Brussels Airlines future and financial perspective

Join this forum to discuss the latest news that happened in the world of commercial aviation.

Moderator: Latest news team

Post Reply
teddybAIR
Posts: 1602
Joined: 02 Mar 2004, 00:00
Location: Steenokkerzeel
Contact:

Re: Brussels airlines future and financial perspective

Post by teddybAIR »

Flanker2 wrote:Look at how many fools invested in the Bpost IPO.
I understand that postal operators are not your wildest dreams, but in the mean time I kindly invite you to check the year on year financials of bpost for the last 10 years and then contemplate on your statement of calling those people 'fools'. While you're at it, just take 15 minutes of your time to gain even the slightest understanding as to why bpost was able to improve it's financial performance year after year in a market where the core business (business daily mail) is under constant pressure.

By the way, compared to one year ago, those 'losers' saw there investment grow by 21% in capital + earn 6% in dividends. That's not based on thin air.

Have a great weekend,
bAIR

Air Key West
Posts: 1107
Joined: 23 Jun 2007, 20:51
Location: BRU

Re: Brussels airlines future and financial perspective

Post by Air Key West »

Flanker2 wrote:It's worrysome to me that RJ100 replacement is taking priority over longhaul expansion,
I understand your frustration. Both are necessary. Replacing the RJ100s which cost too much because they burn too much kerosene, by aircraft that consume less fuel (A319/320) is necessary and the extra capacity will be filled by FR-type fares (even if this is not going to save b.air). The long-haul expansion is necessary. I agree with you. Only, b.air (or Gustin) doesn't get the money to do that from the shareholders (neither the historical shareholders, nor LH). Replacing fuel guzzling aircraft by second hand aircraft that will consume less kerosene is the easier and cheaper of both stratégies, but is is necessary (imho).
Flanker2 wrote:With the excuse of corporate contracts, supposedly smart business men are fooled into spending more for less. In my experience, no miles or corporate contracts can compensate for the savings you get by comparing.
I don't have any concrete experience with corporate contracts, so this is only a contribution to the discussion. I'm tempted to think that corporate contracts with airlines like LH or AF/KL offer fares that are very close to most fares offered by TK or EY (for instance). The latter airlines' fares are very low and consequently it is probably difficult for them to offer even cheaper fares via corporate contracts (just a guess).
In favor of quality air travel.

BrusselsAirlines
Posts: 118
Joined: 07 Nov 2006, 18:29

Re: Brussels airlines future and financial perspective

Post by BrusselsAirlines »

Indeed, amazing how you can buy an airline for 180.000.000 euros and dump it 5 years later for close to zero…

Remember VLM boss Jacobson bonus in 2009 by AF/KLM
Last edited by BrusselsAirlines on 11 May 2014, 06:01, edited 1 time in total.

Flanker2
Posts: 1741
Joined: 05 Dec 2012, 23:15

Re: Brussels airlines future and financial perspective

Post by Flanker2 »

Teddybair, I respect your opinion on Bpost IPO. We'll see in a few years what will happen, but there is nothing reliable about Bpost. It was loss-making and heavily subsidised even throughout the early 21st century.
It's heavily reliant on government contracts, yet as we know, there will be severe savings in every government department in the future.

Postal services are mostly loss-making anywhere you look. Bpost charges high costs for its services and they will see a rise in competition in the coming years, especially coming from parcel operators based in neighboring countries.
Their network will shrink as many of their "Postpunt/Point Poste" franchises will be abandoned. The margins on those services are too low for the kiosks running them, and the franchisees are having a lot of problems from customer complaints because Bpost is just messed up as an organisation IMO.


AKW, corporate contracts are more hassle than a reliable stable stream of income.
Corporate contracts equals unpaid bills from companies, a lot of complaints, set-up fees, commercial resources, constant marketing, always negotiating for more discounts and threatening to leave showing off the offer of the competition, you get the same revenue or less than competitors who charge everyone the same fare.
It gives the illusion that you have a stable and reliable customer base, but big corporations have contracts with about any airline in the neighborhood.

