Brussels Airlines future and financial perspective

[sn26567]

Will the German save Europe (and Brussels Airlines)?

The shares of Lufthansa took a plunge this week as the financial results were below expectations. I think LH will first take care of its own budget before looking at its subsidiaries.

[Passenger]

Is there somebody with real accountancy experience to comment on the annual account of Brussels Airlines nv/SA?

http://bcc.nbb.be/BCCIA0101/WEB/actions ... 0110616011

(regret, I have found only the link to the annual account in Dutch)

[airbuske]

Is there somebody with real accountancy experience to comment on the annual account of Brussels Airlines nv/SA?

http://bcc.nbb.be/BCCIA0101/WEB/actions ... 0110616011

(regret, I have found only the link to the annual account in Dutch)

This is from last year 2010.
There they had a small profit.

Like already told before, they knew that 2011 would be a year
full of investments and that they could expect a loss this year.
But the crisis in Europe and the soaring fuel prices can make
the loss bigger.
Gustin was expecting a loss between 80 and 110 millions.

They will explain their plans next wednesday to us.
I'm very curious!

[Passenger]

Is there somebody with real accountancy experience to comment on the annual account of Brussels Airlines nv/SA?

http://bcc.nbb.be/BCCIA0101/WEB/actions ... 0110616011

(regret, I have found only the link to the annual account in Dutch)

This is from last year 2010.
There they had a small profit.

Yes, I do know that this is the result from last year. But it was only published in Belgium's State Gazette on 16th June 2011, and is thus not that old. Brussels Airlines nv/SA is a non-stocklisted company, and therefore this annual account is the only official publication about results.

Nice to know they will tell you next Wednesday what's going on, but final financial results for 2011 will only be known by June 2012.

[cnc]

but final financial results for 2011 will only be known by June 2012.

you mean published, it will be known much sooner then that

[BrusselsAirlines]

Is there somebody with real accountancy experience to comment on the annual account of Brussels Airlines nv/SA?

http://bcc.nbb.be/BCCIA0101/WEB/actions ... 0110616011

(regret, I have found only the link to the annual account in Dutch)

This is from last year 2010.
There they had a small profit.

Like already told before, they knew that 2011 would be a year
full of investments and that they could expect a loss this year.
But the crisis in Europe and the soaring fuel prices can make
the loss bigger.
Gustin was expecting a loss between 80 and 110 millions.

They will explain their plans next wednesday to us.
I'm very curious!

Any news on the meetings?

[Crosswind]

Nice pineapples

[Megaman]

Following is purely personnal interpretation

Looking at 2010 vs. 2009, they have a negative cash flow (never a good thing on the long run).

They also have a significant increase on their accounts receivable which may be partly based by an increase in volumes, but the increase is much more significant that the increase of accounts payables. Their trade account receivables are higher than their trade account payables which means basically that they need to finance their operational activity through other means, external financing, short term, leading apparently to higher finance costs (finance costs increasing whereas financing in 2010 was I believe cheaper on the market than in 2009 where rates were very high due to the 2008 financial crisis).

Improved operating profit but still a loss (12 mio EUR). Here again, not brilliant. Of this is a provision reversal of +/- 10 million vs. an accrual of 10 million in prior year (this drives 20 million of the improvement). I would consider this as non recurrent activity and you should look at operating profit before this.

It would also be interesting to look at costs as a percentage of revenues, but I don't have time for that. Operating profitability is improving, but is not in the green (and probably won't be from the sayings above in 2011).

Accumulated loss is also very negative.

[Bralo20]

Today in "Het Laatste Nieuws", a big article about Brussels Airlines.

Short:

YTD numbers: +680.000 passengers compared to 2010 (+18,9%)
No other company on BRU or CRL does better then SN
"Worst" month: February with 9,5% increase compared to February 2010
Biggest factor to the success (words of SN itself by Geert Sciot): Use of BIGGER planes with MORE seats, thus ability to offer lower prices (wasn't this the thing that NCB told us that would run SN into the ground?)
The use of bigger planes has also an advantage for "groups" which can travel easier now.
Good prices, decent hours and "real" airports also add to the success. (compared to FR for example where one can land dozens of kilometers from its destination)
Number for September 2011 (not yet complete) compared to September 2010: +20,4%

And some other we knew allready:

Return of free meals in Y to start with Athene, Marrakesh and Agadir.

[Boeing767copilot]

AF winter 2011-12 schedule:

In Africa, Air France is increasing capacity by 6.2%.

Air France is adding one weekly frequency to Lomé (4 frequencies instead of 3).

In addition to the launch of flights to Freetown and Monrovia in summer 2011, there will also be services to Bata (2 weekly flights by A319 Dedicate) via Malabo, as well as Port-Gentil* (4 weekly frequencies operated by A319 Dedicate).

The launch of services to Cape Town (3 weekly frequencies operated by B777-200) completes Air France’s offer to South Africa (1 daily flight by A380 to Johannesburg). This destination is in much greater demand during the winter and will therefore only be operated by a non-stop flight from Paris in the winter.

[Flanker]

Come on Tolipanebas, tell us what's going on.

[Passenger]

Come on Tolipanebas, tell us what's going on.

Seems someone has forgotten to take his daily Rilatine.

[shockcooling]

seems we'll have only 1 CEO from tomorrow on

[Boeing767copilot]

BG or MF?

[Passenger]

BG or MF?

No, it's Flanker who will resign (he was self appointed CEO. And self appointed Chief of the Board also).

