Troubles at Brussels Airlines? Solved!!! Part III

tolipanebas · Post by **tolipanebas** » 03 May 2007, 20:21

Seems like the unions have their first scalp, and rightfully so...

As a riminder: this is the guy that sent out the letter to 'Netjets', ruining the professional carrier of a pilot-union delegate who was not happy with the way things were conducted at SN and thus decided to do what many here have said unsatisfied pilots should do: quit.

Management has always maintained they were not going to give in to the demand of the unions to sack the director of flight operations, but it now seems that their crushing defeat in the referendum (not only did 83% of ALL pilots vote against the proposals, but also were the proposals rejected by the 2 categories at SN (RJ and Airbus) as well as at VEX) has opened their eyes and have made them realise there was no other way out but to apply some pressure on the man to quit.

The CEO must finally have understood the message comming from the pilot community, which unambiguously reads: the threat for a strike is real sir and we support our unions overwhelmingly, now let's first get rid of that man, then take out your wallet and start talking with us in person, or else you can forget about any profit margin this year.

Gate-A1 · Post by **Gate-A1** » 03 May 2007, 20:25

Fiero wrote:Yup. Unfortunatly not that many people originaly from "den dat" remaining. And just for info. How can an employee of a company attack his boss in another way besides having a strike? Because clearly everybody doesn't want our pilots to have a strike. But tell us some other options. And no not the options as looking for another job or learning to live with it.

If you takes passengers in hostages by a strike, you will have more peoples against you. In contrary you need more people with you in order the company hear you and understand you griefs.

Why not make a petition?

Example

Dear Sir, Madam,

As you may know the social dialog isn't at his best in our company.

Many other workers in our position would make a strike. We won't do it. We will provide you the best service and attention as we do every day because we love our job.

However, in order to continue to offer you this level of service, we need to get more consideration from our management.

Please help us by acknowledging this document.

Many thanks for you help and have a good flight

By this way the media will show you in as the good and carefull employees against the bad boss. Moreover, Passager will be greatfull to drive them to destination.

LX-LGX · Post by **LX-LGX** » 03 May 2007, 20:56

Fiero wrote:
How can an employee of a company attack his boss in another way besides having a strike?

To answer your question: a crossbow will give you worldwide coverage.

With employees making horrible statements like your attack, any company is doomed. And that's the message you keep on sending to those who have invested millions of euro's into your company, and who are supposed to invest again within few years, for an unevitable fleet renewal.

tolipanebas · Post by **tolipanebas** » 03 May 2007, 21:17

I must say you are very good at spreading the same mantra of
'and those poor investors have invested milions in this company you are running to the ground'
whereas it has been explained to you already 3 times ALL investors recovered the FULL amount of their LOAN via their income taxes already in 2001, whereas SN has so fartaken up only about HALF of that LOAN, so that in fact every euro SN has burned, was TAXPAYERS money, not that of the investors, but hey, some people think that if they repeat something long enough, it will become reality...; they generally work in communication departments of companies, don't they?

Fiero · Post by **Fiero** » 03 May 2007, 21:27

LX-LGX wrote:
Fiero wrote:
How can an employee of a company attack his boss in another way besides having a strike?

To answer your question: a crossbow will give you worldwide coverage.

With employees making horrible statements like your attack, any company is doomed.

Oh sorry

I'll state it in another way. How can you give a clear statement to the management? Better? So please give us your opinion?

FLY4HOURS.BE · Post by **FLY4HOURS.BE** » 03 May 2007, 22:02

A good thing that that man quit, he does not suit a company like Bru.air.
Maybe we will see no strikes at all.
Let's hope the best for both the company and the pilots.

I wonder why the Belgian gouvernment does not support this company...

Give them at least some tax reductions for instance on employee taxes for the first 3 years.

France does that, Germany does that, many country do that for major investors.

LX-LGX · Post by **LX-LGX** » 03 May 2007, 22:17

tolipanebas wrote:I must say you are very good at spreading the same mantra of
'and those poor investors have invested milions in this company you are running to the ground'
whereas it has been explained to you already 3 times ALL investors recovered the FULL amount of their LOAN via their income taxes already in 2001, whereas SN has so fartaken up only about HALF of that LOAN, so that in fact every euro SN has burned, was TAXPAYERS money, not that of the investors, but hey, some people think that if they repeat something long enough, it will become reality...; they generally work in communication departments of companies, don't they?

