Brussels Airlines in 2019

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Boavida
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Re: Brussels Airlines in 2019

Post by Boavida » 21 Sep 2019, 16:38

They wanted/bought SN for their ridiculous Eurowings project. Now that has failed they don't have a clue what to do with it.

Maybe they should just sell it to a company that is genuinely interested in BRU's home carrier. IAG? AF-KL?

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sn26567
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Re: Brussels Airlines in 2019

Post by sn26567 » 21 Sep 2019, 17:00

Boavida wrote:
21 Sep 2019, 16:38
They wanted/bought SN for their ridiculous Eurowings project. Now that has failed they don't have a clue what to do with it.

Maybe they should just sell it to a company that is genuinely interested in BRU's home carrier. IAG? AF-KL?
They bought SN even before there was any Eurowings low-cost project. The aim was to prevent another alliance to set foot in Brussels. AF/KL was not really interested, but for IAG, BRU looked like an exceptional opportunity. By purchasing SN, LH preempted IAG's ambitions.
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VoloperTe
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Re: Brussels Airlines in 2019

Post by VoloperTe » 21 Sep 2019, 17:34

And now Lufthansa shows no interest in SN ...is there concrete and positive plans for the future? Why SN is not allowed to have new aircrafts? Only second hand Airbus A330 and old 319/320 it's a joke for a national airline in Europe !!

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sn26567
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Re: Brussels Airlines in 2019

Post by sn26567 » 21 Sep 2019, 17:47

VoloperTe wrote:
21 Sep 2019, 17:34
And now Lufthansa shows no interest in SN ...is there concrete and positive plans for the future? Why SN is not allowed to have new aircrafts? Only second hand Airbus A330 and old 319/320 it's a joke for a national airline in Europe !!
The "Reboot" plan aims at making the airline more profitable, so it can afford new aircraft. Give it some time!
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jan_olieslagers
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Re: Brussels Airlines in 2019

Post by jan_olieslagers » 21 Sep 2019, 17:47

a national airline
Forget about "national airlines" aka "flag carriers". That's a concept from the 20th century - today's world works differently.

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lumumba
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Re: Brussels Airlines in 2019

Post by lumumba » 21 Sep 2019, 18:13

sn26567 wrote:
21 Sep 2019, 17:00
Boavida wrote:
21 Sep 2019, 16:38
They wanted/bought SN for their ridiculous Eurowings project. Now that has failed they don't have a clue what to do with it.

Maybe they should just sell it to a company that is genuinely interested in BRU's home carrier. IAG? AF-KL?
They bought SN even before there was any Eurowings low-cost project. The aim was to prevent another alliance to set foot in Brussels. AF/KL was not really interested, but for IAG, BRU looked like an exceptional opportunity. By purchasing SN, LH preempted IAG's ambitions.
If I remember well everybody thought British Airways would buy SN they discussed but never really show interest in the time.
And everybody was wondering why....?!
Hasta la victoria siempre.

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Conti764
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Re: Brussels Airlines in 2019

Post by Conti764 » 21 Sep 2019, 18:15

sn26567 wrote:
21 Sep 2019, 17:00
Boavida wrote:
21 Sep 2019, 16:38
They wanted/bought SN for their ridiculous Eurowings project. Now that has failed they don't have a clue what to do with it.

Maybe they should just sell it to a company that is genuinely interested in BRU's home carrier. IAG? AF-KL?
They bought SN even before there was any Eurowings low-cost project. The aim was to prevent another alliance to set foot in Brussels. AF/KL was not really interested, but for IAG, BRU looked like an exceptional opportunity. By purchasing SN, LH preempted IAG's ambitions.
If I remember correctly (it's been 10 years :shock:) there was a last minute try by BA to acquire SN or do something against LH buying. They failed due to lack of funds (IAG didn't excist yet). And AA was pretty pissed off they lost a longstanding and quite succesfull cooperation with SN to competitor UA... AA/SN could have a been something like KL/DL. Such a shame it didn't happen.

And indeed, when LH bought SN, there were no plans for EW. Now they don't know what to do with SN since they don't really need it, but selling the company, especially to IAG, could (would?) create quite some competition in FRA's backyard. Letting SN die would have the same, albeit lesser, effect.

VoloperTe
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Re: Brussels Airlines in 2019

Post by VoloperTe » 21 Sep 2019, 18:37

I'm not angry with SN, but there are too many serious worries at this moment : too many technical failures with aircrafts, too many unnecessary holiday destinations, older aircrafts, Lufthansa does not care about SN....

