Brussels Airlines in 2020

[nordikcam]

What about CS meetings with the Austrian Government and ours, moreover, represented by Alexander De Croo. It was not this week that he was expected rue de la Loi? I ask that before the planes of some are the planes of others ...

De Standaard has an article from today saying that next week there should be a solution about state aid. I did a google translate but the main points:

1. Vrancx couldn't give any clarity to the employees as negotiations are still ongoing.
2. Gustin is an adviser to the BE government. The BE government has also not forgotten Spohr's intention to integrate SN with EW. Whereas Mayrhuber had more ambitious plans than Spohr.
3. The issue of trust has been a major thorn in negotiations but the talks more recently have been constructive.
4. BE government does not want to give a blank check to LH, the BE government is also looking at what will happen with Germand and Austrian governments also.

Lets see what will happen next week!

Thx a lot sir. Interesting.

[oldblueeyes]

Greener airlines is bullshit bingo for hardcore veggie votes, nothing more.
Greens tend to be very pragmatic if they are in the governments - for example they sit in the supervisory board of the FRA airport ( as members of the regional government) and of course they voted for terminal 3 and new opportunities for LCCs.
In Belgium you don't have an internal network so that it's more a symbolic claim . And "flight nummbers" for commuter trains to various cities are a piece of cake - Lufthansa is doing this in FRA so no real challenge here.
If it comes to flights, it is a matter of capitalization SN is opwrating rigtht now on current mainstream technology.
Interesting to read about Mayrhuber - basically he has some legacy issues left - a hardly restructured Austrian, some fleet decisions that are costly until now etc. and of course, his promised were great 15 years ago - to bad he can't put them back on the table anymore.

As for Lufthansa, the strategic direction was clear:
- target fleet size at group level with approx 100 less aircraft
- 2023-24 depending on market same number of passangers carried via upgauging and business model adjustements

[sean1982]

In the mean time, IAG and Etihad are on the hunt to take Vienna from LH. Which proves that even in corona times business is going on and airlines are looking towards the future. Also puts the whole “no one else is interested in BRU”-story in the bin.

https://www.aerotelegraph.com/en/iag-w ... -lufthansa

[oldblueeyes]

..rather political try to show a "PlanB" to the public.

Etihad? Great investors AirBerlin, Alitalia, Darwim (Etihad Regional) etc. a true success story, indeed. What would they benefit from, especially as now Abu Dhabi signed a cooperation agreement with Wizz? And if long haul would be such a great idea, why doesn't work 400km nearby with Air Serbia?

IAG is just closing down Gatwick and BA fired 12.000 people last week - the last thing their PR needs are rumors of making Level big in Vienna.

Of course, any "talks" can make the ticket for their competitor more expensive, but let's be realistic.

[Inquirer]

In the mean time, IAG and Etihad are on the hunt to take Vienna from LH. Which proves that even in corona times business is going on and airlines are looking towards the future. Also puts the whole “no one else is interested in BRU”-story in the bin.

https://www.aerotelegraph.com/en/iag-w ... -lufthansa

You might be a bit too eager to bin it, Sean: even if IAG have real interest in VIE (and aren't just trolling or hoping to save their struggling LEVEL operation there by growing it with state support), I see no real interest expressed from them in BRU, which I have always read here for all those years would be such a unique opportunity for them? Clearly not then...

FYI, L'echo is running an article today on how the Belgian government has officially come to the conclusion nobody else is seriously interested to fill any void in BRU and will thus go for 'plan A' as presented by Brussels Airlines and the airport: https://www.lecho.be/entreprises/aviati ... m/10225898



A question about those nightstops like they are called:
if their only reason is to feed intercontinental planes leaving in the morning, why not have those leave a few hours later so the planes feeding can go up and down in Europe first????
Is the number of transfer passengers from the US landing in the morning really that big to keep it that way?
Can those USA flights not be made to come in a bit later too then, to shift everything back by a few hours?
Moving the main connecting moment to late afternoon would give BRU an interesting selling point even as they'd be one of the few (only?) medium sized hub in Europe with evening flights to the US.
Also, they'd serve the Belgian corporate passenger better as it would mean they'd probably be having more of those very early morning outbounds to many of the European cities where now the first flight is sometimes in the middle of the morning only, which means you can not always do day returns: I often have to connect via FRA or MUC exactly for this reason, notably to the smaller cities which only see 2 flights a day.

[Poiu]

IAG is just closing down Gatwick and BA fired 12.000 people last week - the last thing their PR needs are rumors of making Level big in Vienna.