Oh boy. Like we say in Dutch: je hebt de klok horen luiden maar je weet niet waar de klepel hangt. Translated: if you don’t know the details of a technical discussion, it’s better not to say anything.

Your remark about recovering the full amount of a loan through income taxes is absolute nonsens, and you really don’t know what you’re talking about. This was never agreed. The only agreement about the investment, is that Finance Minister Reynders has agreed that, in case of bankruptcy of DAT, the investment could be written off as as expenses (whereas normal lost investments in other companies have no influence on the nett result of a company). If (repeat: only in case of bankruptcy) it may be booked as expenses, it means less gross profit that year, thus reducing the final tax on profit the company has to pay. Keeping in mind that all investors have negociated tax deals with Finance, I assume it would allow them to recover 20 to 25 % of their investment. This means the other 75 to 80 % of their investment money is gone, lost, away, burned up in fuel, paid out, not recovered, whatever. Those who had shares of Lernout & Hauspie when they went bankrupt know what I mean: you have paid thousands of euro's for a handful of shares, and you can only use them as paper planes (there's indeed another possibility to do with those shares, but I prefer plain toilet paper).

About the loan: same remark: it's obvious you don't know the details. DAT received one loan from the tax payer: 125 mio euro. This loan was approved by the European Union, on condition that it would be paid back within 3 months. And it was paid back on the last day: on 7th February 2002. I've tried to do that super transfer to my own bank account, but I've failed.

It’s also nice that some refer to the DAT-period, as being better days. May I please remind you that DAT owned 112 mio euro to SIC (Sabena Interservices Center) at the time of the SN-bankruptcy? The reason why DAT didn’t also went bankrupt with such debt, is because Lippens and Davignon managed to convince the debtors from DAT to drop half of the 112 mio euro (this deal was signed on 15 Jan 2002). And the second reason: SIC meanwhile was under concordat (compared to Chapter 11), and therefore was not legally obliged to sue DAT for a pay back. If the liquidator would have sued, it would mean bankruptcy for DAT also.

Yes, DAT made profit in 2000 (last operational year before SN-bankruptcy): 1,51 mio euro. So don't tell us it was better at that time.

Vexje · Post by **Vexje** » 04 May 2007, 08:23

actually I am quite curious (I am sure it has been discussed in previous posts) if anyone can shed some light on the yearly flight hours of the concerned pilots and how this compares to the industry (and please do not compare to British Airways, or KL, or LH, because they are in another league compared to brussels), and doing the same for the salary levels and then see what there is to complain about.

Last things I heard pilots where paid decent (to very decent or even excellent salaries). and i know that most of them have a loan to pay off (but hey, also other aviation professionals take very expensive university courses and this doesn't show in the payslip), and carry a lot of resposibility onboard. However it has to be realised that in the current competitive environment these levels are not sustainable anymore: or you work harder and longer for the same of money or in a couple of years you will have to find a new job.

As well Brussels Airlines is not Sabena anymore nor a full service worldwide carrier with grand plans for expansion. It is a company in redefinition and everything has to be adapted towards this, this includes worker harder and longer for everyone (I am sure if you ask people at BRUAir HQ what the merger has brought they will say more work).

Maybe SN pilots should call some of their collegues at other LCC, or small European carriers and compare with them.

I would say: stop whining, get into your cockpit, show management you care not only about your wallet but also about the company and fly your 700 (or whatever hours) hours that Ryanair, and Easyjet pilots fly. that way you earn alot more respect from not only management but also the flying public and stop hiding behind the unions, that don't seem to be able to defend your rights in any other way than resort to strikes.

I have been working in a couple of airlines and it always comes down to the same things: The ones with the power to destroy the business are also the ones the most detached from it. When was the last time you saw HQ go on strike? Well why is that, because they see the difficulties that are going on inside and they shut up and work a little bit harder to make it work and pick the fruits afterwards when things get better. I do not think BruAir is in a position to have all of this mess with sabena still in the mind of the public and trying to do everything to reposition itself.

