Brussels Airlines' fleet renewal

[TimTam]

By saying that Boxberg's answers in the interview had more substance, I meant that she had learned her job and the switch from cargo to passengers. So, she is definitely not an unintelligent person, but she also knows that her future career depends on how deep she will bow before the German Big Boss.

[TimTam]

On a slightly positive note, in the interview obe referred us to, Boxberg's answers had much more substance than previously. She has learned, but is still under the orders of the Big Boss.

Ohh yes, he decide. First profit. But you can't make profit or bigger profit if you don't invest. And I mean real investment.

Boxberg was repeating the same as during previous interviews. The only difference is that the A220 could be a replacement of the A319 especially during Winter or for adding extra frequencies and the A321neo.

If the A321LR (XLR) is not an option for SN, the A220 is still less of an option for a small airline like SN because of the absence of commonality for pilots flying the Airbus 320/330 family of aircraft.

[oldblueeyes]

SN is a local brand and hssvto integrate into the big picture.
This comes always at the cost that the design is different vs a fully independent company.

The outlook is nothing special, just enforcing the alignment into the fleet and product strategy.

- as a small brand, there is money to be earned in leisure
- brand new aircraft from the grey fleet , rest tactical
- affordable growth and in time upgauging

Likely more ambitious plans would have been cut due to losses caused by strikes.

[fcw]

SN's shareholders were so naive in the end in their selling strategy that a smart LH managed to buy it for peanuts. It allowed them to sideline competition at BRU at a minimal cost which in turn would be offset by flying Belgian passengers to LH's main hubs. For that purpose it has kept SN on a lifeline.

The shareholders didn’t have a choice, it was either sell to Luftie, for whatever they wanted to pay, or bankruptcy!
Even today SN is only surviving because investments are kept to an absolute minimum and employees accept T&Cs well below industry standards.
Making/keeping an airline profitable is extremely difficult, investments are huge and the return minimal. Just have a look at the large number of airlines, some with a big fleet of shiny new jets, who went bankrupt during the last 10 years.

[Atlantis]

SN's shareholders were so naive in the end in their selling strategy that a smart LH managed to buy it for peanuts. It allowed them to sideline competition at BRU at a minimal cost which in turn would be offset by flying Belgian passengers to LH's main hubs. For that purpose it has kept SN on a lifeline.

The shareholders didn’t have a choice, it was either sell to Luftie, for whatever they wanted to pay, or bankruptcy!
Even today SN is only surviving because investments are kept to an absolute minimum and employees accept T&Cs well below industry standards.
Making/keeping an airline profitable is extremely difficult, investments are huge and the return minimal. Just have a look at the large number of airlines, some with a big fleet of shiny new jets, who went bankrupt during the last 10 years.

Oneworld would have been a good alliance. British Airways has only a very few destinations there. SN could have been really the star. In Star they have LH and LX next to them in Africa.

[rwandan-flyer]

Oneworld was never really focused to Africa like SkyTeam or Star Alliance except in South Africa. They were focused only to North America and Asia with Finnair, Cathay, American Airlines, Qantas, Royal Jordanian and Japan Airlines


Since over 15 years, British Airways has ended Entebbe, Addis Ababa, Seychelles, Khartoum, Seychelles, Dar Es Salaam, Lusaka, Harare, Freetown, Monrovia routes. Some of these routes were operated by BMI at the time of closure (before by British Airways) but when British Airways has decided to close BMI they didn't resume flights on these destinations

Iberia has ended flights to Accra, Lagos, Johannesburg, Nouakchott, Luanda and Malabo.

American doesn't serve Africa, while United (Star Alliance) and Delta (SkyTeam) do.

Both British Airways and Iberia have even ended flights to some countries of their former colonial empire. I can't imagine how people will react on this forum, if SN decides to close its routes to Kigali, Kinshasa and Bujumbura.

If Royal Air Maroc has joined Onewoerd it's not thanks to British Airways but because Qatar Airways has stake in the airline.

So i don't really what Oneworld could be do with Brussels Airlines because the alliance was not focused into Africa in 2000s and till late 2010s. And at SkyTeam you have 3 strong actors in Africa : Air France, KLM and Kenya Airways.

I m sorry but LH thus Star Alliance was probably the only choice, because the alliance was building a strong network in Africa with Ethiopian, South African and Egytpair. And they was a gap in Central Africa and West Africa.

[fcw]

SN's shareholders were so naive in the end in their selling strategy that a smart LH managed to buy it for peanuts. It allowed them to sideline competition at BRU at a minimal cost which in turn would be offset by flying Belgian passengers to LH's main hubs. For that purpose it has kept SN on a lifeline.

