Lufthansa buys the remaining 55% of Brussels Airlines

[Boavida]

Now that it seems certain that a significant part of SN will be integrated into EW, would it be possible that LH sees a more longhaul future for Brussels Airlines (meaning an extensive enlargement of the longhaul destinations)?

Today, SN is a shorthaul airline with a few longhaul destinations. Could SN become a longhaul airline with a few shorthaul destinations?

[sn26567]

According to De Tijd, it's the Belgian government that is now leading the negotiations with Lufthansa. The shareholders and creditors pf SN Airholding have selected a quartet of negotiators: Koen Van Loo, the managing director of the public holding company SFPI; Bernard Marchant, CEO of the publishing group Rossel; Arnaud Feist, CEO of Brussels Airport and on behalf of Belfius CEO Marc Raisière or Peter Vermeiren, the general manager for institutional clients in the Brussels area.

As a reminder, Federal Investment Company SFPI owns 100% of Belfius and 25% of Brussels Airport. In other words, the Government is to a great extent leading the discussions. None of the directors of SN Airholding is included in the four-man team. Neither Luc Coene (ex-governor NBB) nor Theo Peeters (formerly KBC) or Emmanuel Van Innis (Engie). Especially the absence of Etienne Davignon, Chairman of SN Airholding and Brussels Airlines, is striking.

An important part of the discussion will be about the size of that integration. Unions and management are wary of a complete absorption through which the identity of Brussels Airlines would be lost.

The presence of the SFPI in the negotiating team not surprising. The holding company remains the largest creditor of SN Airholding with a contribution of 87.5 million euros (loans and equity rights). Brussels Airport has also a lot at stake. More important than its stake from 4.2 per cent in SN Airholding is the fact that Brussels Airlines provides one third of all its passengers. Belfius has an interest of 3.82 per cent in SN Airholding. Rossel owns 0.13 percent.

http://www.tijd.be/ondernemen/luchtvaar ... 7-3085.art

[sn-remember]

According to De Tijd, it's the Belgian government that is now leading the negotiations with Lufthansa.

You sure the gov knows about the star alliance importance and which business plan to support ?
Also, SN sooo small, would it make any sense to cut them into 2 distinct entities ?

[cathay belgium]

Hi,

If SN is too small to cut it in 2, the cut in two ?
LH Belgium longhaul en EW shorthaul ?

LH will take care of STAR ALLIANCE on the long haul I guess...

And about connections, FR and EZY and DY or already years begging for flying the short haul sectors in europe for the legacy airliners...
So not in the near future but ONCE... for sure .. I guess.. but I don't hope for it

We will see soon next year...

CXB

[Poiu]

Why do you think it is an interesting read?
imo, it is written by someone who stopped living 15y ago, a lot has happened/changed since. I think the sale of Brussels Airlines has very little to do with Sabena, although, we should never forget the mistakes that were made in the past, learn from it and avoid making them again.

I also don't understand why BRU would/should no longer be a Star Alliance hub if they are taken over by LH? Especially now, with intra-European (business) traffic under huge pressure to/from BRU, it makes connecting passengers and the longhaul network that more important.

Yes, the impact of the attacks and the negative image of Brussels (the airport and the city) stil have a big impact on reservations and yield. It will take a long time to recover.

Mr Lemmens spent the last 15 years in investigating the SN-SR saga, he was assisted by several lawyers, which were crowd funded by a group of former Sabena employees. By doing so he discovered the illegal transfer of funds and assets to DAT in the days before the Sabena bankruptcy. He also explains that the financial position of Brussels Airlines is weak and without Lufty they would not be flying today.

[Conti764]

If I was pulling the strings at LH, I'd be very careful what to with SN...

The main reason why they acquired their stake in SN the first place was to prevent a competing alliance to develop a possible major hub at BRU. SN was leaning heavily towards Oneworld that time and, contrary to Skyteam and Star Alliance, lacked a very centrally located hub within Europe. Yes, you have LHR, but that airport is so congested...

Integrating SN into Eurowings and dissolve their long haul operations, thus effectively reducing BRU into a low cost airport for Star Alliance, would push BRU right back in the arms of Oneworld. In Europe any European airline can build its hub at any airport and who knows what might happen in the mean time. LATAM is already considering turning BRU into a European hub, AA might return with BRU-NYC and BRU-ORD if SN's flight to the first is to terminate and UA loses the connecting feed at BRU. In the meantime other European OW-members might increase their presence at BRU and Eurowings is nothing else then Vueling to name the OW-affiliated low cost operator... In the end LH might end up what it wanted to fend of in the first place while acquiring SN...

