Lufthansa buys the remaining 55% of Brussels Airlines

[airbuske]

Everybody is talking about “point-to-point” but Eurowings / Germanwings is not really a
“point-to-point” carrier , no ?
CGN / STR is a small hub and connections are possible between Germanwings/Eurowings and LH/OS/LX/SN

[DeltaWiskey]

I think the fact that so much is still so vague, is because CS doesn't know himself and that much still has to be decided (all these major decisions have to be approved by the LH Board). The latest I heard is that EW and SN will have to prove themselves in 2017 and that hard decisions will then be taken based on performance, ie facts & figures.

[Passenger]

It doens’t look that Lufthansa has immediate plans to liquidate nv/sa SN Airholding, the Belgian company that Lufthansa has bought (nv/sa SN Airholding is owner of nv/sa Brussels Airlines).
On 9th January 2017, SN Airholding indeed has re-installed itself as a Belgian holding company for aviation ("Belgian" = a Brussels-based nv/sa). The new board at SN Airholding now is:
Etienne Davignon
Carsten Spohr
Karl Ulrich Garnadt
William Willsm
Ulrik Svensson
Bernard Marchant
Theo Peeters
Emannuel van Innis

Statuutswijziging - NL:
http://www.ejustice.just.fgov.be/tsv_pd ... 030889.pdf
Modification des statuts - FR:
http://www.ejustice.just.fgov.be/tsv_pd ... 030888.pdf
Also related - NL:
http://www.ejustice.just.fgov.be/tsv_pd ... 029188.pdf
Also related - FR:
http://www.ejustice.just.fgov.be/tsv_pd ... 029189.pdf

Edited: see also:
https://www.aviation24.be/airlines/brussel ... ines-2019/

[sn-remember]

Everybody is talking about “point-to-point” but Eurowings / Germanwings is not really a
“point-to-point” carrier , no ?
CGN / STR is a small hub and connections are possible between Germanwings/Eurowings and LH/OS/LX/SN

No their operation is not integrated with lh's and probably not within their own brand (can someone confirm ?)
Compare with LH/OS/LX/SN these are integrated.. Also the star alliance membership opens lots of additional possibilities regarding seamless transfers.

[RoMax]

Everybody is talking about “point-to-point” but Eurowings / Germanwings is not really a
“point-to-point” carrier , no ?
CGN / STR is a small hub and connections are possible between Germanwings/Eurowings and LH/OS/LX/SN

No their operation is not integrated with lh's and probably not within their own brand (can someone confirm ?)
Compare with LH/OS/LX/SN these are integrated.. Also the star alliance membership opens lots of additional possibilities regarding seamless transfers.

EW is definitely offering connections in their own network and they have codeshares with the LH Group, as well as ANA, United and Air Canada (who make use of Eurowings feeding, of which ANA being the biggest in/out of DUS - you are talking about 20 routes here, so more than just a random codeshare).
But it's of course not comparable with a hub operation, it's more a sort of 'accidental hub network' (like Vueling is also doing mainly in BCN, with both intra-EU and intercontinental connections and codeshares - Norwegian is also doing this to a certain extent, with the difference that they are not part of a legacy group like Eurowings and Vueling).
You also have an increasing number of Eurowings M&M status members, also in Brussels.

But of course SN's model is much more focussed at such integration, with a schedule defined to optimise hub operations (although that depends on each route, many EU routes have a very O&D focussed schedule while it might not be 100% ideal for transfers), so that will be a big one to see how that evolves as part of the Eurowings Group.

[sn-remember]

Indeed thank you for the info .. they codeshare in dus only. As feeders to lh 's scarce l/h flights there (+ ua,nh,ac)
It's very limited.
The reason being lh does not operate dus as a hub despite having a few l/hs flights needing some feeding. (20 feeder flights at most as you note, not tremendous)
Bru could very well become a sort of dus-bis in the future.
Except it's not clear about the l/hs and the *A status.
And I am not sure 4U or EW actually interline much ...

[FLYAIR10]

Everybody is thinking 'passengers' here.But,what about freight?. I seem to remember an interesting part of SN's revenue is generated by transporting freight.

Is there an 'EW-cargo'? Are EW-cargo planes carrying cargo?
And is there an 'Eurowings cargo strategy'? How do SN (and BRU) fit in this picture then from this perspective?
Just wondering there was anything published on this specific topic...

[RoMax]

Indeed thank you for the info .. they codeshare in dus only.

And at CGN, VIE, ZRH, STR, ...

