BrusselsAirlines - the TURBOPROPS will come!

[Crosswind]

Anyway, it's time to react, because they talk about heavy losses... I've heard around even 80.000.000 euros

Anybody who can give some info about fuel contract they got?

[Flanker]

Route BRU-MAN and MAN-BRU, a non-seasonal route so that no one has any excuse.
Great circle distance 537km, operational distance 620km.

LCC competition: yes, Flybe and soon Ryanair.

Current schedule:
DEP BRU 09:40 ARR MAN 10:05 on days 1234567 // RJ85 on 1235, RJ100 on 467
DEP MAN 10:35 ARR BRU 12:50

DEP BRU 17:10 ARR MAN 17:30 on days 123457 // RJ85 on 123457
DEP MAN 18:00 ARR BRU 20:15

DEP BRU 20:40 ARR MAN 21:00 on days 123457 // RJ85 on 1234, RJ100 on 57
DEP MAN 06:55 ARR BRU 08:55

Facts
19 frequencies per week (2,7 frequencies per day)
1148 seats on RJ85, 485 seats on RJ100, total capacity 1633 seats.


Simulations (on BRU-MAN sectors, not real world number but realistic approximations for comparison)
Current load factor 70% year-round at an average fare of 140€.

All numbers are for one-way. Multiply by 2 to have numbers for both ways.

Scenario 1: Each RJ85/RJ100 frequency replaced by an A319.
Operating cost per hour A319, 5000€ with 141 seats.
Total capacity goes from 1633 seats to 2679 seats.
Load factors at 140€ average fare 70% x 1633 seats / 2679 seats = 42,7%
Load factors at 120€ average fare = 55%
Load factors at 100€ average fare = 65%
Load factors at 80€ average fare =80%

Revenue at 42,7%//55%//65%//80% = 8429€ // 9306€ // 9165€ // 9024€
Best yield on this route is achieved at 120€ average fare and 55% LF on A319.
Revenue 176.814€ per week

Cost of operations
Flight time 1h12 minutes, at 5000€ per hour, 6000€ per sector
Cost 114.000€ per week

Earning potential
9165 € - 6000€ = 3165€ per sector
62.814€ per week

CASK A319 in this example: 0,069€ per seat-kilometer

Scenario 2: 19 RJ85/RJ100 frequencies replaced by 25 Q400 frequencies.
Operating cost per hour Q400, 2100€ with 70 seats.
Total capacity goes from 1633 seats to 1750 seats.
Load factors at 140€ average fare 70% x 1633 seats / 1750 seats = 65,3% +5% for added frequencies = 70%
Load factors at 120€ average fare = 84% +6% for added frequencies = 90%
Load factors at 100€ average fare = 99% +7% for added frequencies = 100%
Load factors at 75€ average fare = 100%

Revenue at 70% // 90% // 100% // 100% = 6860€ // 7560€ // 7000€ // 7000€
Best yield on this route is achieved at 120€ average fare and 90% LF on Q400.
Revenue 189.000€ per week

Cost of operations
Flight time 1h42 minutes, at 2200€ per hour, 3740€ per sector
Cost 93500€ per week

Earning potential
7560 € - 3470€ = 4090€
102250€ per week

CASK Q400 in this example: 0,086€ per seat-km.

Conclusions

The A319 will definitely beat the Q400 on CASM, mainly due to shorter flight times.
However, the lower costs of operating the right capacity and with improved frequencies will both reduce costs and increase revenues.
The Q400 would not only be more profitable for SN, but it would be able to attract more volume at lower fares, but much more efficiently than the A319.

The commercial viability of replacing RJ's flying at low load factors by larger aircraft that would have to sell lower fares for a further loss in load factors is non-existent.

The best way to attack the LCC's is by stealing their higher yield passengers, rather than stupidly fighting over each other's low-yield passengers. In the above case, this would mean offering more frequencies and lowering average fares by 14% from 140€ to 120€.

By putting dramatically more capacity on the market with A319's, without creating more demand (through added frequencies), you are at the consumer's mercy. Not only will you fill half the cabin with people who cost more to transport than they pay for, your yields from your existing customers will also go down because they will also be able to book lower fares.

