Brussels Airlines future and financial perspective

[sn47031]

As I said B-air management never gave too much attention to the cargo and post biz.
I guess even that many SN staff never heard of the Brussels Airlines Cargo departement.
If you know that 11% of the total revenue of SN was generated by cargo and post a few years ago for a belly space carrier and this by less than 1% of the total FTE working at B-air.
Did Gustin ever find his way to Brucargo and does he know Brussels Cargo moved office and handling agent from S*i*port to WFS? I have my doubts.
SN prefers to give more bag allowance for pax on the African routes as to sell commercial high yield cargo.
During peak seasons the payload for commercial cargo is often zero or below which means loyal forwarders will look for other options, even when these options are ofline.

[RoMax]

As I said B-air management never gave too much attention to the cargo and post biz.
I guess even that many SN staff never heard of the Brussels Airlines Cargo departement.
Did Gustin ever find his way to Brucargo and does he know Brussels Cargo moved office and handling agent from S*i*port to WFS? I have my doubts.

Wtf, what's that for nonesense? As if the management doesn't care about a major revenue generator for their long haul network, as if they don't care about their fastest growing revenue generator over the past years despite the crisis in the air cargo industry, as if the ceo doesn't 'know' they switched contracts from Swissport to WFS and as a result moved their offices...

SN prefers to give more bag allowance for pax on the African routes as to sell commercial high yield cargo.

For a matter of fact SN is still a pax airline and that means your first goal is attracting pax. A high baggage allowance is a key selling point for many African routes. As if they do this because they don't care about the cargo anyway... They even have internal awards for the best cargo station for example.

[sn47031]

Dear RoMAx,
I understand your point of view as a pax airline but the issue is, can you loose loyal cargo forwarders like Brucargo Airfreight /DHL/K&N to high yield destinations for i.e. to NSI to the competition. SN lost already a lot of traffic to KGL to carriers MP/KL. Perhaps you don"t know but the kg rate to, for example NSI is more than 4€/kg++ (++ means the surcharges fuel and security) for some extra bag allow to pax??? .
And my last point: if you can realize more than 10% of the revenue with just a small group of staff, isn't worth to consider it more important?

[RoMax]

Operating in cargo heavy markets such as Africa as a passenger airline is always about the right balance. That extra bag is a major thing for many African passengers, take that away and they'll fly through Paris. There will be periods when cargo might make up for lost revenue on the pax side, but cargo is way too unpredictable and depending on the routing to base your whole African service offer on that as a pax airline. Every kg of cargo they can take on board is a big plus and a revenue source they have to look at, but not at any cost.

And the fact that they lost clients to KL/MP...do you actually think that SN offering slightly more cargo space would have changed that? KL/MP operates both pax flights whith belly cargo as full freighters into that region of KGL, EBB, NBO,... of course they have a better offer for cargo forwarders (both on availability as on price).

And my last point: if you can realize more than 10% of the revenue with just a small group of staff, isn't worth to consider it more important?

Is that 1% the people that actually work for SN itself? I assume so, in that case it's no suprise, they outsource most of the cargo processes.

[travellover]

KL/MP operates both pax flights whith belly cargo as full freighters into that region of KGL, EBB, NBO,... of course they have a better offer for cargo forwarders (both on availability as on price).

Seemingly, AF/KL are cutting their freighter fleet further.
http://www.lloydsloadinglist.com/freigh ... xgH78X8sjg

SN has never taken the step to lease even one freighter that could be dedicated to the african market. Is this operating mode suitable to them ? Theoretically, what kind of plane ? A332F is surely too new/expensive.

[FlightMate]

SN should have set up a dedicated freighter fleet a long time ago.
At least, one cargo plane that will ship dangerous goods for cargo airplanes only. And which can take what the passenger aircraft cannot take anymore due to more luggage.
You can allow flexibility in the ops, mount an extra freighter now and then, fly to new destinations.

Cargo b. Unfortunately failed, but with the proper airplane and the proper contacts (which sn have access to more easily), I'm sure it could have succeed. (and there was the global crisis too...)

[RoMax]

Dangerous business that full freighter...many airlines stepped away from it during the past years or reduced their offer. The financial crisis vastly changed the world of air cargo, part of it is permanently lost to sea freight while it's now even more about high value/low volume. Belly cargo is just fine for an airline like SN.

[sn47031]

Indeed RoMax a lot of cargo operations are outsourced to GSSA. The GSSA gets a buying rate on the european market and a com on the african network but that means there is no overhead on SN cargo staff for the revenue generated if I compare it with all the staff involved for pax. At the airport I see every day a lot of SN staff doing nothing at the self c/i machines. Thats why are consider cargo as important. BTW cargo is recovering again after the crisis.
Cheers

[flieger]

Flightglobal and others had a very good analysis on the Air Cargo sector some time ago.

