Brussels Airlines future and financial perspective

[White Light]

OO-SSH - Airbus A319-112
First flight : 23 october 2006
Eight years as RP-C8601 with Philippine Airlines;
Leased from GECAS.
http://www.planespotters.net/Production ... rlines.php

OK, the plane is leased from GECAS, but it's still an airline from a first world country getting asecond-hand aircraft from an airline from a third world country. OK, it's "only" eight years old, but...

...From LH's press release (compliments of forum member André) we learn that LH will make 23 new A320s available to the new Eurowings. No new aircraft for SN. Why ? No decision on SN's flight renewal until 2017 ? because LH might drop SN even though it is pretending it might not do so ?

[RoMax]

Who operated the aircraft or where really does not matter at all. The condition of the aircraft, how much it has flown, the maintenance history, the price, the availability, ... that's what important. Yes brand new aircraft are slightly better performing, but also much more expensive to lease.

In 2013, Austrian added 3 A320's to its fleet, all of them about 10 years old. This year they added a 777 of (now) 16.5 years old operated by Aeroflot and as from 2005 by Vietnam Airlines.
Etihad bought 777's (5) from Air India, some of them have been stored for years in the hot and humid India.
Delta is another good example, they bought tens of 717's and MD-88/90's of more than 10 years old in recent years, many of them opearting in China in the past (the 717's all from AirTran, but many of the MD-90's).

You get my point?

[White Light]

Yes, I got your point. Nevertheless, one cannot ignore the 23 new A320s from LH for Eurowings and no factory new aircraft for SN. But, yes, I got your point.

[RoMax]

Yes, I got your point. Nevertheless, one cannot ignore the 23 new A320s from LH for Eurowings and no factory new aircraft for SN. But, yes, I got your point.

Eurowings is a fully integrated part of the LH Group already. Eurowings needs a full fleet replacement and needs a common as efficient as possible fleet as a low-cost carrier.

Place yourself in LH's shoes. Would you buy new aircraft for SN? I wouldn't. There are well-priced aircraft on the market that are more than fine, even when they have been operating in 'third-world countries'. Wait for SN to return to profit, standardise its own short/mid haul fleet to all A320series and then you can start thinking if it would be a good investment to plan a fleet replacement with factory new aircraft.

LH was not ordering lots of brand new aircraft for LX in the beginning either. Neither do they for OS (now already a 100% owned subsidiary for a few years). These things come when the time and conditions are right for it.

I like brand new aircraft as well and yes they are efficient and less sensitive for maintenance, but from a cost perspective there are so much more things to be taken into account. There is no reason to be so obsessed (not talking about you in specific, but in general many members here) with having brand new aircraft. The younger your fleet doesn't mean the higher the numbers at the bottom of your balance sheet.

[airazurxtror]

I am not a pilot nor a technician - but, with aircraft bought hither and tither, aren't they differently configured and with not exactly the same caracteristics ? Which possibly could cause errors by the pilots ?

[OO-ITR]

I for one wonder what kind of numbers they're going to post for November.
Many Belgian service companies did pretty bad in November, including many in the tourism industry.

I'm afraid we will have to disappoint you

[RoMax]

Brussels Airlines will report record high revenues from its cargo business this year, citing unprecidented demand for cargo to and from Africa. The decision to continue flying to Freetown, Conakry and Monrovia has largely contributed to this. Due to a lack of their own capacity, they also chartered capacity on full freighter flights. According to the article MD-11F flights of Allied Air.
Cargo revenue normally represents 6 to 7% of SN's total revenue, but is expected to make up for a significantly larger share this year.

http://cargofacts.com/a-record-year-for ... -airlines/

[sn26567]

Strike on Monday in Belgium means a revenue loss for Brussels Airlines of "at least 3 million euros". (Joost Freys in HLN)

[RoMax]

Strike on Monday in Belgium means a revenue loss for Brussels Airlines of "at least 3 million euros". (Joost Freys in HLN)

I read yesterday that they claim they already lost 1.5 million on Monday 8 December...that's a total of 4.5 million Euro for strikes they don't have anything to do with. Way to go unions, way to go... (same for all other companies in Belgium impacted by these strikes)

[Lysexpat]

Strike on Monday in Belgium means a revenue loss for Brussels Airlines of "at least 3 million euros". (Joost Freys in HLN)

I read yesterday that they claim they already lost 1.5 million on Monday 8 December...that's a total of 4.5 million Euro for strikes they don't have anything to do with.

