BRU in 2020

[DeltaWiskey]

@Jetter:
Of course your goals are dependent of the competition. Have you ever heard of 25%-30% margins in aviation, which are no exception in IT?
In an extreme example, if BRU (total) traffic figures decline by 20%, and you manage to carry as much traffic as before, you've done an incredible job, don't you think? Of course it is different if you have 10 or 80 bases, but that's comparing apples to oranges.
Have you done the math yourselves what it takes to get from 35-37% to 45% at BRU? That is not just 20% growth, or doing just a bit better then the competition, it is doing a lot better. That's why I think it is not realistic.

[Jetter]

If SN says they want to increase their market share, that is exactly what they mean. Holding off competition within Europe (growing themselves, while trying to keep the others away or at least growing at a slower pace), while increasing their dominance on the long haul market (except Africa, SN currently still is just a small long haul operator at BRU, United is even bigger on the BRU long haul market excl. Africa)

You automatically assume holding off competition requires an increasing market share. There are many scenario's possible where that isn't the case. Take the departure of Jet Airways to AMS as example, that has supposedly helped SN achieve their goals because it increased their market share. But how on earth is it in the interest of SN that Jet finds that KL is a better partner than SN itself?

Another example: if SN operates at high margins there will be more possibilities for competition to compete on price, attracting them to BRU. If SN sells their tickets at rock-bottom prices that will put off competition because it's hard to compete on price and it's easier to make money elsewhere. How is selling tickets at rock-bottom prices without a decent margin in the interest of SN?

The goal of SN should be to transport as many passengers possible while maintaining a decent margin. That is a better goal than a goal that is completely dependent on other airlines. An increased market share CAN be a result of that, but is by no means necessary.

In an extreme example, if BRU (total) traffic figures decline by 20%, and you manage to carry as much traffic as before, you've done an incredible job, don't you think? Of course it is different if you have 10 or 80 bases, but that's comparing apples to oranges.

No, I don't think that's true. SN's only base is BRU, so they can't move their planes to a more profitable base if the opportunity would arise. Other airlines like FR and U2 do have that possibility. If margins at BRU decrease because of overcapacity and other airlines move away because of said declining margins that will increase the market share of SN. How is such a scenario preferable above increasing demand, increasing margins and a stable market share?

[RoMax]

You automatically assume holding off competition requires an increasing market share. There are many scenario's possible where that isn't the case. Take the departure of Jet Airways to AMS as example, that has supposedly helped SN achieve their goals because it increased their market share. But how on earth is it in the interest of SN that Jet finds that KL is a better partner than SN itself?

While 9W choosing AF-KL-DL over SN in itself is not a good thing (although the obvious choice), yes it was a good thing for SN. I would put it even more clearly, it was a gift sent from heaven for SN/Star to increase their dominance on the BRU long haul market, taking control over very important markets. Things got messed up a bit after 22/03, but otherwise 3 out of 4 routes would have been taken over by SN/UA within 9-12 months. That might still be the case, but EWR 2nd daily is now delayed until at least S16 and also the Mumbai launch would have been a bit earlier. Yes at lower capacity as with 9W operating these flights, but SN/UA/AI/etc. couldn't care less. Let's be honnest, since 9W never managed to excecute their original growth plan at BRU (for various reaons of course, of which many beyond their direct control anyway) and SN pushed them out of the JFK market, they have never been the best partners anymore anyway. SN just wanted India, that's all. For Toronto they codeshared as it was their only direct option, but Atlantic++ pushed as much as possible to transfer with SN/UA/AC via another North American hub.

Another example: if SN operates at high margins there will be more possibilities for competition to compete on price, attracting them to BRU. If SN sells their tickets at rock-bottom prices that will put off competition because it's hard to compete on price and it's easier to make money elsewhere. How is selling tickets at rock-bottom prices without a decent margin in the interest of SN?

SN can't compete on price alone, they rely on a combination of network quality, 'service' and competitive pricing. But when do you think they can achieve the most profitable combination of these: when having a dominant market share at BRU or being one of many with mainly large LCC's eating lucrative parts of the European network (and who knows in the medium long future even long haul, with Norwegian expanding their number of European long haul bases).

The goal of SN should be to transport as many passengers possible while maintaining a decent margin. That is a better goal than a goal that is completely dependent on other airlines. An increased market share CAN be a result of that, but is by no means necessary.

