Lufthansa acquiring Brussels Airlines

[Conti764]

Good to know. I'm just a regular business traveller with an interest in aviation, relying on you aviation experts to educate me! So might I have been right in concluding that a BA purchase of SN would increase the likelihood of Openskies coming to Brussels? Sounds like there is the demand.

It's all very interesting but it's a matter of time before we get an "Off the topic" notification though...! And perhaps the topic title should read "Lufthansa and BA interested in acquiring Brussels Airlines" now...

First of all, I'm far from an aviation expert

Secondly, I don't think Openskies will come to BRU, even with BA purchasing SN. For now they only serve the JFK-Europe market and that particular market is already very well served with over 500 seats a day, and then I haven't counted the 530+ seats of 9W (77W) and CO (764 or 772) to Newark. That makes well over 1000 seats a day between BRU and NY, with EWR having the hand over JFK when it comes to going to Manhattan.

Openskies will have to come up with something very, very extraordinary to squeeze itself in this very hard market.

[Vexje]

Openskies will have to come up with something very, very extraordinary to squeeze itself in this very hard market.

I would largely disagree with that: Demand is there in Brussels for more NA and even NY flights. BRU has one of the largest leakage numbers of Europe towards NA. LH and BA are surely interested in BA so they can also build up another hub for Transatlantics and take some pressure of their main hubs (or better divert the traffic to their hubd in the case of LH). Obviously penetration on Africa is an asset of SN, and terefore both LH (or Star) and BA (oneworld) have interest as well in SN, AF-KLM (skyteam) already is well penetrated in Africa and therefore remains to their network and is not seeking this acquisition.

Some figures:
LH fills 9 weekly flights to NA with brussels traffic (divided between NY, BOS, IAD, LAX, Chicago, Orlando) ever wondered why LH was so strong in BRU
BA fills 6 weekly flights to NA with BRU traffic of which 4 to NY
SK fills 2 weekly to NY with BRU traffic
LX 1.5 to NY
and then there is AZ, EI, VS, OS, IB, TP....
and this without counting people that fly AMS and go by trains as well as CDG

also taking into consideration that alot of the bru origin traffic is connecting in NY, should more NA flight come available in BRU this traffic will dilute the NY demand and could be filled up by now outflowing connecting traffic....

Looking at feeding for NA flights out of BRU the numbers are alot lower and therefore the potential is locally.

Some other numbers:
BA: 8 daily IAD, 8 daily NYC
AF: 2 daily IAD, 6 daily NYC
LH: 6 Daily IAD, 7 Daily NYC

Although Africa will bring in some money, it is all about TA flights where BRU still has enourmous potential....
9W made a strategical choice to have their hub at BRU not because SN was non-aligned, but because of the potential of BRU for TA traffic. They don't need alot of feeding at BRU to get decent LF.

LH and BA are no fools they look at hard figures but won't overpay as the potential is there but they also know that SN is in no position to become a strong competitor on the TA flights, and that is where the potential is.

as a side note: AZ has two profitable long haul interncontinental flights ... you guessed MXP- JFK, and FCO- JFK....

Let the fòaming start....

[NCB]

Vexje, I can't agree.

TATL is already saturated in BRU.
Proof is that between Europe and the US, the cheapest flights are out of BRU.
The demand is too low, the competition too high.

Today I saw AA, US, AC, Air Transat, Delta all with B767's.
All these airlines have bigger aircraft such as B777/A330 and are sending the smaller B767's....

Load factor on the US flight to PHL was around 65%, similarily to last week's flight from PHL.
(Very nice for the pax because you have 2 seats for yourself most of the time.)

Add to that 9W is filling up all the gaps.
Open Skies can come, but they're not gonna make millions in BRU, certainly not with a tiny B757.

About LH, I think that LH feeds alot from BRU to Asia via FRA, but not really much to the U.S.
People (at least me) don't like to wake up at 3 in the morning to catch a flight to FRA before catching a morning flight westbound, since generally all westbound flights are in the morning around 10-12.
I am basing this thought on logic as I do not have the information at hand.

[tolipanebas]

Since yield is reportedly 3 times higher on AFI than on NA, it is a no-brainer any long haul expansion which might happen after the take-over will foremost happen on AFI, hopefully by deploying 2 more planes there, so SN can finally serve more of its destinations directly and offer 3 or 4 new destinations on top.
Fingers crossed, because SN really needs more long haul: the idea it can survive on a VEX kind of low cost European network alone simply isn't true... Without its current long haul routes which are real cash cows, the airline would have gone belly up right already.

NA will always come second due to the lower yield on the routes, yet IF there were to be a transatlantic route, I have a strong feeling it wouldn't be NYC (already very well served) but rather YUL.
The reasons are very obvious:
-) There's far less competition on this route in BRU,
-) It could be operated in code share with AC (in case of a LH take-over)
-) It could draw a lot of traffic from France, where SN has some very good connecting possibilities: CDG, LYS, TLS, MRS, SXB, GVA (BTW- how many flights a day is AF filling to YUL? 2? it is going to be an A380 destination of theirs!)
-) SN was on the brink of opening the route last year, just before fuel exploded and they feered it was too risky now.
Make it a code share flight with AC and LH (who can feed traffic from DUS, HAM, HAJ, BRE etc) and I am sure they can make a profitable transatlantic route out of it... much easier and with higher yield than yet another JFK or EWR route.