It's time for SN to really focus on its European network, remove holidays destinations (except Spain, Italy and Portugal), and a better network with Africa/USA (maybe increase frequencies or new destinations)

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RoMax
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Re: Brussels Airlines in 2019

Post by RoMax » 21 Sep 2019, 19:38

There is a lot of criticism on SN which I understand, but 1 thing I really don't get, why everyone is so obsessed with the leisure network. The 2 simply complement each other with the very big majority of the flights being operated in off-peak times and periods for feeding and business traffic. Sure you can redeploy your fleet to fly 10 times a day on a business route on a Saturday/Sunday and/or in July/August, but you'll simply fly them empty. And if SN would operate absolute 0 leisure routes in the morning peak (it are already just a few on weekdays outside JUL-AUG), sure that gives you a bit of capacity which you can put on other routes. But I whish you good luck to find many of those which aren't already served at least once in that wave and where you can deploy an A320 profitably.

A lot can be said about the SN network, but no matter what you'll always have spare capacity in off peak times that you can use for leisure flights and SN is really not using a lot of peak capacity on leisure flights. Remember taking over the full TCAB network required just 2 extra A320's (and extra peak capacity in summer, like this year with the CSA and GWI wet-leases), still none of that came at the cost of taking away capacity from the rest of business & feeding focussed network. And we're talking close to 1mio pax here!

Just look at LH in FRA, LX at ZRH, OS in VIE etc., they all serve pure leisure routes in Southern Europe and North Africa. Hell, even BA at LHR is serving pure leisure routes!
Why? Because they complement the rest of the network and because they often generate higher income than another feeding flight or business sector on a highly competitive market.

If SN wouldn't have the leisure network at all, it's financial performance would be even worse. So of course interesting what will happen with Thomas Cook in Belgium...
Atlantis wrote:
21 Sep 2019, 13:36
Yes bcs remember the last statement of SN that they are responsible on their own regarding the new fleet and the finance of it. So don't expect that LH will order sth for SN. SN is alone. High time to understand this
You can always read it the way you want, but the point SN was making is that its financial performance is simply not enough to sustain major investments and that for the moment LH is taking the cost of putting 'new' aircraft in Brussels (the 7 A330's and some of the latest A320's are purchased by LH, SN simply wouldn't be able to finance that itself on reasonable terms). You can question the decision of LH to go for (much cheaper) 2nd hand aircraft, but that's also true for OS. LHG's logic is very simple and straightforward: why would I put 100 EUR in SN and not even get 101 EUR for it back, while I can put the same in LX and LH and get 112 EUR in return. LHG will continue to acquire aircraft for SN as it does for all subsidiaries, but it will expect a return from SN that makes it worth for LH to make that investment. OS has the same issue as SN but a bit less worse and EW is a matter of safeguarding LH's market dominance in Germany (swallowing a loss at EW on the short time is still better than letting it collapse and have competition attacking LHG on its biggest and strongest home turf. LH 'investing' (and even that largelly stopped) in EW has to be seen as investing in LH's own security rather than investing in a loss making subsidiary.
But for SN, of course it's worth the question if it isn't very naive to expect a significant profit improvement without investing first. The long haul fleet is a question how it will go in the next months. Of course it doesn't help that so many aircraft come in at the same time, they all come from full cabin retrofit and/or C check, which is synonym to problems very soon after. But if that lasts, there is a structural and major issue. It also doesn't help that pure technical issues are now mixed with 'bad luck', like the cargo leak that held an A332 on the ground for weeks!

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Atlantis
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Re: Brussels Airlines in 2019

Post by Atlantis » 21 Sep 2019, 19:56

This to compare with LOT Polish Airlines. Around 2010 almost bancrupt. Now owned for more than 60% of the government, one private company and almost 7% owned by the employees. This company in buying a lot of brand new 787-8 and 787-9. They are strong in The States and Asia. This month the also opened a new route to Delhi.
They have more than 90 aircraft.

They make millions of Zloty profit. Carriers from neighbour countries are interested to work together or to merge with LOT

Also part of Star

SN in West Europe is not making profit, has 50 aircraft and has a mother company who don't care and they fired the former great SN management. They were making in that time profit with their hybrid model

Since part of LH they are a stand still

I'm very curious, and with me the whole aviation community, what they will announce by the end of this year

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Atlantis
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Re: Brussels Airlines in 2019

Post by Atlantis » 21 Sep 2019, 20:01

RoMax wrote:
21 Sep 2019, 19:38
There is a lot of criticism on SN which I understand, but 1 thing I really don't get, why everyone is so obsessed with the leisure network. The 2 simply complement each other with the very big majority of the flights being operated in off-peak times and periods for feeding and business traffic. Sure you can redeploy your fleet to fly 10 times a day on a business route on a Saturday/Sunday and/or in July/August, but you'll simply fly them empty. And if SN would operate absolute 0 leisure routes in the morning peak (it are already just a few on weekdays outside JUL-AUG), sure that gives you a bit of capacity which you can put on other routes. But I whish you good luck to find many of those which aren't already served at least once in that wave and where you can deploy an A320 profitably.