The only way to achieve sustainable growth on the revenue side, is by maintaining yields on existing customers and stealing the LCC's highest yield pax by offering them better convenience.

[Flanker]

Anyway, it's time to react, because they talk about heavy losses... I've heard around even 80.000.000 euros

Thanks for sharing this because I'm against putting internal info myself here.

It only proves that price dumping is not a solution because it hits all the yields, although it looks good on traffic numbers.

SN seems to have learned its lesson and will therefore reduce capacity by the winter back to levels of last year's winter.

[RoMax]

Thanks for sharing this because I'm against putting internal info myself here.

It only proves that price dumping is not a solution because it hits all the yields, although it looks good on traffic numbers.

SN seems to have learned its lesson and will therefore reduce capacity by the winter back to levels of last year's winter.

NCB did you think about these things:
- much higher fuel cost then expected
- DKR and ABJ costed A LOT of money is still costing SN money
- lower than expected revenue from Club Med charter flights to Egypt/Tunesia for the abvious reasons
- the delayed start of Korongo is costing A LOT of money
- (maybe forgot something?)

And I wouldn't say SN doing "price dumping" they just have a more aggresive way of pricing to respond to the competition. Isn't that normal? Before this year, SN reacted too passive on the competition wich resulted in reducing traffic numbers on some routes.

And yes SN will reduce capacity this winter, BUT after the winter the planes who leave WILL BE REPLACED BY A319/A320 AS SAID BY SN to increase capacity after the winter again!! This capacity reduction is way to cut fuel costs, not some kind of "learned lesson" wich shows them that they were wrong, because they weren't wrong. Their new strategy with aggressive pricing, bigger aircraft on some routes and stronger partnerships with LH and Star is working!

And again, about your MAN exemple. Again you didn't look at the whole story, only at the side that you want to see...
BTW, AGAIN did anyone said SN will replace all RJ routes by A319 routes? Still you seem to ignore that SN will always keep 100-seaters in their fleet...

[Flanker]

And again, about your MAN exemple. Again you didn't look at the whole story, only at the side that you want to see...

Mr Boeing. A complete analysis of the MAN situation was pretty clear.
I've looked at the whole story and you have no arguments to reply to it. The point is made, I guess.

- much higher fuel cost then expected
- DKR and ABJ costed A LOT of money is still costing SN money
- lower than expected revenue from Club Med charter flights to Egypt/Tunesia for the abvious reasons
- the delayed start of Korongo is costing A LOT of money
- (maybe forgot something?)

Excuses, excuses, excuses.
Korongo isn't in SN's results (but in the holding's results) because it's a sister company.
DKR and ABJ costed a few millions at best.
Fuel price increases were expected, the higher volume strategy wasn't able to mitigate the cost increases of fuel and reduce the losses.

On paper it's a success, on the balance sheet it's a zero operation.

There were some benefits to this test.
It's a good way to see where you can go yields wise, and also to see how it affected the low-cost competition.
It's also good marketing to offer lower fares and to let passengers experience the quiet cabin of SN.

Should it be done again? Not unless we're 100% sure that it actually didn't have a negative effect on the financials.

[HighInTheSky]

NCB (I'm sticking to the old name, getting a bit fed up by the changes every few months!),

If you are so unhappy with the way that things go at SN, why don't you go and start up your own company?

Or use the bInventive forms to suggest a new way of working?

Or even better, why don't you call Bernard Gustin himself?? Need the number?

I would like to know in which department you work, because with someone like you it must be one of the most effective departments of our company! However it must be a department where there is absolutely NO communication. You are convinced that you are the only one who can be right, so all the colleagues must be wrong, no?

[Flanker]

I'm not unhappy with the recent developments at all.
I'm quite very happy. I'm actually defending SN's management's position, which seems to have the right mindsets about the future development of the airline. I'm also 100% behind the Korongo project which could lead to something bigger than anyone could imagine and am confident that they will pull off starting a successful airline.

Why don't you ask Tolipanebas and MrBoeing why they are so unhappy to see many turboprops in the SN fleet or why they nag that Korongo may never start?

