Uncertain times for Brussels Airlines staff, and for Brussels Airlines CEO Bernard Gustin : on Monday at 13:00, a meeting of the Board of Directors of SN Air Holding will be held in Frankfurt and in addition to the future integration into Eurowings, there is another and important item on the agenda: a management change.
It is no longer a secret that Lufthansa wants to integrate Brussels Airlines into Eurowings by 2019, but it was not yet known to what extent.
The Brussels Airlines CEO would like to keep the hybrid model (bizz&class / flex&fast / light&relax / check&go on short- and medium-haul flights and business/economy plus/economy on long-haul) together with the Belgian touch (Belgitude), and have Eurowings adopt that business model, but, according to financial newspaper De Tijd, Gustin was, on a previous board meeting in November, brutally silenced by Carsten Spohr, the Lufthansa CEO.
The newspaper added that the chances are very likely that Brussels Airlines will be compelled to adopt the Eurowings low-cost model. Brussels Airlines spokeswoman Wencke Lemmens explained to financial newspaper L’Echo: “We are going through a one-year analysis phase, and Monday is not D-Day.” Another source added: “Of course there are tensions as we are at a turning point in our history.”
It was learned this afternoon that CEO Bernard Gustin and his number two, Chief Financial Officer Jan De Raeymaeker, received a letter announcing the end of their contract with Brussels Airlines.
According to information received by La Libre Belgique, Lufthansa wants a radical change of management within the company. Thorsten Dirks, the boss of Eurowings, told the two Belgians that he wanted to end their contract. The German boss has offered them to sign a document on the terms of this end of their contract, which they have refused. “We made them understand that there was no question that the Germans do this on their own,” says a source familiar with the issue. “In Belgium, there are rules of governance and this type of decision must go through the Board of Directors. The Germans have accepted this principle.”
As a result, the Directors of the company are called Monday at 13:00 in Frankfurt. On the agenda, this change of management and the terms of the end of the contract of the two Belgian managers. The case seems a done deal because the Belgian Directors are a minority (four against five Germans) and have no veto right since January 1 this year. This decision should be endorsed Monday since a simple majority is enough. “The Germans have played the trick,” said a source.
Bernard Gustin, whose turnaround of Brussels Airlines has been lauded internationally, and Lufthansa did not have the same views for several weeks. The Belgian boss wanted to maintain his successful “hybrid” model, while the Germans intend to integrate the European network of Brussels Airlines into their low-cost subsidiary Eurowings while keeping the African flights operated by Brussels Airlines.
More news next Monday, 5 February.
Swiss and Austrian, both were able to keep their identity. These two airlines are culturally closer to Lufthansa which invested in the two carriers with fresh fleets. That is not the case with Brussels Airlines left to acquire second-hand aircraft for its long haul fleet. As Lufthansa will play the trick after the false euforia and promises following the take-over. This first degree approach will have secondary effects. Other carriers will pull into Brussels (e.g. Norwegian with A321LR’s) to launch long-range services. The Belgian public will not identify with Eurowings and probably feel more compelled to travel with the other low cost carriers like easyJet and Ryanair. JetAirFly will also grab some opportunities as it has made a deep penetration into the Belgian market operating also from all of the other regional airports. The mistake Lufthansa is making is to force by authority: this works only temporarily but is doomed to fail in the long term, for sure. They failed to appreciate this as they don’t know a lot from “Belgitude” and don’t care after all. Belgium has over its has always been a country that got swallowed but never digested, whatever of the so called great nations did this. The issue is also that Belgians split over two or even three identities, don’t know what to do with themselves, having a hard time to synergize ambitions for themselves. This comes at a high cost. But Lufthansa itself lacks the “fingerspitsengefuhl” to really appreciate the damage they could do to themselves as they are in high spirits at this particular period of success and profitability for succesfull airlines. We remember very well the time that Swissair was so bullish in acquiring problematic airlines including Sabena and failed to creat a synergistic whole. Ok that is the past. Probably better than others ING (Willie Walsh for that matter, personally met at the IASS of FSF) has understood not to impose British Airways on all and leave Aer Lingus, Iberia, Vuelling their model and identities provided they deliver.
That’s where the conundrum lies as Brussels Airlines only solution is to show the numbers are right, cost/available seatmile and yield. But why would Gustin not be given the chance to outlay and present his plan for the hybrid airline? I for one believe that the Lufthansa strategy will not work and that past promises not kept are going to play them the reverse trick in the longer term if they consider the Brussels and Belgian catchment area as a terrain conquis. Brussels is not a substitute for overcrowded Frankfurt. Munich and Hamburg or Berlin can serve for that. Eurowings may help to tame the needs and wants of Luthansa employees and pilots but that is not in the cards of the Belgian public. Brussels Airlines is not a prostitute for Eurowings which has a pale image in the eyes of the general public, not just tge Belgian one. In Flemish we say: wie niet horen wil moet voelen. No need to translate this…the German language is clise enough to Dutch for them to ponder making the translation, this time not the other way around…Good Luck!
Nice analysis, Jean-Jacques Speyer!
By the way, does anyone know WHY Lufthansa considers that such an integration of Brussels Airlines into Eurowings and its model would be the best option for the LH Group, rather than allowing SN to continue its own model within the LH Group – just as Swiss, Austrian (and to some extent Dolomiti) are still ‘allowed’ to do ?
Geert Veldeman, that’s what everybody wouold like to know. But nobody from LH yet gave a satisfactory answer to that question.