In the meanwhile, the non-corporate SME's who can't get a reasonable contract get the full fares presented and they fly with the competition from the Middle-East or AF/KL, except for a select few smart ones :roll:


I don't say that RJ100 phase-out is not necessary, but I think that SN doesn't need that big a A319/A320 fleet.
If you look at the fleet balance, SN has a ratio of 4.8:1 in narrowbodies vs. widebodies.
Unless they use narrowbodies to Africa, that ratio should be below 3:1 to be a balanced airline. That's what makes LX so much stronger than SN, their ratio is 2:1.
What I'm saying is that SN should add longhaul routes and phase-out the RJ100.

IMO, after they add another 2-3 A330's, they can think about adding more A319/A320's, while continuing the RJ100 phase-out. For me the RJ100 replacement isn't important per se, it's phase-out can however continue.

Passenger
Posts: 7273
Joined: 06 Dec 2010, 20:54

Re: Brussels airlines future and financial perspective

Post by Passenger »

Flanker2 wrote: Corporate contracts equals unpaid bills from companies, a lot of complaints, set-up fees, commercial resources, constant marketing, always negotiating for more discounts and threatening to leave showing off the offer of the competition, you get the same revenue or less than competitors who charge everyone the same fare. It gives the illusion that you have a stable and reliable customer base, but big corporations have contracts with about any airline in the neighborhood.
That may be the case in your branch, but in aviation <-> travel trade, it is not. Just one example: there is no "negotiating for more discounts" since the implementation of the zero commission by almost all airlines, leading to the introduction of the handling fee. And this system works quite well, actually, and companies accept it. Actually, it improved confidence.
Flanker2 wrote: In the meanwhile, the non-corporate SME's who can't get a reasonable contract get the full fares presented and they fly with the competition from the Middle-East or AF/KL, except for a select few smart ones.
Nobody needs a contract to avoid the full fare. With so many online booking sites, everybody can find the lowest fare. Full fares only apply when yield management steps in for a flight (except for allotments off course).

It's not "a select few smart ones" that use Brussels Airlines anymore (that is, if it has ever been so). Actually, it's quite surprising to see what new clientele Brussels Airlines gets with their counter-attack to Ryanair. Let me give you just a few examples: schools are now using Brussels Airlines for the annual trip for their 6th year students - scout groups and other backpacker groups are now using Brussels Airlines because they're chased away by the new high season luggage surcharge from their previous carrier.

sean1982
Posts: 3260
Joined: 18 Mar 2003, 00:00
Contact:

Re: Brussels airlines future and financial perspective

Post by sean1982 »

passenger, you live in a world of dreams :D In the last 2 weeks I carried 10 school groups :D WITH luggage ;)

User avatar
RoMax
Posts: 4454
Joined: 20 Jun 2009, 16:32

Re: Brussels airlines future and financial perspective

Post by RoMax »

sean1982 wrote:passenger, you live in a world of dreams :D In the last 2 weeks I carried 10 school groups :D WITH luggage ;)
Maybe look at proportion... :roll: I don't think Passenger said that ALL of these kind of school/scouts/etc. groups suddenly came to SN. What I read is that he notices much more of these kind of passengers on SN flights compared to previous years. FR is a typicall carrier for such groups, so it's not exactly a wonder that you carried 10 school groups in the last two weeks, neither does it say that there are no (or not more compared to the past) such groups on SN's flights.

Passenger
Posts: 7273
Joined: 06 Dec 2010, 20:54

Re: Brussels airlines future and financial perspective

Post by Passenger »

sean1982 wrote:passenger, you live in a world of dreams. In the last 2 weeks I carried 10 school groups WITH luggage
Yep. I'm sure you did. But how many groups did you have in the same period last year: 20? I can give you two names of schools that have switched airport ànd carrier.

And how are your youth group bookings for July and august: also "more then last year", I assume? Same here my friend: you're loosing many of them, chased away by your backpacker surcharge.

sean1982
Posts: 3260
Joined: 18 Mar 2003, 00:00
Contact:

Re: Brussels airlines future and financial perspective

Post by sean1982 »

as our loadfactors show ... we have an 5% increase in passengers ... so keep dreaming. ;)
and I'm not "your friend"

The full 2?? schools?? that's impressive :D I also know schools that switched airport btw ... but not carrier ;)

User avatar
sn26567
Posts: 40838
Joined: 13 Feb 2003, 00:00
Location: Rosières/Rozieren, Belgium
Contact:

Re: Brussels airlines future and financial perspective

Post by sn26567 »

sean1982 wrote:I'm not "your friend"
Hey Sean, we all try to be and remain friends on this website. 8-)
André
ex Sabena #26567

Inquirer
Posts: 2095
Joined: 14 Feb 2012, 14:30

Re: Brussels airlines future and financial perspective

Post by Inquirer »

Very mature discussion! :roll:
Let's try to remain polite and friendly, please.

