Brussels Airlines in 2020

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

Moderator: Latest news team

Post Reply
User avatar
sn26567
Posts: 36585
Joined: 13 Feb 2003, 00:00
Location: Rosières/Rozieren, Belgium
Contact:

Re: Brussels Airlines in 2020

Post by sn26567 »

Deejay wrote:
16 May 2020, 11:45
Image
Received a nice email this morning signed by CF.... with the heading above....

Good point, all the airlines are in the picture, (i had another one a few weeks ago, with only LH, LX and OS)
But why the hell this little line between the ones on the left, and the ones on the right ?

SN must become a network airline, like the other cousins...

That would be a clear brand positioning understandable for all the customers
Old slide master which must still be updated.

On the Lufthansa Group website, Brussels Airlines is at the right place:
LHGroup_tails-new.jpg
André
ex Sabena #26567

Flanker2
Posts: 1644
Joined: 05 Dec 2012, 23:15

Re: Brussels Airlines in 2020

Post by Flanker2 »

BigJets wrote:
18 May 2020, 09:09
737MAX wrote:
16 May 2020, 20:22

Captain BASIC salary at KLM: 11000€ before tax
Captain TOP salary intended by management after Covid at SN: 5000€ BEFORE!!! tax

Oh yes, retirement age in Belgium = 65
KLM? Full retirement at 60 (when they do not force you earlier out with plenty of money - and when it's the case, they work as freelancers for belgian airlines with huge salaries as well.........).

I agree, not everything is about money. I forgot to mention you'd work much more at SN than at KLM.

Are belgians that worthless?
Plenty of forum members here want a legacy carrier, with a huge network and why not brand new planes paid by LH, but you guys want staff members to work for peanuts?

Belgian managements could take a page from their book :idea:

Can you give me one single reason why these differences between SN & other carriers around Belgium would be acceptable?

Think twice before posting anti-union & staff posts like this, you do not live in their world and you really, really do not know what it all means.
I totally agree with you 737MAX. When Sabena was still around the government and public opinion were saying that staff salaries were too high, “let Sabena go bankrupt and let’s start over” they said, and that’s what happened, even though salaries at Sabena were already less than other surrounding countries.
When SN Brussels Airlines started up people were fighting to get a job. There were hundreds of jobs available with the new airline with thousands of applicants. The salaries were ridiculously low but it was take it or leave it. So many people, just to have work, accepted it (if they didn’t someone else would be there to take their place).
Today it seems that history is repeating itself. Didn’t anyone learn anything from the past? Don't they know how difficult it is to start over, not to mention what the demise of Sabena really cost the taxpayer (loss of income, unemployment, you name it…)? Almost 20 years later and Brussels Airlines still does not have the fleet and network that Sabena had. Brussels has fallen decades behind the competition and now they want to reduce it even more?
When times go bad and the company is loosing money, an airline will look for the easy way (and one of the only ways) to save money: its employees. But, is it really the only option in Belgium?
737MAX is absolutely right: KLM captain 11,000€, SN captain 5,000€ before taxes. In the case of Brussels Airlines the employees are already some of the lowest paid in the western world, how much more can you squeeze out of them, especially since Brussels Airlines is already a, so called, slimmed down lower wage airline after Sabena?
It’s too easy to (always) blame the employees for everything because it draws away the attention from the real problem. I often read on forums how airlines in Belgium are always loosing money. I see how the comparison is made with this airline or that airline. How can you compare? In reality, airlines in Belgium are NOT loosing money, they are very efficient, can be very profitable and successful. It is the Belgian government that is running away with all the profits in the form of extremely high social contributions. Can you think of any other expense an airline in Belgium has that is more than other surrounding major carriers? Everyone talks about this as if it was nothing but this is the real fundamental reason for the failure of airlines in Belgium! Belgium with it’s central location has everything it needs to succeed but still, it isn’t. When a Belgian airline wants to open a new destination, especially on long haul, they will do everything possible to avoid competition, why is that? Brussels Airlines might receive 390mil. Euro and then they have to say thank you to the government, the ones who have been “taking” the profits from them in the first place? If you want to compare Belgian airlines to other airlines then it should be done at a fair level, everyone with the same expenses (including the same landing fees in each carrier's home country). Correct me if I’m wrong but doesn’t Air France have a special statute for it’s cockpit and cabin crew where the airline pays much less social contributions because they consider their crews not to be working on French territory?
These are different times that call for drastic measures. If the Belgian government is really serious about helping Brussels Airlines then once and for all they must lower it’s social expenses, give the airline the necessary tools for it to grow as it should, that would create even jobs (and more contributions) in the long run. Profit margins with airlines are some of the smallest of any business and aviation's economic contribution is of the utmost importance yet until now the Belgian government sits by and does nothing.
They should not ask more from it's employees, that’s too easy. Take away their buying power and it too will be devastating for the economy. It’s a vicious circle.
Of course if all that profit would go directly into Lufthansa’s pockets without growth and progress at Brussels Airlines then all that effort would be for nothing. Negotiating is important. Let the Belgian government take Brussels Airlines away from Lufthansa and take matters in it’s own hands. At least for now.
Wishful thinking or something worth thinking about?
High social contributions are indeed a problem.
However, this is a systemic problem for all companies in Belgium and really not an exception compared to other countries.
Even Southern States like Italy have similar levels of social contributions.
I don't want to sanctify it, it's a systemic problem that needs to be fixed and perhaps even harmonised within the EU to avoid competition between states.

