Brussels Airlines in 2020

[Ge203]

Stupid Spohr came to ask 290 000 000 euros to our gouvernment, and he came with a private jet. Really

This is one of the jets the training academy of Lufthansa is using, thus part of the hours flight by pilot trainees.

By the way there are 5 of them in the fleet.

How frustrated can you be ?

I'm not frustrated at all, I just find ridiculous to dare to ask someone 290 million euros while coming for a 300km flight with a private jet.

Well there’s no flight between MUC and BRU, so how do you want him to come? It’a surely less expensive to fly a citation than an A320...

[Deejay]

I really don't think he's stupid... how can you say this about the CEO of a company of that size ?
if he is stupid, then all his shareholders are stupid also.

he is a CEO that decides only on the value of the business plans that his employees present him, and he has to assure that those Business Plans are profitable.

Again, can somebody explain why it has been impossible to create a viable south-east Asia hub out of BRU... ?
(somebody was speaking about Brics, but the next Brics are Thailand, Vietnam, Indonesia ....)

why would an SN A350 service totally unrealistic ? to BKK, or SIN, or HKG ? there you could also fly some cargo ...

OS can from VIE, LX from ZRH, Thai can to BRU, but SN can't, why ??


if it is due to LH splitting the market, and keeping the eastwards flights to LH, then indeed SN has a problem,and the belgian government has a point ...

[Passenger]

I'm not frustrated at all, I just find ridiculous to dare to ask someone 290 million euros while coming for a 300km flight with a private jet.

Distance Münich-Brussels is 600 kms, not 300 kms.
But then: it's Spohr, so everything is allowed.

[crew1990]

This is one of the jets the training academy of Lufthansa is using, thus part of the hours flight by pilot trainees.

By the way there are 5 of them in the fleet.

How frustrated can you be ?

I'm not frustrated at all, I just find ridiculous to dare to ask someone 290 million euros while coming for a 300km flight with a private jet.

Well there’s no flight between MUC and BRU, so how do you want him to come? It’a surely less expensive to fly a citation than an A320...

There where a flight MUC-FRA and FRA-BRU this morning, there where also possibilities with train so sorry, doing your little princess flying private jet to say we have no money is a totally stupid selfish behavior.

[Ge203]

I'm not frustrated at all, I just find ridiculous to dare to ask someone 290 million euros while coming for a 300km flight with a private jet.

Well there’s no flight between MUC and BRU, so how do you want him to come? It’a surely less expensive to fly a citation than an A320...

There where a flight MUC-FRA and FRA-BRU this morning, there where also possibilities with train so sorry, doing your little princess flying private jet to say we have no money is a totally stupid selfish behavior.

I think he has other things to do than spending hours in a train (if there’s any..). The guy probably has multiple meetings in a day..

[b720]

The man is here for a meeting, a crucial one.. he doesn’t
Have to spend the whole day on a train.. besides, hotels
Are closed in Belgium. The man needs to fly back home.

[oldblueeyes]

Your questions is feasable, however it is the economics that speak against it.

First of all, each daughter airline of the group has to earn for itself the money for development. Brussels is not able to earn right now even the cost of capital for the newer A333. And previous majority shareholders were unable too, although the former CEO is praised as being very patriotic. Business is about delivering money to shareholders.

Secondly, you have to aknoledge that historically Brussels wass operating a small size of aircraft - the A332. From A332 to A359 it is a long ways not only financially, but also in pax flows.

And here we come - the airlines business works in the logic that O&D pax pay more than tranfer pax. That's why a lot of stupid comments here are in the way of "yes but via LHR, AMs etc it is cheaper". So most likely the other hubs have more O&D pax willing to pay the premium for flying directly.

Last but not least - the catchement area - BRU is pretty much in the West why should somebody eg from RPague fly first to Brussels than back? The alternative called Turkish is still valid.

Last but not least, SE Asia was during the last years heavily under pressure due to the M3 airlines. Do you really thing that with A319 and A332 or similar you would get the econmics eg Emirates has with 2 sectors operated with 773 and 388?

During the last years the WACC of the group was around 5% - most likely with all bailout figures it would raise to 7 or 8% . It is simple economics that every Euro spent into a subsidiary has to produce at least this cost of capital, first otherwise you better do not spend it.

[brabel]

Again, can somebody explain why it has been impossible to create a viable south-east Asia hub out of BRU... ?
(somebody was speaking about Brics, the next Brics are Thailand, Vietnam, Indonesia ....)

BRIC = Brazil, Russia, India, China

BRICS = Brazil, Russia, India, China, South Africa

[Deejay]

Again, can somebody explain why it has been impossible to create a viable south-east Asia hub out of BRU... ?
(somebody was speaking about Brics, the next Brics are Thailand, Vietnam, Indonesia ....)