The shareholders didn’t have a choice, it was either sell to Luftie, for whatever they wanted to pay, or bankruptcy!
Even today SN is only surviving because investments are kept to an absolute minimum and employees accept T&Cs well below industry standards.
Making/keeping an airline profitable is extremely difficult, investments are huge and the return minimal. Just have a look at the large number of airlines, some with a big fleet of shiny new jets, who went bankrupt during the last 10 years.

Oneworld would have been a good alliance. British Airways has only a very few destinations there. SN could have been really the star. In Star they have LH and LX next to them in Africa.

Once again, Mr D tried to sell SN to all big players, besides Luftie NOBODY was interested!

[oldblueeyes]

I think that it's always good to recall history facts and not emotions based.

After the collapse of Sabena, SN was a restarting entity with the infrastructure of a regional airline - it had 32 AVRO/BAE's, 4XA319 and 4xA332.

4 years later it merged with Virgin Express, a small (10 aircraft) LCC.

You like it or not, these routes where far away from an established European carrier. And by no means a LCC with a regional airline togther are something worth a hub.

Lufthansa acquired in 2008 - a time where fuel prices where rocketing - a minority stake of 45%nearly bankrup airline and ensured it's survival, and secured an put/call option for the rest of 55% 8 years after.

Until 2016 the company was under Belgian shareholder majority (which had all possible interest to maxime their exit value) and management. From one side there was a tim of development vs the initial phase, however economically it was a failure - otherwise the call rights of Lufthansa for the remaining shares won't have been valuated at 2,8 mil EUR, only.

You can not blame LH to have been following their intrest on getting Brussels at the lowest possible price. Instead of this you should rather questionize the performance of the previous managment on knowing a valuation formula for 8 years and delivering a "performance" of 2,8 mil for 55% - means total company value of 5 mil EUR, only.

There was little enterprise value /substance, otherwise the numbers would have been looking differently.

Maybe it was not the best idea of LH to wait 8 years and let the local management fail. A 100% stake straight from 2008 may have been driving to a different shape of Brussels today. But, as always, there where also some previous owners at the table and possibly their view on 100% sale would have been leading to unreasonable prices.

The grass is not greener somewhere else, the first thing IAG was doing after acquiring Iberia was to transform the short haul into Iberia Express. All the Etihad partners Alitalia, Air Berlin etc collapsed. TAP's partnership with Neeleman didn't went well. Korean couldn't save CSA. If you start seeing the other side of the medal, the fact that Brussels is still on the market, keeps it's brand identity, was upgraded to a network airline (even execution would take some years) is a pretty good situation. Likley far away from a fairytale projection, but real and not as an Airlinsim onlin game airline.

[brabel]

I think that it's always good to recall history facts and not emotions based.

Maybe it was not the best idea of LH to wait 8 years and let the local management fail. A 100% stake straight from 2008 may have been driving to a different shape of Brussels today. But, as always, there where also some previous owners at the table and possibly their view on 100% sale would have been leading to unreasonable prices.

From 2011 to 2014 the local management managed to reduce debts from -80mil to -4mil.
2015 and and 2016 were both positive, respectively 41mil and 15 mil.

I wouldn't call it 'local management fail' though.
The last two years before LH takeover seemed positive and back then the airline also had a lot of growth in my opinion.

[fcw]

From 2011 to 2014 the local management managed to reduce debts from -80mil to -4mil.
2015 and and 2016 were both positive, respectively 41mil and 15 mil.

That is not correct, between 2012 and 2015 the cumulated loss was above 100 million euro and the debt went up from 354 to 423!

[brabel]

From 2011 to 2014 the local management managed to reduce debts from -80mil (in the year 2011) to -4mil (in the year 2014).
2015 and and 2016 were both positive, respectively 41mil and 15 mil.

That is not correct, between 2012 and 2015 the cumulated loss was above 100 million euro and the debt went up from 354 to 423!

I didn't mean cumulated loss as I haven't used that word. No rereading what I said, I understand the confusion.
The yearly loss went from - 80 for the year 2011 to - 4 (for the year 2014).

https://press.brusselsairlines.com/brus ... ional-jobs

Record profit in 2015.

[crew1990]

OO-SBD and OO-SBE are both enjoying their first time in the air at the moment as this is their first test flight.
OO-SFP should fly to her new home today.

[oldblueeyes]

From 2011 to 2014 the local management managed to reduce debts from -80mil (in the year 2011) to -4mil (in the year 2014).
2015 and and 2016 were both positive, respectively 41mil and 15 mil.

That is not correct, between 2012 and 2015 the cumulated loss was above 100 million euro and the debt went up from 354 to 423!

