Lufthansa buys the remaining 55% of Brussels Airlines

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

Moderator: Latest news team

Post Reply
User avatar
Yuqu12
Posts: 477
Joined: 04 Mar 2016, 09:41

Re: Lufthansa to decide on 27 April whether to take over all of Brussels Airlines

Post by Yuqu12 »

I like the idea of Sabena!!!!

convair
Posts: 1812
Joined: 18 Nov 2011, 00:02

Re: Lufthansa to decide on 27 April whether to take over all of Brussels Airlines

Post by convair »

Boavida wrote:Well, IF the European routes will go to the Eurowings brand and SN keeps the African and N-American routes, I see no arguments against a namechange to Sabena. Sabena is still an 'institution' in Africa and also in the US the Sabena brand is much (much!) more known than Brussels Airlines.

Because let's be honest: what's the point of keeping the Brussels Airlines brand if the company will be dismantled like this (all EU flights to EW)...
If you're referring to my post just above yours, I'm afraid you misread me. I think a good number (maybe the majority) of the EU flghts (mostly the business ones) will remain SN.

I like the Sabena idea, but only for Afi; are you sure the name is still so well-known in the US? In the EU, Sabena is probably little known among today's business generation.

User avatar
Airbus330lover
Posts: 824
Joined: 21 Jul 2005, 00:00
Location: Rixensart

Re: Lufthansa to decide on 27 April whether to take over all of Brussels Airlines

Post by Airbus330lover »

Are you sure about 27 april ?

User avatar
galaxy
Posts: 723
Joined: 25 Mar 2006, 00:00
Location: Universe
Contact:

Re: Lufthansa to decide on 27 April whether to take over all of Brussels Airlines

Post by galaxy »

Boavida wrote: I see no arguments against a namechange to Sabena.
Sabena sounds nostalgic, in the first place for the former employees of the company, but it is not a good idea in my opinion. Outsiders will always make the link with the bankrupt company. Why not Belgium airlines or SN Belgica .

User avatar
lumumba
Posts: 1813
Joined: 04 Sep 2003, 00:00
Location: brussels Europe

Re: Lufthansa to decide on 27 April whether to take over all of Brussels Airlines

Post by lumumba »

If there is no reason to change let's keep Brussels Airlines!!!!!
Hasta la victoria siempre.

User avatar
sn26567
Posts: 37695
Joined: 13 Feb 2003, 00:00
Location: Rosières/Rozieren, Belgium
Contact:

Re: Lufthansa to decide on 27 April whether to take over all of Brussels Airlines

Post by sn26567 »

lumumba wrote:If there is no reason to change let's keep Brussels Airlines!!!!!
I think I mentioned elsewhere that the name Brussels has a bad connotation after the terror attacks. And Lufthansa has bought the domain names BrusselsWings.be and BrusselsWings.com on Internet...

But I am the first one to prefer keeping the current name (or Sabena by nostalgia) !
André
ex Sabena #26567

User avatar
lumumba
Posts: 1813
Joined: 04 Sep 2003, 00:00
Location: brussels Europe

Re: Lufthansa to decide on 27 April whether to take over all of Brussels Airlines

Post by lumumba »

sn26567 wrote:
lumumba wrote:If there is no reason to change let's keep Brussels Airlines!!!!!
I think I mentioned elsewhere that the name Brussels has a bad connotation after the terror attacks. And Lufthansa has bought the domain names BrusselsWings.be and BrusselsWings.com on Internet...

But I am the first one to prefer keeping the current name (or Sabena by nostalgia) !

Ok but I think we have to be proud of Brussels Airlines and Brussels in general let's keep it and be strong!
Hasta la victoria siempre.

flightlover
Posts: 665
Joined: 12 Aug 2008, 08:26

Re: Lufthansa to decide on 27 April whether to take over all of Brussels Airlines

Post by flightlover »

Brussels airlines is (was) on track to become a well known brand in Africa, US and the EU.
In Africa they made a good impression during the ebola outbreak. And by linking their name to high profile events (Tomorrowland, Bike for Africa) and well known other brands (Tintin, the Red Devils, Magritte...) they are getting quite a lot of 'free' publicity in their key markets.

In a way I would even state that if LH is thinking about erasing the Brussels Airlines brand, they better do it soon or will be somewhat forced to maintain it for a big part of the operation.

Flanker2
Posts: 1729
Joined: 05 Dec 2012, 23:15

Re: Lufthansa to decide on 27 April whether to take over all of Brussels Airlines

Post by Flanker2 »

Some of you are saying that the price has nothing to do with the strategy after the take-over.
By itself, it's true, but combined with the fact that LH had the call options until next year, the price can be a very good way to understand what LH is planning to do with SN.

If LH is taking over SN without waiting despite a high cost, it could mean that LH is going to invest seriously into SN. You don't throw that much money just to have a status-quo.
If LH is taking over SN without waiting at a low cost (despite opportunities to do the same the previous years), chances are big that LH will not invest much into SN.

I set 100 million as a reasonable benchmark between high and low cost, considering the previously paid 55 millions.

