Africa network SN Brussels Airlines

sn-remember · Post by **sn-remember** » 02 Aug 2005, 13:36

@LJ

Thus the catchment area of AMS is larger than that of BRU (both in pax as in cargo)

I don't want to feed a side question.
However you will find some interesting data on http://66.102.9.104/search?q=cache:A2Cm ... ures&hl=nl
So we can conclude that the "potential market area" of BRU is slightly bigger than AMS.
That does not mean I expect the terminating traffic at Schiphol to be similar to the one at Zaventem; I would expect it to be +- half bigger since the NTHLDs are half more populated than Belgium (and GDP per head is similar). But I don't have the figures for that so I may be wrong ?

Also let's not be too emphasising on the 'Aalsmeer effect'...
Brussels as any ww renowned center has also its share of enviable trumps ! and as you say the 2nd world harbor (also an important diamond center) lies in the periphery of Brussels.

However I am not sure you followed my point:
I was just expressing worries about the eventual future of the so called "african niche" of snba as long as no feeding channel from N-E America is quickly setup and also commerial partnership is not enhanced within Europe , America and possibly Japan.

Indeed I personally find it desirable ito costs and commercial prospects to strenghten the current offer by increasing frequency to the existing key destis as well as expanding to new associated markets.

As for the E-African route discussion, I understand DAR and ZNZ and LUN were mentioned in some media as possible new snba desti ?
But I don't see the point to open new destis if the l/h fleet size stays unchanged ...Do you ?

LJ · Post by LJ » 02 Aug 2005, 21:56

I was just expressing worries about the eventual future of the so called "african niche" of snba as long as no feeding channel from N-E America is quickly setup and also commerial partnership is not enhanced within Europe , America and possibly Japan.

I'm not so pessimistic of the "African niche". My view is that SNBA should focus on undeveloped destinations like Luanda, Lumbumbashi and not trying to go after pax who can also use KL, BA, LX or any other carrier. If they go after the niche (and maybe grow gradually) they'll probably remain part of the aviation scene for many years to come. If they annoy "Goliath" (Air France) too much, I fear AF will go after SNBA (more than they do at present) and then I do't know think Goliath will loose.

BTW niche players are usually highly profitable -> very attractive take over target. Needless to say, if SNBA has more strength (read would be taken over by BA), the situation would change. If this would happen, than AF would have a hard time in Africa

BTW

Also let's not be too emphasising on the 'Aalsmeer effect'...

But compared to BRU the cargo operation at AMS is still much bigger (as seen in your link). Most people tend to look only at the pax numbers, but at AMS cargo is probably more important than pax.

(also an important diamond center) lies in the periphery of Brussels.

But these diamaonds arrive from JNB at AMS.....

sn-remember · Post by **sn-remember** » 03 Aug 2005, 14:30

@LJ
Once upon a time, the "boss" on african routes was Sabena, not KLM.
Actually until 4 yrs ago it used to be the case.
And for my part I am not (yet) ready to adopt a fatalistic submissive "realistic" attitude although I recognise as everybody that we are in the pit.

And sorry, let us not fool ourselves by confusing "niche" (meaning position were you are confident to stay in) and "crumbs" (meaning position you know you will have to abandon as soon as Goliath comes around).

Being an optimist by nature, I say it's urgent time to change the course at the helm of snba not to tentatively revive the past sabena as it was, but to put in the air a new revisited more ambitiously successful company.
See how AirLingus or Austrian-Airlines succeeded their "resurrection" ?

C_J · Post by **C_J** » 03 Aug 2005, 14:40

sn-remember wrote:See how AirLingus or Austrian-Airlines succeeded their "resurrection" ?

Austrian Airlines is making huge losses and Aer Lingus is becoming a low-cost carrier to cope with Ryanair's competition...

But I agree with you, let us stay optimistic and have a little faith in SN.

