Brussels Airlines future and financial perspective

[BAAV]

ok, thanks, that would be great news and may give them confidence to also grow the long haul

[Crosswind]

[..] that SN expected to be in the black at the end of the fiscal year 2015 (the first profit since 2008).

In the black ?

[sn26567]

Black figures = profit (red figures = loss)

[flightlover]

I think I saw that some SN-representative was claiming SN would be in the black this year, even when fuel price wouldn't have come down.
That was at the KanaalZ news of the 19th, if I remember well.

[RoMax]

They indeed say they'll be in the black, at least if nothing serious happens between now and the end of the year, and they would still be without the effect of the low fuel prices and completely aside of the currently doubtful federal state subsidy (which they never used anyway, it has been nothing more than a number in their income statement).

[RoMax]

2016 will be the moment of thruth for SN when it comes to Lufthansa's involvement in the company. Flightglobal reports (based on statements by LH CEO Spohr) that Lufthansa will decide in 2016 whether to retain its shareholding in SN and increase to a majority shareholding, or otherwise "involvement with the Belgian carrier might be terminated". "Spohr says a potential decision to increase the shareholding will involve evaluation of how Brussels Airlines might be integrated into Lufthansa Group."

[Flanker2]

That's a very polarised statement, suggesting that negotiations of some sort are taking place.

Personally, I would prefer to see SN become integrated into IAG because one must admit that it's the only one of the 3 majors in Europe that seems to be in steady hands. WW seems to know what he's doing.

As an alternative, given the mass that SN is accumulating, one can wonder if they can't stabilise as a stand-alone carrier with its own niches, similar to AY. They would have to pick up fresh investments somewhere, but there are market opportunities that SN hasn't touched yet, ie regional Europe and Longhaul to/from Asia and Latin America.

[Inquirer]

Given they are going to turn a profit this year and are growing like never before, I doubt Lufthansa will divest from them. Would be a strange decision after all the financial commitments, especially knowing it would mean they'd hand them over to investors/competitors on a golden platter, as flanker said.
Will be most interesting in what form they'll be integrated into the Lufthansa group however: as a separate brand, or as a Belgian branch of Eurowings?
Their highly successful business model on European routes is likely proving a real headache to the German managers because it makes them hard to integrate into the multi-brand strategy of the group.
Their European product lines them up perfectly with Eurowings which is aimed at doing exactly what they do, whereas their African network can't just be absorbed into any Eurowings operation.
Personally, I wouldn't be surprised if Lufthansa splits up their operations post acquisition: it would also constitute a nice testing ground to see in how far they can use the Eurowings brand as feeder for traditional intercontinental routes (in BRU), something which may be handy at bigger hubs like VIE or MUC in future.
If they find out they can feed intercontinental flights with a quality low fare product just as well as they do through traditional flights, it will proof to be the winning set up for the future of European aviation as a whole: the often spread idea there will be 3 airline groups doing everything but low fare flying and 3 stand alone low fare airlines next to those, is clearly wrong. In my opinion, it getting increasingly clear there will be just 3 aviation groups doing everything, period: and once in a group, there will be cross feeding, just look at how vueling is being used by British AW, Iberia and its OneWorld partners. Even the biggest of stand alone low fare carriers of today may be swallowed up in ten years from now as they will start to feel growth in Europe is limited if they can't tap from the pool of (intercontinental) code share markets.

[sean1982]

I would also think that if acquired the Brussels airlines brand will eventually disappear.

I'd see easyJet absorbed into IAG and FR and Norwegian tandem creating a short haul/long haul mammoth of their own.

[brusselsairlinesfan]

Hope they will keep the brussels airlines brand... Saving the belgian identity of the company!

[Stij]

A very interesting topic this has become...

I can only agree with Inquirer. Just one small remark: Biz & Class and Flex & Fast aren't a low fare offering, they're traditional.

So it's even ideal for feeding:

Biz & Class feeds C
Flex and Fast feeds Y full fare
Light & Relax feeds Y discounted

I wouldn't be surprised to see them offering the hybrid model on all LH group flights, even LH flights from MUC and FRA
Then the questions is: what's the use of the Eurowings brand? SN, AU, LX and LH are very powerful brands in their respective home markets. Just for the long haul then?

