Brussels Airlines new plan

[sn26567]

Brussels Airlines and union delegations reach agreement

The social agreement, based on a set of structural and temporary measures aiming at securing a sustainable future and profitable growth for the company, is focused on job protection and increase of the company’s competitiveness.

Today, Brussels Airlines and the union delegates representing the pilots, cabin crew and non-flying staff (including maintenance) of the Belgian company have reached an agreement and herewith make an end to an intensive negotiation period.

The agreement is in line with the targets set by the performance improvement plan Beyond 2012-2013 that aims to bring the company back to profitability by 2014.

Bernard Gustin, CEO of Brussels Airlines, qualifies this agreement as a significant step for the Belgian airline, demonstrating the strong engagement of both sides towards the future of the company: “We are extremely satisfied that the agreements reached are taking the requirements and interests of all parties into consideration. Union delegates and management have committed themselves to make mutual concessions in order to safeguard jobs and create growth perspectives for our company by significantly increasing our competitiveness”.

All stakeholders within the company are contributing
“The agreements with the pilot, cabin and non-flying community are a crucial milestone for Brussels Airlines. I wish to thank all staff members and union delegates for their commitment and contribution. By strengthening our competitiveness we can offer long-term growth prospects to our company and our partners” says Bernard Gustin.

Details of the agreement
The main topics discussed at the negotiation table were structural measures, such as productivity improvement and seasonality, and temporary measures, like a part-time working regime (for the cockpit crews) and a salary freeze.

Structural measures, such as:

• Productivity improvement on the European & long haul network, in line with the economic objectives set at the start of the process
• Adaptation of operations to the summer & winter season
• Competitive flight time/duty time

Temporary measures, such as:

• Part-time regime
• Salary freeze by keeping the wage scale (barema) at the same level until 2015

Brussels Airlines 7.12.2012

[sn26567]

Lower wages, no job losses at Brussels Airlines

A package savings and new revenue by 2014 should improve the balance sheet of Brussels Airlines with 120 to 150 million euros and make sure that the company has a future.

The remediation plan that is presented today to the staff of the Belgian airline looks impressive. Unions and management have succeeded to secure additional income and savings.

The greatest effort is provided by the 3,500 employees of the airline. There will be a general reduction in the total wage bill because everyone gives up. The staff had been working mostly part-time or temporary, now the older pilots also get temporary contracts because there is much more work in summer than in winter.

The result is that there are no redundancies and employment is guaranteed. That is a number of competitors are different. This week it was announced that KLM 3,000 people are made redundant, previously it was clear that in 5000 Air France must disappear and the Scandinavian SAS, the next few years hundreds of jobs deleted.

But there is not only saved on the staff. The management has negotiated with a series of suppliers such as caterers and handling companies and with them significantly better conditions have been achieved. And Brussels Airport makes an effort in granting Brussels Airlines 'volume discounts'.

Hedging

The oil price is what it is, but now Brussels Airlines will also participate in the hedging system of Lufthansa. Up to now, the Belgian company secured half of its jet fuel needs through such hedging contracts. That alone would annually save approximately 25 million, but this is of course an average.

But the plan is presented today is not just about savings, but also about investments. Next year and in 2014 there will be one additional Airbus A330 in the long-haul fleet. To make that possible shareholder Lufthansa will provide a loan of 100 million euros. Which destinations will be flown is not yet clear.

For short haul flights, the smaller Avro RJ's 85 and older Boeing B737 (a legacy of Virgin Express) are almost all out. And being replaced by A320s from Airbus, modern aircraft that use less fuel and moreover, now the industry is in overcapacity and the aircraft can be leased at relatively better conditions.

They were reportedly not easy negotiations, but the memory of the drama with Sabena and the finding that almost all European airlines - except Ryanair - are in a very difficult situation, has pilots, cabin and ground crew still on the line drawn. The alternative was a bankruptcy.

After De Tijd

[Flanker2]

If there are 30 millions for SN, then there should be 50 millions for Ford Genk?
And for Volvo in Gent, and Audi in Vorst?
And for Arcelor Mittal?
And for all the self-employed who can no longer turn to banks for funding, even though they were bailed out by tax money?

The difference between this bail-out and the subsidies Ryanair receives is very different in nature.
FR stimulates job creation as does SN, but on top of that, it stimulates local economies by enabling inbound travel. This is something that a car manufacturer can't do.

At 300 euro's a ticket, SN doesn't stimulate inbound travel. Few are the routes where they are the only carrier to operate it, which makes them very expendable. What purpose does SN serve except from artificially maintaining jobs, which can be done better in other sectors?

If SN fails, it's most likely that there would be someone to replace them promptly, taking over part of the lost jobs. If it's not FR, it's Transavia, U2, Norwegian or a new Belgian carrier. When Ford Genk and its suppliers close, those jobs are gone forever.

