Brussels Airlines future and financial perspective

[RoMax]

The target for 2013 was a loss of between 20 M and 0.
(I don't find the original reference but see for instance:
by RoMax » 14 Mar 2013, 19:29
- SN expects a loss of 0 to 20 million this year and a profit in 2014)
Thus, the loss is worse than the worst expected.
And a question : are the expected Wathelet subsidies included ?

The original target was indeed something like 0-20 or 0-30, but later in 2013 (November or so?) it was said this would be (much) bigger. I don't remember that number exactly, but it was something like 40-60 million if SN wouldn't get the 12-13 million 'state support'. But Q4 proved to be better than expected.

[Sean_DM]

The target for 2013 was a loss of between 20 M and 0.
(I don't find the original reference but see for instance:
by RoMax » 14 Mar 2013, 19:29
- SN expects a loss of 0 to 20 million this year and a profit in 2014)
Thus, the loss is worse than the worst expected.
And a question : are the expected Wathelet subsidies included ?

Is this really nescessary? SN is doing well, that's a good thing, not something you need to try and spin into something bad. There is enough of that going around here.

[Poeli]

Since When is not making profit a good thing to do for companies? Better than expected maybe, certainly not good.

[Inquirer]

Maybe not as significant as the above financial results for this particular topic, but important nevertheless as they do provide forward guidance for 2014, are these very recent operational figures:
viewtopic.php?f=31&t=52606

Summary:
Just like in January, both European and intercontinental flights attracted more passengers In February. Compared to February 2013, 12.1% more passengers were welcomed on board of the European flights.
The number of passengers on board the African flights grew by 6.1%.
Transatlantic flights welcomed 16.8% more passengers.
In all, following the increase of more than 11% of passengers in January, Brussels Airlines continues the same trend in February with 11.4% more passengers than in the same month last year.

[Sean_DM]

Since When is not making profit a good thing to do for companies? Better than expected maybe, certainly not good.

seeing where they are coming from, it is my opinion that these figures can be interpreted as positive. They are profiting from the economy that is coming out of a slump and forecast is looking good so far. They are still relying heavily on loans and susbidies, this is a point to work on in my opinion, but so far so good I think.

Rome wasn't build in one day.

[Inquirer]

Since When is not making profit a good thing to do for companies? Better than expected maybe, certainly not good.

seeing where they are coming from, it is my opinion that these figures can be interpreted as positive. They are profiting from the economy that is coming out of a slump and forecast is looking good so far. They are still relying heavily on loans and susbidies, this is a point to work on in my opinion, but so far so good I think.

Rome wasn't build in one day.

Its indeed always good to look at trends, much more than just the results alone.

Remember financial reporting is just a snap shot over a certain time frame, a bit like a single picture: to see the movement, you need to look at all pictures one after the other, and then you see a trend, a bit like a movie in fact. A trend generally shows you were you'll roughly be in the near future, so it's clear they are moving in the right direction here.

More clarification is needed, but I think improved significantly after summer, something which is also reflected in the fact they refer to a very strong Q4, as well as their impressive pax growth since the beginning of this year.

As an airline heavily relying on people flying for business, the upsurge in the European and US economy is probably carrying through in their results. We at work for instance are flying much more too, because we're rolling out far more projects than this time last year.

[teddybAIR]

I call it promising results. The FY2013 figures combined with passenger and cargo evolution suggest that FY2014 could be closed near break-even if costs can be kept under control and LCC impact can be limited. It will be interesting to see the march figures as these will be the first indication of the degree of impact of Ryanairs arrival at BRU. However, the february figures (I know, RYR was only present 2 days, but hey...that's 7% of february) already suggest that if there is an impact, it's rather limited. Let's hope so, because it would also suggest that both business models can co-exist at BRU

[RoMax]

Since When is not making profit a good thing to do for companies? Better than expected maybe, certainly not good.

After booking a loss of 80 million on about a billion Euro revenue in 2011, followed by a 60 million loss in 2012 (worse than expected), this is not bad. You don't return to profit that fast if you are that deep. Look at Air France, (some of) their numbers are positive/a good thing to see, still they are not profitable (just like SN maybe this year).
Of course "good" is very relative overhere, but looking at the context, this is a rather ok, maybe even good result.

[Sean_DM]

I call it promising results. The FY2013 figures combined with passenger and cargo evolution suggest that FY2014 could be closed near break-even if costs can be kept under control and LCC impact can be limited. It will be interesting to see the march figures as these will be the first indication of the degree of impact of Ryanairs arrival at BRU. However, the february figures (I know, RYR was only present 2 days, but hey...that's 7% of february) already suggest that if there is an impact, it's rather limited. Let's hope so, because it would also suggest that both business models can co-exist at BRU

I do believe, and I have been saying from the start, that both business models can co-exist at BRU and I would even dare to say it may bring extra passengers for SN on their africa and USA network if they manage to keep their prices attractive. They just need to work a bit on friendliness towards competitors (on a personal level)

[Inquirer]

I don't think it's the style of the Lufthansa carriers to rely on feed by 'hostile airlines', if I may call them that way: see how they reluctantly code share even with STAR Alliance partners (no SAS or LOT code share in BRU for instance), or how Lufthansa doesnt even codeshare with Turkish.
Personally, I find it a pitty they are so protective of their own customer base, although I agree that STAR Alliance included too much 'clutter' which is not up to the standards you can expect from say a Swiss or a Lufthansa, but then why accept them into STAR Alliance in the first place, I wonder????