Social contributions are what's paying people today to stay home but also the medical cost of the Covid-19 crisis. Perhaps wasting less money in other area's can bring some relief.

However, this is less of a problem if the airline is nationalized.
The social contributions just flow back to the government, so more jobs and higher salaries are easier to sustain.



The other problem for SN are the high taxes in BRU. It's hundreds of millions in airport taxes per year for a revenue of around 1 Billion.

Again, less of a problem when BRU is partly owned by the government.


So I tink that it's pretty apparent that the government makes a lot of money through Brussels Airlines, so it doesn't hurt to reinvest it in it, as long as it's invested to keep and grow jobs, the airline, the economic well-being. So yes if LH can sign up to a 20+ fleet of long haul aircraft.
Otherwise, it's time for Belgium to take matters in its own hands.

I could also agree to a low interest loan for Ryanair, or say the Belgian State could invest an equity stake and take a 25% in a joint-venture of "Ryanair Belgium". CRL is a huge base for FR, the social impact in CRL should not be neglected and quite frankly, they benefit the taxpayer by offering or inducing low fares as a benefit.
This would enable to have a more comprehensive, fair and competitive market. i.e. Belgium against neighboring countries.
Belgium can better balance by focussing on BRU for its hub and CRL for low-cost leisure, perhaps even partnering together in BRU on routes that can provide some feed but are too leisure oriented.
Turn cut-throat competition into a partnership, and fight together against the BIG ones, making Belgium the go-to place for a fairly priced flight.

Jetter
Posts: 471
Joined: 06 Nov 2015, 21:07

Re: Brussels Airlines in 2020

Post by Jetter »

Flanker2 wrote:
18 May 2020, 12:21
High social contributions are indeed a problem.
However, this is a systemic problem for all companies in Belgium and really not an exception compared to other countries.
Even Southern States like Italy have similar levels of social contributions.
I don't want to sanctify it, it's a systemic problem that needs to be fixed and perhaps even harmonised within the EU to avoid competition between states.
You can’t harmonize tax levels if governments of some countries spend much more money than those of other countries. Because where is that money going to come from if not from taxes? Belgium is such a country where the people constantly democratically elect politicians that like to spend a lot of money. That of course has consequences for the employees’ taxes, like those of SN. It’s not fair to pretend like those social contributions are just a waste of money and should be left out when comparing wage levels: the people in Belgium pay a lot of tax but in return the government spends that money on things the citizens of Belgium -among which SN employees- want. In countries where the tax is lower employees don’t have the benefit of a government that can spend such amounts of money. You can’t have your cake and eat it too.