BRIC = Brazil, Russia, India, China

i know !

i am talking about the NEXT Brics ....
southeast asian upcoming economies ...

[brabel]

Again, can somebody explain why it has been impossible to create a viable south-east Asia hub out of BRU... ?
(somebody was speaking about Brics, the next Brics are Thailand, Vietnam, Indonesia ....)

BRIC = Brazil, Russia, India, China

i know !

i am talking about the NEXT Brics ....
southeast asian upcoming economies ...

Sorry, didn't read "next"

[Deejay]

Your questions is feasable, however it is the economics that speak against it.

First of all, each daughter airline of the group has to earn for itself the money for development. Brussels is not able to earn right now even the cost of capital for the newer A333. And previous majority shareholders were unable too, although the former CEO is praised as being very patriotic. Business is about delivering money to shareholders.

Secondly, you have to aknoledge that historically Brussels wass operating a small size of aircraft - the A332. From A332 to A359 it is a long ways not only financially, but also in pax flows.

And here we come - the airlines business works in the logic that O&D pax pay more than tranfer pax. That's why a lot of stupid comments here are in the way of "yes but via LHR, AMs etc it is cheaper". So most likely the other hubs have more O&D pax willing to pay the premium for flying directly.

Last but not least - the catchement area - BRU is pretty much in the West why should somebody eg from RPague fly first to Brussels than back? The alternative called Turkish is still valid.

Last but not least, SE Asia was during the last years heavily under pressure due to the M3 airlines. Do you really thing that with A319 and A332 or similar you would get the econmics eg Emirates has with 2 sectors operated with 773 and 388?

During the last years the WACC of the group was around 5% - most likely with all bailout figures it would raise to 7 or 8% . It is simple economics that every Euro spent into a subsidiary has to produce at least this cost of capital, first otherwise you better do not spend it.

thanks !

crystal clear... this is the first time I see an analysis this clear on the eastern potential ex BRU, so thanks again oldblueeyes !

nevertheless, two things about the gulf competition,

first it could well be that the golden days of the A388 are behind, even if the energy costs aren't the same for the gulf guys...
but secondly and more important: I prefer by far to have a 13h journey splitted in one of 1 hour, and then to be able to relax overnight for 12 hours, rather than have two times 7, and a stop in the middle of the night in Dubai...

but it is even better if you can fly straight !!

[saratoga]

Hi

I am not an expert in aviation business, but can it be an idea that CS has no intention at all to save Brussels Airlines. Asking 100 million extra sounds for me a bit like an intention to let the negotiations fail on purpose. Perhaps the real plan is to let BA go fail and get those Eurowings birds based in Brussels.

I have a bad feeling about this and having an idea that these negotiations are just a big show and there is another plan behind it.

What do you think?

[Flanker2]

Your questions is feasable, however it is the economics that speak against it.

First of all, each daughter airline of the group has to earn for itself the money for development. Brussels is not able to earn right now even the cost of capital for the newer A333. And previous majority shareholders were unable too, although the former CEO is praised as being very patriotic. Business is about delivering money to shareholders.

Secondly, you have to aknoledge that historically Brussels wass operating a small size of aircraft - the A332. From A332 to A359 it is a long ways not only financially, but also in pax flows.

And here we come - the airlines business works in the logic that O&D pax pay more than tranfer pax. That's why a lot of stupid comments here are in the way of "yes but via LHR, AMs etc it is cheaper". So most likely the other hubs have more O&D pax willing to pay the premium for flying directly.

Last but not least - the catchement area - BRU is pretty much in the West why should somebody eg from RPague fly first to Brussels than back? The alternative called Turkish is still valid.

Last but not least, SE Asia was during the last years heavily under pressure due to the M3 airlines. Do you really thing that with A319 and A332 or similar you would get the econmics eg Emirates has with 2 sectors operated with 773 and 388?

During the last years the WACC of the group was around 5% - most likely with all bailout figures it would raise to 7 or 8% . It is simple economics that every Euro spent into a subsidiary has to produce at least this cost of capital, first otherwise you better do not spend it.

SN can't magically earn any money for development as long as you don't invest in it.
ANA is very successful on their NRT-BRU flight, this could have been done by SN instead of NH. LH benefits from this flight through the J+ joint venture, SN needs to be happy with codeshares on its feeding flights.

SN has always operated A333's before LH sent them two old A332's from LX that they didn't find a taker for.

As for the "catchement area" argument, of Prague to Asia making more sense via Istanbul, you are wrong in many cases. PRG-BRU-NRT is less detour than PRG-IST-NRT.

