SN's regional network

[JOVAN]

Or the Audi Forest...It will all depends on its performance and on how well its management negotiates its place and role within the group.

SN would have needed enormous investments to make it truly independant, attractive and economically viable. If you had the nerve and resources to build a Swiss or KLM equivalent in BRU over just a few years, you might have a chance...Failing that we can abandon ourselves to nostalgia...

AUDI: Good and positive example, to show that things can work in Belgium.

SN will have to invest in planes and in destinations.
Given the fact that many competitors are suffering (AZ, IB, SK,...OK,LOT,..) it is a matter of chosing the right strategy. But for sure there are passengers prefering to leave from an airport near their place, and connect via a convenient airport to reach their destination in the shortest and safest possible. And return home in the same way.

With 31 contact gates at Pier A, and some more gates (10? or more) to shuttle PAX to smaller planes, there is a fantastic potential to make BRU a "main connecting station" in Europe.

So, there is need to 'create' an image for BRU as "The Connecting Point of Europe; as AUDI have done for their cars. You need to differentiate yourself and your "product". Yes AUDI is a good example.

[RoMax]

But how can SN reinforce its African network out of Brussels and make it viable in the long term if the feeding European network is dismantled or centred around FRA and MUC? If LH wants SN to be its spearhead to Africa, it must allow it to have a feeder network to Brussels. Nobody in Europe will want to fly to Africa if he has to stop in both FRA and BRU.

Look, I'm not convinced about SN's decision about Poland either. But I'm quite sure they wouldn't have done this if they got a large amount of AFI-transfers from WAW and KRK. They probably largely served the O&D-market (which is really booming btw, don't deny that). But if they weren't profitable on this market (I don't say that isn't their own fault, LOT probably got too strong on the market and they wouldn't want to give that up to SN of course) and the market isn't really contributing to the long haul network...than the decision is easy to make. But ok, I'm not 100% convinced of that decision either.
But on the other hand, I'm quite sure SN is NOT giving up on important feeding routes. They may not be the smartest, they can't be that stupid. But again, there is a difference between worthless O&D-markets (many South-European routes in winter season), healthy O&D-markets and feeding markets. Because of their lack of competition against LOT, Poland became a worthless O&D-market I assume (worthless for SN, basicly it's a strong O&D-market, but never for SN, LOT has always been the strong one, taking away all the growth).

SN has to focus on Africa, and some key North-American routes (they also help for Africa and are important as well to feed Europe). The EU network is not up to the standards you should expect from a network carrier, but that takes time to redesign. You can't build the EU-network without the long haul feed. But you can't build a long haul network without the EU-feed either. So you have the (re-)build them in harmony with eachother. Is SN going to do that? I hope so, but I'm not sure, time will tell.

[Flanker2]

So, seen from a higher persective than just BRU alone, the only loss from axing the BRU-WAW/KRK route are the point-to-point passengers which do not want to pass through FRA or ZRH and as I've experienced first hand the most lucrative ones have been taken care of through corporate contracts.
What I have explained above is a basic example of a huge benefit from consolidation only multinationals can come up with, which is why multinationals are slowly taking over the world, like it or not.

That is short-term.
Long term, the fact that they are leaving BRU wide open will hit them back.

The problem is that your multinational is favoring one branch over another.
Your multinational is trying to downsize your smaller branch to serve only niche products and other related products, so that the larger branch can sell the main product and take the credit for it.

If we follow your justification, then SN can cancel all non-lucrative flights East of the Rhine and let LH fly them. Heck, even Africa can go to FRA, something that I've seen looming for years.

[Flanker2]

When you invest hundreds of millions in an airline/plant because of their importance in a fast growing market and you make sure they position themself against competitors like AF and they are doing this succesfully...than it isn't the most logical decision to just close a plant down and replace that production.

I have recently thought about this.
It was said that LH would inject 100 millions into SN. I was of course very happy with that but more recent reports state that it's actually a line of credit.

The big difference between a loan and a capital injection is that if LH lets SN go belly-up, with a loan they are first in line to get some if not all of that money back through liquidation. As a shareholder, you rarely see any money back.
If LH were really committed to SN, they would just exercise their options and inject some capital.


Getting back to the initial discussion, LH does not have that good a network in France and the UK.
They do not serve BOD, NTE, TLN, LIL, ETZ, MPL, RNS, etc...

While I can see that sending an Avro to WAW would be impossible to make money on, by cancelling the route, SN proves once again that their "volume strategy" using larger aircraft, even for them only works with an ideal set of limited and well-defined circumstances.

I've been crying for Q400NG's since 2009. Had they been much faster, they could have chased both LOT and Wizzair out of the market by now and made life difficult for FR too.
With the Q400 they could break-even at an average fare of 50€ (excl. tax) at 100%LF and fly 4 times a day.