Nobody has been fired at BA, consultation started about making UP TO 12000 (our off just under 50000) people redundant, the final figure will be, hopefully, a lot lower.
IAG won’t pull out of Gatwick, Vueling certainly not, BA maybe but after Virgin and Norwegian being forced to leave Gatwick, chances are that BA will reconsider and stay.

[oldblueeyes]

Vueling and Iberia already asked for help from the Spanish state. So let's not think that IAG is a white knight.

What if Lufthana is changing the story and convince the German state that they can provide a great equity story for them? So getting more money (at the end Germany gets currently debt for negative interest rates) and play bullish to consolidate? They wanted this anyhow before the crisis with TAP and Alitalia talks.
Just imagine them:
- buying assets from Norwegian in Gatwick ( major shareholders are now leasing companies and former bodn owners happy to get any cash)
- buying out Corsair from Wöhrl, the German airline turndaround investor ( and if Brussels goes wrong simply moving the African routes to Paris)
- consolidating both these assets under the "Ocean"project of leisure/low business long haul
- further buying a P2P player like Aegean for the short haul
- maybe some Norwegian short haul assets
- if things go wrong in Austria and Belgium consolidate what they want to keep under Eurowings Europe
- partnering with Portugal on TAP with a share call/put model or maybe on a drag a long with the German state for exists etc

With Germany backing them, not the worst strategy, that could pay off also for the German state, if they would make for aexample a partial IPO for a consolidated Eurowings ( with all short haul assets in etc) once the valuations will be good again.

[Poiu]

let's not think that IAG is a white knight.

Absolutely correct, there are no white knights, a consolidation of the European commercial aviation was overdue long before Covid19! Dumping shiploads of money into the sector will only lead to a number of Alitalia style outfits.
Don’t get me wrong, this is an exceptional situation and as such exceptional measures are necessary but helicoptering money in companies who were wobbling before Covid19 struck will only delay the inevitable whilst putting even more pressure on those who had a solid business model.

[oldblueeyes]

True.

and that's why i do believe that the basically healthy ones will consolidate first and do the rights things to do.

IAG:
- they made already a big move with Air Europe -> next step would be to integrate them
- they still have to sort out the Vueling unions issue
- Level long haul is still an experiment
- big question markt is Gatwick - Virgin is struggeling , Norwegian as well, they had to reduce temporary, Easyjet could be partially lamed by a management vs Stelios conflict

Delta
- tried to consolidate their Atlantic bridge, but now they face some problems
- Virgin Atlantic is struggling and they need a European 51% partner - Branson can't make it all alone
- AF/KLM - KLM as always peforming well, AF a lame duck with many unsorted issues - Hop not really reorganized, Transavia growth vs unions etc
- new ideas about Alitalia but here to much politics
- Air Europa "lost"
- at the same time a more sexy bride just acquired and extracted from the One World -> Latam

Lufthansa
- Swiss sorted out
- Germany both with chance of having a safe partnr in the government and speeding up restructuring but also threat of political useless influcence on real markets - eg long haul wishes from Berlin etc.
-Eurowings not sorted out / including here options for Belgium and Austria
- but big chance in the home market with Condor losing its white knight from the East
- bullish before crisis - aiming more (north) Italian market share and take over of TAP together with United

Wizz
- Indigo Partners still expanding ventures and presences
- however already mature in Eastern Europe thus need for Western Solutions or alternatives such as the Abu Dhabi deal
- actually not competing with the big leagcies as pure ULCC
- ... but looking actively for white spots in the market

Easy
- actually the company with most chances to expand their primary airports strategy
- ... but struggeling with the desperate need of the main shareholder for dividends to cross finance the rest of his ventures

Ryan
- at the end of their business model, on the short run, will have to survive until the next wave of province airports and politicians would offer subsidies to fly from nowhere to nowhere
- they might face a consistent discussion on avoiding local taxes vs asking for local support

These are the options on the market, all of them with pluses and minuses.

[LJ]

A question about those nightstops like they are called: if their only reason is to feed intercontinental planes leaving in the morning, why not have those leave a few hours later so the planes feeding can go up and down in Europe first????

The nightstops are there top caputure the business market who want to arrive at their destination early to make the most out of their trip and enabling day trips for some. It's not like employees of companies based in Belgium only travel from Belgium to destinations within Europe. They travel to Belgium (those who work in subsidiaries or offices outside Belgium).