LJ · Post by LJ » 03 Aug 2005, 22:16

And sorry, let us not fool ourselves by confusing "niche" (meaning position were you are confident to stay in) and "crumbs" (meaning position you know you will have to abandon as soon as Goliath comes around).

I'm somewhat mistified about where you get that definition of a niche (never heard that one before). SNBA qualifies perfectly for being a niche player and its limited rescources give it probably no other possibility but to be a niche player. Moeover, who cares if you take on the "crumbs". As long as you make money it's irrelevant. Oh yes before I forget, real niche players search continiously for new niches.

It's unrealistic to see SNBA in every African capital, moreover as they do not have the feed ex BRU to do this. SNBA can build this feed but that would mean a massive investment, and this is not going to happen as the airline will probably be sold after 2006 (you don't take on long term obligations if you know you may be sold in a few years time, makes you less attractive to a prospective buyer).

sn-remember · Post by **sn-remember** » 05 Aug 2005, 17:28

@LJ

if SNBA has more strength (read would be taken over by BA), the situation would change.

Yes probably it would change...
So let's cross our fingers and wait till ...next year ?

But meanwhile the landscape is changing rapidly and I am not sure the AF/KL and others will wait for BRU's operators revival....EXCEPT if they are interested to buy snba themselves!
I know such a proposal will sound crazy to you but
1. if you don't succeed making some sort of "auction rising" snba might not get sold at all!
Remember KL tried a marriage with BA before actually succeeding with AF!
2. It could make sense to have an integrated PAR-BRU-AMS axis linked with HST and highways within 1 hour reach of each other...What a power, almost impossible to counter imho!
The condition to make it work however is a proper distribution of the markets and harmonious development prospects for each player. Not impossible to me.

And then we must also be prepared to play it on our own if merger is decidedly not "in the air" ! Maybe it sounds crazy to you but being an optimistic by nature, I dont feel this to be a dispairing option provided the right people are at the helm!

@C_J

Austrian Airlines is making huge losses and Aer Lingus is becoming a low-cost carrier to cope with Ryanair's competition...

Of course such "resurrection" would have a price !
Who would have given a cent to AE back in 2002? Turning into lowcost was probably the "price" for its rebirth... And what a rebirth ! more than 100 mEuro profit last year and more than 7 m pax carried! And very good prospects for the coming years and (semi)privatisation in the pipeline...
Thank you M. Walsh.

OS which choose another path is admittedly facing serious pbls. As everybody knows expansion unavoidably generates costs and the OS group have by now acquired an enviable size (+- 100 a/c , 10 m pax last year) !! Time will tell if the management did a good job or not...The investors seem reasonably confident since the shares are not suffering too deeply...until now!

For my part what I genuinely fear is the "wait and see" attitude that prevails in snba headquarters at present.
Did you ever hear about the drama of Ionesco "En attendant Godot" ?

Christophe

LJ · Post by LJ » 05 Aug 2005, 20:52

But meanwhile the landscape is changing rapidly and I am not sure the AF/KL and others will wait for BRU's operators revival....EXCEPT if they are interested to buy snba themselves!

It's virtually impossible for AF/KL to take over SNBA. The EU will never allow this as the concentration in the Benelux would be too great. Moreover this combination would have an almost monopoly on Europe - Africa flights.

I don't think AF and KL will go into Africa much deeper than they already do at present (at least not in the near future). AF/KL has to devote too much capacity in other areas (for example China, India) to combat the competition in these markets. However I do think AF/KL will defend its strong position in the African market if attacked ny SNBA or any other airline (however I don't see LH/LX or BA/IB moving into Africa as these airlines also have to compete in other markets and thus haven't much spare capacity for flights to Africa).

FlyA330 · Post by **FlyA330** » 06 Aug 2005, 01:31

I don't think AF and KL will go into Africa much deeper than they already do at present (at least not in the near future).

