CEO Peter Gerber speaks about Brussels Airlines: identity, fleet, strikes, destinations, …

Ten months at the helm of Brussels Airlines, in an exclusive interview to German AeroTelegraph, CEO Peter Gerber talks to Laura Frommberg about how he is received by the staff, about the new Brussels Airlines brand identity, about a larger fleet and why strikes are more pleasant in Belgium than in Germany. 

Highlights of the interview

“Brussels Airlines is adapting on dealing with the global pandemic, passenger traffic for the last weeks of November and the first weeks of December could have been better, but I expect a significant passenger increase as from March onward.”

While Lufthansa recently announced it had repaid all state aid, Brussels Airlines doesn’t have to start repaying the stabilisation package before 2026, like sister companies SWISS and Austrian Airlines: “We expect to be profitable again as from next year (2023), and as soon as the airline is, we will start repaying the state aid.”

At the beginning of the global pandemic, Brussels Airlines announced it cut back its fleet from 54 to 38 aircraft, but Peter Gerber sees growth: “a fleet of 38 aircraft doesn’t suffice, hence we already added one Airbus A330. During Summer 2022, more than 39 aircraft will operate for Brussels Airlines” (Note from the editor: wet-lease operations).

From 2023, Brussels Airlines will expand: “We are converting the current fleet to the bigger Airbus A320. In the future, we will add Airbus A320neo. This will take time, but our goal is to get there in the medium term, also for ecological and economic reasons. And perhaps Airbus A330neo in the future…”

“Brussels Airlines keeps on focusing on New York and Washington (United States), maybe Montreal (Canada), but we are also looking at other U.S. destinations, where we can attract passengers for our African network.”

“As CEO of a passenger airline, I don’t have as much freedom as when I was the CEO of Lufthansa Cargo. In a large passenger network, the Group needs to coordinate on IT and sales. Brussels Airlines, however, can still choose its own brand identity. There are many advantages of being part of the Lufthansa Group, e.g. when it comes to purchasing aircraft and spare parts.”

Read the entire interview in German at AeroTelegraph (English version by Google Translate).

Forum discussion: https://www.aviation24.be/forums/viewtopic.php?p=415438&sid=8857a0e0369365d6cbc55a27c9032365#p415438

The full interview

Would you have thought that we would still talk about the Covid pandemic at this time?

Peter Gerber: That we talk about it – yes. To be honest, I was hoping that last summer would be over. But I also have to admit that in uncertain times I am more often at home on the optimistic side of expectations. Looking back, I have to say: The clever epidemiologists who said at the beginning that the whole thing will occupy us for two years were unfortunately not wrong.

So now you are less optimistic?

I think we are learning better and better how to deal with the pandemic. There are ways of solving many problems. And before the numbers started to rise again, we saw a satisfactory development.

And now?

The last weeks of November and first weeks of December could definitely have looked better. We noticed that this is mainly due to the business travel activity. It just came back a little. But now this is reversed due to the increasing numbers, the companies are more cautious. Little changes, however, in terms of private travel. The people who travel want this and have thought about it carefully – and therefore do it too.

How many dark weeks?

I would expect it to brighten significantly from March onwards.

Lufthansa recently announced that it had repaid all state aid despite the still less than ideal circumstances. What about Brussels Airlines?

We haven’t paid them back yet – neither have Swiss and Austrian. Besides, they are not just gifts of money. These are loans that also earn interest accordingly. We don’t have to start repaying before 2026. We have not yet decided how to proceed. We plan to be in the black as early as next year and as soon as we are profitable we can start. But we don’t have to and we don’t have any pressure.

At the beginning of the crisis, Brussels announced that it would reduce its fleet from 54 to 38 aircraft. Is it still relevant?

We saw that 38 is a little bit little. That’s why we’ve already added another intercontinental jet. Also to strengthen our network in Africa. But we also look continentally to see whether we can fly more and the signs are actually more towards more than less. From 2023 onwards, we definitely assume that we will also grow in the short and medium-haul range.

Can you give me a number other than 38?

I can tell you 39 in any case, because we have already got an additional long-haul plane and thus have 30 short- and medium-haul jets and nine long-haul jets. But I can also tell you that by summer there will be more than 39 aircraft.

Three Airbus A319 will be replaced by three Airbus A320neo. But after that, a large part of your medium-haul fleet will still consist of Airbus A319s, some of which are between 15 and 20 years old. Are they staying or does Brussels want bigger – and newer – planes?

