Korongo Airlines: THE END

[White Light]

Sad ! But from the beginning this thread was a chronicle of death foretold (chronique d'une mort annoncé / kroniek van een aangekondigde dood). How much money did brussels airlines loose in this stupid project, which they could have used to develop their OWN operations ?

[White Light]

Too bad LH didn't invest in the project. .

I think LH is not really interested in Western and Central Africa (and only moderatetly interested in SN).

[convair]

Why not just stop this project which imho was doomed to fail from the beginning : disastrous infrastucture, political situation, perhaps inadequate strategy from brussels airlines, too. Stop it now, I should say !

I'd second that. Half a commitment is no commitment. SN (and LH) should give it the means to do some serious and meaningful operation or pull out IMHO.

Unfortunately, this was the only sensible decision IMHO.

The local employees also deserve some attention. They are probably losing their jobs without a welfare safety net.

I share that: they were enjoying a good and somewhat enviable position at Korongo; I hope they will be correctly taken care of.

Maybe the conclusion is: the country will be hopeless as long as its political class only cares to garner their swiss bank accounts.

PS: Strange (and happy of course) that the aircraft that could no longer operate commercially made it safely to BRU! Preventive action?

[brusselsairlinesfan]

Sad but true... Could it be that Brussels Airlines is already discussing with Congo Airways for a future cooperation?

[Predixs]

But who will use/buy the aircraft?
Anybody an idea?

[flightlover]

As the plane is damaged, it might be more cost effective to sell it off in/for parts. Engines/avionics can rake in a nice amount if they are not too old.
It all will depend on how fast they can find a buyer for it.

[LJ]

But who will use/buy the aircraft?
Anybody an idea?

It will proably go to the insurance company (I reckon SN/Korongo is insured for these kind of events) and for there to the scrapper.

As the plane is damaged, it might be more cost effective to sell it off in/for parts. Engines/avionics can rake in a nice amount if they are not too old.

Moreover, how much metal is in a 737?

I think LH is not really interested in Western and Central Africa (and only moderatetly interested in SN).

I think that LH is not interested in loss making ventures of any kind and especially those which do not contribute much to the overal picture and thus aren't strategically important. On a positive note, this will increase SNs profits (in which LH is more interested).

[Flanker2]

It's a cheap plane, it would be worth more keeping it as backup than selling it off, no?
The best you can get for a B733 is a couple of millions, most of it from the engines.
Also, the special livery will definitely have its appeal. Just put a sticker over the Korongo titles and a dotted b on the tail. It would be gorgeous IMO.

[Passenger]

The aircraft wads not damaged beyond repair. It was damaged during take off from Mbuji-Mayi and fully repaired at the airport were the damage was discovered: luckily for Brussels Airlines, that was at Kinshasa. I'm also quite sure that the Belgian CAA checked/accepted the repairs before ferry flight SN9902 Kinshasa-Algiers-Brussels on 31st August.

OO-LTM is 24 year old, and it's a 737-300 with winglets. It is fully owned by Brussels Airlines (not the bank, not the lease company). It always kept its OO-reg so it won't be a problem at all to sell it at an excellent price. And for sure, at much more then "the value of the engines".

Regarding the Korongo Airlines staff: they are, by far, the top candidates for vacancies with Congo Airways. Even Korongo's technical staff will, though they have worked on B737 (and not A320).

- - -

Meanwhile, Korongo Airlines not only ceased operations but also filed for liquidation:

http://www.flykorongo.com/2015/09/04/ar ... -airlines/

Nous avons le regret de devoir vous annoncer que suite à l’assemblée générale extraordinaire des actionnaires de Korongo Airlines tenue ce 4 septembre à Lubumbashi, la décision a été prise de cesser l’activité de la compagnie aérienne, laquelle est mise en liquidation... Les opérations de vol de Korongo Airlines sont donc définitivement arrêtées... Cette décision a été prise en raison des conditions d’exploitation extrêmement difficiles rencontrées jusqu’à maintenant et de la décision prise par le gouvernement congolais de lancer une nouvelle compagnie aérienne nationale contre laquelle nous ne pourrons faire concurrence dans un esprit de recherche de rentabilité... Korongo Airlines tient à remercier tous ses clients pour leur confiance et exprime ses sincères excuses pour les inconvénients causés par l’arrêt de ses activités...Il va sans dire que Korongo Airlines continuera à prendre ses responsabilités vis-à-vis de ses clients et invite tout passager qui est en possession d’un billet pour un voyage après le 4 septembre 2015 de contacter la compagnie à l’attention du Liquidateur qui a été désigné, Monsieur Patrick WILLIAM, aux coordonnées suivantes: Korongo Airlines SA, société en liquidation, Avenue Msiri, 1939 Lubumbashi – RD Congo, +243 99 60 30 101.

[airazurxtror]

http://www.radiookapi.net/2015/09/05/ac ... issolution

Le directeur général de Korongo Airlines, Christophe Allard, attribue cette décision à l'incident survenu, le 19 août dernier, à l'aéroport de Bipemba, à Mbuji-Mayi (Kasaï-Oriental), où son unique appareil avait été endommagé au moment du décollage.
«Face à nos responsabilités, je dois dire que l'incident du 19 août n'a fait que précipiter cette décision qui est malheureuse et montre un sentiment d'échec », a-t-il souligné.

Christophe Allard reconnait au moins que sa compagnie a réalisé une réussite sur le plan commercial :
«Ces dernières années, on a constaté une augmentation importante de volume de passagers sur toutes nos lignes domestiques. Malheureusement ce n'était pas suffisant pour rentabiliser notre activité dans les conditions où nous étions limités à un seul appareil».

Il affirme avoir tenté en vain d'approcher l'Etat congolais pour participer au lancement de la compagnie Congo Airways.