Nope, if anything will be served on the other side of the atlantic, it won't be NYC, it will be YUL

[Atlantis]

Some figures:
LH fills 9 weekly flights to NA with brussels traffic (divided between NY, BOS, IAD, LAX, Chicago, Orlando) ever wondered why LH was so strong in BRU
and then there is EI

Correct, have you seen lately the campaign of LH on the Brussels Airport site and in the newspaper. The same for EI but then only in the newspapers. And this all with attractive prices for flights to NA.

[BrightCedars]

US airlines have been expanding across the Atlantic thanks to the strong Euro. They wanted to cash in on the exchange rate and make a quick buck to keep breathing, hence all the equipment that could cross the pond was re-routed this way e.g. B757. Now the recessing price of fuel is supporting these flights, many of which would otherwise no longer be around.

Soon, it may be up to European airlines to benefit from the reverting exchange rate and you may see a wave of new transatlantic routes to benefit from the stronger dollar.

I cannot agree with those who say that airlines are operating small metal over the Atlantic in and out of Brussels. Jet Airways aside, AA, CO, DL, UA and US (five US carriers calling here!) are using what they use on most routes, except to very large airports or alliance partner hubs. Don't forget that each of these carriers do not have that much European calling points, even if they did expand these networks in the past years. Sure DL has a B757 on JFK but they operate a B763 on ATL, AA fly two B763 from JFK and ORD, UA fly their B777 (used to be B763) from IAD and CO fly their B777 from EWR, although they started with a B757, then a B767, then a B764. US is also a recent entry (they had tested a while back) and is operating a B757, subbed with a B767 on occasions. I regret that NW's B757 from MSP didn't remain.

I don't see any US West Coast destinations being sustainable at BRU given the aircraft capital involved (you can't rotate a single aircraft in 24 hours when all goes well), but I definitely see BOS as an option. I'm kind of wondering if SN shouldn't do a combination of BOS, YUL and YYZ to provide frequent enough flights and have a multiple of destinations. YUL maybe be low-yield out of BRU and not really be able to drive demand for a frequent enough offer (attractive to business passengers), and this francophone link is sometimes more sentimental than rational in the eyes of the Latin souls in our country (I am one of the Latins!).
Let's say 4 weekly nonstop to BOS, 2 continue to YUL, 2 continue to YYZ, add to that 2 weekly nonstops to YUL that continue to YYZ and 1 weekly nonstop to YYZ, you get a pretty nice starting offer and can test the markets and adjust accordingly. Now that may depend on passengers having to unload their bags in BOS to put it on the plane continuing onto Canada, in which case this wouldn't be convenient at all, I'm not sure about this situation.

I definitely see the more potential on the Africa network. SN has to (re)establish a presence there at much more destinations, flying them in combo. 2 aircraft (ideally A332 in the short term I guess) would be needed to implement this, before expanding the fleet to cover more destinations and increase frequencies (at least all destinations should be served 3 times a week with a maximum of 1 stop and ideally at least one nonstop).

I do agree that the Africa yield is much more attractive than the Transatlantic one, but it's not good to bet all your money on the same horse so it is important that SN establishes alternatives sources of revenue. More important however is to guarantee the sustainability and profitability of the European operation in its own as it is a strategic asset to our country and capital.

So, some told us more news on Sep 15 but had promised some leaks, there is nothing so far!

[BrightCedars]

A footnote about finding the cheapest fares at BRU, it's not very complex.

The big airlines that surround us practice higher fares on their local markets. What they do is that when they want to fill an airplane, they use our market to fill those planes using cheaper tickets, because this way they can keep the price tag identical on their own market and do not dilute their brand or start a downward spiral.

[Conti764]

Vexje, I can't agree.

TATL is already saturated in BRU.
Proof is that between Europe and the US, the cheapest flights are out of BRU.
The demand is too low, the competition too high.

Today I saw AA, US, AC, Air Transat, Delta all with B767's.
All these airlines have bigger aircraft such as B777/A330 and are sending the smaller B767's....

Load factor on the US flight to PHL was around 65%, similarily to last week's flight from PHL.
(Very nice for the pax because you have 2 seats for yourself most of the time.)

Add to that 9W is filling up all the gaps.
Open Skies can come, but they're not gonna make millions in BRU, certainly not with a tiny B757.

About LH, I think that LH feeds alot from BRU to Asia via FRA, but not really much to the U.S.
People (at least me) don't like to wake up at 3 in the morning to catch a flight to FRA before catching a morning flight westbound, since generally all westbound flights are in the morning around 10-12.
I am basing this thought on logic as I do not have the information at hand.

