Brussels Airlines in 2020

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Poiu
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Re: Brussels Airlines in 2020

Post by Poiu »

DeltaWiskey wrote: 02 Apr 2020, 12:08 I also don't understand why so many on this forum would like to see SN fail. If SN goes bankrupt, there will not be a new Belgian carrier! Many investors have already burnt their hand once, they will not do it a 2nd time.
The traffic will be taken over by Ryanair, Easyjet, Wizzair, or if "we" are lucky Transavia or Level, the latter two have at least some decent working conditions.
It's not in the interest of our country that BRU will be dominated by an ULCC like Wizzair or Ryanair, many high paying jobs will disappear.
Nobody likes to see SN fail, I, like several others, just pointed out that SN wasn’t viable before Covid 19 and will be even less so after the crisis. Whilst others were posting record profits SN posted loss after loss despite state aid. During recent years SN needed several bailouts by the state and Lufthansa. Reboot was about cutting down costs and shrinking the airline by at least 10%.
If there would be unlimited taxpayers money available saving SN would be a no brainer, but unfortunately there isn’t.
The Walloon press is reporting the virtual bankruptcy of Brussels Airlines today, investing 500 million to 1 billion to continue with an SNlight could save 2000 of the 3500 jobs, but there are more than 1 million jobs at stake in Belgium today and many could be saved with a lot less money than the millions requested by SN.
My personal opinion is that we should let go SN and get ready to invest 1 billion in another airline, eg British Airways, in exchange of a Brussels base with 15 to 20 aircraft once we start to come out of this crisis. That would be the best long term solution for employees, Bru Airport and the taxpayer.
Last edited by Poiu on 02 Apr 2020, 13:16, edited 1 time in total.

Poiu
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Re: Brussels Airlines in 2020

Post by Poiu »

Boavida wrote: 02 Apr 2020, 12:52 SN has proven in the past that it can be a profitable company. Let's hope everybody gets this and will do what is necessary.
Quite the contrary, SN has proven they’re NOT profitable, have look at the consolidated loss, over 150 million.
This forum seems to ignore the basics of economics, last week SN posted a loss of 40 million euro for 2019, it wasn’t even mentioned here. The Reboot plan has simply been ignored in this forum, whilst it was clear from the start it was about cost saving and shrinking to survive, many on here kept on banging the uncontrollable expansion drum....

Johan23
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Re: Brussels Airlines in 2020

Post by Johan23 »

:mrgreen:

Boavida
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Re: Brussels Airlines in 2020

Post by Boavida »

Poiu wrote: 02 Apr 2020, 12:59
My personal opinion is that we should let go SN and, eg, invest 1 billion in British Airways in exchange of a Brussels base with 15 to 20 aircraft once we start to come out of this crisis. That would be a better solution for employees, Bru Airport and the taxpayer.
:shock:

So Belgium should let go a home carrier to invest 1 billion in a foreign airline?

I thought April 1 was yesterday...

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Yuqu12
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Re: Brussels Airlines in 2020

Post by Yuqu12 »

It may be indeed that SN hasn't always been profitable, but it is also useful to look a little bit further being the government. If they take over SN, it may cost money as long as they aren't profitable but the negative economic consequences of SN going bankrupt will cost probably even more. I just read this morning that the Belgian tourism sector may lose 2 billion euros this year. Travel agencies like Connections etc. rely on SN to fly their clients to their destination. So the question should maybe not be whether it is necessary to save an airline which hasn't always been profitable but the question should rather be whether it is a good decision to accept the negative economic consequences of the biggest Belgian airline going bankrupt because of the fact it hasn't been profitable in the past years. Next to that, SN hasn't had losses as bad as Alitalia, so I don't think that re-nationalise SN would ever cost as much as the Italian government has been funding Alitalia over the last 2 years.

Lastly, the government/Belfius could as well impose conditions on the possible re-nationalisation like shrinking a bit, continue the Reboot-programme or being it a temporary re-nationalisation until SN has the funds to buy out the government/Belfius and become independent again.