I didn't mean cumulated loss as I haven't used that word. No rereading what I said, I understand the confusion.
The yearly loss went from - 80 for the year 2011 to - 4 (for the year 2014).

https://press.brusselsairlines.com/brus ... ional-jobs

Record profit in 2015.

So than it is likely that SN had at exit a value of the Business of 400 + Mio Eur and at the same time accumulated losses nearly in the same figures. And it means that LH bought also debt which it likely reduced from what SN earned, first.

[convair]

That is not correct, between 2012 and 2015 the cumulated loss was above 100 million euro and the debt went up from 354 to 423!

I didn't mean cumulated loss as I haven't used that word. No rereading what I said, I understand the confusion.
The yearly loss went from - 80 for the year 2011 to - 4 (for the year 2014).

https://press.brusselsairlines.com/brus ... ional-jobs

Record profit in 2015.

So than it is likely that SN had at exit a value of the Business of 400 + Mio Eur and at the same time accumulated losses nearly in the same figures. And it means that LH bought also debt which it likely reduced from what SN earned, first.

And it seems that the belgian management wasn't that bad, after all.

[oldblueeyes]

If as a shareholder i getting after 8 years 2,8 Mio for 55% of the company, than it was bad.

Likely the initial shareholders did not received even a portion of their investment.

Would you borrow me 1.000 EUR and i'll give you 10 EUR back?

[theeuropean]

This article is behind a paywall but the title says SN is hesitant on the A330neo and is analyzing the A321neo

If anyone has access it would be nice to have a summary.

Source: https://www.ch-aviation.com/news/140224 ... ls-a321neo

[oldblueeyes]

Likey just repeating what DvB said for Aerotelegraph.
Ruminant "journalism".

[Boavida]

If the A330neo is too loud for (future) BRU/Belgian regulations, it's clear the A350 must become the new SN long haul plane.

[longwings]

And now they will deliver the plane in LH livery with an SN sticker.
This is very bad brand image.

Few passengers really notice the livery of the plane they fly. An interior that does not fit the standard of the rest of the fleet does get noticed, especially by the passengers paying for more comfort.

Cancelling routes to The States is not good. NY is one of the best performing LH destination ex-BRU. I would not be surprised if the 2 destinations to The States will be cancelled and taken over by UA.

United is as short of long-haul aircraft as other airlines. For the first two years of deliveries, new 787s are earmarked either to send 767s into retirement or replace 777s across the Atlantic to free them up for Pacific flying.

Even if they had the aircraft, they're not about to open JFK for one daily flight to BRU.

Which could now easily be replaced by the country of the ayatollahs.

The Ayatollahs are not always rational, but they're also not suicidal. Even if through one of their proxies, they know blowing up a US carrier will only invite a fleet of another type across the Atlantic: the B-2...

Oneworld would have been a good alliance. British Airways has only a very few destinations there. SN could have been really the star. In Star they have LH and LX next to them in Africa.

British Airways did consider buying Brussels Airlines at some point, though not necessarily for its African network. Plans under consideration included turning BRU into an alternate hub for connecting traffic from key cities in North America and Asia to secondary cities throughout Europe. The goal was to transfer some connections from LHR to BRU to increase O/D traffic in London, and to better compete with CDG and FRA.

[Conti764]

And now they will deliver the plane in LH livery with an SN sticker.
This is very bad brand image.

Few passengers really notice the livery of the plane they fly. An interior that does not fit the standard of the rest of the fleet does get noticed, especially by the passengers paying for more comfort.

Cancelling routes to The States is not good. NY is one of the best performing LH destination ex-BRU. I would not be surprised if the 2 destinations to The States will be cancelled and taken over by UA.

United is as short of long-haul aircraft as other airlines. For the first two years of deliveries, new 787s are earmarked either to send 767s into retirement or replace 777s across the Atlantic to free them up for Pacific flying.

Even if they had the aircraft, they're not about to open JFK for one daily flight to BRU.

Which could now easily be replaced by the country of the ayatollahs.

The Ayatollahs are not always rational, but they're also not suicidal. Even if through one of their proxies, they know blowing up a US carrier will only invite a fleet of another type across the Atlantic: the B-2...

Oneworld would have been a good alliance. British Airways has only a very few destinations there. SN could have been really the star. In Star they have LH and LX next to them in Africa.

British Airways did consider buying Brussels Airlines at some point, though not necessarily for its African network. Plans under consideration included turning BRU into an alternate hub for connecting traffic from key cities in North America and Asia to secondary cities throughout Europe. The goal was to transfer some connections from LHR to BRU to increase O/D traffic in London, and to better compete with CDG and FRA.

Oneworld and IAG would have been the far better option for SN.