[Jetter]

If I was pulling the strings at LH, I'd be very careful what to with SN...

The main reason why they acquired their stake in SN the first place was to prevent a competing alliance to develop a possible major hub at BRU. SN was leaning heavily towards Oneworld that time and, contrary to Skyteam and Star Alliance, lacked a very centrally located hub within Europe. Yes, you have LHR, but that airport is so congested...

Integrating SN into Eurowings and dissolve their long haul operations, thus effectively reducing BRU into a low cost airport for Star Alliance, would push BRU right back in the arms of Oneworld. In Europe any European airline can build its hub at any airport and who knows what might happen in the mean time. LATAM is already considering turning BRU into a European hub, AA might return with BRU-NYC and BRU-ORD if SN's flight to the first is to terminate and UA loses the connecting feed at BRU. In the meantime other European OW-members might increase their presence at BRU and Eurowings is nothing else then Vueling to name the OW-affiliated low cost operator... In the end LH might end up what it wanted to fend of in the first place while acquiring SN...

BRU becoming a OW hub is highly unlikely in any scenario other than the SN deal with LH failing and SN being taken over by IAG (which is unlickely on itself). There isn't any European precedent of an alliance setting up a hub in a country where it doesn't have a member (with the exception of LH Italia maybe, but that failed). The opportunities are already there, in Barcelona en Milan i.e., cities that aren't a hub for a full-service carrier yet have potential comparable to BRU. Geographically BRU is in a tough position right in between the 4 largest airports of Europe. For OW a 3rd/4th hub in NW-Europe doesn't make much sense either, they just got DUB as reliever for LHR and LHR itself seems to finally get it's 3rd runway.

[sn26567]

There was another meeting between LH and the Belgian shareholders yesterday. LH wants to accelerate the outcome of the discussions: a new meeting has been set for next Tuesday with the aim to come to a conclusion around mid-November. The Belgian shareholders still want a Belgian anchorage of the company.

As mentioned earlier, the Belgian negotiators are Koen Van Loo, the managing director of the public holding company SFPI; Bernard Marchant, CEO of the publishing group Rossel; Arnaud Feist, CEO of Brussels Airport and on behalf of Belfius CEO Marc Raisière or Peter Vermeiren, the general manager for institutional clients in the Brussels area.

[Atlantis]

There was another meeting between LH and the Belgian shareholders yesterday. LH wants to accelerate the outcome of the discussions: a new meeting has been set for next Tuesday with the aim to come to a conclusion around mid-November. The Belgian shareholders still want a Belgian anchorage of the company.

As mentioned earlier, the Belgian negotiators are Koen Van Loo, the managing director of the public holding company SFPI; Bernard Marchant, CEO of the publishing group Rossel; Arnaud Feist, CEO of Brussels Airport and on behalf of Belfius CEO Marc Raisière or Peter Vermeiren, the general manager for institutional clients in the Brussels area.

I can add that BRU is absolutely not pleased with the full take over of SN by LH and certainly not if they want to integrate them under a LCC.
On this way they want to create a LC airport which will be nefast for the future development of the airport: Pier A West, Star Alliance, new Star Alliance clients at the airport like the Asian ones but also LATAM who will using SN to spread their pax over Europe or other parts. One of the reasons that ANA came to Belgium was that SN has a good cover in Europe and flies to Africa and is a Star Alliance member.
The consequences can be really huge and only Germany and their airports will win. Belgium, BRU and SN will lose in this case.

[Jetter]

What is happening now does not correspond to the agreement signed when Wolfgang Mayrhueber was LH CEO.
When Chritopher Franz took over, one could already feel a new trend, well many felt it except SN's shareholders.
Now Carsten Spohr is on his own trip which has got nothing do to with the spirit of the agreement signed in 2008 (?) which also foresaw that LH could buy the remaining 55% of LH as from 2011. SN's shareholders waited much too long, gave too much time to LH. One would have thought that after what happened with SR, the present shareholders woudl have been more careful. A large part of the blame of what is going to happen rests on the naivety of SN shareholders... History might repeat itself

I share your analysis of LH. But what could the shareholders have done? What do you mean by being more carefull? Without LH SN might very well be bankrupt by now, that doesn't leave much options other than to do as LH desires.

