Brussels Airlines future and financial perspective

[rwandan-flyer]

First of all I think that article contains quite a lot of bullsh*t that's very far from being confirmed. Yes there will be checks, but they must be efficient and both fedpol and BAC are not committed to making that happen (questions remains of resources and for that they are very dependent on the government). 9-12 months? Maybe IF they decide to go a lot further than just rebuilding the old infrastructure for a part of the departures hall, otherwise it will be a matter of months and as far as I know they still aim for 100% by the summer if that proves to be possible.

Regarding the pre-checks and resulting possible waiting times. Don't forget the effect on other airports with people saying "look what they do in Brussels, why are there no checks here, is this safe enough?". If this turns out in more than temporary measures and go into something permanent, other airports will also be forced to look at such measures.

What it can be do in Tel Aviv, in Brussels, or Nairobi can't be do in Paris CDG or Atlanta, due to the configuration and the size of the airport.

At Paris CDG, we have 9 terminals, over 10 cars parking, 2 train stations, dozens Bus and Taxi stations, 9 kiss and fly. Over 130 000 passengers every day, 80 000 workers every day.

Currently French Airports spend between 15 and 40% of their budget, for the security. Total amont was 800 millions of euros, in 2013 (over 100 millions before 11 september Attacks).

We can say that an airport such as Strasbourg spends probably around 20% of its budget, while Roissy 40%. It's huge.

Airport taxes finance airport Security, so ticket prices will hike. In 2014, USA hiked the ticket prices, both passengers and airlines were not very happy. Airlines & consumers associations have sued TSA (Transportation Security Administration).

Auhtorities have to take adequate measures, that will be work everywhere, cause don't forget small airports, where to buy an EDS (Explosives Detection System) which costs thousand hundreds of euros, can be a huge spending.

Put more dogs patrol, increase random checks and to train airport staff for profiling are among solutions. There are others

[RoMax]

Don't get me wrong Rwandan-flyer, I don't see this kind of checks as the solution either. On the short therm BRU didn't have a choice, but they'll try everything they can to avoid such a difficult and hard border between actual landside and restricted landside in the future.

This is the time for BRU to take this situation as a case to show the world how an airport can create a much more secure landside area without making a bunker out of it. If they handle this well, they can be an example for airports all over Europe and North America. But these things take time and as fedpol requires those pre-checks, they'll have to deal with it until they find a better solution.

[rwandan-flyer]

Don't get me wrong Rwandan-flyer, I don't see this kind of checks as the solution either. On the short therm BRU didn't have a choice, but they'll try everything they can to avoid such a difficult and hard border between actual landside and restricted landside in the future.

This is the time for BRU to take this situation as a case to show the world how an airport can create a much more secure landside area without making a bunker out of it. If they handle this well, they can be an example for airports all over Europe and North America. But these things take time and as fedpol requires those pre-checks, they'll have to deal with it until they find a better solution.

In short term, yes i m agree, due to the current situation of the airport (terminal damaged)

New rules will be published by ICAO, in coming weeks. It's ICAO that publishes rules for Airport Secuity with Annex 17.

Then states have to set up their own National Civil Aviation Security Programme in accordance ICAO.

UE (European Civil Aviation Conference) can also add some measures via Doc 30 that will be used in Europe (Intra EU or Extra UE), but the base is always the ICAO.

But depending the level of threat, Airports can create their own Local Security Programme.

Ex : Tel Aviv has put full check before entering the terminal.
Paris CDG has 2 Restricted Areas (Airport Restricted Area & Critical Security Restricted Area)

[sean1982]

every airport in the world has a critical SRA. It depends on certain factors of an operation being present at a certain time. It's not just CDG :/

[rwandan-flyer]

every airport in the world has a critical SRA. It depends on certain factors of an operation being present at a certain time. It's not just CDG :/

I talk about CDG, because i work there and so i know very well this airport .

