The integration of Thomas Cook Airlines Belgium into SN

[DannyVDB]

Hi all,

I open a new topic on the integration of Thomas Cook Belgium in SN. I think it is worthwhile to have a separate topic since now the discussion gets a bit lost in Brussel Airlines 2017 and other topics while this move might have an impact on more than one million passengers (shifting) and the potential of getting new long haul to BRU.

What I want to discuss with you is:

1. What is the status of this plan?
2. What is the potential impact (in terms of pax, financial aspects)?
3. What are the challenges?
4. What will we see as new destinations and especially what are the possible long haul leisure destinations?

I will first give a few of my ideas and then I hope that many of you will react

Danny

[DannyVDB]

On the status

Does anyone have more information on the status of this plan?

It was said it would be by the beginning of the winter season, but depending on the authorisation of the plan. Will this authorisation come in time since we all know this process is slow ...

I ask also because I checked the Thomas Cook Airlines web site and I see for the timetables they still show for the winter timetable departures from Brussels (so as Tomas Cook Airlines), while for the summer 2018 timetable there are NO departures from BRU anymore.

More insights are more than welcome.

Danny

[DannyVDB]

On the impact.

1) Impact on the number of pax
I thought that Thomas Cook has around 1.2 million clients in Belgium. But I assume that includes people travelling by train or car. It certainly includes the pax transported by the own Belgian planes and the pax travelling mostly via FRA (with Condor) for long haul. But also some are already flown by SN or other carriers (e.g. for city trips to Rome or Barcelona).

So we potentially speak about an additional 800.000 or more pax. Anyone has more precise figures: e.g. how many Thomas Cook pax travel already on SN planes, or vice versa how many the 5 (?) A320 carried e.g. in 2016?

2) Impact on the utilisation and LF of SN fleet
I would expect in general higher LF, but also better utilisation of the fleet - e.g. for this winter season they plan to take over 2 planes but all pilots, so their current fleet will be better used (less grounded). Also a further shift towards bigger planes ...

3) Impact on the financial aspects
I can see that the integration will create some explicit synergies and additional income. But on the other hand there might be a pressure on the prices of the tickets (throughout SN), or is that not the case?

4) I don't see an impact on BRU unless they decide to launch additional long haul.

5) I see the step also as a step in the move to the further integration with EW - so the question is: what will be the products/services offered on these flights: SN, EW or former Thomas Cook (will we have 3 classes or 4)? - See also challenges.

More impacts?

[DannyVDB]

Before adding something on the challenges I need to say something on the destinations

1. For the short haul/medium haul this pretty 'straightforward'. These will be the destinations that are now offered by Thomas Cook Belgium (they have agreements with hotels ...). Or do you think they might change? In any case, it will be driven by the needs of Thomas Cook.

For the winter timetable this would mean the following destinations:
- Already served by SN (so most probably more frequencies and/or bigger planes): Marrakesh, Gran Canaria and Tenerife
- Already served by SN, but only in summer months (so they will become year-around): Funchal and Palma de Mallorca
- New destinations for SN: Agadir (until recently this was a destination for SN), Almeria, Fuerteventura and Lanzarote (Spain); Boa Vista and Sal (Cabo Verde); Hurghada and Sharm el-Sheikh (Egypt).

For the summer season, the additional list is impressive. 5 new countries (!): Bulgaria (Burgas, Varna); Cyprus (Paphos); Montenegro (Tivat), Tunisia (Djerba) and FYROM (Ohrid). Also a lot more destinations in Greece, Croatia, ...

They will certainly not be able to serve all these destinations with the current fleet, so: or they downsize in non-leisure destinations during the summer months (but I don't think that is a good idea), or they add additional planes for the summer season.

[DannyVDB]

Now the most exciting part - at least in my eyes - are potential new destinations, long haul (number 2 of the previous post ).

Currently Thomas Cook (Belgium) is channelling their laung haul pax mostly via FRA in a cooperation with Condor who is part of the same Thomas Cook Group ...

So the fundamental question will be: are we offering some of those flights from Belgium. That is what they are discussing now, I suppose.

It is not only a decision of Thomas Cook though, since of course SN/EW/LH wants to seize the opportunity here.

I find it very revealing that LH, Swiss (with Edelweiss) and MyAustrian, and of course also EW are experimenting with this. For example, there is an interesting discussion ongoing on airliners.net on the shift of flights to San Diego from Condor to Lufthansa (agreed or not) and the entrance into the market by Edelweiss as well. This example is interesting since it is a typical mixed leisure/business destination. I was many times there for business purpose (conferences) since not all big cities have such huge conference facilities. [The same is why San Francisco so successful - silicon valley - conferences - tourists].

So what I might see is they seek for these 'combo-cities'. Other examples are: Las Vegas, Miami, Havana, Windhoek ... They differ from Cancun, Varadero, Zanzibar, Phuket ... that the latter are purely leisure.