Again, you shouldn't draw negative conclusions from the material the US carriers use since this is their typical material on transatlantic routes, accept for the power hubs in Europe. BRU is no (power) hub, has no alliance base, so it is quite logical they don't receive the biggest material. So it is quite an achievement we have 5 US carriers flying between BRU and NA (6 if you count in Air Transat) with two of them regularly deploying their big boys (T7 from CO and UA).

The N-A market in/out of BRU is far from saturated, accept for the NY region (which even seems to have some more potential given some posts in this topic are correct). LAX and/or SFO, IAH and/or DFW, BOS in the US alone could have good LF on their flights. Not on A380's of course, but in the future I could see a 788 perform well on these routes. Especially if SN finally joins an alliance and BRU finally has something to put itself in the market (alliance hub in Europe and Euro/American gateway to Africa).

There are heaps of second tier airports in the US (and with second tier I mean no grass strips airports but the airports just under JFK, EWR, LAX, SFO and so on) which on their own might not sustain a profitable LF to BRU, but combined they could. Connect two US airports with each other and on to BRU and you might have decent LF to BRU after all.

BRU will never be the biggest airport in Europe, especially not from N-A, but that market is far from saturated. Of course for a company like SN it is impossible to penetrate these markets, but US carriers could make it work as soon as they have a good reason to fly to BRU (and being an alliance hub and gateway to Africa is one). Right now a lot of N-A traffic is being sucked away by other European carriers, if customers and companies will find BRU again, this will change.

Therefore, and I repeat myself again, it is time BRU should consider building a transfer friendly, alliance dedicated terminal, where pax can hop from one flight to another and stay in an easy to reach, basic hotel with low rates, integrated in the terminal, if they have to catch a flight the next day.

If you offer pax decent facilities, they will be all to happy to fly via your airport, and the companies will follow. There is no reason for Brussels Airport to be too moderate.

[euroflyer]

LH and BA are surely interested in BA so they can also build up another hub for Transatlantics and take some pressure of their main hubs (or better divert the traffic to their hub in the case of LH).

Sorry, I still cannot see why BA or LH should be any different here ... What is the experience of LX ? They have MORE long-haul now than before the take over, LH has not massively "stolen" pax from ZRH or GVA to fill FRA and MUC, they have of course re-arranged cooperations, for the best of both.

And FRA is already VERY crowded, not easy - if possible at all - for LH to get any additional slots and the load factors are already decent today. No need for additional pax from BRU. And the expansion of FRA is still years ahead, if it takes place at all with the recent political developments in the regional government of Hessen.

MUC is getting quite busy very fast as well and is - geographically - better placed for Asia connections. Already in Germany not many people will be willing to fly from HAM, HAJ, TXL or DUS first to MUC and than to NA. Here BRU could take some traffic.

It will all depend on how much demand there is and how many competitors are active and how expansive an airport and all its services are. If the combination is ok, more planes will be flying to NA as well as to Africa no matter of BA or LH are owning SN.

[euroflyer]

Anybody any information if 15 September will still be the day of announcement ?

[Boeing767copilot]

From February 2009, Lufthansa will expanded service from Milan Malpensa to 6 European destinations. Direct flights will then be available to Barcelona, Brussels, Budapest, Bucharest, Madrid and Paris. In the 2009 summer timetable London and Lisbon will be added.

Flights operated by Air Dolomiti, Airbus A319.

source: Travel Magazine Aviation

[b.lufthansa]

This afternoon it will be announced: Lufthansa has bought Brussels Airlines!

[dna]

Press conference this afternoon at 4 pm. According to reports, Lufthansa has "great plans for the further development of Brussels Airlines".

[FlightSimCrew]

to all dont forget the end clause in all brussels airlines internal communication to avoid problems whatever your intentions (postive/negative) are:


This Internal Communication may contain confidential information relating to the Brussels Airlines group. You are therefore strictly prohibited from disclosing its contents or distributing it by any means (including through copying or forwarding of this e-mail) to any external party.

[brusselsairlinesfan]

That sounds great... wait & see the official press releases...

[HighInTheSky]

to all dont forget the end clause in all brussels airlines internal communication to avoid problems whatever your intentions (postive/negative) are:


This Internal Communication may contain confidential information relating to the Brussels Airlines group. You are therefore strictly prohibited from disclosing its contents or distributing it by any means (including through copying or forwarding of this e-mail) to any external party.

It was with positive intentions, but you are right...

[FlightSimCrew]

no problem
cheers

[euroflyer]

First media reports in Germany confirm the deal:

http://www.n-tv.de/Mit_Brussels_Airline ... 23486.html

short and quick translation:
"as dpa" (a German press agency) "has learned from circles inside the company all major points in the negotiations have been agreed", "Mayrhuber and Davignon will inform media in Brussels this afternoon"

[airazurxtror]

Also on VRT and RTL :
http://www.rtlinfo.be/news/article/1699 ... +Lufthansa

[tolipanebas]

LH's CEO Mayrhuber has just arrived and will announce the deal in SN's HQ at BRU airport; staff will be informed first though.

Fingers crossed for some really good news apart from just the announcement itself, like a commitment to add a few extra long haul planes SOON (could be part of the deal, rather than just paying cash).