Newly built frames are even being completed and then mothballed in the desert and other places.
Why??
So this will also answer why Brussels Airlines doesn't need a dedicated freighter as the A330-2F??

Because the whole cargo landscape has changed.
A330's and 777's can take a lot more cargo in the belly holds than ever before.
When the crisis hit and transportation and aviation got a blow as well, the landscape changed.
Also, courier companies like DHL, FEDEX, UPS changed a lot their business and also transport full cargo which are not packages only...
Freighters were purchased by others that are unnecessary now.
Much goes in the belly holds...

So, no, Brussels Airlines doesn't forget to play on the cargo market, but a lot goes under the passenger cabin...

Due to regulations in aviations, combi's like Sabena's 747's don't really exist anymore either.
The landscape did change a lot, not necessarily for the worse as the air cargo sector seems to get out of its crisis...

[woutertheboy]

Indeed RoMax a lot of cargo operations are outsourced to GSSA. The GSSA gets a buying rate on the european market and a com on the african network but that means there is no overhead on SN cargo staff for the revenue generated if I compare it with all the staff involved for pax. At the airport I see every day a lot of SN staff doing nothing at the self c/i machines. Thats why are consider cargo as important. BTW cargo is recovering again after the crisis.
Cheers

They're waiting there to assist passengers with their self check-in. And that seems more important to me then more staff for cargo, since SN is a passenger airline.

1) Passengers
2) Cargo

[tolipanebas]

Cargo is indeed extremely important and those who have pretended otherwise, demonstrate complete ignorance about our operations to the point of them becoming ridiculous even.

A full freighter is however never going to be a viable option for SN: too big a risk to fill, not flexible enough and actually no longer needed (see below).

If you want some good news sn47031, the most likely candidate to replace the 215T MTOW A333s of SN with in 2,5 years is another batch of A330s with a higher MTOW, which you can then stuff full again, because indeed, it regularly happens that our A333s are maxed out on MTOW for their return flights to BRU even though volume is still availble below deck and that's indeed a pitty, but sadly it's the consequence of them dating from the first half of the 1990s when the A330 wasn't supposed to be the plane of choice for long haul routes, while passengers (with their luggage) are always taking priority in case we hit a weight restriction.

The capacities of the A330 have grown tremendously over the past decade and so when our fleet gets rolled over to newer ones, cargo capabilities and revenues from it will grow significantly. It's going to be an important element in paying for the higher leasing fees too, btw.

[flieger]

Absolutely correct Toliplanebas. I say Amen to that

[sn47031]

B-air did indeed a few years ago 2 charters (freighters) from OST to FIH at x-mas time. Due the short time notice of those 2 flights a lot of things went wrong i.e with the trucking (RFS) from BRU to OST.
Heavy claims followed from the forwarders as a lot of cargo was left behind in OST and never departed overthere. If SN organize it well from before it should be a booming biz during the summer season when payload for cargo is often zero due full pax and warm weather.

BTW the staff to assist at the self c/i machines. Right now I saw 6!!! staff. Is this really necessary?

[Flanker2]

Cargo revenue is important in SN's triangle operations in Africa.
Something has to pay for those extra flights that they carry out between the African cities to fill their A333's. That excess volume of air they are transporting is pure waste unless they sell it.

What I said before, before you put words into my mouth again, the cargo business wouldn't be necessary in a narrowbody operation serving several African destinations point to point. The amount of revenue you add from cargo on the A333 minus the additional fuel burn for the added payload, minus the extra sectors they fly in Africa to obtain the triangles, equals zero or less than zero when they have little or no cargo.

If SN wants to operate a decent and reliable cargo operation, they need dedicated small freighters such as B733/B734F that can operate on a schedule alongside the belly cargo. 2 or 3 of them would be enough
to get a decent schedule. The freighters can also be used to feed the belly cargo where there is available space and out of cities that SN doesn't serve with pax.
They could also cooperate with LH cargo that has quite a big cargo hub in DKR, on the way to South America, but also operates other African destinations.

So cargo yes, but not in an opportunistic way. If you do it, do it right.

The niche is big enough IMO, Cargo B wasn't doing bad.

If MTOW is a problem, then Luanda, Cameroon and DRC would be most hit by lack of available mass.
Yet if they downgrade to A332, then volume isn't that big anymore.
Well Tolipanebas, you showcase the exact problem SN will face with newer A330's. The additional cargo space will go straight into paying for the additional lease cost. If it's enough that is, more realistically, the maintenance and resulting operational savings would also have to play their role.