A lot can be said about the SN network, but no matter what you'll always have spare capacity in off peak times that you can use for leisure flights and SN is really not using a lot of peak capacity on leisure flights. Remember taking over the full TCAB network required just 2 extra A320's (and extra peak capacity in summer, like this year with the CSA and GWI wet-leases), still none of that came at the cost of taking away capacity from the rest of business & feeding focussed network. And we're talking close to 1mio pax here!

Just look at LH in FRA, LX at ZRH, OS in VIE etc., they all serve pure leisure routes in Southern Europe and North Africa. Hell, even BA at LHR is serving pure leisure routes!
Why? Because they complement the rest of the network and because they often generate higher income than another feeding flight or business sector on a highly competitive market.

If SN wouldn't have the leisure network at all, it's financial performance would be even worse. So of course interesting what will happen with Thomas Cook in Belgium...
Atlantis wrote:
21 Sep 2019, 13:36
Yes bcs remember the last statement of SN that they are responsible on their own regarding the new fleet and the finance of it. So don't expect that LH will order sth for SN. SN is alone. High time to understand this
You can always read it the way you want, but the point SN was making is that its financial performance is simply not enough to sustain major investments and that for the moment LH is taking the cost of putting 'new' aircraft in Brussels (the 7 A330's and some of the latest A320's are purchased by LH, SN simply wouldn't be able to finance that itself on reasonable terms). You can question the decision of LH to go for (much cheaper) 2nd hand aircraft, but that's also true for OS. LHG's logic is very simple and straightforward: why would I put 100 EUR in SN and not even get 101 EUR for it back, while I can put the same in LX and LH and get 112 EUR in return. LHG will continue to acquire aircraft for SN as it does for all subsidiaries, but it will expect a return from SN that makes it worth for LH to make that investment. OS has the same issue as SN but a bit less worse and EW is a matter of safeguarding LH's market dominance in Germany (swallowing a loss at EW on the short time is still better than letting it collapse and have competition attacking LHG on its biggest and strongest home turf. LH 'investing' (and even that largelly stopped) in EW has to be seen as investing in LH's own security rather than investing in a loss making subsidiary.
But for SN, of course it's worth the question if it isn't very naive to expect a significant profit improvement without investing first. The long haul fleet is a question how it will go in the next months. Of course it doesn't help that so many aircraft come in at the same time, they all come from full cabin retrofit and/or C check, which is synonym to problems very soon after. But if that lasts, there is a structural and major issue. It also doesn't help that pure technical issues are now mixed with 'bad luck', like the cargo leak that held an A332 on the ground for weeks!
The decision of LH to replace old A330 by newer second hand A330 was long time ago taken. Now the situation is completely different...

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RoMax
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Re: Brussels Airlines in 2019

Post by RoMax » 21 Sep 2019, 20:08

Atlantis wrote:
21 Sep 2019, 20:01
The decision of LH to replace old A330 by newer second hand A330 was long time ago taken. Now the situation is completely different...
Oh yes the situation changed, the decision was taken end 2016/early 2017, since then the (structural) financial performance of SN only got worse. And not for reasons that can be attributed to the A330 fleet reliability (except for this summer maybe...).

But so what's your point...?

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Atlantis
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Re: Brussels Airlines in 2019

Post by Atlantis » 21 Sep 2019, 20:21

RoMax wrote:
21 Sep 2019, 20:08
Atlantis wrote:
21 Sep 2019, 20:01
The decision of LH to replace old A330 by newer second hand A330 was long time ago taken. Now the situation is completely different...
Oh yes the situation changed, the decision was taken end 2016/early 2017, since then the (structural) financial performance of SN only got worse. And not for reasons that can be attributed to the A330 fleet reliability (except for this summer maybe...).

But so what's your point...?
Bcs you are convinced that SN still will get planes from LH.
CS is also not a favorite of OS and has to show him also better results, but they still will receive planes

Think what you want, SN is the orphan in this group. This reboot has to work or it will be over and out

rwandan-flyer
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Re: Brussels Airlines in 2019

Post by rwandan-flyer » 21 Sep 2019, 21:02

No reaction, explanation in a press release, press conference, no communication to employees from CF about SN's recent ongoing problems with the long haul fleet ? «Silence radio» ? Sabena/SR scenario ? «Chronique d'une mort annoncée».
Do you think that an airline will hold a press conference or make statement, each time that a flight is canceled or delayed.

