Brussels Airlines future and financial perspective

[Jetter]

It has been reported several times no actual payments have been made for the years '14 and '15

Sure? http://www.flanderstoday.eu/business/eu ... s-airlines

The three airlines received their aid payments for 2014 only two weeks ago, after the mobility ministry delayed the payment for budget reasons.

Finally, a company is 'game over' when it runs out of liquidity, not when it needs to book a single negative result on its annual balance sheet

Theoretically you're correct. Though in practice liquidity often partially relies on credit lines from banks. A shareholder deficit will often lead to banks retracting their credit lines, thus creating a liquidity problem as well.

In short: don't make the mistake to still think of them as they were a couple of years ago. The reality is they have are now a solid business and can thus take quite some hits.,

It seems far from a given that with 1 profitable year behind them SN has enough reserves to handle the very difficult circumstances this year.

[Inquirer]

Note how payment in 2014, means the payment for 2013, sir.

Information about the non-payment for 2014 for instance is to be found in their audited balance sheet for that year since the auditors had to make a legal disclaimer for them to be able to sign off these accounts which included the payment nevertheless. I suggest you check them thoroughly, if you are really interested in all of it, because it's not the first time I've seen you come up with this issue and despite what you repeat (based on popular belief) it doesn't seem to be supported by the limited number of hard facts one can find on this.

Anyway, if you genuinely think shareholders would pull the plug now, while they didn't do so in a much grimmer 2013, allow me to call you extremely bearish to the point of becoming absurd almost: if one thinks heaven will soon fall on ones head, there's nothing I can point at to say it's not very likely, is it?

Anyhow, I need to go: less than 2 hours to my flight only... Grrr.

[RoMax]

The reaction SN had after FR started attacking them is almost a copy/paste of what AF is doing since a couple of years in an attempt to slow down easyJet's growth in France. The low fares they are offering are only sustainable thanks to the low oil price. Despite continued low oil prices the Paris attacks pushed AF back into the red. I am afraid the same will happen to SN.
The future of SN is in EU hands, if they have to repay the subsidies, SN will be in big trouble. A Sabena bis scenario, transferring slots and other assets for a symbolic euro to Eurowings comes closer every day.

AF's product, even domestic (which is where they tried), is totally different. Even more importantly AF is one of the worst airlines in Europe in terms of costs, SN currently has unit costs that are quite near those of the 'high cost LCC's' like Eurowings and Vueling.

And as has been said before, that state aid is nothing more than some numbers in the books. SN has been smart enough in their way to handle that.

With all respect RoMax, Brussels lockdown was peanuts in comparison with your home base being blown up. Nice to see you optimism though. Personally im really looking into work outside of Belgium, I dont trust that the situation will turn out fine.

And where did I say it will be just like last time with the lockdown?
Obviously the short term loss is extremely high now, which was not so much the case with the lockdown. I replied to your post which basically comes down to longer term effect on demand (and related losses). That effect will not last for ages, with exceptions like 9/11 you have a very long lasting drop in demand, but with something like this...wait 6 months and see how many people are still thinking about the attacks of 22/03. Examples enough that show that effect on demand often doesn't last longer than 3-4 months for similar events.

[sean1982]

Note how payment in 2014, means the payment for 2013, sir.

Information about the non-payment for 2014 for instance is to be found in their audited balance sheet for that year since the auditors had to make a legal disclaimer for them to be able to sign off these accounts which included the payment nevertheless. I suggest you check them thoroughly, if you are really interested in all of it, because it's not the first time I've seen you come up with this issue and despite what you repeat (based on popular belief) it doesn't seem to be supported by the limited number of hard facts one can find on this.

Anyway, if you genuinely think shareholders would pull the plug now, while they didn't do so in a much grimmer 2013, allow me to call you extremely bearish to the point of becoming absurd almost: if one thinks heaven will soon fall on ones head, there's nothing I can point at to say it's not very likely, is it?

Anyhow, I need to go: less than 2 hours to my flight only... Grrr.

Much grimmer 2013? You gotta be kidding me. SN just had a 14 day period of 5m € loss per day!

Friends of me are operating A320's with 20 pax?!

There's a name for your syndrome: struisvogelgedrag
(Nice personal attack against jetter btw, because its from your side the mods will probably tolerate)

Good luck catching your flight. The queue to get into the airport was from the ring all the way to the terminal 15min ago

[Jetter]

Information about the non-payment for 2014 for instance is to be found in their audited balance sheet for that year since the auditors had to make a legal disclaimer for them to be able to sign off these accounts which included the payment nevertheless.

I did check the annual reports and didn't find anything about non-payment. The payment is regulated in the decision that created the security allowances, so I don't see how it would be possible that payments haven't been made. As I understand the balance sheets payments have been made and are included in the numbers, though a comment has been added that they might have to be payed back and to allow for repayment the security allowance won't be reinvested. This would mean repayment has been taken into account, but will still hurt SN's liquidity.