Poiu
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Re: Brussels Airlines in 2020

Post by Poiu »

Boavida wrote: 02 Apr 2020, 13:15
:shock:

So Belgium should let go a home carrier to invest 1 billion in a foreign airline?

I thought April 1 was yesterday...
What else do yo suggest? Invest 1 billion in SN and see them burning it in two years?
At least the investment in a foreign carrier would give you shares in that airline which could, eventually, give a return in the future, similar to what happened with the banks in 2008.

sean1982
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Re: Brussels Airlines in 2020

Post by sean1982 »

Johan23 wrote: 02 Apr 2020, 13:14:mrgreen:
Very contributive
Boavida wrote: 02 Apr 2020, 13:15
Poiu wrote: 02 Apr 2020, 12:59
My personal opinion is that we should let go SN and, eg, invest 1 billion in British Airways in exchange of a Brussels base with 15 to 20 aircraft once we start to come out of this crisis. That would be a better solution for employees, Bru Airport and the taxpayer.
:shock:

So Belgium should let go a home carrier to invest 1 billion in a foreign airline?

I thought April 1 was yesterday...
Whilst I dont fully agree with Poiu on this, we would be doing that anyway? Have we seen any willingness of LH to properly invest into SN's future? Will the willingness to invest in SN be there after Corona? Even before it was hard to stay afloat (hence the re-structuring programme) so now we should pour 1 billion of Belgian taxpayers money into it without any garantuees whatsoever? Who is gonna pay that back?

Boavida
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Re: Brussels Airlines in 2020

Post by Boavida »

^^ Obviously I'm talking about the scenario in which LH lets SN go.

sean1982
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Re: Brussels Airlines in 2020

Post by sean1982 »

Boavida wrote: 02 Apr 2020, 13:35 ^^ Obviously I'm talking about the scenario in which LH lets SN go.
Then we would be in a situation like Alitalia, that was/is asking the government every year for extra money to keep it afloat. The only way this MIGHT work is to go back to bare minimums, maybe 3 long haul planes for Africa and 15-ish short haul airplanes and focus on business connections and feeding traffic within star alliance. No more competing with JAF and the ULCC at 15EUR a ticket with planes and staff they can't afford to have.

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Yuqu12
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Re: Brussels Airlines in 2020

Post by Yuqu12 »

@sean1982: if and when the governmen/Belfius decides to invest in SN, they'll certainly impose conditions like with the banks in 2008. The most important thing in the aviation sector is to keep the biggest airline of the second biggest employer of SN alive. If that succeeds, the government can still ask from SN to re-pay the fundings of the government (albeit they should allow SN to pay those back at their own pace).

sean1982
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Re: Brussels Airlines in 2020

Post by sean1982 »

Yuqu12 wrote: 02 Apr 2020, 13:43 @sean1982: if and when the governmen/Belfius decides to invest in SN, they'll certainly impose conditions like with the banks in 2008. The most important thing in the aviation sector is to keep the biggest airline of the second biggest employer of SN alive. If that succeeds, the government can still ask from SN to re-pay the fundings of the government (albeit they should allow SN to pay those back at their own pace).
There is a small posibility this might work, but like a said in above post, in an extremely shrunk version which would have implications on the employment anyway. In my opinion you cannot invest that much public money into an airline and let them pay back just whenever they feel like.

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Yuqu12
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Re: Brussels Airlines in 2020

Post by Yuqu12 »

True, but the banks had the possibility to pay back at their own pace, so I don't really see why an airline wouldn't receive the same opportunity. You can build guarantees there as well, like make it obligatory for airlines to repay the government if they make from the profit of the previous year. If the conditions for aid are stringent enough on guarantees for the government and flexible enough at the same time to allow SN to make the right decisions, I'm pretty sure that a re-nationalisation can work.