[Bralo20]

OO-LTM is 24 year old, and it's a 737-300 with winglets. It is fully owned by Brussels Airlines (not the bank, not the lease company). It always kept its OO-reg so it won't be a problem at all to sell it at an excellent price. And for sure, at much more then "the value of the engines".

Actually,

AFAIK OO-LTM isn't owned by Brussels Airlines. It is common believe that OO-LTM is fully owned by SN but it is not. The plane isn't owned by one of the known or unknown leasingcompanies but it's actually owned by a Belgian bank. I can't access the details right now but if my memory serves me right the plane is owned by I think KBC Bank. I'll look it up on monday when I have access.

Btw, don't hope for an excellent price. Depending on the condition, the amount of cycles, hours, etc... the value of the plane is probably estimated around 2.5 million USD, maybe less but certainly not much more. Late models (last production years) of the 737-300 classic will change hands for a bit over 3 million USD (always depending on condition), including engines, up to date maintenance, no heavy checks needed, fly-away condition. So yes, mostly you'll pay for the value of the engines since you can find airworthy frames without engines for 500.000 USD or less.

[Flanker2]

Yes Bralo20, that's about right.
I think that it would be best if SN keep it as back-up bird so as to maximise the usage on the A32S fleet, but let's see what they're going to do. There are plenty of B733's on the market, but at least this one they are already operating and know its history.

To sell/return it won't be a problem Passenger, but will it be in SN's best interest I'm asking?
Better keep this rotating as back-up rather than a 240.000$ a month A319, no?

[Passenger]

OO-LTM is 24 year old, and it's a 737-300 with winglets. It is fully owned by Brussels Airlines (not the bank, not the lease company). It always kept its OO-reg so it won't be a problem at all to sell it at an excellent price. And for sure, at much more then "the value of the engines".

AFAIK OO-LTM isn't owned by Brussels Airlines. It is common believe that OO-LTM is fully owned by SN but it is not. The plane isn't owned by one of the known or unknown leasingcompanies but it's actually owned by a Belgian bank. I can't access the details right now but if my memory serves me right the plane is owned by I think KBC Bank. I'll look it up on monday when I have access.

OO-LTM is owned by Brussels Airlines. Copy/paste from page 36 from the annual account 2013: "Vliegtuigen in volle eigendom worden geboekt tegen hun historische kostprijs en lineair afgeschreven over 15 jaar naar een restwaarde van 10% van hun kostprijs. De afschrijvingen worden berekend volgens de "pro-rata temporis" methode. Brussels Airlines bezit één toestel in volle eigendom: OO-LTM (B737). Het werd geboekt tegen aankoopprijs en lineair afgeschreven met een residuele waarde van 30%. Alle overige toestellen zijn in operationele lease..."

Translated: ... "Brussels Airlines possesses just one aircraft in full ownership: OO-LTM (B737)..."

[White Light]

I think that it would be best if SN keep it as back-up bird

In itself , not a bad idea, but who is going to fly the plane and what about the flight attendants ?
I may be wrong, but as far as I know there is no commonality between the A319/320 and the B737.
I think there might be type-rating problems for the pilots and training/certification problems for the flight attendants. Can someone shed some light on this ?

[Flanker2]

As SN used to operate a whole subfleet of Classics, I don't think that training/qualifications are a huge issue. In addition, for pilots and maintenance, several Belgians are coming back with the aircraft.
Sure, operating a single of the type would require its deal of attention, but adding an A319/A320 would also require SN to invest in new type-ratings, which carry even higher cost than giving a group of ex-VEX TRed pilots a currency training.
For logistics, it should be doable given the supply in BRU and especially if only intended to be used as spare aircraft spending most of the time on the ground.

In addition, if the residual value was maintained at 30% of new, they're going to have to book a loss if they sell it now, which is not ideal when SN is trying to prove LH that they can be profitable.
All the more reasons to keep it, no?

Of course, there are also other factors to consider but wouldn't it be nice if it stayed and operated in a hybrid livery?

[airazurxtror]

wouldn't it be nice if it stayed and operated in a hybrid livery?

It would certainly be nice if OO-LTM remained with us.
Not in a Korongo livery, tough - a bad remembrance.
It flew with TEA, EBA, Virgin. TEA and EBA are a bit old , but as Virgin was absorbed by SN, and is still regretted by many, why not fly OO-LTM in that striking Virgin red livery ?

http://www.ruudleeuw.com/rem-virginexpress.htm

[Passenger]

In addition, if the residual value was maintained at 30% of new, they're going to have to book a loss if they sell it now...

One needs to know when OO-LTM was bought and at what price. Trust you know those details, because you know that they're going to make a losss on it. Would be great if you would share those details with us here.

...which is not ideal when SN is trying to prove LH that they can be profitable.

SN doens't want to be profitable to proof whatever towards Lufthansa. It's every private companies aim to be profitable. Furthermore, the Belgian shareholders are very happy with the way things are going, I heard.

[Flanker2]

In 1999, the list price for the B733 was 40-46 million USD. Remove customer discounts from that and 25-35 million USD is a realistic price range. 30% of that is 7.5 to 10 millions, and at today's market valuations given above quite accurately by Bralo20, anyone can see that such a sale would result in a one-off impairment that can swing SN's fragile earnings quite significantly.

[airazurxtror]

In 1999, the list price for the B733 was 40-46 million USD.

OO-LTM was built in 1991 (c/n 25070, l/n2037) and delivered new to TEA in may, I think.

[flightlover]

Don't forget that this bird was acquired at the moment SN merged with VEX. Normally it get's a new updated value at that point as you are not paying the price for a new air plane at that time. So the residual value might be significantly less at this point when compared to the residual value calculated on list prices.