Brussels Airlines' fleet renewal

[flightlover]

brussels airlines expands leased SuperJet service from June 2017

brussels airlines last week extended planned Sukhoi SuperJet SSJ100 aircraft operation into October 2017. The leased aircraft from CityJet entered operation with SN on 26MAR17.

SSJ100 aircraft will gradually enter operations on following routes on/after first week of June 2017:
Brussels – Bastia
Brussels – Manchester
Brussels – Stockholm Bromma
Brussels – Strasbourg

Source: Airline Route / Routes online

A bit strange that the initial contract was for such a short period of time, then.

It might have been the plan from day one. By spreading the roll-out in segments they make sure they can familiarize with the opps side and can be in the news more often.

[Bel33]

I fully agree with the comment of Inquirer!
It's the right way to renew the fleet in a short time and to take time to organize the future of the long haul fleet.

[Inquirer]

I don't know what it says at all, apart from the fact you are too focused on "new planes", IMHO.

In general, airlines are getting new planes because they want either/both:
-) something different than what they will replace
-) have ample time to wait for a slow and phased delivery
If not, the 'plus' of new planes quickly fades, I think, and even becomes a 'minus' (cost, risk, etc)?

For Brussels Airlines, what is important is not whether or not the fleet renewal is done with factory new planes, but whether replacement/expansion planes will come and fast.
As said before, that later point has become quite important and is much more guaranteed if they'd do it like is rumoured, so it's not a bad idea at all.

The idea an owner isn't interested in a company that makes him say hundred million annually if one is to go by their results from last year is not very credible, you know?

FWIW, as far as I have come to learn here, Eurowings is currently also looking at additional used A330s.
By your own logic this must mean Lufthansa is thus also not interested in Eurowings either then, because they are not worthy of new A330 planes?
Meanwhile, I can read here how 'obsessed' Lufthansa are with Eurowings at the same time???
One can't have it both ways, however, so how to explain that then?
The logical explanation is that the reason for Eurowings is exactly the same as might be the case at Brussels Airlines, in fact and is indeed perfectly valid: if it has to come fast and it may to be of the same type, why bother to go for new?

Just my personal reading, of course.

[RTM]

No clue what SN will do, will have to wait and see. But there is something worth considering in this discussion I haven't seen yet. Harmonisation.
The current fleet is a bit of everything. 333 - 332, GE, PW and RR... If you add the NEO, it is yet another variant. Though at least the GE will be gone. It is still not less mixed than it is today. If you go for a full 333 RR replacement though, it will be almost fully standardized. Especially if more Singapore birds come in. That just leaves a couple of 332 PW out of sync. Would be a big step in the right direction if you ask me. And if most or all are sub 10 yr old, you're set for years to come imo.

[shockcooling]

No clue what SN will do, will have to wait and see. But there is something worth considering in this discussion I haven't seen yet. Harmonisation.
The current fleet is a bit of everything. 333 - 332, GE, PW and RR... If you add the NEO, it is yet another variant. Though at least the GE will be gone. It is still not less mixed than it is today. If you go for a full 333 RR replacement though, it will be almost fully standardized. Especially if more Singapore birds come in. That just leaves a couple of 332 PW out of sync. Would be a big step in the right direction if you ask me. And if most or all are sub 10 yr old, you're set for years to come imo.

And LH + LX fly the 330-343X (like SFX), so even more harmonisation

[teach]

Allow me to say such is a little bit superficial, since those people clearly haven't thought the 2 options over and are just being guided by the adrenaline they'd love to finally feel when they'd read up on a significant new order being placed by Brussels Airlines in the international press.

Let's think it through for a second, shall we, to see if such would really be such great news?

If they'd place a new order with Airbus soon, it would mean they'd get to a situation where they'd make nice headlines with for sure for a couple of days, but then they'd see those planes tickle in one by one in say 1 or 2 years from now.
In other words: they'll be stuck with a large batch of the old ones for quite some time still!
As ironic as it may sound at first, but a new and spectacular order probably wouldn't really lower the average age of the fleet much during the first couple of years, indeed!

in contrast, if they'd go for what is rumoured to be the case above, it would probably allow for a much quicker replacement of their oldies by swapping them almost simultaneously and thus see them end up with an average fleet age far lower than what it would be ico a one-by-one replacement by newbuilts!
Not to mention the financial picture may look better too after it's done.