(20 feeder flights at most as you note, not tremendous)

20 feeder 'routes' in the ANA codeshare, LH has some more. Those 20 routes on which ANA codeshares, adds up to about 570 EW-operated flights in March. With LH obviously it is more.
Interline agreements are much wider spread, so yes 4U/EW do that.

Anyway, I don't want to pretend EW/4U has a hub operation, which it definitely has not. However it has to be made clear that there is much more integration and cooperation than with a traditional and individual LCC's. Also keep in mind that if EW wants to grow (especially on the long haul) it simply needs feeding. Just like Norwegian needs feeding, just like FR is talking with numerous other LCC and legacy carriers about interlining or possible even codesharing (with the issue that FR doesn't want to accept any responsibility, causing other parties to back off from such deals for now), mainly for long haul feeding but to a certain extent even for intra-EU.

Both LH and EW understand that to fulfill the mission to make SN (or in essence 'LHG') the African leader, they will have to continue feeding BRU as a hub. But LH is very black and white, and BRU is not a hub like FRA, MUC, VIE and ZRH are hubs. The market share of SN is significantly lower at BRU, EU-to-EU transfers are by far the lowest of any LHG hub, the long haul network is the smallest of all LHG carriers, the O&D (and in particular VFR and leisure) is a lot more dominant at BRU than at the other LHG hubs (which is also a strength of BRU, as a local market it's basically the largest in the group, or do people think they took over SN for their beautiful eyes...and LH is also smart enough that they can't move that local market, otherwise they would have done it already by 'killing' SN quick and dirty rather than going into a long term equity partnership followed by a full take-over). That makes that BRU is considered more of a local point-to-point market from a LH state of mind rather than a hub. That doesn't mean they will kill all hub-related hub operations. It could however mean they will not want the development of a route network which purely survives on transfer feeding, but rather a local market based network complemented by feeding, which is especially for long haul simply essential (also for EW).

[RoMax]

Everybody is thinking 'passengers' here.But,what about freight?. I seem to remember an interesting part of SN's revenue is generated by transporting freight.

Is there an 'EW-cargo'? Are EW-cargo planes carrying cargo?
And is there an 'Eurowings cargo strategy'? How do SN (and BRU) fit in this picture then from this perspective?
Just wondering there was anything published on this specific topic...

Belly capacity on EW long haul flights is marketed by LH Cargo since last year or so. So yes they are active in the cargo business, although definitely not in the extent of SN. They also don't have the equipment to serve very specific markets such as temperature controlled (or at least not to the same extent as SN, for example from what I know EW doesn't have fully temperature controlled cargo holds).

But again, it doesn't mean because it currently isn't a core business of EW, that they will have to end it at SN. At SN the cargo team has recently significantly expanded by insourcing additional services in Brussels (especially in the past much of SN's cargo sales were outsourced, that's not fully the case anymore). So it's definitely not the case that they are just waiting there to skip the department, quite the contrary.

[sn26567]

Both LH and EW understand that to fulfill the mission to make SN (or in essence 'LHG') the African leader, they will have to continue feeding BRU as a hub. But LH is very black and white, and BRU is not a hub like FRA, MUC, VIE and ZRH are hubs. The market share of SN is significantly lower at BRU, EU-to-EU transfers are by far the lowest of any LHG hub, the long haul network is the smallest of all LHG carriers, the O&D (and in particular VFR and leisure) is a lot more dominant at BRU than at the other LHG hubs (which is also a strength of BRU, as a local market it's basically the largest in the group, or do people think they took over SN for their beautiful eyes...and LH is also smart enough that they can't move that local market, otherwise they would have done it already by 'killing' SN quick and dirty rather than going into a long term equity partnership followed by a full take-over). That makes that BRU is considered more of a local point-to-point market from a LH state of mind rather than a hub. That doesn't mean they will kill all hub-related hub operations. It could however mean they will not want the development of a route network which purely survives on transfer feeding, but rather a local market based network complemented by feeding, which is especially for long haul simply essential (also for EW).

Pity that BRU cannot be considered as a hub anymore. Under Sabena, BRU was a vibrant hub, with 5 waves of aircraft converging daily to the airport (I remember personally having travelled with Poles coming from WAW and going to DUB via BRU - by the way DUB still isn't served by SN, not even in codeshare. I also remember having myself travelled from BCN to CPH, changing SN planes in BRU, because there was no direct connection).

