They will not let Brussels Airlines go bankrupt they take there responsibility.
But they will not give money without counterpart,with SABENA they did nothing not the same story...
If it's not with Lufthansa it will be with somebody else.
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They will not let Brussels Airlines go bankrupt they take there responsibility.
It gave the 752 a second breath.Matt wrote: ↑12 May 2020, 12:27Long haul with single aisle A321LR: might work tough. I am not big fan of the idea either you know.
But to North America it might work. TAP is already doing it.
If I were Austrian I’d have asked for 787 million, they need to move away from the 767.Ansett wrote: ↑13 May 2020, 01:38 The situation at OS and in Austria is quite similar to SN/Belgium.
https://www.derstandard.at/story/200011 ... urbulenzen
Short summary :
OS is requesting a State aid of 767 m
The worst scenario I agree. And what are the next steps in this saga? A start of the calendar to know if we keep an airline that I think is still a national airline? When does the CS contract end? Could it be dismissed by the shareholders?Deejay wrote: ↑13 May 2020, 11:46 nevertheless, i think that a worst case scenario could be:
Mutti and CS shake hands on a 9B€ deal, Mutti gets two seats on the board, CS doesn't need belgian money, and injects just enough LH money in SN to keep it in a coma/zombie state, to protect his backyard from IAG and AF/KLM at BRU for the next few years, and concentrates on a LH/LX/EW restart ....
realistic ?
What a load of BS.oldblueeyes wrote: ↑13 May 2020, 09:56 Indeed, there are some similarities to Austrian and the position of the local government in Vienna.
The questions is rather - are the Belgian and Austrian states not trying to oversqueeze and thus damaging their position? Let's look at the situation without patriotic aspects and (un)likes towards Spohr. At the end of the day, he is reporting to the shareholder and has to sustain their equity interests.
Let's look to the Swiss deal, as a benchmark:
- total rescue package is approx 50 EUR/pax capacity at 2019 figures
- lay off for 20% of staff, due to market shrinking
- money is credit from banks, 85% of it is backed by the state- LH offers Swiss equity as guarantee for the loan
- Swiss state get's a 2% interest rate on the guarantee volume- exit strategy - no dividend until loan is not refinanced on the free market
- the market committment is that after the market recovers ZRH shall grow at the same rate as MUC and FRA
And please remember, Swiss is the cash cow money making subsidiary of the group, at 20% of group passengers carried and earns itself all money needed for investments like ne fleet. Also ZRH is a hub protected from aggressive low cost entries
Now let's take a look to Brussels and Austrian:
- governments were asking initially for blocking minorities of 25%+1 share
- there were voices claiming for growth guarantees, especially on long haul
- voices claiming that lay offs are not compatible with state aid etc.
- apparently negotiations with IAG and Etihad in Austria for alternatives, although Walsh stated clearly that IAG is consolidating first
Meanwhile the group position is significantly weaker:
- actually no profit - thus the need for restructuring regardless of Corona
- lack of own capitalization - money for the last fleet developments came from Germany - and both companies still earn less than the cost of capital
- end of the tail positions - both together count for approx 15% of carried pax and around 10% of the long haul pax
So if we are honest, the demand of the Austrian and Belgian state representatives is way to high compared to the benchmark, for a way to low situation of the brands. Understandable that CS can't and does not want to agree to such conditions as both companies are the end of the tail in the group.
And if one have heared the tones during the shareholder meeting, a well prepared company has always an alternative strategy. There were two announcements given for those able to listen between the lines:
- the future will consist from maximum 10 operating entities (Germanwings is already out in counting)
- Eurowings Europe (by the way registered in Vienna) shall become a new role
So what if negotiations go wrong?
- both Brussels and Austrian are LH group daughter companies and they are all lcoated in the EU - simple nationalisation dreams just because of local pride won't work
- Eurowings Europe could easily get assets such as slots transferred and the short haul rebranded and operated by them - at the end of the day both Brussels and Vienna airports gave LCC players a strong acting field - half of Austrian's A320 are anyhow owned by Lufthansa, the Brussels fleet is leased so one can get rid of it easily and enough capacity available is owned by the group
- now let's look to the long haul, where many claim that there is no way outside local players with AOCs:
- TATL - it is an open sky issue - so basically any brand can do it - call it "Ocean", where LH covers all touristic or "low business class demand" business as a project
- Asia? - the group has revenue JVs - so no problem to let ANA and air China fly in and share net revenue
- West Africa? - well, this is a niche and up to now this is supported by the group by organising the pax flow to Brussels - but this can be easily transferred to ZRH, FRA or MUC - for the transfer pax it won't make a difference, for the BRU pax it is connecting flight on top indeed and for many African governments the other hubs might be more prestigious - last but not least, LH group might be very happy to show this type of growth eg in ZRH, to get it's obligations served?
Now for sure, this is a black/white scenario, but the point is that negotiations have to be realistic and reasonable for both sides. It is not like Lufthansa can't manage an alternative scenario if local governments come with unrealistic expectations given market reality, relative importance of the local companies in the group and their business performance.
Or maybe to make it more simple - why would you as Lufthansa accept minority participation in your non-core companies, knowing in advance that the local partners are unrealistic and unreasonable?
Not a lot disclosed yet, but apparently Sicily and many former TCAB destinations.
2023. Can be extended max 2026.