What's your problem anyway?
Jealousy of some kind? I'm not always right but here all the evidence suggest that it's aviation common sense.

[HighInTheSky]

Why don't you ask Tolipanebas and MrBoeing why they are so unhappy to see many turboprops in the SN fleet or why they nag that Korongo may never start?

Because, quite frankly, I don't care!

Who talked about many turboprops anyway?

What's your problem anyway?
Jaleousy?

Why should I have a problem?

And jealous about who or what?

Strange to hear that you are "quite happy" at SN and still have so many remarks about how things go. You are "defending" the management's position, yet you say that adding those A319's and A320's was wrong?

[Flanker]

You don't have a clue of what we're talking about, do you.

SN has added 2 A319's and 2 A320's, retired 2 RJ85's.

According to you, that's how they achieved a 20.4% increase in capacity?
Then you're wrong. Most of the capacity increase was achieved by parking smaller RJ85's more often and using A319/B737/RJ100 more heavily.
I was against the capacity increase, not against adding A319's and A320's.

However, me and Tolipanebas are having a debate on what the future fleet should look like.
I'm saying that it should be 2 types, in line with the recent harmonization announcement and that it should be 30/35 TP's and 15 A32S, the TP's taking over most of the Avro roles with some additional A32S taking over RJ100 and B737 sectors.
Tolipanebas says it should be 3 types against all the evidence that management wants 2 types, with a greater emphasis on A32S aircraft, 100 seaters, and only a maximum of 10 turboprops.

If you look at the end of the year, 4 B737's will have left the fleet during 2011, explaining why they added 4 A319's. The remaining 2 A320's can be seen as replacing 2 RJ85's directly, simply because of the needs of the Club Med contract. This means that at the end of the year, we'll have less narrowbodies than last year!
The other 3 RJ85's would probably be replaced at the beginning of the next summer season, by TP's.

It's not completely your fault because some messages you may have heard coming from higher up are simplified so everyone of the staff could understand. The best way to follow fleet movements is to ignore such messages and draw your own matrix and see what's going on.

Let's start from there again, shall we?
If you don't understand what 2 people are debating about, be 100% sure, ask questions, before commenting.

[HighInTheSky]

You don't have a clue of what we're talking about, do you.

Who do you think you are?

If you don't understand what 2 people are debating about, be 100% sure, ask questions, before commenting.

Don't you dare to tell me what I should or shouldn't do!

[Flanker]

Who do you think you are?

Maybe I should be asking you?
You've entered a debate between me and Tolipanebas and accused me of all sorts of things.

Don't you dare to tell me what I should or shouldn't do!

Didn't you do that first and in a much more arrogant way?
Let's refresh your memory.

If you are so unhappy with the way that things go at SN, why don't you go and start up your own company?

Or use the bInventive forms to suggest a new way of working?

Or even better, why don't you call Bernard Gustin himself?? Need the number?

If you want to be included in this otherwise interesting debate, an attitude change would be in line.

[Crosswind]

Hey guys... Nothing can prove your ideas.

Just share them with respect to each other on this forum, and that's it. No need to fight for peanuts. Because it's peanuts.

Whatever will be the options taken by SN, we can only pray that these options will help the company to survive and to grow up.

For the rest, please fight in your garden

[RoMax]

Why don't you ask Tolipanebas and MrBoeing why they are so unhappy to see many turboprops in the SN fleet or why they nag that Korongo may never start?

Wow, WHAT?? Nobody except for you is talking about many TP's (because it doesn't work, but that aside as you never prove to be wrong anyway) NOT EVEN SN ITSELF. They are talking about SOME TP's for the THIN routes!!
AND who is nagging that Korongo may never start? I NEVER said that I think that Korongo may never start and I said I hope it will start as fast as possible. SO PLEASE DON'T ACCUSE OTHERS OF THINGS THEY NEVER SAID!!

Mr Boeing. A complete analysis of the MAN situation was pretty clear.
I've looked at the whole story and you have no arguments to reply to it. The point is made, I guess.