Market share is and should never be a goal on its own, but it is part of it. It will simply be an obvious effect on the longer term (market share is not a short term goal when you are operating in a mature market). Having that mature (relatively slowly growing) market here in BRU, having a strategy which should result in rapid (yet sustainable) growth, will automatically result in an increasing market share on the longer term.
And of course that also depends on other airlines, but if they can't increase their market share "because of other airlines" that would be because they are not as effective in competing as they would have foreseen.

Aiming for a (significant) increase in market share by 2020, doesn't mean that they will do whatever they need to push out competition on the short term just for the sake of increasing market share. That would be insane of course. But that's the difference in seeing market share as a goal on its own, or as part of a broader strategy which should automatically result in a growing market share.

To give an example: SAS, a relatively big carrier at BRU (one of the larger ones intra-EU in terms of seat capacity) and although they are a Star member, SN would be delighted to be able to push them back to where they came from. Yet they know that would ruin their yields and it will likely attract FR and Norwegian to serve these lucrative markets. So that's an example where 'increasing market share' doesn't necessarily mean that you do whatever you want with the sole goal of market share.

That being said, 45% is very ambitious for 2020. Without 22/03 even totally impossible, but now they have sort of a head start... Yet it would still require SN to continue growing at a rate of about 10% or more each year (as from 2017), with BRU maintaining a (very) slow growth rate up until 2020.

But it's sure that SN has seen their chance. EasyJet and Vueling are folding back on some of their important short haul markets (with of course the difficult being thing to keep FR away from taking over all of that 'excess demand'). Delta has reduced their presence. AA is gone. 9W is gone. Legacy carriers such as Alitalia are not exactly jumping in the market after the gaps left by Vueling either.

[Inquirer]

I don't know if the 2020 year was arbitrary chosen by the topic starter or whether it's based on some vision text of the airport, but does anybody know what the official objectives of the airport are for that year?
Given they should know best, it might be interesting to check off each suggestion made above against those.

As to the ambition of BRU.Air to reach a 45% market share at it's home base: I notice the discussion above focused a lot on whether it's a good idea to have market share as performance target by itself, but is it really a performance target, or is it just an easy to understand illustration of their future growth plans?
I agree with jetter it's not very likely to be the target by itself, but I can very much believe it to be the consequence of them continuing to grow with double digit figures for another few years.
Others at BRU are pulling out or virtually standing still, so if indeed they genuinely intend to add expansionist growth to their organic growth of the past few years, than achieving 45% of market share shouldn't be impossible either.

An illustration of that:
they currently bring about 8M passengers on the total of roughly 22M (i.e. 36%).
if they grow to say 13M by the end of 2020 on a total of 29M by then, that's indeed a 45% market share.
For that, they'd need to grow by some 5M on 4 years then, or about 13% per annum: IMHO that's doable if indeed they regain the growth path they followed for 2 years prior to the terror attacks AND combine it with further growth from new (intercontinental?) routes under the wings of Lufthansa...
It also leaves around 4M of further growth by others at BRU: with few candidates to deliver that volume on such a short period of time, that seems more than enough.
Ryanair is a prime candidate to deliver much of the further growth yet plans to grow just 7% in Belgium next year if I recall it correctly, all of it at CRL too and they''ll fly only 2.5M passengers from BRU this year. By 2020 they could double that at BRU if they'd grow by close to 30% for the remainder of the decade then, but even then BRU would need others to provide it with almost 2M additional passengers.
There's talk of some additional 3rd party intercontinental flights to South America and possibly Asia, but whether they will all materialize, I don't know: even then, they seem to be included in this projection.
In short: provided they regain their growth path of before, and regardless what others will do, a figure between 40 and 45% of market share is achievable indeed, and if either ryanair or others can't fully deliver as set out above, they may even take the symbolic half of the market share.

BTW, thanks for posting this!
It shows their strategic vision is to grow a lot, rather than to shrink, post full integration in the Lufthansa group.

[Thomaaas]

I don't know if the 2020 year was arbitrary chosen by the topic starter or whether it's based on some vision text of the airport, but does anybody know what the official objectives of the airport are for that year?

2020 was just chosen arbitrary, not reflected or influenced by any vision text of BRU.

[DeltaWiskey]

I don't think the 45% figure is a goal in itself, it would rather be a side effect of the goal to keep growing and to do better than the (direct) competition.

@Jetter: increasing market share is always good, even in a temporarily declining market. It is much easier to maintain market share afterwards than to regain market share. And don't change my words, I've never written that a declining market is preferable!