I don't agree with this. At the moment AF and KL are still growing in Africa and are using Kenian Airways as a feeder. Kenian is presently opening a lot of new destinations in direct competition with SNBA.

LJ · Post by LJ » 06 Aug 2005, 17:15

I don't agree with this. At the moment AF and KL are still growing in Africa and are using Kenian Airways as a feeder. Kenian is presently opening a lot of new destinations in direct competition with SNBA.

KQ has always (from the moment KL purchased it's share in KQ) been a feeder for KLM and will continue being one (not for AF as AF still doesn't fly to NBO). Last year they opened Lumbumbashi and Djibouti if I'm not mistaken, but the focus for new destinations isn't Africa by definition. Moreover I can't recall any new African destination this year. Although KQ feeds KL, it's not their prime role (KL is a minority shareholder in KQ and thus hasn't much say in the company)

5Y-KQV · Post by **5Y-KQV** » 08 Aug 2005, 14:07

KQ has always (from the moment KL purchased it's share in KQ) been a feeder for KLM and will continue being one (not for AF as AF still doesn't fly to NBO). Last year they opened Lumbumbashi and Djibouti if I'm not mistaken,

KQ launched lubumbashi flights in February 2005.

but the focus for new destinations isn't Africa by definition. Moreover I can't recall any new African destination this year.

New African destinations this year are:
1. Bamako and Dakar - Launched July 2005
2. Maputo - Scheduled to Launch in August 2005. Flight shall be via Harare.
3. Freetown - Scheduled launch is November 2005. Flight shall be via Accra.

Although KQ feeds KL, it's not their prime role (KL is a minority shareholder in KQ and thus hasn't much say in the company)

KL is the single biggest shareholder at KQ, holding 26% of the stakes. They have a lot of say in KQ affairs.

The current shareholder structure of KQ is as follows:

Kenyan Individuals - 33.65%
Kenyan Institutions - 36.27%
East African Individuals - 0.03%
East African Institutions - 0.13%
Foreign Individuals - 0.10%
Foreign Institutions - 29.82%

In terms of individual share holders, the top 3 shareholders are:

KLM - 26.00%
Permanent Secretary, Treasury - 23.00%
Barclays Kenya Nominee A/c - 2.57%

Cheers,

Walter.

sn-remember · Post by **sn-remember** » 08 Aug 2005, 17:35

@LJ

It's virtually impossible for AF/KL to take over SNBA. The EU will never allow this

I'm "somewhat mistified" about where you get that inside knowledge from !
Snba is such small fry and easy to swallow it should make no difference if you ask me.
See for ex LH taking over LX, AND already announcing plans to continue doing so, LO being reported as the probable next target on the list.
This is all part of the airlines business consolidation as a whole and I don't see how Brussels can oppose this unfortunately unavoidable trend.
See BA possibly seeking to take control of IB; would this shut the door to any further possible take over by BA (of SN in our case) ?
I can't believe it seriously.

I don't think AF and KL will go into Africa much deeper ...(however I don't see LH/LX or BA/IB moving into Africa as these airlines also have to compete in other markets and thus haven't much spare capacity for flights to Africa).

Like FlyA330, I disagree.
As everybody knows the big 3 (AF,BA,LH)are already "majors" on the african continent. KL succeeded as the 4th major, successfully serving as broker for AF.
Among declared contenders are IB and LX, playing it softly until now, gradually claiming some definite ambition. It is now clear that LX has the unconcieled ambition -and means within the LH/LX merger- to build the african platform snba is not daring or willing or capable to set up.

And I find this to be damaging because it eventually put in question the future of the traditional belgian air market towards Africa.
Is Sabena dying a 2nd time? And this time with NO excuse !
Because yes I think it possible to successfully develop a comprehensive african network from BRU in the present environment. And if M. Kuipers is afraid of competition, he should imho think about possible retirement?
Greetz
Christophe

LJ · Post by LJ » 09 Aug 2005, 20:57

I'm "somewhat mistified" about where you get that inside knowledge from !
Snba is such small fry and easy to swallow it should make no difference if you ask me.