You're comparing the wrong two options. It was realistically never a choice between leasing second-hand A330s and BUYING new A330neos, but one between leasing second-hand and LEASING new neos. If they went for that option, no new order would need to be placed, and they could take delivery of their first planes quite soon, as there are three lessors who have ordered A330neos, with a combined total of 55 planes on order, very few of which have been placed with airlines so far. And those lessors were among the first to order the neo, so they'll have some of the earliest delivery slots.

Don't get me wrong: I'm not in the 'they HAVE to get new planes because otherwise LH doesn't love them' brigade, I just wanted to point out that your comparison isn't the correct one.

[Bralo20]

You're comparing the wrong two options. It was realistically never a choice between leasing second-hand A330s and BUYING new A330neos, but one between leasing second-hand and LEASING new neos. If they went for that option, no new order would need to be placed, and they could take delivery of their first planes quite soon, as there are three lessors who have ordered A330neos, with a combined total of 55 planes on order, very few of which have been placed with airlines so far. And those lessors were among the first to order the neo, so they'll have some of the earliest delivery slots.

Don't get me wrong: I'm not in the 'they HAVE to get new planes because otherwise LH doesn't love them' brigade, I just wanted to point out that your comparison isn't the correct one.

Does the Lufthansa Group even lease planes (on long terms)? They do have a leasing division for leasing planes to other companies. AFAIK they buy (buy in the broad sense of the word) every bird they operated with the exception of the Air Berlin deal but that's a wet lease deal. So i'm not sure that leasing brand new planes from any of the lessors would be even be considered. When you have the ability to finance your planes (or anything for that matter) it's way more cheaper than leasing planes from a lessor, for a decent company (with the financial ability) leasing is purely a waste of money.

[convair]

When you have the ability to finance your planes (or anything for that matter) it's way more cheaper than leasing planes from a lessor, for a decent company (with the financial ability) leasing is purely a waste of money.

I may be wrong but I doubt leasing a 10 year old plane (already well depreciated by its owner, the lessor) cost as much as leasing a factory-new one of the same type.

[Bralo20]

I may be wrong but I doubt leasing a 10 year old plane (already well depreciated by its owner, the lessor) cost as much as leasing a factory-new one of the same type.

That's correct, but still, leasing is throwing away money, no matter how old the plane is or how cheap the price is. Leasing is OK for a short time as an interim solution or when you don't have the capital or credit lines to buy. This is what Brussels Airlines has done in the past, Brussels Airlines lacked resources to buy planes (new or second hand) so for an airline like SN (and many other airlines) there is no other solution than to go on the leasing market and obtain planes this way. But if you have a stable company with sufficient assets, credit lines, etc... it's always much much cheaper to buy a plane outright (or any other type of equipment, building, etc...).

Just my 2 cents

[sn26567]

Then I don't understand the strategy of Finnair with its A350s. As soon as it gets one of them, it sells it to lease it back, and with the money it pays for the next one! And so on...

[Bralo20]

Then I don't understand the strategy of Finnair with its A350s. As soon as it gets one of them, it sells it to lease it back, and with the money it pays for the next one! And so on...

Sale and lease-back is a quick way to get hard cash. Chances are that Finnair's financial situation was brighter when they ordered the planes and made deposits on them. It might be the case that Finnair just don't have the necessary cash on hand or big enough lines of credit to accept the next planes. So if you want to free up some quick cash you sell your plane that you own to a leasing company and lease it back, as an airline you can even make a profit on the sale of the plane while getting a quick cash infusion that enables the airline for future expenditures. I doubt that the sale generates enough profit to set off the extra costs over the leasing periode (12 years I thought with Finnair) but it certainly gives them a nice bag of cash. But after 12 years those leases will have cost significant more compared to when they kept ownership over their planes.

[DeltaWiskey]

That's correct, but still, leasing is throwing away money, no matter how old the plane is or how cheap the price is. Leasing is OK for a short time as an interim solution or when you don't have the capital or credit lines to buy.

It is not black and white like that.