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Airbus330lover
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Re: Brussels Airlines in 2020

Post by Airbus330lover »

Bralo20 wrote: 02 Apr 2020, 11:59
Airbus330lover wrote: 01 Apr 2020, 17:12

No Air Belgium, nor Air Antwerp ? They prefer to give money to LH ? The SR story ?
No, according to the latest info leaking out (and HLN did publish it also a a bit ago) the Belgian government is looking if it's possible to take over Brussels Airlines from Lufthansa. They suspect that LH won't have the funds for SN and they deem SN necessary for the Belgian economy. So it seems that SN will become Belgian again... Biggest question will be at which price...
Hopefully, without politicals on the managment

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Airbus330lover
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Re: Brussels Airlines in 2020

Post by Airbus330lover »

Yuqu12 wrote: 02 Apr 2020, 13:21 It may be indeed that SN hasn't always been profitable, but it is also useful to look a little bit further being the government. If they take over SN, it may cost money as long as they aren't profitable but the negative economic consequences of SN going bankrupt will cost probably even more. I just read this morning that the Belgian tourism sector may lose 2 billion euros this year. Travel agencies like Connections etc. rely on SN to fly their clients to their destination. So the question should maybe not be whether it is necessary to save an airline which hasn't always been profitable but the question should rather be whether it is a good decision to accept the negative economic consequences of the biggest Belgian airline going bankrupt because of the fact it hasn't been profitable in the past years. Next to that, SN hasn't had losses as bad as Alitalia, so I don't think that re-nationalise SN would ever cost as much as the Italian government has been funding Alitalia over the last 2 years.

Lastly, the government/Belfius could as well impose conditions on the possible re-nationalisation like shrinking a bit, continue the Reboot-programme or being it a temporary re-nationalisation until SN has the funds to buy out the government/Belfius and become independent again.
Good point, but why Belfius ? We have a lot more investors outside the banks and Belfius alone.

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Conti764
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Re: Brussels Airlines in 2020

Post by Conti764 »

Poiu wrote: 02 Apr 2020, 13:08
Boavida wrote: 02 Apr 2020, 12:52 SN has proven in the past that it can be a profitable company. Let's hope everybody gets this and will do what is necessary.
Quite the contrary, SN has proven they’re NOT profitable, have look at the consolidated loss, over 150 million.
This forum seems to ignore the basics of economics, last week SN posted a loss of 40 million euro for 2019, it wasn’t even mentioned here. The Reboot plan has simply been ignored in this forum, whilst it was clear from the start it was about cost saving and shrinking to survive, many on here kept on banging the uncontrollable expansion drum....
Yet nobody claimed the government should just invest hundreds of million is loss making SN. It seems only logical the company will (would) get money by further following the Rebootplan or at least a variant of it. I already posted that with government intervention they should be careful not to turn SN into a new Sabena.

More an XL SN Brussels Airlines scenario. Pre-VEX-merger SN was returning profits with even a 26 million euro profit in 2007 in the first year of Brussels Airlines.

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Conti764
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Re: Brussels Airlines in 2020

Post by Conti764 »

sean1982 wrote: 02 Apr 2020, 12:48
DeltaWiskey wrote: 02 Apr 2020, 12:08

I also don't understand why so many on this forum would like to see SN fail. If SN goes bankrupt, there will not be a new Belgian carrier! Many investors have already burnt their hand once, they will not do it a 2nd time.
It's not a question about wanting to see it fail, it is a question off "should public money be invested into it". If you work for the company, then it's probably a no brainer. If you are a critical taxpayer like myself, the answer isnt so clear. There are hundreds if not thousands of companies that will need to be saved, many of them of critical importance to the Belgian economy and public life. Why invest a couple of 100 million euros into a company that with some small exceptions has not made a profit in its whole excistence? Where the parent company has not showed the slightest intrest in making it into something useful but just uses it as an extension to prptect their home market? Should all of our tax money be used to protect the FRA market of LH? I have serious doubts about it, specially because we will all be paying more then a few tickets a year to keep it afloat. Question is ... for how long?
If you want to saveguard whatever is left of Belgian aviation the government has no choice but to keep SN afloat. Afterall, SN going bankrupt will have huge repercussions for BRU as well in losing other traffic apart SN's resulting in even more job loss. Like in 2002 neighbouring country's airlines will prey on whatever is left of the Belgian market but that's not what they should be going after.

SN has to change strategy (again). The merger with VEX proved a mistake, going after the price sensitive travellers as well. Return to the basics of SN Brussels Airlines and rebuild from there with fewer A319/20 aircraft but retaining as much long haul traffic as possible.