After the demise of Sabena of course the first priority was to re-establish direct connections with European cities, and the hub function was neglected. BRU could never fully recoup that hub function, and this explains why LH is acting a&s it does now, integrating SN into EW. But they could also have acted differently, trying to rebuild the former Sabena model.

[nordikcam]

BRU ( before terror attacks ), VIE and ZRH were similar airports for the number of passengers ( 2015). I guess ZRH was the bigger, than BRU and finally VIE. May we make a comparison for transfer passengers ?

[RoMax]

Pity that BRU cannot be considered as a hub anymore. Under Sabena, BRU was a vibrant hub, with 5 waves of aircraft converging daily to the airport (I remember personally having travelled with Poles coming from WAW and going to DUB via BRU - by the way DUB still isn't served by SN, not even in codeshare. I also remember having myself travelled from BCN to CPH, changing SN planes in BRU, because there was no direct connection).

Of course those EU-EU transfers still exist in signifcant volumes, but not the extent that it used to be with Sabena or not as with LH/LX/OS (although of course everyone has its core markets in this field). Was BRU a vibrant hub with Sabena? Yes it was, but it was also an artificially sustained hub. If they (Sabena, Belgian politics, unions, ...) wouldn't have wasted so much time and money in the 80's and 90's when many hub-and-spoke networks really started to thrive, BRU could have succeeded in becoming a (secondary) core hub in Europe and bigger than the likes of CPH, ZRH, VIE, etc., which now it isn't and you can't really blame SN for not achieving that level, they had to build on a completely rotten system and were not given the resources that for example LX got in ZRH.

But do we necessarily have to be sad about that? We can think of what BRU could have been as a major hub, or we can cherish the extremely valuable local market that we have here. And not only the business market, the leisure and VFR market is probably even more important. There are multiple destinations on which SN used to focuss purely on the business and transfer markets, failing big time, while operating these destinations now in a successful way by refocussing their offer to the local VFR/leisure markets (and in many cases the business and transfer markets follow automatically when growing on that new, but much stronger basis). Also keep in mind that the local market has much higher yield potential than focussing a lot on transfers.

It took SN more than 10 years to find the right balance, but it seems they are getting there quite well now, but that also means accepting that BRU is not a traditional hub like the others in the group. Does that mean that SN is a point to point carrier? No definitely not, and that's where I don't agree with the black and white way of communicating by LH. But SN is not the same as LX or OS, and we should accept that.

BRU could never fully recoup that hub function, and this explains why LH is acting a&s it does now, integrating SN into EW. But they could also have acted differently, trying to rebuild the former Sabena model.

If I would be making the decisions at LH, I wouldn't make the decision to redevelop the Sabena model (in terms of the hub and spoke model). SN has found a good balance between 'hubbing' and a focus on a strong local market and they should develop that further.

[RoMax]

BRU ( before terror attacks ), VIE and ZRH were similar airports for the number of passengers ( 2015). I guess ZRH was the bigger, than BRU and finally VIE. May we make a comparison for transfer passengers ?

Overall in terms of pax BRU indeed is not significantly smaller (it was bigger than VIE and not that much smaller than ZRH). But have a look at the market shares of OS at VIE and LX at ZRH. OS represents about half of the traffic at VIE and LX is between 50 and 55 percent depending on which parameter you use. Also the share of transfer traffic by LX and OS is significantly higher than at SN.

Again, we should try to see it as a good thing that BRU is at a relatively comparable size, without that amount of hub traffic. That shows the strength of the local market. The unfortunate thing is that after the bankruptcy of Sabena, so much of that market was lost to foreign carriers and that it's so difficult in this competitive industry to regain that market share. Although that's what they have been doing almost continiously over the past years, each percent at its time.

[lumumba]

Anyway if they keep there African network and even develop there long haul to 16 planes it's impossible without a hub....

[RoMax]

Anyway if they keep there African network and even develop there long haul to 16 planes it's impossible without a hub....

As I said, just like EW can't do without network feeding if it wants to grow on long haul (for now that feed remains limited to their own network, but there will be a point that they'll feed from other carriers, no doubt), also SN will continue to need it and nothing indicates that this will not be the case. Except for the simplistic communication by LH on hub/network and point-to-point carriers. But that's what I just tried to explain, why in LH's logic they consider SN as a point-to-point carrier (which it indeed isn't in the pure sense of the word).

[nordikcam]

Anyway if they keep there African network and even develop there long haul to 16 planes it's impossible without a hub....