Another question pop-up then... can't you make the hybrid model work long haul as well?

Cheers,

Stij

[airbuske]

LX , OS and LH are doing the same as SN , no ?
They are now offering Economy Light , Economy Classic , Economy Flex and Business class fares
The only thins that SN is not doing , is offering a small snack in C&G and L&R.

So I suppose is not that difficult to integrate SN into the multi-brand strategy.

BRU is a testing ground for the LH group.
I see LOOP being used by the whole LH Group on SH and MH in 2016.


At this moment Eurowings will be used to replace the Germanwings brand on SH
and to offer low cost flights from CGN. They changed already their mind in VIE.

But now, Austrian says it will concentrate on its role as a classic network carrier, while Eurowings will operate the two A320s with its own crews. Austrian places the decision in the context of Lufthansa Group’s “new strategic direction” which includes a “sharper distinction” between network and point-to-point traffic.

Brussels Airlines is not really a point-to-point carrier so they will they keep the Brussels Airlines brand ?

This is a quote from Lufthansa official from the 29th of june :

Lufthansa Official: "Brussels Airlines does NOT become Eurowings or Brusselswings. Only co-operation is possible between Brussels Airlines and Eurowings. As is happening now at Austrian Airlines".

But I have still my doubts

[convair]

Commercially speaking, I think it would be a mistake to drop a well-established brand like Brussels Airlines.

[Boavida]

It would be very stupid to drop the Brussels Airlines brand. Europe is not a country, there hardly is a European identity. In Europe, all airlines have their national identity. AF-KLM also keeps their 2 national brands. If LH drops the Brussels brand, it should also drop the Austrian and Swiss brand. And why not ditch the Lufthansa brand itself, in favor of a nameless generic soulless "European" brand like "Eurowings"? That's right, it would be ridiculous and unthinkable.

IF the Brussels Airlines brand was to be dropped, it should only be for the return of the SABENA brand

[brusselsairlinesfan]

It would be very stupid to drop the Brussels Airlines brand. Europe is not a country, there hardly is a European identity. In Europe, all airlines have their national identity. AF-KLM also keeps their 2 national brands. If LH drops the Brussels brand, it should also drop the Austrian and Swiss brand. And why not ditch the Lufthansa brand itself, in favor of a nameless generic soulless "European" brand like "Eurowings"? That's right, it would be ridiculous and unthinkable.

IF the Brussels Airlines brand was to be dropped, it should only be for the return of the SABENA brand

I do fully agree!!!

[crew1990]

IF the Brussels Airlines brand was to be dropped, it should only be for the return of the SABENA brand

Wich is unlikely to happen, Brussels Airlines is now a stronger brand than Sabena, nor in the country where Sabena used to fly and that Brussels Airlines doesn'y fly yet and in RDC where Sabena still a brand well known.

The other problem is the fact that Sabena is a French acronym so of this happend I'm sure the north of Belgium will not be happy. I can't even imagine the réaction of De wever of it would happend

[sean1982]

I dont really agree boavida. Loads of very succesfull airlines are not a "country legacy" at all and its exactly those that LH is trying to fight: Ryanair, easyJet, Norwegian, tui, air europa, Thomas cook .. And so on.

I dont think that lots of belgians will lose any sleep if boarding a Brussels airlines plane vs a eurowings plane as long as price/service balance is right. The only thing that LH has to do is a smooth transition and building up brand awareness of eurowings.

[Atlantis]

Interesting interview with Bernard Gustin

http://www.anna.aero/2015/10/29/anna-ae ... rd-gustin/

[Flanker2]

Gustin is really learning the ropes.

No more U.S. expansion for the moment but more Africa. That's the right focus.
I wouldn't mind seeing more Asia, but I think that it makes more sense for now to expand Africa first so they have enough weight to eventually support flights to Asia and to make the U.S. flights more profitable.

I hope that they work harder to pull in Air China though, and perhaps also a flight out of HKG.
SIN with SQ would be a nice bonus, but not as important.

[tolipanebas]

Gustin is really learning the ropes: No more U.S. expansion for the moment but more Africa. That's the right focus.

Once again you are taking your own fiction for facts.
Over the next few weeks news will emerge that will clearly show US expansion is still high on the agenda too. Logical, as a fast growing African network can't be supported without it...