Leasing (aircraft) is more complex than renting a house. A lot of different aspects come into play, also financial accounting practices and liability, which can be much different for leases than for ownership. This makes that because of the tax laws, it can be financially more sensible to lease aircraft, rather than buy them. That's also why some airlines groups set up specialised leasing subsidiaries the benefit from these different tax laws.

Unlike some real estate, an airliner only loses value (rather than gains) during its 20-25 year lifespan. Unlike a new car, the loss of value is more gradually in time, but also depends on heavy maintenance checks. It has also become general practice that lessors contribute to heavy checks, so basically that a lessor pays the operator a substantial amount of a 6y/12y check or a cabin refurbishment.

Large leasing companies have more negotiating power than some (smaller) airlines and can get much bigger discounts from the OEM, hence for smaller airlines it makes generally more sense to lease aircraft.

All in all, I would definitely not say that leasing is always more expensive than buying. Many different factors come into play and the difference is often not that big in the end.

[Thomaaas]

I may be wrong but I doubt leasing a 10 year old plane (already well depreciated by its owner, the lessor) cost as much as leasing a factory-new one of the same type.

That's correct, but still, leasing is throwing away money, no matter how old the plane is or how cheap the price is. Leasing is OK for a short time as an interim solution or when you don't have the capital or credit lines to buy. This is what Brussels Airlines has done in the past, Brussels Airlines lacked resources to buy planes (new or second hand) so for an airline like SN (and many other airlines) there is no other solution than to go on the leasing market and obtain planes this way. But if you have a stable company with sufficient assets, credit lines, etc... it's always much much cheaper to buy a plane outright (or any other type of equipment, building, etc...).

Just my 2 cents

You're not totally correct, even EK leases some of its A380 while they obviously have the resources. So it's not as black and white as you make it out to be.

[sean1982]

I may be wrong but I doubt leasing a 10 year old plane (already well depreciated by its owner, the lessor) cost as much as leasing a factory-new one of the same type.

That's correct, but still, leasing is throwing away money, no matter how old the plane is or how cheap the price is. Leasing is OK for a short time as an interim solution or when you don't have the capital or credit lines to buy. This is what Brussels Airlines has done in the past, Brussels Airlines lacked resources to buy planes (new or second hand) so for an airline like SN (and many other airlines) there is no other solution than to go on the leasing market and obtain planes this way. But if you have a stable company with sufficient assets, credit lines, etc... it's always much much cheaper to buy a plane outright (or any other type of equipment, building, etc...).

Just my 2 cents

It's not just about resources in the bank but also operational profitability. If you want to replace your old fleet completely by new planes, the monthly leasing contribution is going to be substantially higher. If the operation doesn't generate enough to justify that extra expense, it ain't worth it because it will have detrimental financial effects in the long term. Lufthi clearly did the maths.

[lumumba]

I can understand all the the arguments about older planes but today you can not have a fleet without Wi-Fi ,roaming etc...
So they will have to invested in all this planes to be at the same level as the others airlines.

[RoMax]

I can understand all the the arguments about older planes but today you can not have a fleet without Wi-Fi ,roaming etc...
So they will have to invested in all this planes to be at the same level as the others airlines.

You don't need a brand new aircraft to offer services like wifi, that can perfectly be fitted to an older aircraft. Does it cost a bit more than having a new aircraft which has been fitted with such a system from the factory, possibly, I don't know, probably depends on what system the airline chooses anyway (some are easy fits, others require a bit more physical work, whether if it's a retrofit or not), but it's definitely not going to be a breaking point for choosing between new or second-hand, that'll be a marginal cost compared to the overall investment.

[sn26567]

Tail of the second SSJ100 in SN colours (to be delivered soon...)

[TLspotting]

Absolutely correct !

This new aircraft is EI-FWA,arrived at Venice 7 days ago,on 5th April !

Greetings,
Thibault

[Yuqu12]

Absolutely correct !

This new aircraft is EI-FWA,arrived at Venice 7 days ago,on 5th April !

Greetings,
Thibault

I don't think it is FWA. Normally, only brand new planes would come to SN, so probably it will be EI-FWE.

[TLspotting]

Impossible for EI-FWE,he's not in the Cityjet fleet,follows planespotters.net.
So the only possibility is EI-FWA,because it landed on 7th April and now taken off not yet.