Brussels Airlines in 2020

[Luke777]

I think there will be will be excitement soon, but unfortunatly...it will be short-lived...

[Conti764]

Why fly to Newark? Let a second daily flight be flown by UA and look for another use for that equipment...

Wow, is this the real Belgian attitude?

After a lot of sad news in which a lot of people will loose their job, there are some (vague) prospects for growth and new destinations after the corona-crisis, and the reaction is: let it fly by other airlines. Maybe we should just let Brussels Airlines fail now then?

Strange reaction since I have been very much in favour of support to Brussels Airlines aid.

The thing is, however... SN is part of the A++ joint venture so income of a flight within the JV will be split amongst airlines. Why 'sacrifice' a plane that could be used elsewhere on a route UA contemplated on before the March 22 attacks?

For NYC, keep focussing on JFK since SN is the only one flying BRU-JFK within A++ and leave EWR to your alliance and JV-partner.

[Conti764]

Why fly to Newark? Let a second daily flight be flown by UA and look for another use for that equipment...

Many reasons, if one tries to use logic:

- JV - yes, it is a JV with UA and obligations might come from both sides - pure virtual JVs do not exist
- economics - you can easily calculate and steer pax flows hub-to-hub, that is something low risk and highly predictible, especially if the company to grow is not able to deliver profits yet
- market risks - if one earns money, it can try experimental new routes and burn cash until ceasing them or developing them to break even - but a company that makes no money can not simply fly out of the blue -> remember, a firm's objective is always delivering a profit!
- employment - if you want safe jobs you better go safe routes first - otherwise the option is not flying somewhere else, but no jobs at all and fleet somewhere else

You can still fly another route with A++ (UA-)support. Have a look at another potential transatlantic destination that is not to or from a UA-hub. JFK is a good example since it brings in a lot of Africa bound passengers, but BOS and MIA are hinted as well. Transatlantic, thus JV-covered and no UA hubs.

If you have a partner across the Atlantic the size of UA, it's just my two cents you'd better leave those flights to the company that has both the fleet and the cash to do so. In the meantime spread the transatlantic offer from BRU beyond UA hubs.

But coming back to facts:
- it is known that Lufthansa is the driving force towards the 321XLR development
- however, no plane is flying yet
- and if Brussels should become some, it has to prove first that it can handle the cost of becoming them, as they would be brand new

How is LH the driving force towards the A321XLR development when Carsten Spohr less then a year ago said it is a niche plane and no game changer?

No plane is flying yet but with a far less radical redesign than let's say the 737MAX the projected EIS in 2021 or 2022 is pretty sure to go about.

If the A321XLR would help SN to reach the targets set by LH by opening up new routes at a lower cost than A330's why wouldn't LH go for it? They have all the figures and statistics.

[crew1990]

And we are again into this north-america and africa expansion. When will SN fly to country from the BRIC like Brazil, India and China

[oldblueeyes]

Well,

Both interest and "game changing" do not exclude each other.

Please remember that in the last 3-4 years the major discussion on the long haul was the low cost or P2P long haul. Eurowings tried and failed on a decentral odel with 332, Level is not doing well in Paris, Norwegian was so "successful" that creditors diluted the old shareholders to 5%.

So if we say that the 321XLR is not going to change the long haul business model with hubs, than the statement seems to be valid.

On the other hand, there is no secret that Lufthansa wanted to consider a long range 321 for the whole group, the 321LR did not matched the needs of all airlines and a 321XLR was a choice to be - min requirements to be able to fly 8.700km.

Summarising, it is unlikely to see Lufthansa flying under any brand Berlin-Boston with a 321XLR, but it is likely to see a 321XLR completing hubs towards niche markets.

[lumumba]

Why is the difference so big between a low cost has Ryanair making huge profits and other airlines?
That's the question looks like Ryanair has the right business model for the future.
They will survive without state aid I understand the anger of them it's not fair.

And I repeat it's not Brussels Airlines bashing we have to save it for all the reasons mentioned before I just try to understand.

[Poiu]

Why is the difference so big between a low cost has Ryanair making huge profits and other airlines?
That's the question looks like Ryanair has the right business model for the future.
They will survive without state aid I understand the anger of them it's not fair.

And I repeat it's not Brussels Airlines bashing we have to save it for all the reasons mentioned before I just try to understand.

Ryanair had the perfect business plan for the past. Will it work in the future? Nobody knows...
Personally I think W!zz has a good business plan to be successful in the future.
But back on topic: nice to see Lufthansa making plans for the future of SN, but I am afraid it’s only a dangling carrot in front of the State and employees noses. SN was struggling to survive, long before CoVid 19, a severe restructuring was on the way, the world gets hit by Covid, they desperately need money the State only wants to give when there is a future and out of the blue here is your future: expansion in 2026...