There is only 1 way to make short-haul become profitable. That is to both use it as feeding and main flights, to/from places where they have no competition.
I can only think of 2 such places.
1. Some lucrative longhaul routes, eg Africa
2. Some regional but large cities in the UK and France.

But SN is doing the reverse. They are trying to fund their shorthaul network with rock-bottom fares to JFK, the most competitive route out of BRU and all Europe. Sure JFK is satisfying on paper, but the feeding flights are a disaster.
There are a few things they are doing right though, and that is to operate regional routes to some places in Italy, from where they can feed the JFK flights with decent yields for both the feeder as the longhaul flight.
They should expand that mindset to other regional destinations in France and the UK and provide top-notch connecting facilities at BRU to make a real interconnecting center at BRU, so people would choose SN over AF and BA.

[RoMax]

The big difference between a loan and a capital injection is that if LH lets SN go belly-up, with a loan they are first in line to get some if not all of that money back through liquidation. As a shareholder, you rarely see any money back.
If LH were really committed to SN, they would just exercise their options and inject some capital.

It's indeed a loan and indeed LH to exercise their option and actually inject capital would be more of a commitment. But if I were LH, I would do it like that as well. They have their own financial problems as well. They injected quite some money in Austrian in the past years/months. They booked a serious loss on the BMI-story. LX isn't the financial wonder anymore and LH Group isn't as profitable as they would want. Than you have a half daughter that has financial problems as well. I wouldn't take it over either. I would loan it money, support it operationaly and commercialy and hope for the best before taking it over. If they don't take over SN in 2014 (I believe the last year they can exercise their 'unique' option) than I would worry.

[Flanker2]

Ok then we agree on the level of commitment.

[cnc]

flanker, while you are right on on some spots you fail on others.
JFK is operated by SN but not owned in terms of revenue as its revenue-sharing due to the JV.
Poland may be booming but its still low yield and the LCC's gain most here and unlike SN LOT has a loyal higher yield base of pax.
IMHO there's only one good possible future scenario:
SN serves only longhaul destinations and the few premium european routes it has leaving all the rest of the european network to 4U which has a BRU base by then.
I fear all other scenario's will end in disaster and all will depend on LH

[A330]

Interesting views on the matter, I hadn't looked at it this way. But indeed, LH Group is in charge, and they decide upon their overall strategy of operations based on how they can keep costs low and revenues as high as possible. There is nothing wrong with that, well in fact this is exactly what they should do! If that means SN cutting some destinations, too bad for the enthusiasts.
LH seems to be in charge, and a lot of decisions are already made "as if" SN is 100% owned by LH group. But until then, they should be careful with this game, as it will make SN less "attractive" on some points (if those routes were succesful for SN to begin with).
Now, for routes that went the other way, I'm thinking of BSL. EDI is also a new destination, but I don't think at the expense of LH, LX or OS. Anyone know of any others in Europe? In Africa, there are DLA and NSI.
Back on topic, what kind of destinations should be in SN's network, keeping in mind that they should be important to their overall network, and LH/LX/OS are not better positioned to channel pax through FRA, MUC, ZRH or VIE?
Eastern Europe seems a no-go, with WAW already skipped. Otherwise I would think BRU is better located for traffic from Portugal, Spain and France to UK and Scandinavia. Unfortunately, the current economic situation has made SN cut some frequencies (LIS, MAD?) or went seasonal (OPO, FAO). I would think they should look to new destinations in UK (LCY, SOU, NWI, EMA, LBA, ABZ, BFS) and France (NTE, BOD, PGF, or LIG). Some of them are not too far from BRU, in the UK that should be fine, in France that would be disadvantage (TGV or Thalys, like LIL).
What are your ideas on these destinations, would they make sense?

[Air Key West]

SN's regional network should, indeed, be extended, but does this fit with the LH Group overall strategy ?
The extension of the regional network will also serve as feeder for the long-haul flights.
However, given that most network carriers in Europe have loss-making regional networks, the main objective is at least to reduce the losses as much as possible, but some airline CEOs seem to forget that a loss-making European network is necessary in order to have a profit-making long-haul network and, consequently, possibily, a profitable airline.
SN's challenge now is to find the proper mix of cost-efficient regional aircraft. IMO, the airline will need a 50-seater (the ATR42-600 ?) for short thin routes and feeder services from cities geographically close to BRU.
They already have a number of A319-320s (do they have any A321s, I don't rememeber). However, these aircraft are often too big (see SN's load factor) and the airline also needs 70 and 90-seater aircraft, where the only option today to me seems to be the MRJ. But does this fit with the LH Group strategy ? I don't think so. Does SN still fit with the LG Group strategy. Not sure.
And on top of the 50-seaters and the 70-90-seaters the airline will also need larger aircraft (the current A319-320s). But then, having three families of aircraft serving the European network may not be ideal either for a smaller airline like SN. To me it's close to an unsolvable puzzle.