Interesting that indeed there are thus a significant customer migrations from CRL to BRU after all, Sean; something you vehemently denied in another topic when it was pointed out with operational figures from the respective airports :!:

sean1982
Posts: 3260
Joined: 18 Mar 2003, 00:00
Contact:

Re: Brussels airlines future and financial perspective

Post by sean1982 »

there is no SIGNIFICANT customer migration at all, load factors in CRL remain constant as I've said thousand times before. It's not because a few schools switch to BRU that there is a SIGNIFICANT switch. So far I haven't seen any operational figures from CRL at all here (probably because SN staff doesnt have acces to computers there :roll:), and as usual you try and draw conclusions from a few assumptions that don't make sense at all.

Inquirer
Posts: 2095
Joined: 14 Feb 2012, 14:30

Re: Brussels airlines future and financial perspective

Post by Inquirer »

Load factors are something different from customer volumes and the operational figures from CRL for March clearly showed significantly less passengers vs last year, so whatever you are made to believe: reality is that significantly less people are currently flying from CRL than before.
You can easily combine the 2 facts from above (stable load factor, less volume) if you accept that less seats are offered on the market to start with, which is exactly what is happening, isn't it, precisely to cope with the migration?
I may not work in aviation, but I am no fool either like you often try to make it sound and neither are other people around here, I am sure.

sean1982
Posts: 3260
Joined: 18 Mar 2003, 00:00
Contact:

Re: Brussels airlines future and financial perspective

Post by sean1982 »

Off course less people are flying from CRL becasue there are less airplanes based there??
But the airplanes that are there are still flying as many passengers as before (or more)
Does that mean passengers have migrated to BRU? Not at all

LJ
Posts: 911
Joined: 14 Mar 2004, 00:00
Location: Heiloo NL

Re: Brussels airlines future and financial perspective

Post by LJ »

Flanker2 wrote:It gives the illusion that you have a stable and reliable customer base, but big corporations have contracts with about any airline in the neighborhood.
I doubt you know how alliance based corporate contracts work. At the company (a very large financial institution) I work for we have an alliance based contract. All employees must travel the alliance specified unless there is no nonstop option available from the alliance. Travelling outside the contract can result in not getting the cost reimbursed by the employer. The negative thing about corporate contracts is that the fares can be very low

teddybAIR
Posts: 1602
Joined: 02 Mar 2004, 00:00
Location: Steenokkerzeel
Contact:

Re: Brussels airlines future and financial perspective

Post by teddybAIR »

Flanker2 wrote:Postal services are mostly loss-making anywhere you look.
Hi Flanker, I worked for bpost as a business consultant for a few years and am happy to say that recently I joined them. The average airline can learn a thing or two from bpost when it comes to running a profitable business in a competitive environment. And yes, it will become even more competitive in the future, that's what we are preparing as we speak.

And on the subsidies: bpost does not receive any subsidies. It earns an allowance for nationwide daily servicing of every letterbox each day, regardless of how remote it is. You can bet your *ss that we're ready for the day any government decides to reduce that allowance...but don't come expecting the same service levels.

Have a nice day.

Flanker2
Posts: 1741
Joined: 05 Dec 2012, 23:15

Re: Brussels airlines future and financial perspective

Post by Flanker2 »

I doubt you know how alliance based corporate contracts work. At the company (a very large financial institution) I work for we have an alliance based contract. All employees must travel the alliance specified unless there is no nonstop option available from the alliance. Travelling outside the contract can result in not getting the cost reimbursed by the employer. The negative thing about corporate contracts is that the fares can be very low
Alliance-based contracts... interesting concept and not new at all.
Yet why would a large corporation tie its employees to a single exclusive supplier when a choice is almost always available and could generate generous savings when used appropriately?
A. Someone somewhere in the corporation receives an envelope at regular intervals
B. Corporation owns shares or interest in said supplier
C. Corporation receives money back through a back door
D. Family or political connections

If you work in sales, you know how it works.