My company has a contrat with several airlines, some weeks it happens that flights have huge delay or are canceled , especially during the summer, when the planes fly a lot. Reasons are not the same.

Last year, i had this pb with an US Airline flying to Switzerland. Due to the snow, airport was closed. The aircraft diverted to Paris. Crew has reached its maximum duty time. They sletp at Paris and the aircraft spent the night at Paris Cdg. It was another crew who was in Paris (arrived 2 days ago from another flight from USA), who brought the plane to Switzerland, the following day, with some pax on board, who slept in hotel at Paris CDG.

The aircraft has reached its destination with over 24hrs of delay.

Most of time, when you can read a news in the press, it's because passengers have called a newspaper, a channel TV or a radio, or posted a message on twitter that gone viral, and then once the new is published, airline makes a statement.
Last edited by rwandan-flyer on 21 Sep 2019, 21:23, edited 4 times in total.

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RoMax
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Re: Brussels Airlines in 2019

Post by RoMax » 21 Sep 2019, 21:14

Atlantis wrote:
21 Sep 2019, 20:21
Bcs you are convinced that SN still will get planes from LH.
SN will get planes from LH if it has the financial performance to justify growth and/or fleet renewal. That's what I'm saying. In other words, at this moment: no.
Atlantis wrote:
21 Sep 2019, 20:21
CS is also not a favorite of OS and has to show him also better results, but they still will receive planes
Yes OS is getting 10 2nd hand A320's to replace their 18 Q400's (similar to the earlier Avro replacement at SN) to standardise their fleet further to less subtypes and fuel growth with less aircraft. Necessary, but not exactly impressive. And OS makes more profit than SN, don't forget that, not enough, but still significantly more.
Atlantis wrote:
21 Sep 2019, 20:21
This reboot has to work or it will be over and out

Obviously, I don't think I ever claimed something else.
SN has been 'living on the edge' so to say for as long as it exists. Every few years there has been a new cost cutting program, everytime shaving off a few % here and there. LH is not the kind of owner that will tolerate that any longer. Reboot has to be big, structural and more than likely that will hurt before it will achieve something nice (just like LH did in Vienna some years ago or like IAG did in Madrid before Iberia started to thrive again).

Shareholders determine what happens with their money in the end, for someone that knows so much about BRU/BAC, I don't think that's a secret for you, right Atlantis?! ;)

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Conti764
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Re: Brussels Airlines in 2019

Post by Conti764 » 22 Sep 2019, 00:01

RoMax wrote:
21 Sep 2019, 19:38
You can always read it the way you want, but the point SN was making is that its financial performance is simply not enough to sustain major investments and that for the moment LH is taking the cost of putting 'new' aircraft in Brussels (the 7 A330's and some of the latest A320's are purchased by LH, SN simply wouldn't be able to finance that itself on reasonable terms). You can question the decision of LH to go for (much cheaper) 2nd hand aircraft, but that's also true for OS. LHG's logic is very simple and straightforward: why would I put 100 EUR in SN and not even get 101 EUR for it back, while I can put the same in LX and LH and get 112 EUR in return. LHG will continue to acquire aircraft for SN as it does for all subsidiaries, but it will expect a return from SN that makes it worth for LH to make that investment.
Pretty lame strategy if you ask me...

SN needs investments to grow, not the least on the one market that kept them afloat for many years.

Imho the issue is not that SN gets (fairly recent) second hand aircraft, but the fact that LH first expects a big return on investment before investing in the company and as such it puts SN at a handicap against major competitors on the key market (Africa).

BRU is a pretty sweet spot, right in the middle between AMS and CDG, two hubs of LH biggest competitor AF/KL on the premium market. Allow SN to grow into Africa and beyond strengthens its position at BRU and might steal away some traffic from AF/KL which still has some monopoly on certain routes.

But for SN to grow, you need investments. Even if they come at a loss on the short and medium term. For years, LH only kept SN afloat and it lost two years with that ridiculous 'integration into EW'-joke.

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Conti764
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Re: Brussels Airlines in 2019

Post by Conti764 » 22 Sep 2019, 00:06

RoMax wrote:
21 Sep 2019, 21:14
Obviously, I don't think I ever claimed something else.
SN has been 'living on the edge' so to say for as long as it exists. Every few years there has been a new cost cutting program, everytime shaving off a few % here and there. LH is not the kind of owner that will tolerate that any longer. Reboot has to be big, structural and more than likely that will hurt before it will achieve something nice (just like LH did in Vienna some years ago or like IAG did in Madrid before Iberia started to thrive again).