But by all means please go ahead and cut the branch you are sitting on, the drop down will be much harder afterwards when in retrospect you will realise you ruined the ( or yet another?) Brussels based airline and you will be flying on a meager Easy salary.

just my 2 cents,

tolipanebas · Post by **tolipanebas** » 04 May 2007, 09:18

LX-LGX wrote: Your remark about recovering the full amount of a loan through income taxes is absolute nonsens, and you really don’t know what you’re talking about. This was never agreed. The only agreement about the investment, is that Finance Minister Reynders has agreed that, in case of bankruptcy of DAT, the investment could be written off as as expenses (whereas normal lost investments in other companies have no influence on the nett result of a company). If (repeat: only in case of bankruptcy) it may be booked as expenses, it means less gross profit that year, thus reducing the final tax on profit the company has to pay. Keeping in mind that all investors have negociated tax deals with Finance, I assume it would allow them to recover 20 to 25 % of their investment. This means the other 75 to 80 % of their investment money is gone, lost, away, burned up in fuel, paid out, not recovered, whatever.

Well, you are plain wrong here;

The Belgian fiscal administration -on explicit demand of E. Davignon- agreed to allow ALL investors to consider their loan to SN Airholding as 'irrecuperable' and has thus allowed them to deduct it in full from their income taxes in 2001 already...

This incentive to win over investors is a FACT and has been published in 'Trends', but hey, don't let facts ruin a good story like the one you are running here...

For those really interested, do a search in the 'Trends' archives on 'SN Brussels Airlines' or 'SN Airholding': you will find some remarkable atricles on the complicated yet very favourable fiscal and financial construction which will show who is right and who is spreading nonsense...

As to the loan of the Belgian government being allegedly repayed:
it has actually been transferred from DAT to SN Airholding and converted from a short term credit to a long term loan.
Again a simple search in the Archives of Trends would learn you this!

fly · Post by **fly** » 04 May 2007, 12:27

to Vexje,

Thats why so many pilots are leaving because they compare what they could have in another airline.
We do not drive around in big company cars, we get bullied when we go and ask for a favour or holiday for one day because you kid has to be baptised. Up until now , the endless times they called me to do a flight in off days or do extended duties in order not to cancel flights I always did it to help the company. Then everybody gets a pay rise or something else verry positive and what do I get..... I lose 800 euros a month and get to see my family much less and see my career go down the drain. I didn't pay 100000 euro's pilot training on top of my university education fly for free for 3 months and dedicate half of my life to aviation , while all the others where travelling and partying and I was in the air building hours and taking endless exams , for this.
I can say that if Brussels aitrlines continues like this they will lose up to 50 % of their pilots. I for one am not waiting until we get better conditions, I gave my resignation and will be soaring better skies in a couple of months and give my family the life they diserve.

All the best to Brussels Airlines and the ones sticking to it , I hope you will do well and may see better times.

airazurxtror · Post by **airazurxtror** » 04 May 2007, 12:41

fly wrote: I can say that if Brussels aitrlines continues like this they will lose up to 50 % of their pilots.

... not to mention a good many of their customers.

fcw · Post by **fcw** » 04 May 2007, 16:28

I voted with my feet as well... Working for a LoCo now , working 15% more hours, long working days, but a lot more off days, and salary more than double of wat SN paid me.

guppypilot · Post by **guppypilot** » 04 May 2007, 22:43

Many still don't realize what they're doing or saying.
While more & more airlines are starting business out of Brussels, the BA pilots keep on complaining about their hard life, being underpaid, saying that "weekends are normal working days for pilots, without any compensation! So a prolonged WE de facto does not exist" (as fcw says).

Taking the pax as hostage will definitely drive them away from your airline. Keep on doing what you're doing now, and all pax will divert to other airlines. Just to be sure of arriving on time for their important meeting.

At least I will change airline. I just don't want that uncertainty. I have to be sure of my flight.

You have a nice product, guys. Don't do the same mistakes we saw in the past.

fcw · Post by **fcw** » 05 May 2007, 00:19

guppypilot wrote:Many still don't realize what they're doing or saying.
While more & more airlines are starting business out of Brussels, the BA pilots keep on complaining about their hard life, being underpaid, saying that "weekends are normal working days for pilots, without any compensation! So a prolonged WE de facto does not exist" (as fcw says).

... Don't do the same mistakes we saw in the past.

So saying that we work 2 to 3 saturdays and sundays a month is already considered as a mistake???
You say yourself that airlines offer more and more flights and so will need more and more pilots. It takes more or less five years before a pilot has the necesaary experience to become a captain. We will see a shortage of experienced pilots in the near future and you are telling us that we should accept a salary cut? Are we living in the same world?