[oldblueeyes]

The question is one wants Ryanair and Wizz as benchmarks.

Let's start with employment - Ryan is using contractors - so where is no fly there are no earnings and no social security for the employees. Is this what you want?

Secondly - they fly based on subsidies - so all taxpayers pay the subsidies for flying from nowhere to nowhere for the hybris of regional politicians.

Third- they fly as they can fill the planes - it might be fine for this looking for a holiday and flexible, but for the engines of the business communities, their frequencies and cancellations policies are not what predictibility means.

And last but not least - they became big by fighting in markets with weak home carriers - badly managed state owned leagcies in Eastern Europe, Italy, province airports in Southern Europe etc.

[Passenger]

So tomorrow is D-Day for Alexander De Croo. He has announced that he has convocated Carsten Spohr to his office: David beats Goliath. De Croo can be that arrogant because Brussels Airlines indeed needs the loan to avoid bankruptcy. So Belgium demands a lot from Lufthansa: interest on the loan (10%?), a blocking minority of 25%+1, investment in new A321XLR, less CO², limited job losses, guarantueed growth as hub, ...

But what if Lufthansa rejects those Belgian demands and announces that corona has made a bankruptcy unavoidable? Impossible? No, says Wouter Dewulf, aviation specialist University Antwerp.

An objective comparison shows that Belgium will loose more then Lufthansa will loose. LH looses its investment - but with the corona crisis, it would have taken perhaps 10 years before the first Euro profit would have been paid out. First they have to neutralize the cumulated loss + loss of BY2019 + intrest on the loan + corona damage. And what is the count for Belgium? 4.000 unemployed from Brussels Airlines plus another 5.000 unemployed at Brussels Airport, SwissPort and other suppliers/creditors. Plus normal damage from a bankruptcy = unpaid VAT, RSZ/ONEM, taxes. Plus Thousands of Belgian citizens and travel agents loose their deposits (SN tickets and ticket vouchers become useless after a bankruptcy). Plus loss of social security and income taxes on the previously employed people. And then this bleeding government (7% deficit) should invest a few Billion extra in a new airline, to compensate all the losses???

Wouter Dewulf: "...after a bankruptcy, slots will become available at Brussels Airport, and Lufthansa/Eurowings has the aircraft and crew to fill them in immediaty... On top, they know the yields so they can select the best routes... And Lufthansa has all SN customers details via M&M...." (De Standaard, 13th May 2020).

[Conti764]

So tomorrow is D-Day for Alexander De Croo. He has announced that he has convocated Carsten Spohr to his office: David beats Goliath. De Croo can be that arrogant because Brussels Airlines indeed needs the loan to avoid bankruptcy. So Belgium demands a lot from Lufthansa: interest on the loan (10%?), a blocking minority of 25%+1, investment in new A321XLR, less CO², limited job losses, guarantueed growth as hub, ...

But what if Lufthansa rejects those Belgian demands and announces that corona has made a bankruptcy unavoidable? Impossible? No, says Wouter Dewulf, aviation specialist University Antwerp.

An objective comparison shows that Belgium will loose more then Lufthansa will loose. LH looses its investment - but with the corona crisis, it would have taken perhaps 10 years before the first Euro profit would have been paid out. First they have to neutralize the cumulated loss + loss of BY2019 + intrest on the loan + corona damage. And what is the count for Belgium? 4.000 unemployed from Brussels Airlines plus another 5.000 unemployed at Brussels Airport, SwissPort and other suppliers/creditors. Plus normal damage from a bankruptcy = unpaid VAT, RSZ/ONEM, taxes. Plus Thousands of Belgian citizens and travel agents loose their deposits (SN tickets and ticket vouchers become useless after a bankruptcy). Plus loss of social security and income taxes on the previously employed people. And then this bleeding government (7% deficit) should invest a few Billion extra in a new airline, to compensate all the losses???

Wouter Dewulf: "...after a bankruptcy, slots will become available at Brussels Airport, and Lufthansa/Eurowings has the aircraft and crew to fill them in immediaty... On top, they know the yields so they can select the best routes... And Lufthansa has all SN customers details via M&M...." (De Standaard, 13th May 2020).

Political posturing, nothing more, nothing less…

First of all, I'm pretty convinced Alexander De Croo did not 'convocate' Carsten Spohr to come to Belgium, he probably kindly invited him.

Belgium has more to loose then Lufthansa, and I assume that the people who are advising De Croo know so. So my guess is that tomorrow, they'll reach an agreement after which Spohr 'allows' De Croo to sell the deal in a for the latter most convenient way (political posturing) as long as Spohr can offer a favorable deal to the board.

There are obvious political faultlines within the government. VLD has nightmares about 2001, MR - like its socialist counterparts in Walloonia - are convinced you can just nationalise SN to twist LH's arm and the CD&V considers (partial) state ownership as something from the past...