As I said, just like EW can't do without network feeding if it wants to grow on long haul (for now that feed remains limited to their own network, but there will be a point that they'll feed from other carriers, no doubt), also SN will continue to need it and nothing indicates that this will not be the case. Except for the simplistic communication by LH on hub/network and point-to-point carriers. But that's what I just tried to explain, why in LH's logic they consider SN as a point-to-point carrier (which it indeed isn't in the pure sense of the word).

And the reality says the number of transfer Pax @ BRU is growing faster than the number of other types of passengers...

[RoMax]

And the reality says the number of transfer Pax @ BRU is growing faster than the number of other types of passengers...

Percentage-wise yes (although that's not even the case over the past months, with transfer growth actually being lower than O&D growth, I'm curious to see how it developed in February as I haven't seen the BRU statistics yet). In absolute numbers (important to consider given the relatively small share of transfer traffic at BRU) the trend is often very different. Yes the share of transfer traffic is generally increasing, but not as significant in absolute numbers as often pretended.

Again: yes SN serves a 'significant' hub network and again yes it's growing (on the credit of long haul growth, the short haul network is much more based on O&D growth!) and yes it is an essential element in the successful recipe of SN. But also: it's still not comparable to the other hub carriers in the group (btw, have a look at the growth being generated by both LX and OS, it varies month by month and I think February was a bit off track for OS, but except for that they are growing very significantly with a continued focus on network feeding, although also OS is putting increasing resources on O&D leisure markets). That makes that LH draws a very strict line without much of a grey zone...while SN is in that grey zone between a hub carrier and a point to point carrier, and that's something they must recognise. I hope they do, but they fail to comunicate that (although that's typical LH communication... )

[Inquirer]

Good morning all.

That was quite interesting reading, romax.

When I was reading through your many posts, I felt total understanding, because I've been willing to explain something similar for a long time, but didn't have time/words/facts to support it and grew tired of the endless discussions which are clearly emotionally driven, and lacking understanding of corporate mentality in Germany.

The 3 takeaways to me are:

1- Lufthansa must urgently do something about the confusing name giving of its business segments.
Its typical German to be needing some 200 letters to describe something very simple, but they know in English it's not done and so Germans seems to have a habit of systematically coming up with either very long literal translations or alternatively very poor English shorts to what they mean to say.
Just look at how Lufthansa officially tries to describe what Eurowings is: 'a high quality low fare airline with focusses on both leisure as well as corporate travelers'...
What's wrong with the simple and single word 'hybrid' anyway????
Is it because Germans immediately think of CARS in that case or what?

2- its true that when you fly on a Swiss of Lufthansa plane on routes in Europe (and I do so on a weekly basis), the amount of people not simply traveling between the origin and destination country is HUGE, compared to what I notice on Brussels.
No idea what the average connecting percentage is on Brussels Airlines, but on Lufthansa's European routes I wouldn't be surprised to see it's close to 50% even! I think many people here don't realize this!
With that in mind, and from a Lufthansa perspective, it probably leads them indeed to not seeing Brussels Airlines with maybe just 15 to 20% (?) as a hub airline, after which they just call it 'point-to-point', which is equally wrong since those connects are likely a crucial part of the African business.
Did I already mention the suggestion to go for the word 'hybrid' instead?

3- you're bang on in your assessment that an airline which can fill most of its capacity with local traffic is actually having a stronger commercial position in its home market vs one that needs to rely on huge numbers of feed to achieve roughly the same loads.
To put it simple: how many ordinary Brits or Germans fly 'their' British Airways or 'their' Lufthansa at least once a year? I think that percentage wise, more Belgians fly with Brussels Airlines.
as such, Brussels Airlines are far more of a point-to-point airline than all others, without that meaning they are not operating a real hub at BRU: the word 'hybrid' nicely covers both.

[sn-remember]

Indeed thank you for the info .. they codeshare in dus only.

And at CGN, VIE, ZRH, STR, ...

Not in my book .. Would you have a reference ?

[RoMax]

Not in my book .. Would you have a reference ?

Probably the easiest (semi-public) source to have a nice (monthly) overview per airline is the Flightglobal database (with subscription). But to give an example which you could easily look up yourself: look at all flights to/from LHR under a United flight code. Many of those are codeshares, including a number of EW/4U operated routes. Same with Air Canada for example at LHR and ZRH. All in all monthly there are a few thousand EW/4U operated flights on which other LH Group airlines as well as NH, UA and AC have a codeshare. Only NH is DUS-only focussed (except for the BRU-STR route, where they feed into STR via BRU).