Lufthansa is also only making money on its long haul network and losing money on short haul.
In fact, Lufthansa would rather see how Air France, KLM, Finnair, BA take away traffic from BRU rather than let their own carrier secure that pie in the market and even help them invade the other hubs.

There is no future for SN with LH as partner.
That has been clear for the past 10 years and it's even clearer now with the Covid-19 crisis.

SN is just a placeholder for LH, nothing more.
You are saying so yourself.

Belgium is being presented the unique opportunity of building a thriving and independent aviation industry.
10 more years of restructuring under Lufthansa or a booming future?

My choice is clear.

I want to come back here in the future and talk about the amazing perspectives of Belgian aviation.
As many of you noticed, I stopped coming around here a couple of years ago when it was clear that SN was turning into EW, there was nothing to talk about anymore.

Will Belgium seize it sopportunity?

I doubt it, surprise me.

[theeuropean]

Maybe they want to put EW in Brussels or maybe not. It was mentioned previously the LH knows the profitable routes but wouldn't SN also know the same information? Also if I remember correctly didn't the Belgian government say they could relinquish slots to LH? I doubt that they can do that as any EU carrier can fly from any European country, but maybe they could ask BRU to give LH bad slot times? Furthermore, if they based EW planes in BRU wouldn't the crews based here have to pay Belgian tax and so would the aircraft or am I mistaken? I remember something about this as it was discussed about FR in Charleroi.

[oldblueeyes]

So do you think that the airport can do whatever they want or the state can proceed towards arbitrary nationalisations just because somebody from the government was not pleased by the talks?

Most of you don't realize that this is not about a flag or tail logo on the airplanes, but about the career paths and emplyoment histories of the Brussels people.

The option for the governement is to pay them to be epmploed and trough a common effort and overcome these times wihtout any real market or pay them unemploment benefits and let them loose seniorities, type ratings and all other things related to this industry.

Lufthansa can still shrink SN to an appropriate level to their real commercial needs and operate it further. But is this the best option for the country and the taxpayers money?

[Flanker2]

Hi

I am not an expert in aviation business, but can it be an idea that CS has no intention at all to save Brussels Airlines. Asking 100 million extra sounds for me a bit like an intention to let the negotiations fail on purpose. Perhaps the real plan is to let BA go fail and get those Eurowings birds based in Brussels.

I have a bad feeling about this and having an idea that these negotiations are just a big show and there is another plan behind it.

What do you think?

Carsten Spohr doesn't have a plan. Never had, never will.
A look at how Eurowings is being managed is sufficient to realise that.
Eurowings has potential to be successful, but not the way they are doing it under his leadership.

If I had 9 Billions in state aid still hanging in the balance, I wouldn't bother to come to BRU to talk about a measly 290 Millions.
The mere fact that he did, is that either negotiations for the 9 Billions are already completed, or he is worried that he may only get a tiny fraction of that and trying to squeeze every penny he can.

If he's not careful, he's going to regret opening his mouth too much about conditions for the German bailout.

[LJ]

This is why to me short flight should be replaced by train service directly from BRU but being sold as a flight like Air France is doing for Brussels. So a passenger book the entire trip via the booking system but instead of an A320, you get a train. It doesn't make any thing about the pricing as the whole journey is commercialised by the same airline

Why would Eurostar want to run trains between BRU and London? They're not going to increase the stops between Amsterdam and London, especially not between Brussels and Antwerp (where the Eurostar is already too slow). If it doesn't even stop at AMS, it certainly won't make the detour to BRU.

[nordikcam]

Carsten Spohr doesn't have a plan. Never had, never will.
A look at how Eurowings is being managed is sufficient to realise that.
Eurowings has potential to be successful, but not the way they are doing it under his leadership.

If I had 9 Billions in state aid still hanging in the balance, I wouldn't bother to come to BRU to talk about a measly 290 Millions.
The mere fact that he did, is that either negotiations for the 9 Billions are already completed, or he is worried that he may only get a tiny fraction of that and trying to squeeze every penny he can.

If he's not careful, he's going to regret opening his mouth too much about conditions for the German bailout.

Can we imagine that the Belgian Government knows what the German Government will do. Like the Austrian Government, moreover. Or everyone is watching everyone ?
I think managing CS is a disaster. Eurowings is the clear proof of this and that it uses SN or OS to prevent the development of BRU or VIE at two airports outside it's comfort zone. Hope the belgian Government knows that.

[Flanker2]

So do you think that the airport can do whatever they want or the state can proceed towards arbitrary nationalisations just because somebody from the government was not pleased by the talks?