FLY4HOURS.BE · Post by **FLY4HOURS.BE** » 05 May 2007, 01:10

guppypilot Posted: Fri May 04, 2007 10:43 pm Post subject:

--------------------------------------------------------------------------------

Many still don't realize what they're doing or saying.
While more & more airlines are starting business out of Brussels, the BA pilots keep on complaining about their hard life, being underpaid, saying that "weekends are normal working days for pilots, without any compensation! So a prolonged WE de facto does not exist" (as fcw says).

Taking the pax as hostage will definitely drive them away from your airline. Keep on doing what you're doing now, and all pax will divert to other airlines. Just to be sure of arriving on time for their important meeting.

At least I will change airline. I just don't want that uncertainty. I have to be sure of my flight.

You have a nice product, guys. Don't do the same mistakes we saw in the past.

Most pilots have a bond with the company that offered them a type-rating.
Commonly that lasts 3 to 5 years.
The same applies to Brussels Airlines pilots.
So pilots had to complain recently as the company tries to take advantage of this system to make pilots work more for the same pay.

I have some doubts but could you correct me if I'm wrong?

Brussels Airlines has around 600 pilots in service.
Their fleet has 49 aircraft.
600/49=12 pilots per aircraft... a bit much isn't it?

LX-LGX · Post by **LX-LGX** » 05 May 2007, 01:36

tolipanebas wrote:
Well, you are plain wrong here; The Belgian fiscal administration -on explicit demand of E. Davignon- agreed to allow ALL investors to consider their loan to SN Airholding as 'irrecuperable' and has thus allowed them to deduct it in full from their income taxes in 2001 already...

This incentive to win over investors is a FACT and has been published in 'Trends', but hey, don't let facts ruin a good story like the one you are running here...

I hope you have better knowledge from what's going on in the cockpit then your knowledge about accountancy in general, because technically it's illegal, even with a ministrial approval - and it's absolutely ridiculous what you're suggesting. With all respect to Trends: I don't have to check their archives to know what happened - actually, I prefer original files, the Annual Reports, the Report from the Infrastructuurcommissie, ... What you call a FACT was one of the OPTIONS Davignon and Lippens had. Your "FACT" was rejected, but Finance minster Reynders agreed on a booking of the investment as cost (loss), but as said before: only in case of bankruptcy. And that was enough as incentive for Davignon to convince the investors.

Do you really think that the European Union would accept the deal you're mentionning? Do you think the Raad van State / Conseil D'Etat would allow such violation of the "principle of equality" (Gelijkheidsbeginsel) through a government decision? Do you think that the other airlines operating to/from BRU would accept such privilege to one domestic airline? Translated to an employee, your income taxe joke means: when you receive your final tax bill, Revenue tells you that you have to pay an extra 2.500 euro's within 2 months. However, you may buy a television from it. Or Lotto tickets. You then don't have to pay the 2.500 extra tax. And if you win something with your Lotto-tickets, you may keep it all.

If the investment (you call it a loan...) indeed may have been deducted from the income tax, Davignon would have had thousands of "investors". Every company that makes profit indeed then would queue for DAT-shares, because they were for free: you buy shares, and Revenue pays them back to you.

tolipanebas wrote:
As to the loan of the Belgian government being allegedly repayed:
it has actually been transferred from DAT to SN Airholding and converted from a short term credit to a long term loan. Again a simple search in the Archives of Trends would learn you this!

Check the dates! Yes, there was a loan, but not from Belgian government to DAT. Because contrary to what you're saying, the 125.000.000 euro was paid back exactly after three months, on 7th Febr 2002 (it was not booked in the federal Budget as a loan, but as an "overbruggingskrediet" - as demanded by the EU). You are probably talking about a short term loan that was converted to a long term credit of 79.997.700 euro, but that was a totally other decision, from DAT's Board from 24th March 2003: Davignon's SN Airholding II (not SN Airholding) received 367.681 new DAT-shares for it. Another 30 mio euro's then was blocked on a special bank account "uitgiftepremies", as legally obliged. I have the account number, but I'm looking for the login and password...

If you have Trends, read 5th April 2007, page 102: the love from the shareholders towards the airline is limited, and there's a basic principle for investors: do not fall in love of your shares. Translated to the recent treats, this means: if you and and your fellow would-be-strikers go on with "Davignon, open your wallet" and "how can we attack our company", the shareholders could well regard their investment as lost.