Your MAN analys was not clear, it only showed what you want to see. And you didn't even listen, who said MAN is a possible A319 route. And don't say because it has LCC competition...yes but from a smaller aircraft with lower frequency. This can't be compared with routes like Milan, Berlin,... who have competition from airlines with high freq and big(ger) aircraft. I only see MAN as a 100-seater route. So, NO, the point is not made.

Excuses, excuses, excuses.
Korongo isn't in SN's results (but in the holding's results) because it's a sister company.
DKR and ABJ costed a few millions at best.
Fuel price increases were expected, the higher volume strategy wasn't able to mitigate the cost increases of fuel and reduce the losses.

On paper it's a success, on the balance sheet it's a zero operation.

There were some benefits to this test.
It's a good way to see where you can go yields wise, and also to see how it affected the low-cost competition.
It's also good marketing to offer lower fares and to let passengers experience the quiet cabin of SN.

Should it be done again? Not unless we're 100% sure that it actually didn't have a negative effect on the financials.

DKR and ABJ costed more than "a few millions". They lost A LOT of revenue on these routes and they are still losing A LOT of revenue on these routes.
Fuel prices were NOT expected at these levels. They expected prices of about 80 dollar, not 100 dollar or more like it is now.
Korongo, as far as I know, that project is costing money to SN itself also.

And you still seems to think that the capacity reduction this winter proves that the new strategy failed... NO, they just return the 737's this winter to save money on the fuel side and these airplanes are not needed anyway. AND the 737's are being replaced by A319/A320's after the winter. + if the strategy would have been failed, than there would be other destinations that would have been hit by this capacity reduction. The typicall summer destinations are reduced in capacity, NOT the previous RJ routes wich are now operated by A319's. In contrary: CPH and MXP will get the A319 in September (when the 3th and 4th A319 for this year enter service) and other destinations will get more A319 as they get now. HAM for exemple is now 2/day RJ100 and 2/day A319. As from this winter: 4/d A319. GVA, TXL, PRG, HAM, MXP, CPH,... are still getting their A319's this winter AND after the winter. So NO (!!!) the strategy didn't fail!!

[HighInTheSky]

Hey guys... Nothing can prove your ideas.

Just share them with respect to each other on this forum, and that's it. No need to fight for peanuts. Because it's peanuts.

Whatever will be the options taken by SN, we can only pray that these options will help the company to survive and to grow up.

For the rest, please fight in your garden

You're quite right Crosswind,

I've let myself get carried away in this dispute.

As from now, I shall not post anymore in this thread, as it is clear this is going nowhere.

[RoMax]

As from now, I shall not post anymore in this thread, as it is clear this is going nowhere.

And I think that would be the best idea FOR EVERYONE until we here something more OFFICIAL about these TP's for SN. Because just as every SN treat where NCB goes into discussion with 'the rest' this is indeed going nowhere.

[Airbus330lover]

Let's start from there again, shall we?
If you don't understand what 2 people are debating about, be 100% sure, ask questions, before commenting.

EUH ! Is it the NCB private forum ?
A forum is a forum and... open to everyone

[diminbru]

I even wonder why people respond to NCB's post...I diagonally read them, laugh at it and pass to the next (interesting) thread on this forum...
Why would one need to waste his/her energy to repeat the same over and over again?

[cathay belgium]

Ncb
Stop with your arrogant attitude now this forum is free for replying by anyone, no need to behave in this way if discussion is Only between you nd tolepane give him a call if you also follow sn why didnt they in the past /afi?/ and dont you dare to leave luchtzak again omg it,s happening again... Cxb

[Flanker]

AND who is nagging that Korongo may never start? I NEVER said that I think that Korongo may never start and I said I hope it will start as fast as possible. SO PLEASE DON'T ACCUSE OTHERS OF THINGS THEY NEVER SAID!!

Apologies to you and Tolipanebas. It was someone else who said that Korongo would be an Air DC II.

DKR and ABJ costed more than "a few millions". They lost A LOT of revenue on these routes and they are still losing A LOT of revenue on these routes.
Fuel prices were NOT expected at these levels. They expected prices of about 80 dollar, not 100 dollar or more like it is now.
Korongo, as far as I know, that project is costing money to SN itself also.