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Conti764
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Re: Brussels Airlines in 2020

Post by Conti764 »

Poiu wrote: 02 Apr 2020, 13:29
Boavida wrote: 02 Apr 2020, 13:15
:shock:

So Belgium should let go a home carrier to invest 1 billion in a foreign airline?

I thought April 1 was yesterday...
What else do yo suggest? Invest 1 billion in SN and see them burning it in two years?
At least the investment in a foreign carrier would give you shares in that airline which could, eventually, give a return in the future, similar to what happened with the banks in 2008.
Keeping the cow that produces the much needed milk to keep SN alive implicates that such foreign company would have to set up a Belgian branch with a Belgian AOC to operate the profitable long haul routes to Africa. Which company will dare to take on such endeavour in times when they need to restructure and fight to stay alive themselves?

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Conti764
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Re: Brussels Airlines in 2020

Post by Conti764 »

sean1982 wrote: 02 Apr 2020, 13:30
Johan23 wrote: 02 Apr 2020, 13:14:mrgreen:
Very contributive
Boavida wrote: 02 Apr 2020, 13:15
Poiu wrote: 02 Apr 2020, 12:59
My personal opinion is that we should let go SN and, eg, invest 1 billion in British Airways in exchange of a Brussels base with 15 to 20 aircraft once we start to come out of this crisis. That would be a better solution for employees, Bru Airport and the taxpayer.
:shock:

So Belgium should let go a home carrier to invest 1 billion in a foreign airline?

I thought April 1 was yesterday...
Whilst I dont fully agree with Poiu on this, we would be doing that anyway? Have we seen any willingness of LH to properly invest into SN's future? Will the willingness to invest in SN be there after Corona? Even before it was hard to stay afloat (hence the re-structuring programme) so now we should pour 1 billion of Belgian taxpayers money into it without any garantuees whatsoever? Who is gonna pay that back?
Yes. You never get guarantees in a highly competitive industry as aviation. It comes down to determining if the risk is worth the effort. In my opinion it is. And if I'm reading the press reports correctly it's not pure taxpayer's money that will be invested into the company but is Belfius taking charge into looking for the necessary funds.

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Conti764
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Re: Brussels Airlines in 2020

Post by Conti764 »

sean1982 wrote: 02 Apr 2020, 13:40
Boavida wrote: 02 Apr 2020, 13:35 ^^ Obviously I'm talking about the scenario in which LH lets SN go.
Then we would be in a situation like Alitalia, that was/is asking the government every year for extra money to keep it afloat. The only way this MIGHT work is to go back to bare minimums, maybe 3 long haul planes for Africa and 15-ish short haul airplanes and focus on business connections and feeding traffic within star alliance. No more competing with JAF and the ULCC at 15EUR a ticket with planes and staff they can't afford to have.
Imho you'e being a little too harsh with trimming down the long haul flying, although I do agree with heavily trimming down the European fleet. But for the rest it seems pretty obvious SN will have to let go of the lower part of the market and focus on the higher yielding business market. I'm curious to see how aviation will evolve after Corona anyways. I think it will make a shift towards higher yield flying again.

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Conti764
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Re: Brussels Airlines in 2020

Post by Conti764 »

sean1982 wrote: 02 Apr 2020, 13:47
Yuqu12 wrote: 02 Apr 2020, 13:43 @sean1982: if and when the governmen/Belfius decides to invest in SN, they'll certainly impose conditions like with the banks in 2008. The most important thing in the aviation sector is to keep the biggest airline of the second biggest employer of SN alive. If that succeeds, the government can still ask from SN to re-pay the fundings of the government (albeit they should allow SN to pay those back at their own pace).
There is a small posibility this might work, but like a said in above post, in an extremely shrunk version which would have implications on the employment anyway. In my opinion you cannot invest that much public money into an airline and let them pay back just whenever they feel like.
I assume the most favourable scenario is the Belgian state taking a stake through the FPIM in SN, not granting a pure loan. If SN would get to stable profitably one day, they could either take the dividents payed or sell their stake to another investor.

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