Don't mix up loss wit REVENUE loss gentlemen! There are no variable cost when you are not flying. So on flights with a low LF factor you actually make a profit when you are not flying. Ryan and EZY park a lot of aircraft over the winter as they would loose more using them.
Not saying Sn is making a profit due to the strike, but 3mio loss in revenue equals maybe to a loss of 500.000.

[RoMax]

Don't mix up loss wit REVENUE loss gentlemen! There are no variable cost when you are not flying. So on flights with a low LF factor you actually make a profit when you are not flying. Ryan and EZY park a lot of aircraft over the winter as they would loose more using them.
Not saying Sn is making a profit due to the strike, but 3mio loss in revenue equals maybe to a loss of 500.000.

That's true and I never said it is the same, neither did I ever mixed things up, but 4.5 million Euro as an accumulated 'loss' (loss of revenue is one thing, but there are a lot of additional costs related to a strike, especially when an operation comes to a complete standstill), that's still a significant actual financial loss for a small company like SN (well, let's call it medium sized). Especially as it's a strike which is not caused by disagreements within the company itself, contrary to the strike they had last year (in November?).

[tolipanebas]

For those wondering, Brussels Airlines recorded yet another month of record growth in November, with a high double digit percentage passenger growth vs same month last year, showing a growth path similar to the previous months. Wait till you see the numbers...

[brusselsairlinesfan]

Please tell us tolipanebas!

[nordikcam]

Please tell us tolipanebas!

You can check too press releases of traffic of Brussels Airport with + 18 % in november...

[tolipanebas]

André posted the offical figures for November today:
https://www.aviation24.be/airlines_press_r ... mber-17-4/

Summary:
Close to half a million passengers flown on scheduled flights only: +17,4%
Passenger growth on European routes alone even more spectacular: +21,0%
Pax LF increased by 2,4%

[RoMax]

So SN will end 2014 with +6.5 million passengers? Quite a difference with their previous record of 5.9 million And these numbers do not include all the passengers they transport on charter flights. Has anyone an idea of roughly how much pax SN will have transported on charter flights this year? Because of course these are included in BRU's totals, but not in the published numbers of SN, so it's difficult to compare the two.

[Flanker2]

BRU's November pax numbers are +247.400
SN's pax numbers are +73.500
So +173.900 or about 70% of the BRU growth is owed to other airlines.

Like I said earlier, this is a temporary bubble in traffic, caused by low fares out of BRU.
But such fares are not sustainable. Something's got to give.
I wonder if FR is really going to wait it out or increase competing routes out of BRU during the spring. If they're going to, it's about time that they start marketing them.

[Stij]

I quickly calculated their market share (in pax) and it remained stable (30,9 in 2013 => 30,7 in 2014)

If you add that FR partly reduced capacity in CRL to create capacity at BRU, I think their Belgian (all airports) marketshare actually increased.

Cheers,

Stij

[RoMax]

I quickly calculated their market share (in pax) and it remained stable (30,9 in 2013 => 30,7 in 2014)

But does this include their charter pax to/from BRU? Because when you calculate SN's market share from their published data with that of BRU, you should take into account that the actual market share in BRU will be slightly higher. But I have no idea how much higher (probably not that much?), that's why I asked if someone has (rough) numbers about SN's charter volume to/from BRU.

BRU's November pax numbers are +247.400
SN's pax numbers are +73.500
So +173.900 or about 70% of the BRU growth is owed to other airlines.

Indeed, but that's only half of the story. When looking at the growth rate, we see that SN's growth is similar to that of BRU, so even though the majority of BRU's growth doesn't come from SN, they manage to keep their market share in BRU at the same level as last year.

[Stij]

But does this include their charter pax to/from BRU? Because when you calculate SN's market share from their published data with that of BRU, you should take into account that the actual market share in BRU will be slightly higher. But I have no idea how much higher (probably not that much?), that's why I asked if someone has (rough) numbers about SN's charter volume to/from BRU.

Very true, but as it's probably not that many pax I think we can conclude market share is stable.

Cheers,

Stij