[Poiu]

Just had my first, post attack, flight on SN. LF below 50%. I don't have any insight in the forward booking numbers, but if they are not good, I see the perfect storm brewing.
The money in the bank is not an asset but money from pre booked tickets,only a very tiny part is future benefit. Part of that money has been used to finance the operation from other airports. (Compare it when the money from the mortgage for building your new house is in your account, but you use it to buy a car the day before you have to pay the builders)
Many passengers asked for a refund and the bills related to operate half empty flights will arrive soon.
Up to now it didn't LOOK too bad, because an expanding airline sells more tickets and has to pay bills related to operations when it was smaller. When the opposite happens it can go wrong very quickly!

[Jetter]

I don't have any insight in the forward booking numbers, but if they are not good, I see the perfect storm brewing.

Booking numbers are negative since the attacks (more cancellations than bookings).

[RoMax]

I don't have any insight in the forward booking numbers, but if they are not good, I see the perfect storm brewing.

Booking numbers are negative since the attacks (more cancellations than bookings).

From what I know not anymore. Net bookings made a huge drop after the attacks, but started recovering gradually already the days after. Net bookings remained negative for basically a whole week but were breakeven about one week after (I'm now just talking about the data I've seen that was published, showing the 130% drop in net bookings). I'm quite sure net bookings are now positive again (current, not considering a rolling period since the attacks), but of course definitely not at the level they should be and they lost a lot of bookings over the past weeks.

[RoMax]

Again, there are no long waiting times once you get at the airport (as I said, roads still a problem though). Secondly, the 3 hours (actually for Schengen they just say 2) advised is just the regular talk. Once you get at the airport you can easily do it in 45-60 minutes in the peak and less outside the peaks based on actual waiting times.

But we'll see what happens. I hope BAC and the government (although I don't put a lot of hope on the last one) can convince fedpol to remove or at least reduce the additional checks in the future. But if it remains permanent (and I doubt it will be in this form, but definitely in some form more security will be demanded), just wait and see what happens. Don't expect for just one moment that BRU will remain the only one once they implement 'something' permanent.

[FLYAIR10]

SN gets warm welcome back at Washington's Dulles airport with water salute , Belgian flags and banner.



Wonder what the LF was on this flight.

[sean1982]

Air france reported in jan that the attacks in Paris cost them 120 million EUR at that point (and that is without their HUB being shut for 2 weeks and WITHOUT ridiculous checks at paris airports at that time) and reported in februrary (4 months after the attacks) that losses were still ongoing (because of the attacks)

[nordikcam]

Air france reported in jan that the attacks in Paris cost them 120 million EUR at that point (and that is without their HUB being shut for 2 weeks and WITHOUT ridiculous checks at paris airports at that time) and reported in februrary (4 months after the attacks) that losses were still ongoing (because of the attacks)

And what conclusion do you draw regarding SN knowing that AF was 6 times more aircraft or passengers ( I guess ) than SN ?

[sean1982]

Air france reported in jan that the attacks in Paris cost them 120 million EUR at that point (and that is without their HUB being shut for 2 weeks and WITHOUT ridiculous checks at paris airports at that time) and reported in februrary (4 months after the attacks) that losses were still ongoing (because of the attacks)

And what conclusion do you draw regarding SN knowing that AF was 6 times more aircraft or passengers ( I guess ) than SN ?

Not drawing any conclusions, I would like to see numbers from SN. Its a little scary to see though that 4 months after the attacks losses were still ongoing as direct result

[RoMax]

AF isn't exactly an example anyway. It's still far from being a competitive airline, contrary to SN lately. Even one year later they could still be claiming losses because of the attacks just to cover up their weak performance.

SN will see the impact of this probably easily for 4-5 months indeed, maybe much longer (after the lockdown of Brussels it was about 2 months of impact). But that doesn't mean they will still be making net losses because of it at that time.

[Poiu]

AF isn't exactly an example anyway. It's still far from being a competitive airline, contrary to SN lately. Even one year later they could still be claiming losses because of the attacks just to cover up their weak performance.