[Duke]

But what could the shareholders have done? What do you mean by being more carefull? Without LH SN might very well be bankrupt by now, that doesn't leave much options other than to do as LH desires.

I am not a specialist nor an airline business analist. But when I see how the IAG group has evolved, and the role of Aer Lingus in that group, there might be a missed opportunity for Brussels Airlines in that group.
Brussels Airlines (at least the long haul part) could have turned into OneWorld (French speaking) African branch, thereby stressing Brussels Airport's role as a modern and efficient hub.
Brussels Airlines' long haul African operations would have been a perfect complement to British Airways own African operation, mainly to English speaking Africa.
The 'old' fleet of A330's would probably have been replaced already by 10 or more shiny new planes...

Maybe the shareholders could not have done much, but starting negociations with another party could have added some pressure on Lufthansa...

Let's still hope for the best though,

Regards,

Duke

[lumumba]

I think everybody thought like you in the beginning but British Airways did not move...

[DeltaWiskey]

IAG didn't exist until 2010. Aer Lingus was taken over by IAG in 2015. LH bought the first SN shares in 2008. Very different timeline altogether. LH moved first, played it smart, took a risk and is being rewarded now.

Why takes everyone for granted that the incorporation of SN into the LH Group is a sad story? It can also be a success! It is definitely the aim to keep going at the pace and spirit of the last few years.

Replacing 'old' (& cheap) aircraft with new shiny ones doesn't turn a loss-making airline in a profit-making airline. It takes much more than that. I guess we all know an airline that bought all shiny new airplanes and went broke shortly after that? (it wasn't the only reason, but it certainly didn't help)

[lumumba]

IAG didn't exist until 2010. Aer Lingus was taken over by IAG in 2015. LH bought the first SN shares in 2008. Very different timeline altogether. LH moved first, played it smart, took a risk and is being rewarded now.

Why takes everyone for granted that the incorporation of SN into the LH Group is a sad story? It can also be a success! It is definitely the aim to keep going at the pace and spirit of the last few years.

Replacing 'old' (& cheap) aircraft with new shiny ones doesn't turn a loss-making airline in a profit-making airline. It takes much more than that. I guess we all know an airline that bought all shiny new airplanes and went broke shortly after that? (it wasn't the only reason, but it certainly didn't help)

I'm totally agree with you but I think that strategically SN is better with One World .
And at the time everybody thought that BA would invest in Brussels Airlines but like I said before they did not move.
And it's still strange because BA did it before and took some risks with AirLiberte,Deutsche BA etc..
That where all big investments,Brussels Airlines was not so much money with a local market and a nice airport.
Anyway still strange for me.

[Boavida]

Why takes everyone for granted that the incorporation of SN into the LH Group is a sad story?

Euh... maybe because they want to kill Brussels Airlines and turn it into a soulless, generic low-cost airline called 'Eurowings' ?

[Jetter]

The fact that LH gave only a loan to SN instead of investing in it by injecting fresh money was alreday suspicious.

Not suspicious imo. When you partially own a company and want to invest, that investment has to be matched by the other owners/shareholders or they have to be willing to let their share water down. If the other shareholders don't want to cooperate with either of those options that the logical solution is a loan.

[Poiu]

Ansett- you don't seem to understand, without Lufty there would be no SN today!
They made it loan, as an investment would have been a loss in case of bankruptcy.
As for the future: A mate went to the EW interview for their future PMI base and was told that EW would open a base in BRU in the not too distant future.

[sn26567]

EW would open a base in BRU in the not too distant future.

An EW base in BRU is not a problem. They can fly all the tourist destinations in the Mediterranean. But don't let them put their hands on SN for the intercontinental flights and their feeder routes in Europe.
.

[lumumba]

EW would open a base in BRU in the not too distant future.

An EW base in BRU is not a problem. They can fly all the tourist destinations in the Mediterranean. But don't let them put their hands on SN for the intercontinental flights and their feeder routes in Europe.
.

That's exactly what I wanna hear....perfect!

[DeltaWiskey]

Funny that you mention PMI, it was announced today that it will be a new destination in S17 (just once weekly to start with).

We'll see what the future brings, currently EW has a higher cost structure than SN for their A320 fleet, so I don't see why they should urgently open a base at BRU. I think there are better opportunities elsewhere for EW (like FRA ).