BigJets
Posts: 124
Joined: 27 Mar 2005, 00:00

Re: Brussels Airlines in 2020

Post by BigJets »

Ansett wrote:
18 May 2020, 11:01
On that part of BigJets' post, you have got a point. But I remember that in the last years of sabena's life, it was considered to delocate pilots to Luxembourg (to save on taxes and social contributions, I presume). I don't know if 25 years later, that would still be advantageous (and legal)
Yes, indeed, in the Sabena days there was an attempt to save on social contributions by trying to relocate to Luxembourg. That would have been a great help. That really shows that this problem is a serious one, one that has been going on for a long time. Unfortunately, 25 years later no government in power has had the guts to do something about it. So, nothing changes and Belgian airlines continue to loose money.
As an example, If you would be paying 20% less social contributions and thanks to that Brussels Airlines would grow 300% now that would be a win win situation for everyone, wouldn't it?

Jetter
Posts: 471
Joined: 06 Nov 2015, 21:07

Re: Brussels Airlines in 2020

Post by Jetter »

BigJets wrote:
18 May 2020, 13:05
Ansett wrote:
18 May 2020, 11:01
On that part of BigJets' post, you have got a point. But I remember that in the last years of sabena's life, it was considered to delocate pilots to Luxembourg (to save on taxes and social contributions, I presume). I don't know if 25 years later, that would still be advantageous (and legal)
Yes, indeed, in the Sabena days there was an attempt to save on social contributions by trying to relocate to Luxembourg. That would have been a great help. That really shows that this problem is a serious one, one that has been going on for a long time. Unfortunately, 25 years later no government in power has had the guts to do something about it. So, nothing changes and Belgian airlines continue to loose money.
As an example, If you would be paying 20% less social contributions and thanks to that Brussels Airlines would grow 300% now that would be a win win situation for everyone, wouldn't it?
Where is the government going to spend 20% less on? Education, healthcare, pensions? All things that also benefit the same SN employees that you want to tax less. It’s way too easy to just propose huge tax cuts without saying what consequences you accept. Also the powerful unions in Belgium would not agree with enormous austerity, yet they are supported by many SN employees. If much lower taxes is what SN employees want they should turn their back on the current unions to not be hypocritical.

nordikcam
Posts: 1052
Joined: 24 Aug 2008, 10:22
Location: Uccle

Re: Brussels Airlines in 2020

Post by nordikcam »

b.lufthansa wrote:
18 May 2020, 11:19

The promise of Miami, Newark, Boston and A321 long range aircraft is a way to soften the negotiations but these can't never be made.
To read you, LH is making crazy promises to get money from the Belgian Government, promises planes and destinations, but you already know that these are only empty promises ... I hope someone to circulate the information to the Government. No ?

BigJets
Posts: 124
Joined: 27 Mar 2005, 00:00

Re: Brussels Airlines in 2020

Post by BigJets »

b.lufthansa wrote:
18 May 2020, 11:19
Brussels Airlines's plan is to reduce the total amount of early morning arrivals into Brussels (the so-called nightstop-reduction), and to let its African fleet depart later.

In my opinion, this is NEVER going to work.
Indeed, that is not a good idea to cancel the night stops, first of all for the businessman who wants to start his day early and most of all for the feeder flights to the long haul network. There is a saying, never change something that's good. Yes, night stops cost money but to make money you must be willing to spend money too. It takes many years to fine-tune operations so that a hub and spoke system can work and many things to consider when doing so. Changing that can prove to be a big mistake.
b.lufthansa wrote:
18 May 2020, 11:19

The promise of Miami, Newark, Boston and A321 long range aircraft is a way to soften the negotiations but these can't never be made.
It's not that it may never happen. Maybe it will but why is it that suddenly Lufthansa is announcing all sorts of growth plans for Brussels Airlines while in the past LH has never really cared? Do you think that maybe they want something?