[Jetter]

CS also referred to the expensive night stops. For me this means again that he sees SN's future as a LCC/P2P airline. We must all learn to read between the lines. Also the fact that apparently now it has been decided that LH/EW/LX will fly again much sooner than OS/SN. A confirmation of something we knew before (at least some of us); = CS wants basically an LH Group with LH/LX (and possibly EW).

It’s only logical that SN will fly again later if you look at the lockdown measures in Belgium, with many countries relaxing them Belgium is now one of the most restricted countries in Europe.

As to LH pilots offering to cut there salaries by 45%. Great, they can afford it. Not every pilot or flight attendant can afford to do that.

You think every LH pilot can make that concession easily? Others like KL offered a cut as well. Where is the offer of SN’s pilots? Surely they can ’afford’ it while keeping a good standard of living: flight attendants manage to live with much lower wages.

[Flanker2]

I'm going to repeat it again and over again if necessary.

This is the time for SN to cut ties with Lufthansa.
The problem is not Lufthansa but Carsten Spohr.
We have a very different Lufthansa today than when Gustin negotiated the sale with Wolfgang Maryhuber.

Maryhuber is the one who came up with the masterplan of integrating LX, OS, SN to form a larger group of airlines. He was a trustable and charismatic business person.

Carsten Spohr does not have the charisma that Maryhuber has, he's just a bully.

He's bullying Austria, Belgium and even his own Germany for a Lufthansa-takes-all type deal that has all these governments wondering if it makes sense at all to save them. The conditions he is seeking in Germany are ridiculous.

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Bernard Gustin was not a very good CEO at first. He sold SN to LH for very little, laid out his Airbus-only strategy, wetleasing all the rest of the regional aircraft. The merger with Virgin Express could have gone better. He followed Lufthansa into their full-takeover trap, which also in the end costed him his job.

However, despite some key strategic mistakes, he became very good at his job.
He was able to make the Airbus-only strategy work somehow. It was not perfect nor profitable but the airline didn't fall apart, which could just as easily have happened when U2, FR and VY came to BRU and Transavia were lurking.
He has also opened up to the leisure market, by far Belgium's largest market, with cooperations with Thomas cook and Club Med.
Africa grew organically but not by much.
He launched flights to the USA, which were not a disaster but not very profitable either. He did however manage to do that in a very competitive environment with 9W running a scissor hub and despite a strong AA presence.

Despite refusable of LH to let them fly to Asia, Gustin was able to attract a couple of Asian Star Alliance partners to BRU to offer codeshare flights.

However, I think that Gustin showed that he had "his" SN in his hands when he fended off Ryanair and Vueling attacks to the BRU operation, something that I did not see him capable of doing and which earned my respect. Doing that required a sense of open-mindedness that other CEO's couldn't have displayed.
Gustin effectively invented the Hybrid-model.

I think that whatever is decided next, Gustin needs to be put back at the head of SN.
He may be no good at the head of another airline, but SN is his baby and he knows what to do to protect market share, but also to grow.

Gustin has also shown that he's a patriot, he stands and falls with Belgium even if that comes at a cost to him personally.



So my suggestion to the Belgian government, is to try to look if LH can give hard guarantees for growth and investments in SN, and I don't mean something written on a restaurant napkin.
More jobs, more aircraft, flights to Asia, major expansion in Africa, expansion to Latin America, etc...
If they can give hard guarantees, sure give them 290 million, or even 500 million in loans.

If they can't, let them declare SN insolvent and let a government fund make an offer on SN.
Invest 3 Billion EUR and make it a proper airline with > 100 aircraft, no wetleasings.
Purchase aircraft instead of leasing to crank up margins.
Direct rail connections from BRU to Amsterdam, Rotterdam, Paris, London and Koln.
Flights to Asia, more flights to Africa, dots in Latin America.
Regional flights covering second tier airports across Europe for feeding.
Aggressive cargo strategy, specialising in perishables.

Basically, build a new LX in BRU.

[b.lufthansa]

So my suggestion to the Belgian government, is to try to look if LH can give hard guarantees for growth and investments in SN, and I don't mean something written on a restaurant napkin.
More jobs, more aircraft, flights to Asia, major expansion in Africa, expansion to Latin America, etc...
If they can give hard guarantees, sure give them 290 million, or even 500 million in loans.

If they can't, let them declare SN insolvent and let a government fund make an offer on SN.
Invest 3 Billion EUR and make it a proper airline with > 100 aircraft, no wetleasings.
Purchase aircraft instead of leasing to crank up margins.
Direct rail connections from BRU to Amsterdam, Rotterdam, Paris, London and Koln.
Flights to Asia, more flights to Africa, dots in Latin America.
Regional flights covering second tier airports across Europe for feeding.
Aggressive cargo strategy, specialising in perishables.