Freken
Posts: 91
Joined: 23 Jan 2016, 21:20
Location: BRU

Re: Lufthansa to decide on 27 April whether to take over all of Brussels Airlines

Post by Freken »

sn26567 wrote: I think I mentioned elsewhere that the name Brussels has a bad connotation after the terror attacks. And Lufthansa has bought the domain names BrusselsWings.be and BrusselsWings.com on Internet...
A simple WHOIS check reveals that they were bought in June 2014! I don't believe that signifies something..

saratoga
Posts: 234
Joined: 04 Apr 2006, 00:00

Re: Lufthansa to decide on 27 April whether to take over all of Brussels Airlines

Post by saratoga »

I am wondering what is going to happen concerning recruitment for pilots: all pilots now coming from Lufthansa school and the ability/requirement to speak fluently german?????

I hold my breath.

User avatar
sn26567
Posts: 37695
Joined: 13 Feb 2003, 00:00
Location: Rosières/Rozieren, Belgium
Contact:

Re: Lufthansa to decide on 27 April whether to take over all of Brussels Airlines

Post by sn26567 »

saratoga wrote:I am wondering what is going to happen concerning recruitment for pilots: all pilots now coming from Lufthansa school and the ability/requirement to speak fluently german??
That would be stupid. "Think globally, act locally"!
André
ex Sabena #26567

convair
Posts: 1812
Joined: 18 Nov 2011, 00:02

Re: Lufthansa to decide on 27 April whether to take over all of Brussels Airlines

Post by convair »

Flanker2 wrote:Some of you are saying that the price has nothing to do with the strategy after the take-over.
By itself, it's true, but combined with the fact that LH had the call options until next year, the price can be a very good way to understand what LH is planning to do with SN.

If LH is taking over SN without waiting despite a high cost, it could mean that LH is going to invest seriously into SN. You don't throw that much money just to have a status-quo.
If LH is taking over SN without waiting at a low cost (despite opportunities to do the same the previous years), chances are big that LH will not invest much into SN.

I set 100 million as a reasonable benchmark between high and low cost, considering the previously paid 55 millions.
We don't know what are the exact conditions (financial and other) of the option they got when they bought the 45%; we don't know what was SN's book value at that time; we don't know if there were other potential buyers; we don't know how eager the shareholders were to get rid of part of their initial investment, and, hence, the premium (if any) paid by LH to secure the option; we don't know what was the business plan on which LH decided to buy their first 45%, etc..., so we can only have a very approximate guess.

The Reuters article referred to earlier (page 2 in this thread) by Apuneger gives 65 million for the 45% and a total cost for LH of upto 250 million, "depending on performance". Your 100 million for the remaining 55% seem to be in the ballpark. However, I expect that their loan of 100 million (now only 80 if the reported recent re-imbursement is correct) will come as a deduction of the purchase price and be erased from SN's books.
What is more important, however, is the fact that they are (yet to be confirmed) exercising their option now. They could have waited 1 (or maybe 2-some people indicate 2018 as deadline-) more year(s) and maybe buy the remaining shares at a discount, given the expected fall of SN's profit (if not a loss) this year and next year after the terrorists' attack on BRU. This can only mean they have a plan for immediate positive action for SN, and that plan can only mean expansion/investment.
sn26567 wrote:
saratoga wrote:I am wondering what is going to happen concerning recruitment for pilots: all pilots now coming from Lufthansa school and the ability/requirement to speak fluently german??
That would be stupid. "Think globally, act locally"!
Absolutely! I very much doubt all the pilots in the LH group speak german!

User avatar
Conti764
Posts: 1784
Joined: 21 Sep 2007, 23:21

Re: Lufthansa to decide on 27 April whether to take over all of Brussels Airlines

Post by Conti764 »

sn26567 wrote:
lumumba wrote:If there is no reason to change let's keep Brussels Airlines!!!!!
I think I mentioned elsewhere that the name Brussels has a bad connotation after the terror attacks. And Lufthansa has bought the domain names BrusselsWings.be and BrusselsWings.com on Internet...

But I am the first one to prefer keeping the current name (or Sabena by nostalgia) !
No you're not...

But LH buying a domain name doesn't need to mean something...

LJ
Posts: 897
Joined: 14 Mar 2004, 00:00
Location: Heiloo NL

Re: Lufthansa to decide on 27 April whether to take over all of Brussels Airlines

Post by LJ »

convair wrote:What is more important, however, is the fact that they are (yet to be confirmed) exercising their option now. They could have waited 1 (or maybe 2-some people indicate 2018 as deadline-) more year(s) and maybe buy the remaining shares at a discount, given the expected fall of SN's profit (if not a loss) this year and next year after the terrorists' attack on BRU. This can only mean they have a plan for immediate positive action for SN, and that plan can only mean expansion/investment.
Or it can mean they feel they now have a chance to restructure SN. I agree that LH feels it now needs to be fully in control of SN, but you cannot conclude from LH's actions that it's all good news for the current employees and/or SN. In the end, it's easier to restructure a company if you're fully in control than when you have other shareholders which do not have to agree with you.

convair
Posts: 1812
Joined: 18 Nov 2011, 00:02

Re: Lufthansa to decide on 27 April whether to take over all of Brussels Airlines

Post by convair »

I disagree:
1. They will always have a chance to restructure SN, as restructuring is always a possibility nowadays. Now is not better nor worse than any time.
2. It's more confortable to request it when you're the minority shareholder, prior to a fuller commitment.
3. They did it already, though indirectly, when they stated they were waiting for SN to exit red figures prior to exercising their option.