I have nothing against Lufthansa but when they start treating their (so called) partners the way they did with Brussels Airlines then there is a problem. The decisions that are being made at(or for) Brussels Airlines, are they in the advantage of Brussels Airlines of for Lufthansa? I think we know the answer to that. Increasing flights to Frankfurt or Zurich is for feeding which network exactly? Brussels Airlines could be getting the A321XLR, not because they would like to have it (which they do) but because now there is a surplus of aircraft and that’s a way for LH to get rid of them. When you hear things like that (and there are many other examples) then it makes one realize that in the interest of Brussels Airlines, they would be better off alone. It reminds me of the days when Swissair was plundering Sabena.

Poiu
Posts: 822
Joined: 14 Nov 2015, 09:38

Re: Brussels Airlines in 2020

Post by Poiu »

BigJets wrote:
18 May 2020, 13:05

Yes, indeed, in the Sabena days there was an attempt to save on social contributions by trying to relocate to Luxembourg. That would have been a great help. That really shows that this problem is a serious one, one that has been going on for a long time. Unfortunately, 25 years later no government in power has had the guts to do something about it. So, nothing changes and Belgian airlines continue to loose money.
As an example, If you would be paying 20% less social contributions and thanks to that Brussels Airlines would grow 300% now that would be a win win situation for everyone, wouldn't it?
Your memory is letting you down BigJ, as compensation for not relocating crew there has been a significant reduction in social security for air crew in Belgium.
By memory: since 1995ish airline companies have been exempted from half of the pension contributions for crew. On top of that half of the pension contributions withheld from the salaries didn’t have to be transferred to the State but were be transferred to the airline. This ended around 2012 when the special pension system for crew came to end.
The savings for SN were around 4 million a year and they were only half their present size at that time.

Jetter
Posts: 471
Joined: 06 Nov 2015, 21:07

Re: Brussels Airlines in 2020

Post by Jetter »

BigJets wrote:
18 May 2020, 14:06
b.lufthansa wrote:
18 May 2020, 11:19
The promise of Miami, Newark, Boston and A321 long range aircraft is a way to soften the negotiations but these can't never be made.
It's not that it may never happen. Maybe it will but why is it that suddenly Lufthansa is announcing all sorts of growth plans for Brussels Airlines while in the past LH has never really cared? Do you think that maybe they want something?
It’s not that sudden, LH also said before reboot that SN can grow again when they have a good profit margin. That’s also mentioned as a criterium now. The only real difference is that LH is now more concrete about which extra destination and planes.
I have nothing against Lufthansa but when they start treating their (so called) partners the way they did with Brussels Airlines then there is a problem. The decisions that are being made at(or for) Brussels Airlines, are they in the advantage of Brussels Airlines of for Lufthansa? I think we know the answer to that. Increasing flights to Frankfurt or Zurich is for feeding which network exactly? Brussels Airlines could be getting the A321XLR, not because they would like to have it (which they do) but because now there is a surplus of aircraft and that’s a way for LH to get rid of them. When you hear things like that (and there are many other examples) then it makes one realize that in the interest of Brussels Airlines, they would be better off alone.
With the Belgian aviation policies of the last decade there was no potential of a prospering network carrier, not as part of LH and not alone.

Homo Aeroportus
Posts: 1210
Joined: 24 Feb 2007, 18:28
Location: 2300NM due South of North Pole

Re: Brussels Airlines in 2020

Post by Homo Aeroportus »

Does anyone know the reason for dropping Ouaga?
This service was operated on the route to ABJ as an en route stop. Saving the landing fees ok but weren't there enough Pax to cover?
AF will be given a quasi monopoly to EU, same as for BKO.