At SN or any other airline, corporate contracts don't get that generous a discount. Yes, on paper it's double digit percentages, but that's on their crazy high fares.
What's 30% off a 700 return to LIN? Is it a good deal? Those who sign those contracts think so, because they don't care, the company is paying.

Teddy, the subsidies have been stopped indeed, but the Belgian post has been loss-making for most of the 20th century, so I don't believe in its continued success.
My company is a Bpost corporate customer, we always have issues with them. Parcels come back for no apparent reasons, second delivery attempt to my clients within 5 minutes from eachother, delays on every 3 deliveries, high charges for shipping to Europe. Whenever justified, we ship from Holland where we can get a lower rate as regular walk-in customer than when shipping through Bpost with corporate rates.
Their Shipping Manager is a useless sytem that tricks you into ordering Express if you're not careful and forces you to enter a house number following the street, while in some countries there are often no house numbers (UK), or they come before the street name (France, USA).
Whatever they charge us more for their horrendous service, we get it back through our weekly calls to the customer service, which is slow and inefficient. We call with Voip, costs us nothing, their staff however costs them 20 EUR / hour.

Also, I received a parcel from Asia, a half destroyed box. "If you want it, you take it, otherwise we send it back". As if I was going to pay another 150 euro's to have it shipped again, to get it again destroyed...

I still use them because there is no other viable choice, but if there is even a hint of a new provider, I won't hesitate to try them out. GLS is cheaper for some people, but they think that they're carrying waste.
If I had the volume, I would work with other corporations and set up a ccoperative parcel service that is cheaper, reliable, and would care. Somebody is bound to do that sooner or later.

Bpost's recent success is solely attributed to the closure of hundreds of post offices across the nation, replacing them by deposit boxes and "Postpunt", thus saving a lot of money on rent and staff.
I don't believe in either concept, the Postpunt where we drop off our parcels is fed up with us as they only earn a few cents on 5 to 10 minutes worth of scanning and printing a receipt.

So I think that Bpost's alleged success is only temporary and at the expense of angry customers.

Passenger
Posts: 7273
Joined: 06 Dec 2010, 20:54

Re: Brussels airlines future and financial perspective

Post by Passenger »

The Flemish newspaper De Tijd has an interview with Jean-Claude Cloquet, CEO Charleroi Airport. He openly invites Brussels Airlines to move some flights to CRL and/or to open new routes out of CRL. "BRU is an international hub, but since Brussels Airlines recently opened new no-transit / point to point routes, there are opportunities for them in Charleroi", Cloquet states. He also suggests a national platform for civil aviation to counter attack competition from the Middle East.

Source De Tijd is subscribers, hence this copy on VRT:
http://www.deredactie.be/cm/vrtnieuws/e ... /1.1965539

(edited : "to move flights" -> "to move some flights")
Last edited by Passenger on 13 May 2014, 09:35, edited 1 time in total.

JAFflyer
Posts: 188
Joined: 06 Nov 2006, 14:36

Re: Brussels airlines future and financial perspective

Post by JAFflyer »

Dear God, now we are talking about Bpost in a Brussels airlines future and financial perspective thread...
Is there any aviation enthusiast who likes to read these stories??

teddybAIR
Posts: 1602
Joined: 02 Mar 2004, 00:00
Location: Steenokkerzeel
Contact:

Re: Brussels airlines future and financial perspective

Post by teddybAIR »

JAFflyer wrote:Dear God, now we are talking about Bpost in a Brussels airlines future and financial perspective thread...
It's called an analogy, benchmark, best practice, ...and you can choose to learn from it and translate & apply learnings from other industries to yours, or you can choose not to. You could try and learn how regulators are lobbied, how distribution models are continuously adapted in a declining market, how you manage two types of employees (statutaires & contractuals), how you innovate while remaining true to your core activities & competencies...or you can chose to ignore all that and be satisfied with Brussels Airlines' curent financial track record and with the current P&L...

Post Reply