't be sustained for very long. Figures for 2013/2014 are still much better than for the EU and/or the euro zone.
Social unrest, budget deficit ? Doesn't that ring a bell ? Same here. The poor economic performance in Europe doesnt stop other airlines from expanding operations in Europe or to/from Europe.

All that we are suggesting is part of a discussion forum and will remain wishful thinking. I'm sure b.air has the real figures and studies them carefully. That's all they can do (no money from investors to act) and , consequently, they say there are no opportunities for b.air to expand (except for very low yield markets like the US, of course ; ok, they claim that these flights feed their AFI operations ; right, but if they showed us their "real" figures, I wonder if the balance between the cost of US operations and the benefits for the AIF operations is positive). Off topic : nothing of what we are hoping for according to our personal sensitivities will materialize ; nobody seems to realize we're heading for a Sabena/Swissair scenario with one major differnce : LH will survive (where SR failed). Unless LH's new CEO decides to change LH's attitude towards b.air... (just a personal opinion I think I am entitled to express on a disucssion forum).

[RoMax]

Nobody denies Brazil's economy is still growing, but at a much slower pace than the expections for quarter after quarter in the last two years (mainly last year). And Brazil aviation didn't stop growing, but it did get a hit because airlines were not well prepared for a slower but more sustainable growth.
And as I said in my previous post, Europe-Brazil traffic is actually quite strong (at least the EU carriers are successful on it while TAM cut all flights from GIG). But as I also said, Brazil is no easy market (Africa neither, but Brazil is difficult in another way and contrary to Africa SN doesn't have local relations or experience). It would be very difficult for SN to get their share of the Brazilian market.

[LJ]

Off topic : nothing of what we are hoping for according to our personal sensitivities will materialize ; nobody seems to realize we're heading for a Sabena/Swissair scenario with one major differnce : LH will survive (where SR failed). Unless LH's new CEO decides to change LH's attitude towards b.air... (just a personal opinion I think I am entitled to express on a disucssion forum).

Not really off topic as I doubt that SN management can do anything without the backing of LH.

[Flanker2]

I don't like all that talk about GDP growth.
GDP growth is an indicator of the growth of economic activity at the national level. If used as an indicator for an airline, it's only useful for domestic airlines to measure the potential of domestic service.
For international service, trade between the countries that the route serves is the only significant indicator. The trade balance is thus the main indicator to look at.

Also,
A country can have a 0% GDP growth and yet its wealth can be growing at full swing.
In other words, it's not because a country is earning as much or less than the previous year that it's no longer making money...
In fact, take a country like Norway where GDP growth is almost zero or negative in the past years, meaning the economic activity is unchanged, but their trade balance is so huge that their wealth is ever increasing.

Brazil's economy is now slowing down, but its imports and exports are much higher and both still growing. Brazil's trade balance is now actually turning negative, as they are importing more than they are exporting... when you become rich you start buying Audi, Mercedes Benz, Saab Gripen, etc...But as long as there is a huge volume of import and exports, there is demand for air travel in and out of Brazil... that simple.
While most of the Brazilian import/export trade is with the U.S., Brazil is now looking to expand its relationships with the EU, they are discussing a free trade agreement. This transaltes into more demand for air travel between Europe and Brazil.

I repeat that Sabena/VASP era numbers are irrelevant... Brazil opened up internationally only recently... look at the following graph of the Brazilian trade balance:



http://www.latin-focus.com/content/coun ... atrade.gif