Brussels Airlines future and financial perspective

[Conti764]

I agree, Jetter, but does European legislation regarding state aid allow such exceptions? We can only hope LH goes ahaid and buys the remaining shares.

[sean1982]

Sorry to see you suffer so much on commuting sean1982. But I hope you mean back and forth to work? Or do you take public transportation? Otherwise I just can't see how it can take 4 hours to get there.

Everyone has their own priorities but for me a commute is max 1h to go to work unless it is in extraordinary circumstances. So, 2h in total.

I mean by car yes, normally I drive about 35 min to BRU, now im close to 2hrs (not including the 15-20 min to get into the airport)

[Jetter]

I agree, Jetter, but does European legislation regarding state aid allow such exceptions? We can only hope LH goes ahaid and buys the remaining shares.

Yes. The previous state aid was a lost cause from the start, so they should change the argument for said aid ASAP, with the new rationale being the terror attacks.

1. Save as otherwise provided in the Treaties, any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the internal market.

2. The following shall be compatible with the internal market:

(a) aid having a social character, granted to individual consumers, provided that such aid is granted without discrimination related to the origin of the products concerned;

(b) aid to make good the damage caused by natural disasters or exceptional occurrences;

(...)

[Conti764]

Okay, thanks for the explanation :thumbup:

[Conti764]

Sorry to see you suffer so much on commuting sean1982. But I hope you mean back and forth to work? Or do you take public transportation? Otherwise I just can't see how it can take 4 hours to get there.

Everyone has their own priorities but for me a commute is max 1h to go to work unless it is in extraordinary circumstances. So, 2h in total.

I mean by car yes, normally I drive about 35 min to BRU, now im close to 2hrs (not including the 15-20 min to get into the airport)

Just out of curiousity, how did you do it before CRL entered the BRU market?

[sean1982]

I didnt live where I live now I moved after I got BRU base

[sn-remember]

Activity hampered for 1 year at BRU .. Slow recovery expected, no more than 40% of normal activity during summer time. 3 to 6 hrs waiting time for pax in a shelter like, military enforced block. Nothing attractive, really. Prospects look bleak for all business actors, retailers are considering closing and airlines should be in no hurry to restart operations as there will be no trafic guarantee (me think). In such a dire context, the question of SN future operation, and indeed survival is raised.
In French : http://www.lalibre.be/economie/actualit ... a2d4227ad0

[Jetter]

With such very long waiting times they won't need more than 40% capacity. AMS and CDG have many more destinations and are only 1.5 hours away from BRU. This simply means that those are quicker overall from BRU and even more so from other places in Belgium.

[RoMax]

First of all I think that article contains quite a lot of bullsh*t that's very far from being confirmed. Yes there will be checks, but they must be efficient and both fedpol and BAC are not committed to making that happen (questions remains of resources and for that they are very dependent on the government). 9-12 months? Maybe IF they decide to go a lot further than just rebuilding the old infrastructure for a part of the departures hall, otherwise it will be a matter of months and as far as I know they still aim for 100% by the summer if that proves to be possible.

Regarding the pre-checks and resulting possible waiting times. Don't forget the effect on other airports with people saying "look what they do in Brussels, why are there no checks here, is this safe enough?". If this turns out in more than temporary measures and go into something permanent, other airports will also be forced to look at such measures.

[SFM]

The very first post in this topic seems surprisingly accurate today...

Is the aviation world f***ing damned to die, in Belgium?

[Inquirer]

Allow me to step out of my way once more and say I think the'll be just fine after this is over.
Sure, this situation is costing them a lot of money at present, but I'm having a feeling they can actually take the hit so far.

Let's be honnest for a second: their public claims of 'up to 5m per day' are likely just a way to put some extra pressure on both politics and airport to move ahead (and can become a basis for negotiations on financial compensation later); real cost figures will IMHO be close to half of that: simply devide their annual turnover by 365 days, add some 20% to that due to it being high season right now and substract from it the fuel cost savings they're making from not flying as much as normally, and you end up around 2.5 to 3m a day.
Bad for sure, but projected against an operating profit of close to 50m last year and likely a much better one even this year without all of this, I'd be reluctant to claim they can no longer be profitable this year even, let alone go bankrupt soon (one would need several bad years in a row for that)!
My conclusion is all of this has so far cut deep in their projected profits of this year, but it isn't life threatening at present. Which also explains the calm demonstrated by them.
I wouldn't expect them to just wait for the end if it were indeed near; you'd be hearing from them.