H.A.

oldblueeyes
Posts: 65
Joined: 13 Apr 2020, 12:44

Re: Brussels Airlines in 2020

Post by oldblueeyes »

You gave the answer in your question - it was not a full route, but a marginal point. And with dropped demand expected, the anticipated economics are not anymore given.

Deejay
Posts: 21
Joined: 06 Feb 2018, 09:20

Re: Brussels Airlines in 2020

Post by Deejay »

If SN is going to be considered as a "normal" network airline, when is it going to be fully integrated in the LH Group booking engine ?

If you try to book a triangle: BRU-GVA-VIE-BRU, for instance,

on the SN website, they let you fly the GVA-VIE over BRU with SN, while there are several OS direct flights daily

and on the LH website, you need to go over FRA with LH to do the GVA-BRU, they don't propose the SN flight, (which is codeshared with LX !!) ....

they achieve this so well for LX and OS, where it's seamless .... why not for SN ?

User avatar
Guillermo
Posts: 4
Joined: 27 Apr 2012, 09:52

Re: Brussels Airlines in 2020

Post by Guillermo »

Received the LH June schedule last week. A majority of the Brussels Airlines African destinations are available via FRA. Did not catch any route information, though .. FRA will be fed out of BRU, only available starting in FRA and direct flights or via African hub(s) ?

rwandan-flyer
Posts: 370
Joined: 19 Dec 2010, 12:30

Re: Brussels Airlines in 2020

Post by rwandan-flyer »

"The proposals on the table are unacceptable" say the unions of Brussels Airlines

The long negotiation marathon started on Monday at Brussels Airlines. After the announcement last week of the restructuring plan which aims to cut 1,000 jobs, unions and management came together to start negotiations under the Renault procedure, which applies during collective redundancies. Phase 1 of this procedure focuses on consultation and information. Unions have over 100 questions to ask management. Discussions that promise to be difficult.
https://www.rtbf.be/info/belgique/detai ... d=10504271( French)

Ansett
Posts: 529
Joined: 13 Apr 2016, 19:12

Re: Brussels Airlines in 2020

Post by Ansett »

Not off topic really, rather a historical reminder as a side note :
https://www.brusselsairlines.com/en-be/ ... hansa.aspx

LH could, in theory, have acquired the remaining 55 % of shares of SN, but with such a clause in the agreement
The price for taking up the remaining 55 per cent depends on performance-related factors so that the cost for complete acquisition of Brussels Airlines could amount to a maximum of 250 million euros.
LH had all the reasons in the world to let SN be worth as little as possible at the time of the full take-over.
They waited and were allowed to wait six years to buy the remaining shares for… 2 million euro ?
Who, on the other side of table, was naive enough to accept such a provision in the take-over agreement ?

737MAX
Posts: 449
Joined: 29 Aug 2017, 08:46

Re: Brussels Airlines in 2020

Post by 737MAX »

Jetter wrote:
18 May 2020, 13:14

Where is the government going to spend 20% less on? Education, healthcare, pensions? All things that also benefit the same SN employees that you want to tax less. It’s way too easy to just propose huge tax cuts without saying what consequences you accept. Also the powerful unions in Belgium would not agree with enormous austerity, yet they are supported by many SN employees. If much lower taxes is what SN employees want they should turn their back on the current unions to not be hypocritical.
Belgium has the highest taxation rates on employment, but it's also a country where the return to the citizens is one of the lowest in Europe. Are SN staff members also to blame for this?

Anti-union people would invent anything to be against them without thinking further than their nose. Of course because they don't need them. Or don't have any.

I'd bet everything I have you'd be crying behind your union if you were a SN staff member today.

User avatar
Atlantis
Posts: 4426
Joined: 12 Apr 2005, 00:00

Re: Brussels Airlines in 2020

Post by Atlantis »

Guillermo wrote:
18 May 2020, 16:28
Received the LH June schedule last week. A majority of the Brussels Airlines African destinations are available via FRA. Did not catch any route information, though .. FRA will be fed out of BRU, only available starting in FRA and direct flights or via African hub(s) ?
Probably it is bcs SN would like to start flying as from 15th June but only European destinations.
LH is still flying to BRU from FRA. So they could pick up those pax for the moment. It will "end" as from the moment that SN will fly again by themself to Africa.