Shareholders determine what happens with their money in the end, for someone that knows so much about BRU/BAC, I don't think that's a secret for you, right Atlantis?! ;)
LH will shit its pants the day BRU gets lost to competitors. The moment they'll have to stop their shuttle service to FRA they will realise what a fuck up they did with SN.

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RoMax
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Re: Brussels Airlines in 2019

Post by RoMax » 22 Sep 2019, 00:56

Conti764 wrote:
22 Sep 2019, 00:01
Pretty lame strategy if you ask me...

SN needs investments to grow, not the least on the one market that kept them afloat for many years.

Imho the issue is not that SN gets (fairly recent) second hand aircraft, but the fact that LH first expects a big return on investment before investing in the company and as such it puts SN at a handicap against major competitors on the key market (Africa).

BRU is a pretty sweet spot, right in the middle between AMS and CDG, two hubs of LH biggest competitor AF/KL on the premium market. Allow SN to grow into Africa and beyond strengthens its position at BRU and might steal away some traffic from AF/KL which still has some monopoly on certain routes.
SN grew a lot over the past years from just 7.5mio pax in 2015 to >10mio in 2018 (still growing now but at a much slower rate), sure overall that growth was mainly on short haul. But also on the long haul with 1 extra A330 each in 2016 and 2017 (mainly for Toronto and Mumbai, but in each case also some frequencies to Africa were added). Then in Jan'19 BOM was stopped and that capacity moved largely to Africa. Now the new A333 cabin features some extra Y class seats and 2 of the 4 A332's are replaced by A333's (with the other 2 probably following when their leases end in 2021/2022).
That might all not be the exiting growth some hope for and sure there's potential in Africa, but it's also a market which is quickly saturated when adding too much extra widebody capacity because it's relatively stable in terms of demand (yes it is, it's not because intercont. operations by some local African airlines + the Middle Eastern carriers are flourishing that they do it profitably, they try to get a foothold in the market and do that at a cost that SN simply can't sustain for the moment). Being overly ambitous has crashed a lot of airlines in the past. SN is still growing in sub-Saharan Africa, no need to start dreaming and dump capacity just to gain market share to then wait 5-10 years to get a return on that initial (huge) investment and consequent losses. When SN gets its financial foundations on order, then you can start taking bigger risks, but until then it would be foolish to risk so much. When you talk about 'just' 1 extra A330, you're talking milions. More than what SN is earning today.
Conti764 wrote:
22 Sep 2019, 00:01
But for SN to grow, you need investments. Even if they come at a loss on the short and medium term. For years, LH only kept SN afloat and it lost two years with that ridiculous 'integration into EW'-joke.
Major growth like we've seen over the past year, don't hope for it. SN grew a lot over the past years without the EBIT following (the contrary) so what's the point in taking even bigger risks in growth.
Even sustaining SN as it is today requires significant investments and that's exactly what LHG has done, at a loss indeed, at least for the time being.
The A333's to give an example, ONLY the new cabins cost 10mio EUR for each aircraft (so 70 million, excluding the cost of PY seats in the 3 remaining other aircraft and excluding the purchase cost of those 7 A330s, which is obviously several times more).
Every year over the past years SN has invested over 3-digit million figures, if you look at the financial result of SN it's not difficult to understand that this is not sustainable without significantly improving the profit margins.
Conti764 wrote:
22 Sep 2019, 00:06
LH will shit its pants the day BRU gets lost to competitors. The moment they'll have to stop their shuttle service to FRA they will realise what a fuck up they did with SN.
I think LH has other things to shit their pants on for the moment, but yes for sure they don't want to loose control over BRU. But that doesn't mean they will keep SN going on as it does today. As I said before, Reboot can be expected to be drastic because all those 'standard reorganisation plans' of the past 18 years haven't solved anything structural (they helped SN to stay afloat, but that's about it). And if that still fails, then I don't see a very bright future for SN.

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Re: Brussels Airlines in 2019

Post by nordikcam » 22 Sep 2019, 01:10

And when will we learn more about this "Reboot" plan? End of september or end of 2019? Thx

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Re: Brussels Airlines in 2019

Post by saratoga » 22 Sep 2019, 09:08

I am not an expert in management but can it be a plan of LH waiting to see SN going bust and then refill the open slots by their own aircraft based in Brussels?? Cause in the end, they got SN for very cheap money.

It happened in my ex company as well. The mother company lets 1 daughter going bust, and then transfering all the open slots to another daughter company.

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