[rwandan-flyer]

Brussels Airlines
4 h ·

After more than 7 weeks of hibernation mode, we plan to resume our flights with a reduced network offer as from 15 June. The network of the first weeks will be communicated in the days to come.

All passengers holding a ticket for a flight before 15 June can find all info regarding their booking here: https://www.facebook.com/brusselsairlin ... 6201141644

[lumumba]

The question is one wants Ryanair and Wizz as benchmarks.

Let's start with employment - Ryan is using contractors - so where is no fly there are no earnings and no social security for the employees. Is this what you want?

Secondly - they fly based on subsidies - so all taxpayers pay the subsidies for flying from nowhere to nowhere for the hybris of regional politicians.

Third- they fly as they can fill the planes - it might be fine for this looking for a holiday and flexible, but for the engines of the business communities, their frequencies and cancellations policies are not what predictibility means.

And last but not least - they became big by fighting in markets with weak home carriers - badly managed state owned leagcies in Eastern Europe, Italy, province airports in Southern Europe etc.

About the regional airports and subsidies that's crazy knowing that this is already a polluting industry with no tax on oil!
Thx for the clarification.

[longwings]

When do we expect to see an official list of destinations being dropped? There are two ways to draw such a list. Either do a profitability analysis of each destination and cut the ones deemed not viable in the short-to-mid term then make changes to the fleet; or start by setting fleet-wide financial objectives (e.g. cut lease costs by x%), determine the number of aircraft to retire to meet the objectives, and adjust the network accordingly.

The first one tends to be more effective but may need multiple tweaks to get to a result that translates into an efficient fleet. The process is time consuming.

The second can be done faster, in fact rather very fast, if not a lot of care is taken into selecting the destinations to be dropped once the fleet changes have been determined. As a result, destinations that are marginally profitable may fall off while loss-making ones are retained.

[PttU]

But coming back to facts:
- it is known that Lufthansa is the driving force towards the 321XLR development
- however, no plane is flying yet
- and if Brussels should become some, it has to prove first that it can handle the cost of becoming them, as they would be brand new

How is LH the driving force towards the A321XLR development when Carsten Spohr less then a year ago said it is a niche plane and no game changer?

Ah, classic bargaining technique. "No, I'm not interested" - "But what if it's at this low price?"

Plans for 2026 are nice eye-candy, but 6 years is quite a long time. I'm afraid the plans for 2026 are mainly for convincing people there is a future so it's safe to pump money into.
A lot can happen, but a bigger lot can not happen. Just try to think back to the situation 6 years ago and what has happened since. Time will tell.

[Homo Aeroportus]

So what is this A321XLR about?
A fake news as Donald would say?
Maybe some closer to the LH Propaganda Abteilung (all is good, sleep well) may help me understanding as there must be some logik somewhere...

I have been led to believe that cargo is very important for SN on its AFI network.
The A321 is not precisely large in terms of cargo capacity. 5 ULDs in the FWD hold and 5 in the AFT one. But the XLR version has ACT installed and that takes out 1-2 positions in each hold.

Less than a year ago, Herr Hohmeister (then Lufthansa Chief Commercial Officer – Network Airlines) talking about the A321XLR he said :
"About half of Lufthansa’s cargo is carried in the hold of passenger planes, contributing 10-15% of flight revenue.
This aircraft is not a cargo provider, so why should I take a maybe 0.3% cost advantage against a 10-15% revenue disadvantage as Lufthansa?” He drew an important distinction that the group’s impression of the XLR may not be shared by peers. “Of course others might not have a cargo organization like we have.”
https://runwaygirlnetwork.com/2019/07/0 ... rtcomings/
02 July 2019

On the other hand, if SN is miserably incompetent and incapable of making money on its AFI Ops, all is not lost for the LH Group as the cargo is now in the hands of FRA. Let's be positive and play corporate.


In fact this A321XLR doesn't seem appealing to Herr Spohr either.
https://www.aero.de/news-31944/Lufthans ... anger.html
26.06.2019
Flotten
Lufthansa: A321XLR "kein Game Changer"
Lufthansa setzt sich mit dem Flugzeug ebenfalls auseinander. "Die XLR könnte in unser Netzwerk passen", äußerte sich Konzernchef Carsten Spohr am Montag vor Investoren in Frankfurt zu dem Flugzeug, wie "Reuters" berichtet. "Meiner Ansicht nach ist sie allerdings ein Nischenprodukt."
Spohr zweifelt an, dass Passagiere bereitwillig Strecken von über vier Stunden in Flugzeugen des A320-Formats zurücklegen. Die A321XLR werde deswegen "kein Game Changer" werden.

