Brussels Airlines Financial Results 2009

[Air Key West]

Mr Boeing, you say that "You need to relay on the specialists but not completly because than this can happen".
Some specialists would have said what I wrote in one of my previous post, which is based on sound economics and past experience, not on panic : "Now, if you have a look at oil prices, you will see they tend to move in cycles and not consistently in one direction. In other words, like in the song "Spinning wheel" by the band Blood, Sweat and Tears, you have to remember this : "spinning wheel must go round, what goes up, must come down".
When oil can be considered being at the bottom of a cycle, it is wise to hedge. When oil can be considered at the top of a cycle (as it was in 2008, unlike what some - not all - analyst said), it is wise not to hedge or to hedge at the most 50 % of your fuel needs and not 70 % like b.air did."
I'm sorry, but b.air management have been making mistake after mistake. Any normal employee would already have been sacked after making so many mistakes. When are these people going to get kicked out ?

[tolipanebas]

If management had not waited three years to add a fifth A330 to the fleet and this aircraft had already been flying in 2009 bringing in serious money from the money-making African network, there might even have been a break-even. But waiting for three years to add an aircraft to your fleet of which you know it will bring in good money is just one more mistake by management).

It is indeed ironic that the cautious approach of our management not only made us miss out on a lot of potential revenue (through not daring to risk expanding more rapidly on long haul), but has also made us loose a lot of money (through unfavourable hedging).

Whereas the second is still understandable in the context of the mass hysteria surounding fuel prices in 2008, the first really isn't, yet both are perfect illustrations of my point of longstanding frustration with them: our management are OVERLY cautious and OVERLY obsessed with controlling all of their costs, whereas they are UNDER concerned about maximizing revenues as well as fleet and/or network optimalisations.

Flying around half empty planes is a shame really, regardless whether you've hedged 30%, 50% or 70% of fuel at (un)favourable rates and regardless whether your crews work even more flexible and even cheaper than last year or not; better get that long haul network growing strongly, so our short haul network finally starts to be used more efficiently! That 6th A330 should be coming this year already, with another 2 for 2011! It is going to drive down costs per seat far more than any costcutting plan can and there are ample routes to deploy and fill their seats on!

[LJ]

That 6th A330 should be coming this year already, with another 2 for 2011! It is going to drive down costs per seat far more than any costcutting plan can and there are ample routes to deploy and fill their seats on!

Assuming you can fill the seats with a good yield.... Filling seats has never been a problem for SN, however filling them while maintaining a good yield has.

If management had not waited three years to add a fifth A330 to the fleet and this aircraft had already been flying in 2009 bringing in serious money from the money-making African network, there might even have been a break-even. But waiting for three years to add an aircraft to your fleet of which you know it will bring in good money is just one more mistake by management.

It's always easy to judge with the knowledge of today. The decision to wait was quite understandable given the priorities of the SN management (making the company ready to be sold). Now that management has secured this (I personally don't believe LH will not excersise its option), they can look further and treat the company as a going concern again.

[tolipanebas]

The decision to wait was quite understandable given the priorities of the SN management (making the company ready to be sold). Now that management has secured this (I personally don't believe LH will not excersise its option), they can look further and treat the company as a going concern again.

Actually, SN was ready to be sold... until our shareholders thought it would be nice to create some extra value by merging it with a low cost airline which happened to be BRU-based too, after which they spent more than 2 years taking in what now seems nothing but dead weight, only to end up with no additional extra shareholders value at all!

As said: hindsight is always 20/20, but as you know all too well, I've always felt they should have focussed on long haul expansion then too, rather than mess around with VEX and all the bad things that came with it and are now slowly revoked again.

[NCB]

our management are OVERLY cautious and OVERLY obsessed with controlling all of their costs, whereas they are UNDER concerned about maximizing revenues as well as fleet and/or network optimalisations.

Flying around half empty planes is a shame really, regardless whether you've hedged 30%, 50% or 70% of fuel at (un)favourable rates and regardless whether your crews work even more flexible and even cheaper than last year or not; better get that long haul network growing strongly, so our short haul network finally starts to be used more efficiently! That 6th A330 should be coming this year already, with another 2 for 2011! It is going to drive down costs per seat far more than any costcutting plan can and there are ample routes to deploy and fill their seats on!

Excellent writing.
It's time to take calculated risks, expand mid-longhaul before anything and explore new strategies, with or without LH. Korongo is a great project but things need to move faster, new strategies must be contemplated within all the corners of the business.

It's always easy to judge with the knowledge of today

That is true. However it is important to learn from one's mistakes to avoid them in the future.
So far nothing suggests that lessons have been learned. Top management is obsessed with finding the record cheapest A333 on the market.
By doing so, they are missing important opportunities to raise revenue to further expand the fleet.

Airkeywest is right about hedging. SN better focus on operating aircraft instead of playing games it doesn't know how to play, especially the Russian roulette.

There are great things going on, for instance Diabolo to enter service in less than 2 years, which means that it's time to start negotiating with Eurostar and Thalys about Amsterdam, London, Paris, Köln from Brussels Airport.
Also, why not ask to have the IC trains doing Oostende-Gent-Brussels-Liege-Eupen and Antwerp-Brussels-Charleroi to make a mandatory stop at the airport? With that BRU would get coverage on most of Belgium's major cities and it would avoid the cost of implementing special trains to go to the airport.
It's going to add 5 minutes to the travel time for the passengers who don't need to stop there but that would definitely benefit the airport and SN.

[LJ]

It's time to take calculated risks, expand mid-longhaul before anything and explore new strategies, with or without LH. Korongo is a great project but things need to move faster, new strategies must be contemplated within all the corners of the business.

Forget about SN making its own decisions. Although LH hasn't got the majority yet, SN wouldn't do anything if it hasn't got the blessing from LH.

Top management is obsessed with finding the record cheapest A333 on the market.
By doing so, they are missing important opportunities to raise revenue to further expand the fleet.

Maybe because SN can't afford a brand new aircraft? It's easy to judge about the actions of management when you don't known the exact reasoning behind a certain decision. It would be interesting to know what exactly goes on in board rooms, but confidentiality rules will make that impossible.

There are great things going on, for instance Diabolo to enter service in less than 2 years, which means that it's time to start negotiating with Eurostar and Thalys about Amsterdam, London, Paris, Köln from Brussels Airport.

Forget about the Thalys to Amsterdam. KLM would never allow SN to be able to codeshare on their trains (they don't even have a benefit for running those trains to BRU). Furthermore, Cologne is covered by LH, thus no need for SN getting into this business. Eurostar is also not an options as SN would have to invest in infrastructure at the airport (security at the train station, passport control etc.). Not something LH will allow.

Actually, SN was ready to be sold... until our shareholders thought it would be nice to create some extra value by merging it with a low cost airline which happened to be BRU-based too, after which they spent more than 2 years taking in what now seems nothing but dead weight, only to end up with no additional extra shareholders value at all!

Yeah, I forgot about that stupid decision....