[Flanker2]

That's one of the issues indeed. What may be in SN's interest may not be in LH's interest and vice-versa.

I'm not so hot about the ATR42-600. The issue is that it has 30% less seats but burns only 15% less than the ATR72-600. You could say the same about the Q300 which performance-wise is almost the same as the ATR42, but it's much more rugged.

What I think, is that although the shorthaul network as a whole can be seen as loss-making, there is money to be made on regional routes, both as feeders but also as point to point.
Several factors here:
1. Regional airports are often willing to pay money to attract traffic/tourists to stimulate local job creation
(see below for recent story about Angers willing to support a link to BRU)
2. Regional airports are often served by only 1 or 2 airlines, so yields are higher
3. SN's target customer is a regional customer. People who live in or near major cities either go LCC or have a choice of many airlines to fly to get to their destination, and are thus low yield.
4. Elderly people and people with more money who don't want to fly Ryanair are more likely to be living in smaller cities and closer to a regional airport than young/less wealthy people who have to head to the cities to find work.
5. Tour operators love to offer trips to smaller cities in the south.



Conformément aux pratiques en vigueur dans les aéroports régionaux
européens, les compagnies Skywork et Sunair demandent aux collectivités locales un
accompagnement financier pour la phase de lancement des deux lignes. Nantes,
Tours, Poitiers, Angoulême, etc, pour ne citer que les concurrents directs de l’aéroport
d’Angers, sont déjà entrés depuis plusieurs années dans la logique d’attribuer des
aides importantes aux compagnies aériennes qui ouvrent des lignes sur leurs
aéroports

http://www.angers.fr/fileadmin/plugin/t ... 062010.pdf

[Atlantis]

Maybe stupid, what what about this.

What if SN could create a Brussels Airlines Regional or Brussels Airlines Express and this only for very short flights and I mean flights around max 1,5h.
There is a lot of potential when we see around of us. The Netherlands f.e. they could start up flights to Amsterdam but also Rotterdam. We see that train between Schiphol and Brussels is not that a success. Rotterdam is also asking for a direct trainlink to Brussels. Brussels Airport, Brussels Airlines, Jet Airways did many tries in The Netherlands to attract people from there to use Brussels Airport. Why not start direct feeder flights?
We have the same situation with France. Orly is not served ex-BRU and vv. Why? There is still a huge potential even as other cities in France.
The same can be done with Austria, Switserland, Luxemburg and other.

For this Regional or Express devision has, of course, a totally other type of aircraft be used with very short turnaround. On this way they can feed SN their African and America flights or other popular destinations.

Bring this Regional or Express devision in an other CAO and attract young and new pilots, cheaper, who need experience. This can be for them later a jump to the A319-320-330.

[shockcooling]

Maybe stupid, what what about this.

What if SN could create a Brussels Airlines Regional or Brussels Airlines Express and this only for very short flights and I mean flights around max 1,5h.
There is a lot of potential when we see around of us. The Netherlands f.e. they could start up flights to Amsterdam but also Rotterdam. We see that train between Schiphol and Brussels is not that a success. Rotterdam is also asking for a direct trainlink to Brussels. Brussels Airport, Brussels Airlines, Jet Airways did many tries in The Netherlands to attract people from there to use Brussels Airport. Why not start direct feeder flights?
We have the same situation with France. Orly is not served ex-BRU and vv. Why? There is still a huge potential even as other cities in France.
The same can be done with Austria, Switserland, Luxemburg and other.

For this Regional or Express devision has, of course, a totally other type of aircraft be used with very short turnaround. On this way they can feed SN their African and America flights or other popular destinations.

Bring this Regional or Express devision in an other CAO and attract young and new pilots, cheaper, who need experience. This can be for them later a jump to the A319-320-330.

Let's say, we create DAT v2.0

[Didymus]

It can easily be done... Brussels South - Petite Ile - Line 28 - Schaerbeek - Brussels Airport and back to Schaerbeek through the Diabolo (Line 36C/1), no driving post change underway.

The junction with line 28 (Brussels South-Schaerbeek), which is what you're referring to, lies before Brussels South when coming from Ghent. I don't see how you can stop at South and go around the city without turning back.

The same goes for the trains coming from Liège and running to Oostende, they can be traced through the Airport without any need for a directional change to get back to Brussels. I've been diverted once through the Airport while the regular line (line 36) was out of use due to a track damage, and the time loss was minimal.

I'm sincerely wondering why that path isn't used on a regular base.

[Air Key West]

What if SN could create a Brussels Airlines Regional or Brussels Airlines Express and this only for very short flights and I mean flights around max 1,5h.