FLY4HOURS.BE · Post by **FLY4HOURS.BE** » 05 May 2007, 21:40

if you and and your fellow would-be-strikers go on with "Davignon, open your wallet" and "how can we attack our company", the shareholders could well regard their investment as lost.

Maybe yes, maybe no.

Let' s wait and see. Don't pull conclusions too early.
Brussels Airlines has made mistakes in the past few months.
Staff has done well to complain, as you need to make good promises from in the beginning.
That avoids them having problems again and again in the future.

After these conflicts are resolved, Brussels Airlines will have good times, I think.

Regards

Gate-A1 · Post by **Gate-A1** » 06 May 2007, 10:24

Dear LX-LGX

Of course we can not reduce the value of an investment or of a loan but we can accrue a charge in french we say "Provision pour risques et charges"

In this way you have a charge that decrease the company's profit

Of course if the investment makes profits and gives you dividends, fiscal administration will ask you to reverse the accrual and you will by this way increase the profit and so the taxes

Same think for a loan, if the company pays back you have to reverse the accrual, same story, more profit and taxes.

LX-LGX · Post by **LX-LGX** » 06 May 2007, 12:21

Gate-A1 wrote:Dear LX-LGX

Of course we can not reduce the value of an investment or of a loan but we can accrue a charge in french we say "Provision pour risques et charges". In this way you have a charge that decrease the company's profit. Of course if the investment makes profits and gives you dividends, fiscal administration will ask you to reverse the accrual and you will by this way increase the profit and so the taxes

Same think for a loan, if the company pays back you have to reverse the accrual, same story, more profit and taxes.

Agree, but one can only amend it, when the Annual Account from the company where you have invested shows a decrease of their shares. But even then: it still has to be booked on the passiva part of the investors' balances, and not as activa, like tolepanebas suggests.

More important is that the investors in DAT are Belgian top companies who can afford a) that an investment has no return, and b) that an investment has to be written off. Off course they don't like it, but they won't let their sleep for it. Look at the names: Fortis, BBL-ING, Dexia, KBC, Electrabel, Tractebel, Solvay, UCB. Look at their 2006 results: KBC: 3.4 billion euro (that's 137.150.000.000 old BEF). Fortis: 4,4 billion euro (177.495.000.000 old BEF). Electrabel: 2,1 billion euro (84.713.000.000 old BEF). These are not their turnover figures: it's their nett result.

Wolfgang Riepl (Trends) says that Davignon wants that Brussels Airlines improves it's operational results from poor to European average no later then by 2010.

LJ · Post by LJ » 06 May 2007, 14:50

LX-LGX wrote:
Gate-A1 wrote:Dear LX-LGX

Of course we can not reduce the value of an investment or of a loan but we can accrue a charge in french we say "Provision pour risques et charges". In this way you have a charge that decrease the company's profit. Of course if the investment makes profits and gives you dividends, fiscal administration will ask you to reverse the accrual and you will by this way increase the profit and so the taxes

Same think for a loan, if the company pays back you have to reverse the accrual, same story, more profit and taxes.
Agree, but one can only amend it, when the Annual Account from the company where you have invested shows a decrease of their shares. But even then: it still has to be booked on the passiva part of the investors' balances, and not as activa, like tolepanebas suggests.

Sorry LX-LGX but I've to agree with Gate-A1 on this one. Although it's correct that the provision is booked as a passiva, it's still possible to reduce profits by making a provision. I won't speculate on this particular case as neither do know (or want to know) this case. However, it's very very likely that those who provided a loan have taken a (large) provision for the loan to DAT/SN. The assumption that these companies wouldn't have a provision for questionable loans is completely incorrect. All banks (and other credit providers) make provisions for loans to companies with a certain credit rating.....and SN/DAT wouldn't be an exception (or else they have a very bad credit risk management system). The only problem is that you won't see it (which is very easy to explain because it's highly confidential information).

BTW provisions for bad/questionable loans are not taken on the basis of the annual accounts, but taken on the credit rating either provided by an external credit rating agency (Moody's or S&P) or an internal risk model. The balance sheet is part of this judgement, but not the most important one (balance sheets are usually full of window dressing etc.).

Finally, let's not forget many banks or venture capital firms only invest for these kind of (tax write off) reasons in highly speculative businesses (which includes companies which just went bust)....