So in my opinion they might start (when an additional A330 frame is decided) with flights to Lagos/Libreville (depending on the situation there), e.g. three flights a week and then opt for e.g. twice a week Cancun-Varadero or Cancun-Havana, 1 flight a week to Zanzibar-Mombasa and one flight a week to Windhoek (becoming more and more popular).

Risks seem low to me since most of the flights will be already filled by Thomas Cook ...

On a side-note: if you want to see the full long-haul flight offer, quite interesting, see https://www.thomascookairlines.be/en/ge ... _S2018.pdf

The challenges are for tomorrow ...

[sn26567]

Wow, DannyVDB, quite a programme! I hope indeed it can lead to interesting discussions.

For my part, I don't think that SN will launch long-haul destinations for Thomas Cook. If Thomas Cook itself did use Condor (and previously Jetairfly) for its long-haul flights, it was because it could not fill planes with its own Belgian customers. There is no reason why this would change after the takeover by SN.

[RoMax]

For my part, I don't think that SN will launch long-haul destinations for Thomas Cook. If Thomas Cook itself did use Condor (and previously Jetairfly) for its long-haul flights, it was because it could not fill planes with its own Belgian customers. There is no reason why this would change after the takeover by SN.

Except that SN will be able to 'centralise' much more traffic on one flight, on the right type of routes. Just like SN will eventually be able to operate more flights to a number of leisure destinations than what HQ could do on its own.

But on the other hand, I just don't think it's a priority at this moment. At least not on a large scale and not for 2018 I assume.

If we see something move on this level, it'll probably destinations like Mombassa. Some years ago SN was already planning on starting that route (1 flight/week if I remember well), but it was cancelled due to insufficient demand and mainly other priorities at that moment.

[lucas]

For my part, I don't think that SN will launch long-haul destinations for Thomas Cook.

Indeed, I also don't think that SN will add more long-haul destinations due to the take-over of Thomas Cook. But i do think that there will come more long-haul flights with the integration in Eurowings. If you see what how EW has grown the past years, in many German cities, you can also think that EW will do the same in Brussels, when the take-over has been completed.

[DannyVDB]

Just a quick reaction:

1) SN flew Mombasa for a short period, but stopped it mainly for the unstable/unsafe situation which led of course to less bookings, etc. Mombasa is more stable now.

2) The reason why Thomas Cook gave up to fly their own long haul metal was not because there was no demand, but because it was/is too difficult to have just one or two long haul planes and do that efficiently. It is even for TUI not obvious, even if they are much bigger and even if they would cooperate cross-border (with other members of the group). Hence, there was a time when they tried to work together on the long-haul (I mean TUI and Thomas Cook, at least in BE).

3) They announced themselves they would look into it: it fits in both Thomas Cook and SN strategy (and in the strategy of LH/EW. It is not a decision of Thomas Cook only, but a joint strategy.
" ... In addition to giving Belgian customers the choice of more departure days and an expanded number of flights, the two companies will work together to assess the opportunity to launch new long-distance flights to sun and beach destinations in North America, the Caribbean, Africa and Asia over the next three years ..."

4) Going more on far away destinations is a trend among the young people, but also the 'older'. I see it in my direct environment. My youngest daughter is going now and then to Cape Town ; I have several colleagues who are thrilled by Namibia ...

To be honest I would not be surprised to see that being prepared in 2018 and coming in 2019 ...

Just my two cents
Danny

[RoMax]

1) SN flew Mombasa for a short period, but stopped it mainly for the unstable/unsafe situation which led of course to less bookings, etc. Mombasa is more stable now.

Can be that they once operated there, cannot remember that. My comment was about the route being planned a few years ago as a weekly flight for the winter season, but it was eventually never launched and that frequency was moved to another route.

Regarding the future, again as I said I doubt very much it's a priority now. But indeed as from 2019, I don't think we have to exclude the possibility that more leisure-oriented long haul routes might be launched (probably on a small scale initially, that's why I gave Mombasa as an example).
Indeed SN-TC talked about the possibility in their extended partnership announcement, and I think it makes sense. It's not 'just for TC' that they'll operate such routes, but just like with many of the other leisure routes on short/medium haul, SN will be able to sell many flight-only tickets on several of such type of routes and they might cooperate with other companies as well (within the limits of the agreement with TC obviously).

[Passenger]

Belgium's Competition Authority is investigating the merger/take over. This is a routine procedure after both airlines announced their plans to the Competion Authority.

Publication in the Belgian State Gazette (7th Aug 2017):
NL:
http://www.ejustice.just.fgov.be/cgi/ar ... 040572#top
FR:
http://www.ejustice.just.fgov.be/cgi/ar ... er=summary
EN:
(not available)

[A330]

Belgium's Competition Authority is investigating the merger/take over. This is a routine procedure after both airlines announced their plans to the Competion Authority.