Unlike what you may think SNBA isn't small and does attract pax from Southern Netherlands and Northern France. Furthermore any link up between AF/KL and SNBA (which also controls Virgin Express) will diminsih competition in Belgium (the pax are almost forced to use one of the three airlines) and thus this combination would be able to set prices and block airlines from entering into the mentioned markets.

See BA possibly seeking to take control of IB; would this shut the door to any further possible take over by BA (of SN in our case) ?

A takeover by BA of SNBA wouldn't generate the anti-trust issues which a AF/KL would. Not only is the geographical area different, both airlines also have a competetitor called Eurostar.

And I find this to be damaging because it eventually put in question the future of the traditional belgian air market towards Africa.

Do you really think airlines like LX will venture into destinations like Kigali, Lumbumbashi, Kinshasa or any other not so well known destination? I don 't think so. These airlines are the laggerds in the market and will only serve a destination if they become "mature" markets. You only have to look at the recent annaouncement by BA that they'l fly to ADD and Abuja, both are destinations where SNBA not Belium has any link with and thus shouldn't be considered.

Because yes I think it possible to successfully develop a comprehensive african network from BRU in the present environment.

However SNBA has neither the finances nor the point to point market to link many of the bigger African destinations (like ACC, JNB, CPT) with BRU. This leaves only one possibilty for SNBA: specialise and remain focused on underserved markets which make money (BTW this deosn't mean they shouldn't look for new markets) .

SN30952 · Post by **SN30952** » 09 Aug 2005, 21:31

LJ wrote:Do you really think airlines like LX will venture into destinations like Kigali, Lumbumbashi, Kinshasa or any other not so well known destination? I don 't think so. These airlines are the laggerds in the market and will only serve a destination if they become "mature" markets. You only have to look at the recent annaouncement by BA that they'l fly to ADD and Abuja, both are destinations where SNBA not Belium has any link with and thus shouldn't be considered.

What are you talking?
These 'not so well known destination" all were flown by Sabena. Maybe you weren't born yet?
But times are changing. You should know eg Sabena was one of biggest in BKK years ago, with two hands full of traffic right. Sobelair was flying dozen of African destinations in their heydays. But people and times change, maybe laggards now, but certainly not then!.

LJ · Post by LJ » 09 Aug 2005, 22:25

What are you talking?
These 'not so well known destination" all were flown by Sabena. Maybe you weren't born yet?

I was referring to the fact that unlike SN, who ventures into unknown territories, airlines like LX and KL wait untill a destination has proven itself and then go into that market. I never mentioned that SN is the laggard. In fact I see SNBA as an innovator (unlike LX or KL who are the laggards). I personally believe this role will be the only way in which SNBA can remain profitable (unless taken over by a bigger airline) in the long run as their resources are limited.

FlyA330 · Post by **FlyA330** » 10 Aug 2005, 15:46

I really think SNBA have to react now...it's nice at the moment, the money comes in from the African flights (and this sector ONLY makes the company profitable) but they don't need to rest now. At the moment they are a static company and the only thing that they are doing is increasing destinations with codesharing. They need to wake up NOW and take some risks!! Kinshasa is the best moneymaker for SNBA but soon there will be another big company which will start to fly almost every day to this city... Emirates !! They are already flying cargo flights to KIN but they will start also with pax. Many pax at them moment are flying from Kin to Dubai via Brussels and with Emirates they can take a direct flight. The same with Freetown. The UN is travelling a lot from FNA and they are doing this with SNBA via BRU...but now they can take a second major airline to do the same...Kenian. Someone has to open the eyes of the SNBA management !!

Post by **airbuske** » 10 Aug 2005, 16:03

Isn't is possible to set up something like Birdy airlines ?
SNBA delivers the crew and the others the planes .
SNBA can expand in Africa without too much risks and money.

