Brussels Airlines' fleet renewal

[DeltaWiskey]

Why is that bad management? It's kind of normal normal that big decisions (impacting long term strategy/budget) get the "blessing" of the parent company. It is no different for LX, OS, EW/4U,... or any other company that is 100% owned by another company.

[PttU]

There's a difference between

all the decisions will have to be submitted to the LH Board for final approval

and

big decisions (impacting long term strategy/budget) get the "blessing" of the parent company.

The question is where to draw the line, what's a big decision, and what is a smaller (operational) decision.

[DeltaWiskey]

If you read some financial reports from large (publicly traded) companies, you'll get an idea where to draw the line, it's not always black and white.

There are also some representatives of LH in the SN Board, so the Board will not easily decide something that won't get approved in the first place. There is also a lot of interaction between SN, LH and EW to work towards shared goals, so many of the board agenda points will already have been coordinated beforehand. The "final" approval of the SN board decisions by the LH Group board is rather an official necessity of being a 100% daughter of a publicly traded company. (It makes sense that a holding company has control over its subsidiaries, doesn't it?)

[convair]

Now that SN is a 100% daughter of LH, all the decisions will have to be submitted to the LH Board for final approval.

Really? That's bad management! I would think that the SN Board (in which LH is represented anyway) would at least have some freedom to decide alone on matters of minor importance, e.g. less than €xxx,000. Of course, the purchase or leasing of planes for a long period does not fall in that category of decisions.

If you read some financial reports from large (publicly traded) companies, you'll get an idea where to draw the line, it's not always black and white.

There are also some representatives of LH in the SN Board, so the Board will not easily decide something that won't get approved in the first place. There is also a lot of interaction between SN, LH and EW to work towards shared goals, so many of the board agenda points will already have been coordinated beforehand. The "final" approval of the SN board decisions by the LH Group board is rather an official necessity of being a 100% daughter of a publicly traded company. (It makes sense that a holding company has control over its subsidiaries, doesn't it?)

I had the opportunity to exchange with RoMax on this matter a few pages back. I believe the view I expressed (see hereunder) more or less represents how a group is usually organized with regard to decision-making. As long as a board decision has been made in accordance with the laws and the statutes of the company (i.e. the belgian subsidiary in this case), it cannot be overturned by any other entity.
And I think a read in a recent post in this tread that the statutes provide that the board has been given full power.

Keep in mind that SN is now part of the LH Group, meaning that the SN board is not the only governing/supervising body that needs to agree on certain things (depending on what type of decision and how LHG is involved in it). For example at LH itself their Supervisory Board has to approve everything involving capital expenditure above a certain value threshold (in particular aircraft and other non-current assets), as well as long-term leasing of aircraft. Depending on how the deal is planned to be dealt with at SN, it might very well be that there are additional approvals needed from e.g. the LH supervisory board.

Just saying that even if the SN board gives its final approval tomorrow, that doesn't necessarily mean it will be made public already as there are additional steps to be taken in the formal procedure (SN is now via LH part of a publicly traded German organisation, that comes with some additional formal procedures that have to be followed).

Well, yes and no. Unless the Company Statutes specifically provide that some decisions are reserved to the shareholders' assembly (i.e. Eurowings and/or Lufthansa now), the SN board legally has the power to take all (other) decisions. However, important decisions are usually prepared by the management and then submitted to the board for decision. Any required approval from the group should normally be obtained before a board meeting.

[Inquirer]

Concerning the somewhat weird discussion about corporate governance as it evolved here above, I'd simply like to add that it's standard practice at any multinational to have a mechanism where strategic long term decisions which require significant investments and/or have important repercussions on the balance sheet to be coordinated with the holding company.

Surely nobody here thinks Audi Vorst for instance is allowed to decide to boost their production capacity by installing a second assembly line, just because the A1 is selling well currently, all by themselves?

Any well run multinational is quite different from the nearest big organisation most people will intuitively compare it with, which is our rather inefficient political state structure.
In Belgium indeed we have regional governments unilaterally taking diametrically opposing decisions or spending money from other governmental levels as if there's no tomorrow, all without the federal government able to step in and prevent them from doing so.
Such setups are not to be found in multinationals... at least not for a very long time, or they go out of business asap.

I think it's perfectly normal that the final decision to go ahead and buy new planes is taken by the highest supervising level, acting on a firm and final proposal of Brussels Airlines first. I suppose such proposal will have to be accompanied by a solid business plan as to where they intend to deploy that extra capacity on, so as to judge both the soundness of the proposed investment as well as to coordinate this future expansion with other entities within the group and thus to make best use of the group's financial resources and thus maximize the return on investment, while at the very least avoid any internal conflict or overlaps!

[convair]

Concerning the somewhat weird discussion about corporate governance as it evolved here above, I'd simply like to add that it's standard practice at any multinational to have a mechanism where strategic long term decisions which require significant investments and/or have important repercussions on the balance sheet to be coordinated with the holding company.

Surely nobody here thinks Audi Vorst for instance is allowed to decide to boost their production capacity by installing a second assembly line, just because the A1 is selling well currently, all by themselves?

Any well run multinational is quite different from the nearest big organisation most people will intuitively compare it with, which is our rather inefficient political state structure.
In Belgium indeed we have regional governments unilaterally taking diametrically opposing decisions or spending money from other governmental levels as if there's no tomorrow, all without the federal government able to step in and prevent them from doing so.
Such setups are not to be found in multinationals... at least not for a very long time, or they go out of business asap.

I think it's perfectly normal that the final decision to go ahead and buy new planes is taken by the highest supervising level, acting on a firm and final proposal of Brussels Airlines first. I suppose such proposal will have to be accompanied by a solid business plan as to where they intend to deploy that extra capacity on, so as to judge both the soundness of the proposed investment as well as to coordinate this future expansion with other entities within the group and thus to make best use of the group's financial resources and thus maximize the return on investment, while at the very least avoid any internal conflict or overlaps!