Most of you don't realize that this is not about a flag or tail logo on the airplanes, but about the career paths and emplyoment histories of the Brussels people.

The option for the governement is to pay them to be epmploed and trough a common effort and overcome these times wihtout any real market or pay them unemploment benefits and let them loose seniorities, type ratings and all other things related to this industry.

Lufthansa can still shrink SN to an appropriate level to their real commercial needs and operate it further. But is this the best option for the country and the taxpayers money?

If Lufthansa wants to do the Eurowings thing, its fine with me.

In the meanwhile, Belgium can restart a new airline with attractive lease coonditions, 30 long haul aircraft and turn BRU into a real hub. 390 Millions would be a good start, 3 Billions sounds better.
Jetblue was started with 150 Millions if I remember well. Look at where they are today.

Aviation can play a central role in the economic recovery of Belgium, both in terms of jobs and attractiveness for future business, becoming like a European Dubai.

Mr. Gustin, Mr. Davignon, Belgian politicians, I hope that you realise that this is a once in a lifetime opportunity for Belgium.

As for the national/private issue, I understand that they will have 6 years to reprivatise it.
That should be plenty. They can eventually do what they did with Bpost and what I suggested before, ie float the airline on the stock market, maintaining key people like Gustin at its helm.

If Belgium misses this opportunity, there will be no future for the Belgian aviation industry.
BRU is also a major component of that.

Today is November 1st 2001. Airplanes are grounded, staff are worrying about their jobs.
Do we need another 20 years like we had between 2001-2020, where Belgium went from a country with a glorious airline and about every business having some kind of ties to Sabena, to an aviation market that has no focus, no strategy, no future and lives day by day, with news of insolvencies and job losses of airline X or Y every year?
Or does Belgium build 20, 50, 80 years of being industry leaders, and the pride of having a strong intercontinental airline that puts the Belgian flag on the map as the capital of Europe?

Indeed, Brussels became the European Capital under Sabena. Let's also not forget about NATO.
Still today, Belgium is harvesting the fruits of that.


A recapitalisation of SN as a LH subsidiary is not a guarantee for its future.
In fact, less than 9 months after the Belgian government injected 150 Million into Swissair-owned Sabena, Sabena went belly-up. It was a legal mess after that.
Wouldn't it have been much better if that money had been invested in Brussels Airlines?

May this serve as a reminder: https://ec.europa.eu/commission/pressco ... MEMO_01_56

MEMO/01/56

Brussels, 27 February 2001

Recapitalisation of SABENA: the Commission is on the case

As with other instances of recapitalisation of airlines, the Commission will examine the compliance of this recapitalisation operation with the rules of the Treaty concerning State aid, i.e. assess whether the State is behaving like any private investor in this operation. The outcome of this check, which is part of a customary procedure, will be known very shortly.

The Belgian authorities submitted to the general meeting of Sabena on Friday, 23 February 2001, for approval, a company recapitalisation and restructuring plan comprising in particular an immediate EUR 250 million increase in the company's own capital subscribed to the extent of EUR 150 million and EUR 100 million respectively by Swissair and the Belgian State. It also makes provision for a subsequent purchase by Swissair of a substantial proportion of the Sabena shares at present held by the Belgian State. At the moment, Swissair owns 49.50% of Sabena's capital. When the bilateral agreement between the EU and Switzerland, which is in the process of being ratified, enters into force, this percentage will be increased to 85%. In addition, the Belgian State may transfer to Swissair at any time the 15% share of the capital which it will still hold.

SN could have acquired 5 additional long haul aircraft instead of wasting millions on new aircraft seats made in Germany "to align its product offering to the rest of the LH Group". Not only was that a huge waste of money, but it was a product downgrade for the passengers, and we will never be able to quantify the business lost from that.
Just an example of how SN was milked by German interests looking after each other at the expense of Belgian jobs and the Belgian aviation industry.

[Flanker2]

Oldblueeyes, you guys are willing to blow up 9 billions over "political interference" and see now what's happening, every politician and their mothers are involved. Instead of asking people what they smoke, you guys in FRA should stop smoking and get on your knees to kiss Mutti's feet.

As if political interference would matter at all when LH is already one of the most subsidised companies in Germany.

Let me tell you this.
9 Billions is too much for an airline group that should have set earnings aside.
At the same time, it's nothing because with their incompetence, they will burn through it in less than 2 years.

Another week went by without news from Germany.
And yet, Lufthansa has started unrolling their operational plan for June.

With streets full of people contaminating eachother, the second wave is around the corner.
So instead of worrying about teeny tiny Brussels Airlines, I would get my own house in order first.