Basically, build a new LX in BRU.

3 billion after the Sabena demise DAt (new company) got peanuts. Who thinks this will be different now

[Boavida]

If only they managed to create a Sabena-KLM company back in the day....

[Airbus330lover]

If only they managed to create a Sabena-KLM company back in the day....

Yes discussed, but ... never finalized

[Poiu]

If only they managed to create a Sabena-KLM company back in the day....

Yes discussed, but ... never finalized

In 1990 (ish) both KLM en BA had a 20% participation in Sabena, the infamous SWA (Sabena World Airlines). The cooperation didn’t last for long though, officially because of bad results, but, without becoming too political, there certainly was a language problem as well.
A couple of years later there was a close cooperation with Air France, which didn’t last either.

[Inquirer]

We're getting off topic here, so feel free to delete:
the deal between Sabena and KLM was well advanced, but ultimately blocked by the PS who didn't want to see French become all but a marginal language in the merged company: they pulled out all stops and convinced the socialist government in France to have Air France make a competing offer, which looked better on paper.
Of course, there was just too much overlap between 2 companies of massively different sizes so ever work well, so they broke up after a couple of years, but the best chance of a logical merger with KLM was meanwhile gone forever.
The irony is that the 2 candidates of that time to merge with, are now merged themselves and even KLM is having to fight for its place under the Fench sun.
It's a nice illustration of what happens when governments interfere with business strategies or why such should indeed be avoided.

[Passenger]

I'm going to repeat it again and over again if necessary.
...
So my suggestion to the Belgian government, is to try to look if LH can give hard guarantees for growth and investments in SN, and I don't mean something written on a restaurant napkin. More jobs, more aircraft, flights to Asia, major expansion in Africa, expansion to Latin America, etc... If they can give hard guarantees, sure give them 290 million, or even 500 million in loans. If they can't, let them declare SN insolvent and let a government fund make an offer on SN. Invest 3 Billion EUR and make it a proper airline with > 100 aircraft, no wetleasings. Purchase aircraft instead of leasing to crank up margins. Direct rail connections from BRU to Amsterdam, Rotterdam, Paris, London and Koln. Flights to Asia, more flights to Africa, dots in Latin America. Regional flights covering second tier airports across Europe for feeding. Aggressive cargo strategy, specialising in perishables. Basically, build a new LX in BRU.

You may repeat the same business plan a hundred times, it won't help. Not because nobody accepts it, but because you cannot objectively evaluate your incompetence and therefore you overestimate your ability. That's no insult, really not: books have been written about this (= the Dunning-Kruger effect).

"...More flights to Asia, more flights to Africa, conquer Latin America.. Invest 3 Billion..." Is there nobody you know in aviation or travel or tourism who can explain to you how deep we're in the shit right now, and how little prospect there is for the near future? Why don't you simply adapt your business plan with IATA's prognosis? "...Q3: Recovery in domestic markets, slow international recovery, recession. Q4: Recovery in domestic, 50% recovery international markets, recession...”. And we're only in Q2 now!

A recession and only 50% international recovery during Q4. And what is flankers' answer? "3 Billion and more flights to Asia, Africa, South America!"

I rest my case.

[oldblueeyes]

Patriotic approaches are not bad in their own but they are not realistic to market realities and an open skies Europe.

It's nice to have big dreams on long haul, but the reality is that this work typically in alliance internal JV's. And the alliances are built around big founding members from each continent and each of them has a word to say.

Delta is already a shareholder in AF/KLM and Virgin Atlantic serving already 3 hubs nearby.

IAG has not only UK and Spain but needs also critical mass for DUB.

LH is founding member of the Star Alliance and unlikely that they would stay close friends if they would get a punch in their face. Also they have a very good relation with Neeleman - lastly they were in talks to catch TAP together with United, 20 years ago they were with 25% shareholders in Jet Blue etc.

So where should find a new company friends on the other side of the Ocean that could carry passengers further? Outside JFK which is a markt itself, even highly popular leisure destinations such as Miami were not working for Austrian...

Dreams are always good, but taxpayers' money should go into something feasable.

[LJ]

I'm going to repeat it again and over again if necessary.

This is the time for SN to cut ties with Lufthansa.

AF/KL would welcome your thoughts. They would be greateful if they can have the whole area from The Netherlands till France for themselves.