[airazurxtror]

However, the february figures (I know, RYR was only present 2 days, but hey...that's 7% of february) already suggest that if there is an impact, it's rather limited.

After two (2) days of Ryanair at Brussels ? You must be joking.
There will be an impact, and it will be heavy - if not, why would Gustin panic so much ?

[Sean_DM]

I don't think it's the style of the Lufthansa carriers to rely on feed by 'hostile airlines', if I may call them that way: see how they reluctantly code share even with STAR Alliance partners (no SAS or LOT code share in BRU for instance), or how Lufthansa doesnt even codeshare with Turkish.
Personally, I find it a pitty they are so protective of their own customer base, although I agree that STAR Alliance included too much 'clutter' which is not up to the standards you can expect from say a Swiss or a Lufthansa, but then why accept them into STAR Alliance in the first place, I wonder????

Not saying that they have to rely on it, but I can imagine some LCC passengers who come from AGP for example on an FR flight just to pick up a bargain to JFK from SN. It's not going to be "the grand masse" but every passenger, euh I mean guest, is a win.

[Boeing767copilot]

Are the expected Wathelet subsidies included ?

Yes they are, approximately 15 mil.

So without subsidies in 2013 a net loss of 37 mil.

[RoMax]

There will be an impact, and it will be heavy - if not, why would Gustin panic so much ?

They compete on just 6 of SN's routes of which only LIS, FCO and BCN could have a major impact. And where do you see the panic? SN is adapting yes, but they would have done this without FR in BRU as well. I don't see the panic, on the contrary, I have never seen SN so confident.

[teddybAIR]

I don't think it's the style of the Lufthansa carriers to rely on feed by 'hostile airlines', if I may call them that way: see how they reluctantly code share even with STAR Alliance partners (no SAS or LOT code share in BRU for instance), or how Lufthansa doesnt even codeshare with Turkish.

I also don't think it's their style to refuse a passenger willing to pay for an onward ticket after having flown another airline, so I don't see the issue.

[RoMax]

Are the expected Wathelet subsidies included ?

Yes they are, approximately 15 mil.

So without subsidies in 2013 a net loss of 37 mil.

I thought SN would get about 12-13 million of the total 20 million?

I have looked it up again, in December Davignon warned that without the subsidies, they would book a loss of 45-50 million. Probably he did exagerate a bit (knowing that Q4 was going well) to put some extra pressure, but still quite a bit higher than 35-37 million they would have actually booked without the support (if it is included).

[Sean_DM]

I have to say that I have been quite dissappointed by SN on a personal level. From the 50 or 60 or so employees that I've met in the last 3 weeks that I said good morning - evening to, only one did not stick their nose in the air and turned their face away. I really cannot understand why people cannot just be civil? :/

[Inquirer]

Not saying that they have to rely on it, but I can imagine some LCC passengers who come from AGP for example on an FR flight just to pick up a bargain to JFK from SN. It's not going to be "the grand masse" but every passenger, euh I mean guest, is a win.

Oh, yes of course, but then ryanair should first start to fly to destinations which brussels airlines aren't serving themselves, otherwise I doubt many people will take the ryanair flight over the Brussels airlines feeding flight, especially as the latter will offer them through check in and will likely be cheaper than paying for two separatel tickets?

So unless we see some really interesting dots on the ryanair routemap from BRU, I think this is just purely theoretical?

[Sean_DM]

I don't know, their will probably be figures about that somewhere.
As far as I know their will be additional FR destinations from BRU after the summer.

[Inquirer]

I don't know, their will probably be figures about that somewhere.

Indeed, maybe somebody like tolipanebas could clear that up for us?
He seems to have been in the know about the strong Q4 result too as well as the fact they would come in pretty much on target for this year after all already some time ago, so maybe he can enlighten us on this too?

As far as I know their will be additional FR destinations from BRU after the summer.

Yes, but my remark still stands: unless they add routes not currently served yet, it's very unlikely to be of any added value to brussels airlines long haul routes; imagining for a second ryanair moves (some of) their high frequency routes to e.g. Dublin, Budapest, Madrid, Milan etc from CRL to BRU, what extra connectivity through BRU does that move offer to any passenger from those places which isn't currently available yet to him, notably on a brussels airlines' (or codeshare partner's) feeding flight?