Publication in the Belgian State Gazette (7th Aug 2017):
NL:
http://www.ejustice.just.fgov.be/cgi/ar ... 040572#top
FR:
http://www.ejustice.just.fgov.be/cgi/ar ... er=summary
EN:
(not available)

They don't get much time to reply: publication august 7th, replies by august 9th!

[sn26567]

Belgium's Competition Authority is investigating the merger/take over. This is a routine procedure after both airlines announced their plans to the Competion Authority.

Publication in the Belgian State Gazette (7th Aug 2017):
NL:
http://www.ejustice.just.fgov.be/cgi/ar ... 040572#top
FR:
http://www.ejustice.just.fgov.be/cgi/ar ... er=summary
EN:
(not available)

They don't get much time to reply: publication August 7th, replies by August 9th!

I guess that, if there are opponents (TUI? Ryanair?), they must have prepared their arguments since a long time, when the merger deal was signed.

[Passenger]

Belgium's Competition Authority is investigating the merger/take over. This is a routine procedure after both airlines announced their plans to the Competion Authority.
Publication in the Belgian State Gazette (7th Aug 2017):
NL:
http://www.ejustice.just.fgov.be/cgi/ar ... 040572#top
FR:
http://www.ejustice.just.fgov.be/cgi/ar ... er=summary
EN:
(not available)

They don't get much time to reply: publication august 7th, replies by august 9th!

That 9th August is no strict deadline:

Het Auditoraat verzoekt belanghebbende derden hun eventuele opmerkingen ten aanzien van de voorgenomen concentratie kenbaar te maken, bij voorkeur voor 9 augustus 2017.

L'Auditorat invite les tiers concernés à transmettre leurs éventuelles observations sur l'opération de concentration de préférence avant le 9 août 2017.

[DannyVDB]

Tomorrow, there will be a joint press conference to announce more details about their plans ...

"On 20th September Managing Director of Thomas Cook Belgium Jan Dekeyser and Brussels Airlines CEO Bernard Gustin will further clarify their plans during a press conference at Brussels Airlines b.house at 10u30" (Brussels Airlines website)

Curious what it will be: the flights flown by Thomas Cook Airlines Belgium are granted, but what with new routes?

I connect it also to what I read on airliners.net

"Interesting information circulating on a German pilots messageboard, apparently posted by an airberlin employee:
He/she says that Lufthansa Group has bought the 10 A330-200 airberlin returned to lessor AerCap - who, without that purchase, was, as he says, in no haste to repossess the aircraft. The move is described as a "pre-emptive strike" to make sure that no-one else can continue airberlin's long-haul ops at DUS. He/she also alleges that Eurowings will take over the Carribbean long-haul routes from Dusseldorf, either directly or through some sort of deal involving Brussels Airlines."

Could we see SN flying from Dusseldorf or taking some A330 to add flights for TC from BRU?

Any opinion?

Danny

[DannyVDB]

It seems they are already published. As compared to what published before by TC, some new destinations are added

Brussels – Agadir
Brussels – Almeria
Brussels – Boa Vista – Ilha do Sal – Brussels
Brussels – Djerba (NEW)
Brussels – Enfidha
Brussels – Funchal – Gran Canaria – Brussels
Brussels – Gran Canaria
Brussels – Hurghada
Brussels – Lanzarote
Brussels – Lanzarote – Fuerteventura – Brussels
Brussels – Marrakech
Brussels – Marsa Alam
Brussels – Palma Mallorca
Brussels – Tenerife South

Curious whether they will announce more tomorrow ...

D

[sn26567]

Curious whether they will announce more tomorrow ...

Patience! I will report.

In the invitation, SN says that through the combination it will add 300,000 seats and 26 new destinations, positioning itself more and more as a leisure airline.

Does it mean that the integration into point-to-point airline Eurowings will be that much easier?

[airbuske]

I connect it also to what I read on airliners.net

"Interesting information circulating on a German pilots messageboard, apparently posted by an airberlin employee:
He/she says that Lufthansa Group has bought the 10 A330-200 airberlin returned to lessor AerCap - who, without that purchase, was, as he says, in no haste to repossess the aircraft. The move is described as a "pre-emptive strike" to make sure that no-one else can continue airberlin's long-haul ops at DUS. He/she also alleges that Eurowings will take over the Carribbean long-haul routes from Dusseldorf, either directly or through some sort of deal involving Brussels Airlines."

Could we see SN flying from Dusseldorf or taking some A330 to add flights for TC from BRU?

Any opinion?

Danny

It will be Eurowings, they annouced that they will fly from DUS to CUN /VRA / PUJ and POP as from November 2017.
I think EW will replace AB on some routes from DUS and TXL.
Maybe SN will help them and maybe we will see soon DUS as new destination ?

[HQ_BRU_Lover]

Yesterday the 'new' destinations weren't loaded yet. But even they're loaded now: no flights bookable (May 2018).

[Yuqu12]

It would be nice to see flights from Brussels to Düsseldorf and to connect there with flights to the Carribean destinations and thus Germans living near Düsseldorf travelling to Africa can maybe connect in BRU.