I fully agree with you, Inquirer!
I was merely pointing out that, once the local board has taken a formal decision, compliant with the laws and the statutory regulations of the company and indeed after all coordination steps and hurdles within the group have been completed, that decision is souvereign and there is no point for the group to ratify it.
So, no need to wait for news from the LH board regarding the decision taken (or not taken) by the recent SN board.

[Airbus2016]

Oo-sfo is on his way back from abu dhabi

[luchtzak]

Oo-sfo is on his way back from abu dhabi

[Luke777]

Does somebody know for how long SFO and SFM can still remain ? The SFM seems to be the oldest 330 in the world, still flying. I heard that airbus does not have previous experiences with 330s exeeding this age. Rumours are that they soon want to recall the SFM in order to take it apart and use these part for evaluation of ageing and metal fatigue studies... true ?

[Stij]

Welcome Luke777!

I heard these rumours in the past, but I don t know if they re true...

Cheers,

Stij

[RoMax]

Does somebody know for how long SFO and SFM can still remain ? The SFM seems to be the oldest 330 in the world, still flying. I heard that airbus does not have previous experiences with 330s exeeding this age. Rumours are that they soon want to recall the SFM in order to take it apart and use these part for evaluation of ageing and metal fatigue studies... true ?

All the excitement on the forum here about SN/LH's decision on the (partial) long haul fleet replacement is of course because of something. OO-SFM is one of the 7 A330's that will reach EOL (end of lease) in the 11-month period between the end of 2018 and the end of 2019 and will be replaced at that point.

For the rest I can't confirm anything on the technical state of SFM or what Airbus would want to do with it, I just have no idea personally. But from what I know there are two Cathay Dragon A333's still flying that are even older.

[MD-11forever]

[ But from what I know there are two Cathay Dragon A333's still flying that are even older.

True. Those two Cathay Dragon birds were built in 1992 , while the oldest Brussels Airlines A330 was built in March 1994. Nevertheless, KLM is flying 747s that were built in 1989.
Just for information: 5 of the 10 oldest A330s that are still active fly at Brussels Airlines (data from planespotters.net):

c/n Aircraft Type Reg Airline
12 Airbus A330-300 B-HLJ Cathay Dragon
17 Airbus A330-300 B-HLK Cathay Dragon
30 Airbus A330-300 OO-SFM Brussels Airlines
37 Airbus A330-300 OO-SFN Brussels Airlines
45 Airbus A330-300 OO-SFO Brussels Airlines
55 Airbus A330-300 AP-BKL Shaheen Air
71 Airbus A330-300 B-HLA Cathay Dragon
82 Airbus A330-300 OO-SFW Brussels Airlines
83 Airbus A330-300 B-HLB Cathay Dragon
95 Airbus A330-300 OO-SFV Brussels Airlines

[lumumba]

[ But from what I know there are two Cathay Dragon A333's still flying that are even older.

True. Those two Cathay Dragon birds were built in 1992 , while the oldest Brussels Airlines A330 was built in March 1994. Nevertheless, KLM is flying 747s that were built in 1989.
Just for information: 5 of the 10 oldest A330s that are still active fly at Brussels Airlines (data from planespotters.net):

c/n Aircraft Type Reg Airline
12 Airbus A330-300 B-HLJ Cathay Dragon
17 Airbus A330-300 B-HLK Cathay Dragon
30 Airbus A330-300 OO-SFM Brussels Airlines
37 Airbus A330-300 OO-SFN Brussels Airlines
45 Airbus A330-300 OO-SFO Brussels Airlines
55 Airbus A330-300 AP-BKL Shaheen Air
71 Airbus A330-300 B-HLA Cathay Dragon
82 Airbus A330-300 OO-SFW Brussels Airlines
83 Airbus A330-300 B-HLB Cathay Dragon
95 Airbus A330-300 OO-SFV Brussels Airlines

Not true OO-SFM first flight was in June 93 but was not directly delivered to Air Inter because they didn't want this plane anymore.
And enter the fleet of SABENA in 97.....

I also think that they (Cathay Dragons one) have a lot less flights hours because they started they commercial flights only in 97 they stayed with Airbus for a couple of years.

[ryandaughter]

It seems that OO-SFT is close to land at BRU in a few minutes...

[stragke]

about the whole a330 situation.
Brussels airlines doesn't have the oldest A330
But it has 2 or 3 A330's that has been longest use in comercial flying.
The 2 older aircraft are test-beds and after testing THEN they were flying comercial.

[travellover]

It seems that OO-SFT is close to land at BRU in a few minutes...

Thank you. Very good news.

https://flightaware.com/live/flight/OOSFT

OO-SFT
HHN Kirchberg, Germany
BRU Brussels, Belgium
Tuesday 14-Mar-2017 20:55 CET
Tuesday 14-Mar-2017 21:27 CET

[luchtzak]

It seems that OO-SFT is close to land at BRU in a few minutes...

Thank you. Very good news.

https://flightaware.com/live/flight/OOSFT

OO-SFT
HHN Kirchberg, Germany
BRU Brussels, Belgium
Tuesday 14-Mar-2017 20:55 CET
Tuesday 14-Mar-2017 21:27 CET

https://www.aviation24.be/airlines/brussel ... -airspace/

[ryandaughter]

It looks like that OO-SFN is currently making some test flight over the Gent area. Yesterday it came back from Accra this last night with no specific delay.

[lumumba]

OO-SFU is also doing some tour's....

[brusselsairlinesfan]

Screenshot_20170315-141231.pngOO-SFU is also doing some tour's....

A330 training sessions?