We are converting to the Airbus A320. And in the future, of course, we want the Airbus A320neo. But of course, you have to be able to afford that and they have to be available. So it will take some time. But the goal is to get them in the medium term, also for ecological and cost reasons.

On long-haul routes, you will replace seven A330-200 and A330-300 with newer A330-300s. Why not go with the more efficient A330neo?

On the cost side, it helps us if we have a homogeneous fleet that uses the same engines. We feel comfortable with our intercontinental fleet, but that doesn’t mean that we’re not looking at efficient options like the Airbus A330neo for the future.

They also want to increase the number of flights to the USA with long-haul jets. Why, if everyone really does fly there?

We’re not going to the US because everyone is. On the routes to North America, we are also interested in transferring passengers to and from Africa. There are a few planned destinations in the US.

Could any destination be added on the WestCoast?

Not at the moment. First of all, let’s focus on New York and Washington. Then Montreal is in the room, where we are currently not flying to. And then we also look at a few other places in America, albeit in perspective. Exactly those hotspots where there is a lot of traffic in the direction of Africa

Africa is Brussels Airlines’ core competence, but you are not represented in southern Africa. Is the competition too big?

It is more because there is already a large number of offers from the rest of the group. Lufthansa and Swiss have been flying intensively to South Africa for a long time. One of the reasons for this is strong demand from industry. But South Africa is also very popular as a holiday destination in Germany and Switzerland. Of course, you could also add flights from Brussels now, but we prefer to take care of destinations that make more sense and are not already served by our group. Africa is pretty big.

The subsidiary airlines of the Lufthansa Group not only have to coordinate with the destinations. How much autonomy do you have as head of Brussels Airlines – also in comparison with your previous position as head of Lufthansa Cargo?

As the head of a passenger airline, I don’t have as much freedom as at Lufthansa Cargo. But that is also clear and correct, because several airlines have to coordinate with one another. And then everyone has to give up a little bit of freedom. At Cargo there was only one airline. The freedom of design is still high, especially when it comes to the brand and the company. And where we cooperate, it also makes perfect sense. In a large network, uniform IT and coordinated sales are required. We also have advantages as part of the group when it comes to purchasing aircraft and spare parts.

There are always rumours in the media that Lufthansa wants to sell Brussels …

Of course, that’s not true at all.

How does it happen again and again?

You shouldn’t forget that it really wasn’t always easy for employees. Starting with the Sabena bankruptcy, through the reconstruction, various mergers and changes in strategy … It is clear that not everyone has always looked to the future with confidence. Occasionally such rumours may still arise, but I believe that the vast majority of employees have now understood that the Lufthansa Group stands behind us. We are their daughter in the capital of Europe and we have an African competence that is very unique. And the fact that the group believes in us is also shown by the investment in the new brand identity. You don’t just do that.

You presented the rebranding with a new logo and a new aircraft painting a few weeks ago. The timing of such an investment in the midst of the pandemic did not go down well with all employees. How did that happen?

We even originally had the plan to present the whole thing a little earlier. However, due to the pandemic development, the schedule has proven to be too ambitious. In any case, the plans come from the time before the pandemic, they are already three years old. There are at least two things in favour of introducing the rebranding now. In addition to the commitment that the Lufthansa Group stands by the brand and wants to develop it further, there is also a technical reason. In the next few months alone, six aircraft will be repainted. We only repaint the planes when the time comes anyway, otherwise, it becomes very expensive very quickly. The next cheap slot with so many planes is coming much later. So now was the golden time to start the next year with a visible change.

So were you able to convince the critical employees?

I have the impression that we have long since accepted the rebranding internally. I saw that with the new Lufthansa livery back then. And it definitely took a moment longer.

When are all planes repainted?

The whole process should finally be completed between 2024 and 2025.

And how much did you pay for it?

The expenditure is around 300,000 euros.

The new brand was also about emphasising the Belgian identity more. Why was that important?

Lufthansa’s experience with all airlines is that it is good to highlight the specifics that are typical of the country, for example in Switzerland and Austria. And here with us, Belgitude plays a major role. There is such a typical Belgian hospitality that can perhaps be described as warmth paired with pragmatism. Openness is also very important. You notice that when you come here as a stranger. Personally, I have never been received like this either.

So nice, do you mean? After all, as a German, you have been appointed to head Brussels Airlines. Such steps by the Lufthansa Group repeatedly met with criticism in Switzerland.