Furthermore, Michel Meyfroidt also leaves - so Bernard Gustin becomes the only CEO.
New COO becomes Peter Kranich (LH).

[airazurxtror]

In fact, Gustin and Meyfroid are not CEO, but Managing Directors, members of the Executive Committee with Follet.


Management
Chairman of the Board:
Viscount Etienne Davignon

Executive Committee:
Managing Directors
Bernard Gustin & Michel Meyfroidt
EVP Strategy & Business Development
Erik Follet

http://company.brusselsairlines.com/en_ ... ation.aspx

[fcw]

This is my personal evaluation of the financial situation: I think that at the current pace, with the current strategy and considering the operating environment, without any cash injection, we can be happy to make it to the end of 2012. That's without considering the damage that the media would make on future bookings if the story is floated on the news.

"... if the story is floated on the news ...": which story? There is no story! There are only rumours: rumours constantly set out by you and rumours set out by people who are working for a competition airline. Journalists are extremely anxious with so called "stories about financial problems at company xyz".

"

The story is out, BruAir on the edge of bankruptcy: http://www.standaard.be/artikel/detail. ... 120321_009
Hate to say it, but for the second time in a couple of days Flanker proves his manegerial skills.

[Inquirer]

The story is out, BruAir on the edge of bankruptcy

Being a regular user of the said airline, I read the article in De Tijd and you seem to have taken the liberty to interpret the content of the news article quite freely to say the least....

The newsarticle states B.Air complained by voice of its chairman E. Davignon to the federal government about the lack of a level playing field between airlines based in Belgium and airlines based elsewhere in the EU yet operating from Belgium and he warned them those artificially aggravated adverse operating conditions are not sustainable in the long run, something which is widely understood to be the case indeed, I think?

The good news is it seems the government is finally willing to work on a fiscal solution and has mandated Mr Wathelet to draw up an action plan to try to restore some of our country's competitivenes in the skies, possibly through a dedicated and more favourable fiscal regime for Belgian airlines and their flight crews.

I'd say if this comes into being, then we've seen a very good exemple of the top lobbying Davignon is capable of, as I am sure quite some other sectors of our industry would love to be moved under a more favourable fiscal regime too.

Belgium's social and fiscal rules are indeed a real competitive burden for all companies that need to compete on the international scene, be it airlines, transport companies or other and IMHO it would be good if the government would finally let go of the idea that every single company and every sector of our industry needs to be taxed in exactly the same way: reality is some sectors of our industry are operating far more on the international scene than others and so a much smaller burden should be placed on their sholders indeed to be able to compete on a level playing field: a one fits all fiscal policy is doomed to fail.

[Bralo20]

The story is out, BruAir on the edge of bankruptcy: http://www.standaard.be/artikel/detail. ... 120321_009
Hate to say it, but for the second time in a couple of days Flanker proves his manegerial skills.

A bit overdramatic isn't it? SN isn't on the edge of bankruptcy, yes, they suffered a big loss (which was know for a very long time) but it isn't so that they will be bankrupt in the next couple of days, weeks, months or even the next couple of years...

Davignon used the (expected) loss to put pressure on the government to lower the taxes for flying personnel and I'm guessing that he probably added a small threat that they could "move" the company to more fiscal friendly countries. Just like many shipping companies did in the past by outflagging their vessels out of Belgium (to Luxemburg for example).

Btw: SN did'nt ask for money, all they did was ask for a more friendly fiscal climate... Not more (nor less) then a political game...


Btw: In "De Tijd" it is mentioned SN is considering leaving Belgium, so that's totally different then being on the edge of bankruptcy...

[Flanker]

My interpretation is that on the edge of bankruptcy is not yet what is implied in this article, but we're inching closer to that edge, with certainty.
I also want to see the face of the stagiaire/intern who made the budget for a 20 million loss in 2012. Did he forget a digit? A 1 or 2 at the front or a 0 at the end?

Belgium's social and fiscal rules are indeed a real competitive burden for all companies that need to compete on the international scene, be it airlines, transport companies or other and IMHO it would be good if the government would finally let go of the idea that every single company and every sector of our industry needs to be taxed in exactly the same way: reality is some sectors of our industry are operating far more on the international scene than others and so a much smaller burden should be placed on their sholders indeed to be able to compete on a level playing field: a one fits all fiscal policy is doomed to fail.

Let's face it inquirer, you can't be wrong with regards to Belgium's unthinkable and unsustainable fiscal policies. However, there is one exception with regards to this matter when we talk about SN's payroll.
In fact, at SN, it's not the company who's absorbing most of the burden of the unbalanced playing field but the employees. Flight crew payroll cost is higher at FR than at SN, they are just using their pilots more efficiently.

I don't think that solving the fiscal issue would give any palpable advantage to the company (although of course it will avoid an exodus of flight and cabin crew towards the sandpit by providing a fair and decent pay).
In fact I find that this way of alarming the customers in the important pre-summer travel booking period is rather crazy I don't know about you but if I knew that an airline is "being pinched to death" or in a "precarious situation", I would avoid them. Worse is that it didn't come from the media but Davignon himself started this avalanche.
A serious conversation doesn't start by blowing up your company' in front of the whole world (or even implying anything close to that, because we know how the media is). So for me this is rather the start of a political blame game rather than the start of a serious conversation about leveling the playing field.

A few more of these articles, no Lufthansa and SN can join Sabena at the museum.
Well of course, there are other solutions before that happens, I talked about one recently (bel ipo, management and operational restructuring. This kind of article really don't help this scenario)