"The XLR could fit into our network," said CEO Carsten Spohr to investors in Frankfurt on the aircraft on Monday, as "Reuters" reports. "In my opinion, however, it is a niche product."
Spohr doubts that passengers willingly travel over four hours on A320-sized aircraft. The A321XLR will therefore "not be a game changer".


So yesterday the name of the game was : "No money, no honey". First make money then we will give you the right tool to make money.
Now SN is offered network extension to the US and NBO (that SN once served before being taken out by LH).
Sweetening the pill that way is for sure too rudimentary for the diplomatic skills of a leader of his caliber, no?

H.A.

[lucas]

Has anyone actually a reliable source fo confirming that SN would get XLRs and new routes to for exemple Nairobi? I think the only source I have seen passing here was an article on VRTnws in which it was said that it was an option that...
Are these just rumours that are been taken for real announcements or have I just missed something?

[Ge203]

When do we expect to see an official list of destinations being dropped? There are two ways to draw such a list. Either do a profitability analysis of each destination and cut the ones deemed not viable in the short-to-mid term then make changes to the fleet; or start by setting fleet-wide financial objectives (e.g. cut lease costs by x%), determine the number of aircraft to retire to meet the objectives, and adjust the network accordingly.

The first one tends to be more effective but may need multiple tweaks to get to a result that translates into an efficient fleet. The process is time consuming.

The second can be done faster, in fact rather very fast, if not a lot of care is taken into selecting the destinations to be dropped once the fleet changes have been determined. As a result, destinations that are marginally profitable may fall off while loss-making ones are retained.

ACE, BLL, BRS, CHQ, CLY, PMO,CTA, FNC,FSC, HAJ, HRG, SNI, KGS, KRK, LED, LEI, RAK, RHO, SVO, SVQ, VLC, ZAD, ZAG and ZTH for the short/medium-haul
CKY and OUA for the long-haul.

[oldblueeyes]

About the regional airports and subsidies that's crazy knowing that this is already a polluting industry with no tax on oil!
Thx for the clarification.

at

And now see the numbers at CRL Airport.
- nearly 8 Mio Pax
- 70% market share of Ryanair - makes 5,5 Mio Pax, or equivalent of 20 aircraft
- 10% Wizz - equivalent of 2-3 aircraft

Maybe the real threat for Brussels airlines is not in Frankfurt but the rivalry between the French and Flemish communities in the country leading to a type of competition where everybody is loosing.

[Matt]

Has anyone actually a reliable source fo confirming that SN would get XLRs and new routes to for exemple Nairobi? I think the only source I have seen passing here was an article on VRTnws in which it was said that it was an option that...
Are these just rumours that are been taken for real announcements or have I just missed something?

I hope they won't use a A321LR ( or XLR ) for Nairobi

Spohr doubts that passengers willingly travel over four hours on A320-sized aircraft. The A321XLR will therefore "not be a game changer".

=> He has a point. I think it's only really a good thing for trans atlantic flights.

But he is kind of funny, seeing LH operated a A319 for it's route Frankfurt - Pune...

[Passenger]

...I'm pretty convinced Alexander De Croo did not 'convocate' Carsten Spohr to come to Belgium, he probably kindly invited him.
...

Telling the press that Carsten Spohr will come to Brussels on Friday, is a convocation. A friendly invitation from a politician would be: "the CEO from Lufthansa and myself have agreed to meet very soon".

At the risk of getting a lot of heavy criticism, I will say : given the way that LH has treated SN after Mayrhuber's departure...

"Treated"? Lufthansa ownes Brussels Airlines. The more profit Brussels Airlines makes, the better for Lufthansa. Why don't you accept that?

At the risk of getting a lot of heavy criticism, I will say : given the way that LH has treated SN after Mayrhuber's departure, SN should not give in to LH. If LH, then decides to let SN go bust, let's assume «our» position. Different options are possible if LH abandons SN for good. I can suggest them in detail, if you would like me to. There is no profitable future for the airlines sector (and those around it) until probably 2023.
Do not believe any promises from CS, certainly not if they are vague, in the conditional. Let's show that we have balls and take responsibily for «our own future». There is no future anymore for SN within the LH Group, except being blackmailed, subsidizing LH instead of SN, being taken for a ride with the Germans laughing at us behind our back.

Yes, show us your plans please. Just in general will be fine. First tell us how much the bankruptcy will cost for the Belgian taxpayer (an error margin of 25M is fine). And then tell us how much capital you will raise for your new airline, and where you will find that.

There is no future anymore for SN within the LH Group, except being blackmailed, subsidizing LH instead of SN, being taken for a ride with the Germans laughing at us behind our back.

"Blackmailed"? Repeat: Lufthansa ownes Brussels Airlines. The more profit Brussels Airlines makes, the better for Lufthansa. Why don't you accept that?