Of course, all depends on what happens over the next few weeks:
Can BRU successfully reopen,
Will they get enough slots to run a decent hub again (without point to point leisure routes),
Will they succeed in keeping some direct competitors out over summer maybe,
Can they possibly negotiate a commercial gesture from BAC for helping them out?

I think the most interesting part to the long term financial repercussions of all this is still to come, and provided they play their cards well commercially, bilaterally and politically, they might come out fairly well even for the years to come. If the results for 2016 have to take a hit because of it, then so be it: no shareholder in his right mind is going to close a company which is riding on a wave of commercial successes and just posted excellent results in the wake of a highly successful market repositioning and turnaround. Not at least because they didn't do it when things looked much grimmer a couple of years ago.

[Flanker2]

I think that you are right Inquirer about the loss projection, it's in line with my estimates and same calculation method, so no surprises there.

I'm also not too worried about the short-term and the rest remains to be seen.
Longer term though, will the pax come back? Will the capacity come back?

I think that BRU and SN should work together on communications though.
Telling the media that it will take months to regain full capacity isn't exactly going to encourage the advance bookings. Advance bookings are an integral part of cash flow.

If this situation of less than 20% departure capacity lasts for more than a month from restarting operations, there will be a concern.

[sn26567]

A positive excerpt from abroad about SN:

The only party still smelling of roses in the increasingly drawn out battle behind the scenes between several stakeholders including Zaventem Airport, Aviation Security and Police at present is Brussels Airlines. The carrier, robbed of an early return to its hub airport, has pulled out all stops to ensure passengers booked with them can reach their European destinations out of Liege and Antwerp while intercontinental services operate out of Frankfurt and Zurich to Africa and North America.

Bus services to and from Liege and Antwerp are provided for passengers free of cost and many of the airline's staff have volunteered to stay on after their shift and help the social media teams and call centres to answer questions from passengers with minimum delay. It is precisely such an attitude which will result in passenger retention when the airline returns to Zaventem next week, date and of course operational details which flights will resume still to be confirmed.

[sean1982]

Just so you know, anything you do "after your shift" voluntary needs to be counted as duty time. And it was not only SN who reorganised their flights in an extremely short time

[FlightMate]

BRU at 40% capacity for the summer.

What was SN's market share in BRU?

If (and that's a big IF) priority is given to SN to relaunch their operations, they would actually be competition-free for several months.
Although it's only a small compensation compared to the losses incurred by the bad publicity.
And the biggest competition will come from AMS and CDG.

[shockcooling]

Just so you know, anything you do "after your shift" voluntary needs to be counted as duty time. And it was not only SN who reorganised their flights in an extremely short time

Staff as in people who work for the company, not only 'flying' staff as you assumed...

[sean1982]

BRU at 40% capacity for the summer.

What was SN's market share in BRU?

If (and that's a big IF) priority is given to SN to relaunch their operations, they would actually be competition-free for several months.
Although it's only a small compensation compared to the losses incurred by the bad publicity.
And the biggest competition will come from AMS and CDG.

This scenario is not acceptable for loads of other companies

[RoMax]

BRU at 40% capacity for the summer.

They still aim to be able to work at 100% in July. That 40% is nothing more than bad rumours in some press.

[DeltaWiskey]

I think that is the very least BRU should aim for, capacity back to 100% in time for the summer holiday. If BRU can only provide 40% during the summer, that will probably be the end for SN and very bad publicity for Brussels and Belgium.

SN was in bad shape a couple of years ago, they restructured and are doing ok now. If these attacks happened 5 years ago, that would probably have meant the end for SN.

To those guessing how much SN is actually losing, don't underestimate the costs of operating from 4 bases, relocation of crew and cost of hotac in fra/zrh, costs of all extra bus lines. Bernard Gustin said already a couple of times that from a financial point of view, they better stop flying until BRU is operational again. It is only because the improved profitability in recent times and the spirit of all employees that they are still flying around some passengers.

[Pocahontas]

Belgian companies should get priority in Belgium... Seems logic to me. France, holland, UK, Ireland, Italy, Spain etc.. Would all do the same. In what a stupid world are we living in if that is not possible?