SN will see the impact of this probably easily for 4-5 months indeed, maybe much longer (after the lockdown of Brussels it was about 2 months of impact). But that doesn't mean they will still be making net losses because of it at that time.

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.

[sean1982]

AF isn't exactly an example anyway. It's still far from being a competitive airline, contrary to SN lately. Even one year later they could still be claiming losses because of the attacks just to cover up their weak performance.

SN will see the impact of this probably easily for 4-5 months indeed, maybe much longer (after the lockdown of Brussels it was about 2 months of impact). But that doesn't mean they will still be making net losses because of it at that time.

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.

[Inquirer]

Just a small suggestion:
It might financially be far less damaging for the balance sheet of a network airline to be unable to fly its network of destinations due to the closure of its hub, than it is to be able to do so and do it at a loss like Air France did.

The 'trick' to send all connections through Frankfurt and Zürich, while focusing on just the direct routes with an adapted schedule is a brilliant move to slash your operating costs by a lot and more or less align them to the suddenly much lower demand. The only main element remaining is the too big overhead costs then, but for just a couple of weeks, such is far from dramatic.

As said before: it really all depends on how quick things pick up again: a few months and they'll be just fine (say they will have lost 40 to 50m then, to be set off against an anticipated operational profit of some 60 or 70m); a couple of years and they will have to adjust to the new normal then. But in that case, I doubt they'll be the only ones.

Some performance numbers would indeed be nice to have, but those of March will not show us much since it happened relatively late in the month and they were booming till it happened, so I expect them to be far from dramatic in fact, and April is only just started, so we'll just have to wait for a stabilized outlook till somewhere in May: patience is a must in these cases as a trend forecast needs to be based on preliminary data; meanwhile only common sense may give us some guidance as to the way the trend will likely go and there I'd say its still perfectly manageable at present, which also explains their convincingly calm attitude.

[Poiu]

As said before: it really all depends on how quick things pick up again: a few months and they'll be just fine (say they will have lost 40 to 50m then, to be set off against an anticipated operational profit of some 60 or 70m); a couple of years and they will have to adjust to the new normal then. But in that case, I doubt they'll be the only ones. .

Your ballpark figures are probably a good guess, BUT if the repayment of the subsidies or a sudden spike in oil prices would come on top it will be game over.
The "convincingly calm attitude" is because for the moment they are still fire fighting. The damage can only be assessed once the fire is out.

[Jetter]

Your ballpark figures are probably a good guess, BUT if the repayment of the subsidies or a sudden spike in oil prices would come on top it will be game over.
The "convincingly calm attitude" is because for the moment they are still fire fighting. The damage can only be assessed once the fire is out.

The repayment of the subsidies is not a question of if, only of when. SN might be given some new state aid given the circumstances though.

[Inquirer]

Some people with a clearly limited understanding of accounting give way too much importance to poorly understood issues in order to pile up financial problems until they mount sky high.

A few things to take into consideration, maybe:

It has been reported several times no actual payments have been made for the years '14 and '15, both of which I agree are (at the very least in part) dubious. Only year '13 has apparently been paid out, but there the case against it is weaker as there are no real discriminated parties.
As such, the most likely outcome to me is that '14 and '15 will not be allowed to proceed (in full), but then since no actual payback need to be made, it's not going to have any impact on their liquidity, just on the look of the balance sheet.

Also, please note it is not even remotely likely there will be an incontestable verdict in this case in 2016, so the likeliness of them having too book both the full impact of the terror attacks as well as the write down of the security fee credits made so far in one and the same year is quite remote, to say the least.

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, often not even when it has to do so several years in a row: if anything, that is the very minimum anybody should have learnt from their financial results from a few years ago, so even on a non-financially oriented forum it surprises me quite a lot to read somebody thinks an operationally sound and profitable company is 'game over' whenever it may have to book a negative result on their balance sheet.

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.,

Ps: lunch break is over, I need to make my way to the airport now.
I'll see what it gives and post a report about the new procedures and their time use, later.