Personally, I feel very warmly received, without any resentment. That is a warmth that you cannot necessarily expect in other countries. There the awareness is greater that whoever comes now has to play according to the rules of their own country. You are sure to always find someone who doesn’t like all of this. But in the vast majority, it is not. After all, Brussels Airlines is clearly a Belgian company with a Belgian identity. But this also includes openness to the world. People from 62 nations work for us. In general, I also have to say: if a person condemns someone because of their nationality, then I tend to be very careful with that person.

Belgium is cosmopolitan and personable. But Belgium is also known for a very strong culture of strikes.

I think that’s where the Belgians belittle themselves. Yes, there are strikes here, but there are big differences, for example with Germany. Striking is a human right in Belgium. You can always strike, without any restrictions. And it also happens that there are strikes here from time to time. But there are fewer long and hard labour disputes as we know them in Germany.

But how can that be when strikes are so natural?

Of course, sometimes there are threats that are issued. And the unions have a very important position, no question about it. What I mean is the harshness with which labour disputes are carried out in Germany. Everyone is a bit more moderate here. And: The willingness to enter into dialogue is always there. Even when there is a strike, you always talk to each other.

We remain open to the dialogue and are back at the table with the unions.

Really? Brussels Airlines’ flying staff recently went on strike because they did not feel they were being treated fairly during the crisis. The tone of the accusations made by the unions was harsh.

Some of our aircrews responded to the unions’ call to strike, but a large part took off and none of the ground crew took part in the action. The timing was of course very unfortunate, as we are still facing the greatest crisis in our history and in the history of aviation as a whole. The workload is very high right now, not just in the flight operations department, but in all departments of the company, and I think there is a lot of pressure in all areas right now as the sickness rate is higher than ever due to Covid and quarantines. We are in the process of addressing these workload issues, but it will take time.

And then there are other agreements negotiated as part of our restructuring plan to transform Brussels Airlines into a structurally profitable company that can offer its employees perspective. These agreements are, of course, still very necessary and cannot be renegotiated, but we remain open to the dialogue and are sitting around the table with the unions again.

If striking is a human right, should you strike too?

(Laughs) Interesting consideration. Since I’m employed, I should actually be able to. Whether that’s such a good idea is another question.

What is also a speciality in Brussels that does not occur at all of the other Lufthansa Group’s hubs: You have extremely strong competition from low-cost airlines. Ryanair wants to expand again significantly. How can you, as a non-low-cost airline, compete against it?
First of all, you have to have your own costs under control. That is definitely the case with Brussels Airlines – thanks to the restructuring that is now in its final stages. And the gap that still remains has to be closed with a better service promise – i.e. better connection quality or even better service. In addition: Even the low costs have to stick to the rules of the game and not simply dust off subsidies and play with questionable tricks.

In the holiday flight business, you have two competitors in the country: TUIfly and Air Belgium. How many is there for?

In fact, the market in this area is not at all saturated. The reason is the bankruptcy of Thomas Cook, which left a large void. So we still see good growth opportunities.

I can imagine that we will see a widespread shortage of pilots again.

The German trade union Verdi recently warned that there is a shortage of staff in the aviation industry – initially on the ground, but also in the air as traffic increases. Do you notice this churn?

At least it is looking good for us at the moment. We are in the process of hiring 180 additional flight attendants. These are exclusively temporary members of the cabin crew, whose contract was not extended in 2020 as part of our restructuring. We always said that if we hired again we would contact them first. 90 percent of the people we called want to come back, even if they have other jobs in the meantime. That says something about our company.

And in other areas?

We can see that it is already an issue, especially when it comes to ground handling. I can also imagine that we will see a widespread shortage of pilots again. We have seen that over and over again in the past, in times when you had to push on the brakes.

And if that’s what you expect, there’s nothing you can do about it?

The tricky thing right now is: We are currently all ahead of us this winter. And the pandemic has always surprised us negatively over the past few months. Therefore, we are currently still happy that we have the instrument of short-time work. Because of the financial situation of the entire industry, our room for manoeuvre is very limited. And so it is actually very paradoxical: if everything recovers and everything goes as we want it to, then we may have a problem on the personnel side. But what makes me positive – and what I would like to emphasise again: I find it extraordinary how people in the aviation industry have achieved extraordinary things every day for two years under the most adverse conditions and continue to do so, because they have such a passion for aviation to have.