Last but not least, even belly cargo has its cost. 10 tons of cargo adds several tons to trip fuel.
Anyone interested in doing the math? (I Bet it would add around 9 tons to 11 tons of fuel burn in a triangle operation) Also, it adds risk to the pax operation and handling, agents' commissions and earnings must also be taken into account. So it's not all profit.

[sn47031]

Just one more example how SN management cares about cargo.
Three years ago there was a request from the US diplomatic departement to settle up a traffic between the US and Africa for diplomatic cargo escorted all the time by two American diplomatics. So in brief one or two ULD were requested on several destinations per week in East and West Africa escorted by 2 US agents with full C-class tickets for the stretches US-BRU-Africa RT. So a win-win situation both for pax as cargo. Money was not an issue for the US. Cargo rates for this traffic were double as high as gencargo.
SN did so difficult and decisions were always delayed that finally all the traffic went to LH and AF.
For more info please ask time:matters member of LH family.

[pijaleu]

If SN wants to operate a decent and reliable cargo operation, they need dedicated small freighters such as B733/B734F that can operate on a schedule alongside the belly cargo. 2 or 3 of them would be enough

Anybody:
Do you know what capacity a B73F has?
I know about 8 PAG, with a total of +/- 20 Tons. But that's for a B733F of another airline.

I also know cargo of SN to Africa is always a surprise. Sometimes a lot, sometimes not.
And most of the time not that easy to palletize.
SN has some variaty in their ULDs (PMC, PAG, AKE, PLA, ...) in order to have some room to load as much as possible. Is it doable in a B73F?
So I'm not convinced one or more B73F for SN will solve the problem of lost capacity in Flanker's narrowbody company. It can work on inbound cargo traffic (vegetables, fish, ...) but for export, hmm, i don't think so and I do have experience in charging SN's cargo.

[RoMax]

An example of the touroperators SN is working with, the two weekly Malta flights are in cooperation with Travelworld. Travelworld probably has about the most extensive holiday offer from the Benelux to Malta with a very wide range of hotels and holiday packages to the relative small island. They have been using Air Malta for years, but now signed an additional contract with SN which will operate two weekly morning flights.

http://www.travel360.be/nieuws/actueel- ... ld?gn=6433

[Flanker2]

Anybody:
Do you know what capacity a B73F has?
I know about 8 PAG, with a total of +/- 20 Tons. But that's for a B733F of another airline.

I also know cargo of SN to Africa is always a surprise. Sometimes a lot, sometimes not.
And most of the time not that easy to palletize.
SN has some variaty in their ULDs (PMC, PAG, AKE, PLA, ...) in order to have some room to load as much as possible. Is it doable in a B73F?
So I'm not convinced one or more B73F for SN will solve the problem of lost capacity in Flanker's narrowbody company. It can work on inbound cargo traffic (vegetables, fish, ...) but for export, hmm, i don't think so and I do have experience in charging SN's cargo.

A B733F is indeed +/- 20 tons. It's not much but it's enough. Volume isn't bad.

I don't say that such an operation would be easy to manage. Cargo is very prone to ups and downs, especially when you deal with perishables, which have to be caught or harvested.

However, the best thing is to operate a scheduled service and try to fit everybody into that schedule. Sometimes that doesn't work out, so you just delay a flight to wait for a truck to get unloaded and palletised, sometimes you add an additional stop to pick up more cargo left behind by another freighter or because of lack of belly space.

When you operate only belly cargo, you can't do that because you can't delay a flight or let it make additional stops. Add this scenario: Your A333 breaks down in Africa... engine went boom and no replacement aircraft available within 3 days because another aircraft is also AOG... what happens with perishable cargo onboard and waiting at the second African stop before flying back to Europe?
Pax, you can put in hotels but perishable cargo... you lose the revenue, you can lose an important client and you have to pay the full value of the cargo back on top of having to dispose of it.

If you have 3 B733F, with one used mainly as spare to pick up larger one-off loads and as support to the 2 others, you can send this 3rd one to pick up such cargo.

Of course this is less important on destinations where they fly with high frequencies.
But this also means that the more SN flies tight schedules with their A333, the less cargo they can accept, because they have to build more and more slack to reduce the risk.

[tolipanebas]

SN just announced its audited financial results for 2013, demonstrating the turn around is well underway.

SN booked a small annual net loss of €22M on a turn over of €1,140M, which is at the better end of the result range targeted for 2013 (-€20M to -€30M), notably thanks to a very strong Q4.

source:
viewtopic.php?f=31&t=52605

[airazurxtror]

The target for 2013 was a loss of between 20 M and 0.
(I don't find the original reference but see for instance:
by RoMax » 14 Mar 2013, 19:29
- SN expects a loss of 0 to 20 million this year and a profit in 2014)
Thus, the loss is worse than the worst expected.
And a question : are the expected Wathelet subsidies included ?