Anyway, if you genuinely think shareholders would pull the plug now, while they didn't do so in a much grimmer 2013, allow me to call you extremely bearish to the point of becoming absurd almost: if one thinks heaven will soon fall on ones head, there's nothing I can point at to say it's not very likely, is it?

I never said shareholders will pull the plug. I've said SN is unlikely to survive without extra financial support from LH or state aid.

[Poiu]

It is correct that the subsidies haven't been actually paid, BUT they are accounted for. Without subsidies the loss would been much higher in 2014 and the benefit of 2015 would only have been around 32M.
If they are proven ilegal, SN will have to book a loss of 35M€.
Why do you think SN's liquidity is good Inquirer? Liquidity needs to looked at carefully in a business where customers pre pay. Eg: I can start selling cars tomorrow which I buy from the manufacturer at 10000€, a bit above the price, but I only have to pay for them one year later. I sell them for 9500, a bit under the going rate, but against cash payment only. I will easily sell 1000 of them during the first year so my liquidity will be 9500.000 at the end of the year. As long as I expand and sell more cars than the previous year my liquidity will even improve, but if the manufacturer turns out to be fiddling with the engines and nobody wants to buy my cars anymore, I will go bankrupt within months.
Look at VLM, decreasing passenger numbers with exceptional costs from the past. Less than two years ago their liquidity looked very good, today their nett asset is probably negative, a recipe for disaster.
(I do have an economic background and ran a business by the way)

[Jetter]

It is correct that the subsidies haven't been actually paid

Any source on this?

[Passenger]

Jetter, perhaps you can already organize Brussels Airlines' funeral?

[sean1982]

Jetter, perhaps you can already organize Brussels Airlines' funeral?

One informative post from you would be such an improvement rather than populistic remarks

[nordikcam]

Jetter, perhaps you can already organize Brussels Airlines' funeral?

+1 Not easy to understand why someone hate so much this company !

[sean1982]

Jetter, perhaps you can already organize Brussels Airlines' funeral?

+1 Not easy to understand why someone hate so much this company !

Because someone asks pertinent valuable questions he "hates" a company?

[Passenger]

Jetter, perhaps you can already organize Brussels Airlines' funeral?

One informative post from you would be such an improvement rather than populistic remarks

About "populistic remarks", it will be difficult to beat this one:

SN just had a 14 day period of 5m € loss per day!

[sn26567]

Cool down, guys, please!

I was at the latest press conference before the attacks. Bernard Gustin said that SN had received the subsidy for one year. For the following years, the subsidies are in the books, but have not been spent until there is certainty that they will be paid.

There was one slide referring to the "Airport Security Charges" that said exactly "Accounted for in 2013, 2014 & 2015 P&L" (and yes, the system is challenged). "Amount relative to 2013 paid in 2014, remaining not (yet)". No decisions yet, no changes vs. 2014.

Clear?

[sean1982]

That's not populistic .. that's what SN CEO said. It's a fact, unfortunatly

http://www.ringtv.be/nieuws/brussels-ai ... erlies-dag

[Jetter]

For the following years, the subsidies are in the books, but have not been spent until there is certainty that they will be paid.

Aha, there we have the misunderstanding. The first part is what I've understood from the annual reports as well. But 'not been spend' is something different than 'not been payed'. The security allowance has been payed, received and is included in the balance and results, but has not been reinvested (aka spend) afaik.

[Passenger]

Gustin didn't say what this "5 mio a day" was. Could be he means the direct costs like hotel costs for passengers, fuel for reroutings, extra staff costs, repositions costs, bus transfers, ... Could be he also included the loss of nett profit that will not be realized.

[nordikcam]

That's not populistic .. that's what SN CEO said. It's a fact, unfortunatly

http://www.ringtv.be/nieuws/brussels-ai ... erlies-dag

Yes, but it was the 30 of march ( Ring Tv ) ...one week after the terror attack...not two weeks !!

[sean1982]

That's not populistic .. that's what SN CEO said. It's a fact, unfortunatly

http://www.ringtv.be/nieuws/brussels-ai ... erlies-dag

Yes, but it was the 30 of march ( Ring Tv ) ...one week after the terror attack...not two weeks !!

There hasn't been any further communication from SN about their financial situation since, so we can only guess. Whether the costs were direct or indirect, 5m is 5m, it doesn't really matter.

[Passenger]

If your employer Ryanair pays you for each negative post against Brussels Airlines, you're in for a good month.

Fact is that it does matter what the 5 mio exactly is. Gustin was so vague that it's impossible to use his quote in a decent discussion.

[sean1982]

Unlike some here I prefer not to do struisvogelpolitiek and pretend nothing has happened. It has nothing to do with being negative or my employer. It's you who keeps spinning it that way.

Why does it matter? If a CEO says he loses 5m EUR a day, then it's 5m. If the costs were DIRECT costs,then losses from cancellations and lower LF's are not factored in and it means it was actually much more than 5m. If it was the total package with factored losses (which I sincerely hope) then it's actually not that bad. I have written more pro SN posts on this forum in 2 weeks then you did for FR in your whole lifetime, so don't accuse me of an agenda