It doesn't mean there will be no redundancies but they will not transfer SN's office to Germany! But I still believe expanding the business will (should) be their first priority.

Flanker2
Posts: 1729
Joined: 05 Dec 2012, 23:15

Re: Lufthansa to decide on 27 April whether to take over all of Brussels Airlines

Post by Flanker2 »

LJ wrote:
convair wrote:What is more important, however, is the fact that they are (yet to be confirmed) exercising their option now. They could have waited 1 (or maybe 2-some people indicate 2018 as deadline-) more year(s) and maybe buy the remaining shares at a discount, given the expected fall of SN's profit (if not a loss) this year and next year after the terrorists' attack on BRU. This can only mean they have a plan for immediate positive action for SN, and that plan can only mean expansion/investment.
Or it can mean they feel they now have a chance to restructure SN. I agree that LH feels it now needs to be fully in control of SN, but you cannot conclude from LH's actions that it's all good news for the current employees and/or SN. In the end, it's easier to restructure a company if you're fully in control than when you have other shareholders which do not have to agree with you.
This is exactly my point.
If they buy it cheap and fast, it's for restructuring or fractioning, if it's expensive and fast, it's for investment to add BRU as a 5th hub. If the price they pay now is closer to 200 millions it will definitely be the latter, but if it's like 60 millions, it's pennies that will be used to boost their Eurowings program.

The 100 million loan stays on SN's books even after the full take-over. On LH's consolidated balance this is and remains a zero operation, ie minus 100 millions in cash plus 100 millions of loans given out.
So it can't be used to buy-out the other shareholders. The cash will have to come out of LH's balance sheet and the difference with SN's net worth will either be boooked as loss or goodwill.


Also, the main reason why a progressive transfer of SN's Africa routes to FRA/MUC/ZRH won't leave a void in BRU that for instance IAG can come in and take advantage of by establishing a new carrier: market size.
The African routes are thin niche markets and they won't be able to absorb so much capacity.
In addition, LH will have the advantage of having an established customer basis and running operation, which is the whole complexity of Africa operations.

I think that a switch to a Sabena name would facilitate such a move to FRA/MUC, as they will keep the customer base while running the operation under another company. Running Brussels Airlines out of FRA/MUC doesn't make much sense.
Remember that if anything, the attacks have given LH a viability test.

convair
Posts: 1812
Joined: 18 Nov 2011, 00:02

Re: Lufthansa to decide on 27 April whether to take over all of Brussels Airlines

Post by convair »

Flanker2 wrote: The 100 million loan stays on SN's books even after the full take-over. On LH's consolidated balance this is and remains a zero operation, ie minus 100 millions in cash plus 100 millions of loans given out.
So it can't be used to buy-out the other shareholders. The cash will have to come out of LH's balance sheet and the difference with SN's net worth will either be boooked as loss or goodwill.
You're right about that of course. Well done!

But I stick to the rest of my post.

Passenger
Posts: 6937
Joined: 06 Dec 2010, 20:54

Re: Lufthansa to decide on 27 April whether to take over all of Brussels Airlines

Post by Passenger »

It's funny to read that people know how many millions Lufthansa will pay, without having seen the actual contract, the annual account 2015 and/or the consolidated balance 2015 from Brussels Airlines and/or SN Airholding.

It's even more funny how people think that a re-introduction of Sabena as brand name is a good idea. "Sabena" is such a stupid idea that I don't react to it, except this: it gives an indication of the very young age of those suggesting it.

Poiu
Posts: 855
Joined: 14 Nov 2015, 09:38

Re: Lufthansa to decide on 27 April whether to take over all of Brussels Airlines

Post by Poiu »

LJ wrote:
convair wrote:What is more important, however, is the fact that they are (yet to be confirmed) exercising their option now. They could have waited 1 (or maybe 2-some people indicate 2018 as deadline-) more year(s) and maybe buy the remaining shares at a discount, given the expected fall of SN's profit (if not a loss) this year and next year after the terrorists' attack on BRU. This can only mean they have a plan for immediate positive action for SN, and that plan can only mean expansion/investment.
Or it can mean they feel they now have a chance to restructure SN. I agree that LH feels it now needs to be fully in control of SN, but you cannot conclude from LH's actions that it's all good news for the current employees and/or SN. In the end, it's easier to restructure a company if you're fully in control than when you have other shareholders which do not have to agree with you.
Or they have to buy now, because they know SN Is close to the edge and they don't want to take the risk of loosing the valuable Africa network.
Lufty wants SN to survive and become successful, which is good news, but once they fully own SN the cost cutting will start and office staff will be the first victims.

Post Reply