Bring this Regional or Express devision in an other CAO and attract young and new pilots, cheaper, who need experience. This can be for them later a jump to the A319-320-330.

From what we read here and in the press, pay and working conditions at SN are already rock bottom, so creating a subsidiary which could hire cheaper pilots and cabin crew with less favorable collective agreement conditons (CAO in nl/ convention collective in fr) is not an option (imho).

[RoMax]

From what we read here and in the press, pay and working conditions at SN are already rock bottom, so creating a subsidiary which could hire cheaper pilots and cabin crew with less favorable collective agreement conditons (CAO in nl/ convention collective in fr) is not an option (imho).

It depends, there is not a lot to save on the staff, but there will always be some things that can be changed for a regional part of an airline that isn't possible in one simple airline like it's the case now. But of course it's the question if the current SN staff is willing to move to such a new subsidiary. Germanwings staff that will move from LH will keep their LH-contracts for a while, after that LH expects a lot of staff will leave or will be relocated within LH and they'll hire new people for Germanwings instead.

What such a subsidiary can change is the product. Such an airline doesn't need to offer the current EU-product of SN. Passengers on such short flights don't want comfort or high service. They want flexibility (high frequency), reliability, reasonable pricing, miles/FFP, smooth transfers,... Different product, different pricing strategy, regional (the Netherlands, Germany, France, UK, possibly Luxemburg) high frequency network and a 'new' effecient fleet for such short flights.

[Air Key West]

Bring this Regional or Express devision in an other CAO and attract young and new pilots, cheaper, who need experience. This can be for them later a jump to the A319-320-330.

Sorry that I cannot agree with you on this point either, but I don't think it's wise form a security point-of-view to have only young pilots with little experience fly small aircraft (it's perhaps even not authorised, at least I hope so). I think you will always need at least a senior pilot (captain) and perhaps a junior pilot (first officer), but only two "junior" pilots, one acting as captain does not seem very re-assuring to me.

Anyway, thank you for contributing to the debate. Everybody should be allowed to express an idea or suggestion and we don't all have to agree.

[Air Key West]

What such a subsidiary can change is the product. Such an airline doesn't need to offer the current EU-product of SN. Passengers on such short flights don't want comfort or high service

Sorry, I'm in the "disagreement mode" tonight. SN's product in Europe is also rock bottom : uncomfortable new slim seats, poor seat pitch (30"), recently downgraded catering in C and b.flex and still drinks and snacks for sale in b.light. It's difficult to go much lower than what is being offered at the moment.

[RoMax]

Sorry, I'm in the "disagreement mode" tonight. SN's product in Europe is also rock bottom : uncomfortable new slim seats, poor seat pitch (30"), recently downgraded catering in C and b.flex and still drinks and snacks for sale in b.light. It's difficult to go much lower than what is being offered at the moment.

LX, OS and LH are using the same seats, still they have a way better EU-network, so that's not an excuse for SN, the problem is somewhere else (and not in their onboard service). Downgraded catering in C and b.flex is indeed not good. But for flights below 1,5 hours...people don't care about that as long as the prices are OK and they get a highly flexible product with high frequency offering great connections for business trips and for transfers onto the long haul network.
For such short flights, people will not buy on board in b.light as they don't want it for such prices. If SN offers it for free, they would win some extra customers, but not enough to justify the extra costs.
Hence why every European FSC is pulling back on service on their EU-flights (and not only in the LH Group), some are more extreme as others, but they are all starting to do it.
The only thing that's still keeping away many business pax from the LCC's is the often lack of frequency, no FFP's (tough easyJet clients will be able to earn miles on the Emirates FFP) and not always the reliability you would want. Otherwise they would also go for the cheap, no-nonsense product.

[Flanker2]

I like the idea of the "Express" division.
That would enable a lot of flexibility, such as planning Q400 flights on mainline routes to increase frequencies, yet branding them Express, so that people who don't want to fly them can still opt for other flights... which is what LH has been doing with Cityline for years.

Lower labour cost and higher efficiency could be achieved.

I would also suggest that shorthaul/regional b.light be remodeled as a full no-frills service, including pax paying for checked luggage and seat selection and publishing all fares as one-way fares and only showing the totals after the flight selections, such as LCC's do.

Crush the LCC's by offering frequencies to regional airports, that are often very sensitive to bus and train schedules, so that pax would spend 60€ more to be on your 9am flight rather than having to book a hotel to be on FR's 06:30 flight because of a lack of train/bus and no taxi cab within 5km.

This 06:30 public transportation issue is one I encounter very often with FR. If you think for a moment, this issue also occurs for people travelling from one of FR's largest bases CRL, as for instance the first trains from Brussels don't allow enough time for connecting from trains to those flights.

[Airbus330lover]

......

I'm sincerely wondering why that path isn't used on a regular base.

Probably political reason as always in Belgium