If everybody needs to fly first to FRA then SN would not need any long haul plane anymore 😉

Passenger
Posts: 6709
Joined: 06 Dec 2010, 20:54

Re: Brussels Airlines in 2020

Post by Passenger »

Ansett wrote:
18 May 2020, 18:10
Not off topic really, rather a historical reminder as a side note :
https://www.brusselsairlines.com/en-be/ ... hansa.aspx
LH could, in theory, have acquired the remaining 55 % of shares of SN, but with such a clause in the agreement
The price for taking up the remaining 55 per cent depends on performance-related factors so that the cost for complete acquisition of Brussels Airlines could amount to a maximum of 250 million euros.
LH had all the reasons in the world to let SN be worth as little as possible at the time of the full take-over.
They waited and were allowed to wait six years to buy the remaining shares for… 2 million euro ?
Who, on the other side of table, was naive enough to accept such a provision in the take-over agreement ?
Such clause is not abnormal for partial take over with call option. And the contract wasn't made by "naive" people. Lawyers and accountants worked on it, on request of Davignon, Van Innis, Theo Peeters, Gustin and others. And 100% sure: they knew what it meant. Besides, what's your problem with that low amount? Lufthansa didn't buy SN Airholding from the Belgium state, but from Belgian investors. And the less Lufthansa had to pay to former owners, the better for the Lufthansa Group.

The reason why Lufthansa had to pay only 2,6M, is because Brussels Airlines didn't show good "performance related factors" at the contractual date. Lufthansa would have been more then happy when they had to pay 250M: that would mean that Brussels Airlines was a goldmine after full take over, with each year millions of dividend. Since the takeover, not one Euro dividend was paid to Lufthansa. Reason: there is a cumulated loss of 100M. So even if Brussels Airlines would make a profit of 100M in 2019 (quod non), no dividend could be paid.

oldblueeyes
Posts: 65
Joined: 13 Apr 2020, 12:44

Re: Brussels Airlines in 2020

Post by oldblueeyes »

Such put/call clauses are usual if take overs are done in steps. Typically there is a valuation method agreed in advance ... something like operational profit multiplied with an industry typical multiplicator plus accumulated assets minus accumulated debt.
It is the duty of the management to perform in such a way that the company valuation mechanism agreed is maximized. for example by growing trough debt, if the value created is higher.
I doubt that the selling shareholders were badly advised- such deals are quite normal and the top law firms advising them are not newbies.
So it is rather the management team that didn't performed as expected. And if we realize this, than maybe we realize that Lufthansa did not fired Gustin because of being very patriotic, but simply a bad manager. Even if in the branding issue he might have been right, his operational performance before as he was serving mainly the interests of the old shareholders was miserable.
And now a man with these qualities is advising the government.

Jetter
Posts: 471
Joined: 06 Nov 2015, 21:07

Re: Brussels Airlines in 2020

Post by Jetter »

Ansett wrote:
18 May 2020, 18:10
Not off topic really, rather a historical reminder as a side note :
https://www.brusselsairlines.com/en-be/ ... hansa.aspx

LH could, in theory, have acquired the remaining 55 % of shares of SN, but with such a clause in the agreement
The price for taking up the remaining 55 per cent depends on performance-related factors so that the cost for complete acquisition of Brussels Airlines could amount to a maximum of 250 million euros.
LH had all the reasons in the world to let SN be worth as little as possible at the time of the full take-over.
They waited and were allowed to wait six years to buy the remaining shares for… 2 million euro ?
Who, on the other side of table, was naive enough to accept such a provision in the take-over agreement ?
Etienne Davignon, he also sold Electrabel to Suez and ran Fortis into the ground. :cry:

Post Reply