And you still seems to think that the capacity reduction this winter proves that the new strategy failed... NO, they just return the 737's this winter to save money on the fuel side and these airplanes are not needed anyway. AND the 737's are being replaced by A319/A320's after the winter. + if the strategy would have been failed, than there would be other destinations that would have been hit by this capacity reduction. The typicall summer destinations are reduced in capacity, NOT the previous RJ routes wich are now operated by A319's. In contrary: CPH and MXP will get the A319 in September (when the 3th and 4th A319 for this year enter service) and other destinations will get more A319 as they get now. HAM for exemple is now 2/day RJ100 and 2/day A319. As from this winter: 4/d A319. GVA, TXL, PRG, HAM, MXP, CPH,... are still getting their A319's this winter AND after the winter. So NO (!!!) the strategy didn't fail!!

We don't have the winter numbers yet, so let's wait and see what's going to happen to load factors and capacity. We'll probably never see the route numbers but your teaser is frightening.

If true, I think that 90% of the people on this forum would agree that putting an A319 on 4 daily MXP during the winter seems to be too much of a waste, when SN is already operating LIN.
CPH, PRH and HAM 4 daily with A319 also seems overkill. GVA could hold 4 daily frequencies on A319 as could TXL but they will never fill all of the sectors, so the extra revenue they could get on some heavily-loaded flights, they're going to lose on the almost empty flights.

Your MAN analys was not clear, it only showed what you want to see. And you didn't even listen, who said MAN is a possible A319 route. And don't say because it has LCC competition...yes but from a smaller aircraft with lower frequency. This can't be compared with routes like Milan, Berlin,... who have competition from airlines with high freq and big(ger) aircraft. I only see MAN as a 100-seater route. So, NO, the point is not made.

MAN is a very typical route within SN's network where Avro RJ capacity can be replaced more efficiently by Q400's than with A319's. MXP, TXL also make sense because of the same reasons as MAN.
The turboprop is more efficient at increasing revenue and volume while reducing costs.
It doesn't matter if it's BRU-MAN or BRU-XXX, all that matters is that it can be applied to SN's European network from the moment that it has an average load factor of more or less 60%.

Adding capacity shouldn't be done in the form of dumping additional seats on existing flights, but by adding more frequencies at good yields.

I can do the analysis for 15 routes where this conclusion fits, and another 10 where it makes sense for SN to operate (additional) off-peak frequencies with turboprops.
Then I can do an analysis for 10 new routes that SN can operate.

[Flanker]

I even wonder why people respond to NCB's post...I diagonally read them, laugh at it and pass to the next (interesting) thread on this forum...
Why would one need to waste his/her energy to repeat the same over and over again?

You don't seem to be the only one to read them diagonally.
It's a shame, because they are very good analysis and studying material for would-be airline bean-counters.

Ncb
Stop with your arrogant attitude now this forum is free for replying by anyone, no need to behave in this way if discussion is Only between you nd tolepane give him a call if you also follow sn why didnt they in the past /afi?/ and dont you dare to leave luchtzak again omg it,s happening again... Cxb

No one said it's not. However it doesn't give you the right to cut into a debate between 2 parties with bullcr*p, without first reading and understanding everything the 2 parties are saying.
That's arrogance.
It's funny, it reminds me how you said that I have no route knowledge at all.

Let's start from there again, shall we?
If you don't understand what 2 people are debating about, be 100% sure, ask questions, before commenting.

EUH ! Is it the NCB private forum ?
A forum is a forum and... open to everyone

Who said otherwise? You don't make any sense.


You know what the problem is?
You're not actually reading what is written, you're picking up keywords and making up sense all by yourself and assuming it's arrogant or whatever you want.
That's the problem with writing to a crowd whose mother language isn't English.

In reality, if you read everything carefully and follow all the calculations and numbers, it's exactly the kind of stuff many of you enthusiasts would die to read.
All written by the gentleman's hand, who only responds harshly to arrogance.

If you look at my posts carefully they're 0% arrogance. The replies I get however are 90% arrogance.
Or Jealousy?

I'm sure that I have my deal of fans.