FlyA330 · Post by **FlyA330** » 10 Aug 2005, 16:13

Everything is possible but then the BeCA (Belgian Cockpit Association) and all other unions will be on fire since SNBA is controlled by the unions !!

sn-remember · Post by **sn-remember** » 11 Aug 2005, 13:06

I really think SNBA have to react now...it's nice at the moment, the money comes in from the African flights (and this sector ONLY makes the company profitable) but they don't need to rest now. At the moment they are a static company and the only thing that they are doing is increasing destinations with codesharing. They need to wake up NOW and take some risks!!

How right you are !
I was already saying this in my very first posts when I joined this forum one year ago

And it was already true 2 even 3 yrs ago...
But some people NEVER understand !

Snba (innovator or laggard is not the point) should actively develop the high yield business to Africa and try a sort of come back on that continent after nearly 4 yrs sleeping, it is fully agreed upon by nearly everybody except notably by the mgt..

But let me change slightly the subject.
What about the low yield business? Tourist pax or simply the average pax willing to have the best bargain for his/her flight? This is a very important tendancy and imho certainly worth looking into .
In that respect I would welcome a new low cost concept taking shape from Bru to Africa, maybe fed from a limited N-Atlantic destinations ?
And why not develop it under the "Virgin" brand ? "Virgin Something" to be more fashionable?
Let us be inspired by the existing low cost operators recent successes !
I believe there is big opportunities there too!
Greetz
Christophe

sn-remember · Post by **sn-remember** » 11 Aug 2005, 17:55

Quote:
Because yes I think it possible to successfully develop a comprehensive african network from BRU in the present environment.

However SNBA has neither the finances nor the point to point market to link many of the bigger African destinations (like ACC, JNB, CPT) with BRU

Sorry LJ , nearly forgot your reply but you seem so focused on your position you probabbly missed mine.
Indeed the core of my explanation was obvious: There is no future for any carrier in just point to point exploitation. True at BRU as well as AMS or ZUR or indeed most places. So the question is: How to setup an effective transit traffic at BRU ? (as was purposefully build up at AMS along the years or at ZUR or at any similar place?)

Do you really think airlines like LX will venture into destinations like Kigali, Lumbumbashi, Kinshasa or any other not so well known destination?

Yes I think so ! LX is already flying to some ill deserved places why not the one you mentioned?
And as the last post of A330 suggests, Emirates will certainly not remain the only "bad guy" before long !
BTW Lubumbashi is not served by snba and never was by Sabena either (as far as I can remember).

Quote:
See BA possibly seeking to take control of IB; would this shut the door to any further possible take over by BA (of SN in our case) ?

A takeover by BA of SNBA wouldn't generate the anti-trust issues which a AF/KL would. Not only is the geographical area different, both airlines also have a competetitor called Eurostar.

I don't see where Eurostar comes in the picture

But I don't want to argue on this because neither of us are specialists on this question and moreover I doubt AF/KL would be interested to rescue the company they contributed to asphyxiate? Unless proven otherwise !

Christophe

Atlantis · Post by **Atlantis** » 09 Dec 2005, 21:56

I want to give some remarkable figures about some Africa destinations of SNBA.

2004 was a very strong year of the African network of out national airline.
But, some destinations aren't doing well in 2005.

Kenia: -38,2%
Senegal: -16%

Do you remember last year when SNBA decided to increase the flights to Dakar? So, in that way it's not bad that SIA is a codeshare partner for SNBA. They can fill the empty seats.

And Kenia; SNBA drop the flights to Mombasa. That's the main reason for this loss at Kenia.

When I see this figures it's clear that SNBA has to take some action before expand on other destinations. Some other destinations has also losses but these two are the biggest.
SNBA needs good feeder lines for those routes. So, SNBA wake up!!

Source: Travel newsletter.