Brussels Airlines future and financial perspective

[cnc]

what was the operational result? imo far more telling then the complete financial "performance"

[Flanker2]

We ought to see the full balance sheet changes and financial performance before calling it an "acceptable loss".
After all, SN sold some aircraft and they also received cash injections, could amortize the A330 refitting program, which all could make the year-end loss prettier than it really was.

We'll analyse it when the financials are out, I promise, and if I indeed was wrong, I will show my utmost respect where respect is due.

[Bralo20]

According to the article in De Tijd they will add this year 2x A330's instead of one. What happened to change their idea? Initially it was 1 for this year but now they mention 2?

[Boeing767copilot]

In 2013 just 1 A330 for SN, ex-SR and Sabena.

[airazurxtror]

In 2013 just 1 A330 for SN, ex-SR and Sabena.

Ex-Swissair and Sabena indeed !
When well-run companies order new planes in order to save money on fuel and maintenance, SN keep taking old second-hand aircraft.
Not very glamorous either.

[cnc]

In 2013 just 1 A330 for SN, ex-SR and Sabena.

Ex-Swissair and Sabena indeed !
When well-run companies order new planes in order to save money on fuel and maintenance, SN keep taking old second-hand aircraft.
Not very glamorous either.

aside from the money do you have any idea how long you'd have to wait to get a new A330 currently?

[RoMax]

aside from the money do you have any idea how long you'd have to wait to get a new A330 currently?

To help him a bit, some indications. They have a backlog of about 300 aircraft and production is running at about 100-120(?) aircraft a year (101 in 2012).
MAYBE you could get some (quite) new A330's, but I don't think SN has won the lottery.
So why would they do that (at this moment!!) while an older A330 can do the job as well (SN only operates rather short long haul flights, if they would operate very long flights, it would be another story).

[OO-ITR]

In 2013 just 1 A330 for SN, ex-SR and Sabena.

Ex-Swissair and Sabena indeed !
When well-run companies order new planes in order to save money on fuel and maintenance, SN keep taking old second-hand aircraft.
Not very glamorous either.

aside from the money do you have any idea how long you'd have to wait to get a new A330 currently?

pff why bothering replying to his posts...
I guess SN doesn't need shiny new airplane to win several awards and be ranked nr 1 in several parts of the Star Alliance survery...

[airazurxtror]

Lufthansa has now extended from end 2014 until end 2017 its option to buy the remaining 55% of SN - does not want to buy SN before it makes a profit ...

http://www.lalibre.be/economie/actualit ... lines.html

[crew1990]

Does it mean that SN is "safe" for 3 more years?

[RoMax]

- SN expects a loss of 0 to 20 million this year and a profit in 2014
- LH extended its option to buy the remaining 55% of the SN Airholding from 2014 to 2017 (option can be exercised each year in April). This was decided late last year (I suppose this was all part of the Beyond 2012-2013/100 million loan 'agreement')
- LH wants to see a profit and a good outlook before taking over SN
- SN used "(a bit) less than 50 million" (I read about 45 million somewhere) of the LH-loan in 2012. "A little bit too much", but they expect they don't need to use any of it in 2013
- The consolidated cash position stands at 150 million

[Flanker2]

Does it mean that SN is "safe" for 3 more years?

Why so? SN is safer if LH buys them out completely.
LH clearly said that they don't want to take full ownership until SN makes steady profits with positive outlooks.
Isn't that what I've been saying all along? LH won't buy SN unless they see that SN can make money for them.

Regarding the 2012 results, didn't the government forgive a huge amount of SN's start-up loan?
That's 42 millions in debt wiped out. The question is then, does the 60 million loss include this 42 million bonus?

0-20 million in 2013?
Profit in 2014?
One thing you can't take away from Gustin and his team is the huge optimism. If I remmeber well, last year the budget projection early in the year was for a -25 million loss... for all I know, only an amateur could have drafted something that unrealistic.

My take for 2013 is an unpredictable business environment, euphoric financial markets, unpredictable oil and currency markets and specific to aviation, leisure driven market with low yields.
Unless SN reinvented the hot water, I don't see what is going to make them decrease their costs or increase revenues sufficiently to close the gap between the lines.

Operating the oldest fleet of A330's with some edging on the 20 years, will certainly not help them and get back to bite them under the form of increasing overhaul costs. Their new business class seats are already falling apart, the slim seats on the A320 are becoming harder by the day.
And the RJ100's are getting older and older.

The one thing I wish for SN is that its management eats some open-mindedness pills and start doing something new, something great, something wow. It doesn't have to cost money, it has to be so good though that people will fly them specially for that. AND that they hire some marketing geeks so that they stop advertising 30% off in Europe, as if airline fares are fixed prices on which you can get discounts... it looks like a rip-off (30% discount on 130% of the price).

It's a huge mistake to apply fractional discounts on strongly variable pricing.

[airazurxtror]

- SN expects a loss of 0 to 20 million this year and a profit in 2014

With SN now receiving the best part of the 30 million euros yearly governmental subsidy to Belgian airlines, they should be OK.

[RoMax]

With SN now receiving the best part of the 30 million euros yearly governmental subsidy to Belgian airlines, they should be OK.

There will be no 30 million, 20 million/year is the maximum for all airlines together (and that's split according to their size, so it's normal SN get's the biggest share).
Let's not talk about 60-70(?) million Ryanair gets each year.

[sn26567]

And don't call it a subsidy: it's only a reduction in social security payments and taxes.

[airazurxtror]

And don't call it a subsidy: it's only a reduction in social security payments and taxes.

Ah ! qu'en termes galants ces choses-là sont mises !

[Inquirer]

De Tijd has an interesting article on B.air today, in which they give a fairly detailed overview of the significantly improved financial situation and evaluate the turn around quite positively.

[OO-ITR]

De Tijd has an interesting article on B.air today, in which they give a fairly detailed overview of the significantly improved financial situation and evaluate the turn around quite positively.

too bad you have to be a member to see the article. Do you think we will be able to read the article later?

[FlightMate]

Although I am still disappointed by the result, it is indeed not as bad as I thought it could have been.
And talking about only a "small" loss this year, while we are already near Q2 means it is likely to be achievable.

As flanker pointed out, Gustin's optimism could be seen as amateurish, but he has to make passengers (and maybe shareholders?) confident. If he talks about heavy losses, near-bankrupcy,... in the press, people will get scared and won't be making advance booking anymore.

Talking about fleet. I think as well that new A330 could have been ordered/leased a few years ago. Better future-proofing, specially with fuel cost being so high. Otherwise, SN will always start with a handicap compared to better-equipped airlines.

[travellover]

The current fleet of eight A330-200/300 (including due to be delivered ex Swiss HB-IQR) is 17 years old but has still an added value for the refurbishment of the cabins.