[RoMax]

If there are 30 millions for SN, then there should be 50 millions for Ford Genk?
And for Volvo in Gent, and Audi in Vorst?
And for Arcelor Mittal?
And for all the self-employed who can no longer turn to banks for funding, even though they were bailed out by tax money?

The Flemish government has paid MILLIONS to Ford to continue in Genk, which they didn't after all... Same for so many other companies in Belgium (and other countries all over the world).

And the 30 million is not for SN, SN may save about 20 million on these measurements, the other airlines (JAF, TNT, HQ, ) will share the rest of that 30 million.

The difference between this bail-out and the subsidies Ryanair receives is very different in nature.
FR stimulates job creation as does SN, but on top of that, it stimulates local economies by enabling inbound travel. This is something that a car manufacturer can't do.

At 300 euro's a ticket, SN doesn't stimulate inbound travel. Few are the routes where they are the only carrier to operate it, which makes them very expendable. What purpose does SN serve except from artificially maintaining jobs, which can be done better in other sectors?

If SN fails, it's most likely that there would be someone to replace them promptly, taking over part of the lost jobs. If it's not FR, it's Transavia, U2, Norwegian or a new Belgian carrier. When Ford Genk and its suppliers close, those jobs are gone forever.

Have you ever imagined the importance of SN in Africa (and the African-Belgian relations) and the growing importance in the US? SN may not stimulate the European leisure people to/from Belgium, but they do stimulate much more valuable business.

Seriously, when looking at a network carrier like SN you have to go way beyond the leisure point-to-point traffic. Or isn't KLM important for the economy of The Netherlands? After all, 70% of their pax are transfer pax, they don't go beyond the borders of AMS. Same for all other network carriers.
(btw, don't see this as a KLM-SN comparison, it's just an extreme example)

[Flanker2]

It is clear that most of the 30 million would go to SN.

Importance of SN in Africa and other àçé'àçàé'*%. In the Sabena days the impact was much worse, now there are more operators operating to Africa, so it doesn't really matter.
And if it does matter because of the "charitable" importance of SN, they should have thought about that before letting Sabena go bust.
Fool me twice, shame on me.


As for the year-long subsidies from Ford Genk:
SN already received a huge cheap loan from the Flemish government and had equity injected into it by the governments. So this is not the first time SN receives help either.

[RoMax]

Well they should have thought about that before letting Sabena go bust.
Fool me twice, shame on me.

It's not my task to defend political decisions taken more than 10 years ago... (I don't like politics either, who does?!) But by the time it was clear Swissair wouldn't pay anymore, it was 'decided' that is was better to let go of Sabena and start with a new, clean airline.

But we are talking about now. SN isn't that big with 'only' 3.500 people working for them directly, but the total amount (direct and indirect) is at least the double (the amount of indirect jobs is much higher than any foreign airline could reach, as they would base everything overhere). They are extremely visible in certain parts of Africa, enabling African-Belgian economic relations.
Now SN also started in the US, their value overthere increased as well. Not just for that one daily flight, but as part of a big JV with United being their main partner, they play a huge role. SN/UA take more and more control over the business market of Belgium-US (with SN having a growing image, presenting them as 'the' Belgian airline, and it works, their long haul product is extremely popular in the business world).
SN, contrary to Sabena, has a quite clean-sheet image in the US and Africa. So their value to the Belgian economy is much bigger than you might expect.

Tough it's a pitty (and nobody can deny that) that they are a reall joke in Europe... OK for transfers to the US and Africa, but point-to-point in Europe with SN... Not my first choice for sure. But how they have to solve that? I don't believe they can with the Q400 at least. I hear several complaints of people that travel often from Toulouse to Belgium with SN. They all want the more comfortable and faster Avro back (not that the Avro is the solution of course, way too expensive, but this is just how many frequent flyers feel on the longer Q400-flights in SN's network, being used to the Avro).

[OO-ITR]

belgian aviation will receive 20 million of support from the Belgian government
http://deredactie.be/cm/vrtnieuws/polit ... luchtvaart
sorry in dutch only...

[Acid-drop]

If there are 30 millions for SN, then there should be 50 millions for Ford Genk?
And for Volvo in Gent, and Audi in Vorst?
And for Arcelor Mittal?

Exactly that indeed...
Subsidies so they keep thousands of jobs in Belgium...
Not a stupid calculation, each unemployed person cost 1000 per month and doesn't generate tax ...
Subsidies are part of the calculation for every company in Belgium. The pharma and chemical industry is paying almost no tax at all. Some could call that also subsidies.

At 300 euro's a ticket, SN doesn't stimulate inbound travel. Few are the routes where they are the only carrier to operate it, which makes them very expendable. What purpose does SN serve except from artificially maintaining jobs, which can be done better in other sectors?

That's probably why the flemish gov has never invested anything in aviation ... they probably believe the harbours or other sectors are more important

If SN fails, it's most likely that there would be someone to replace them promptly, taking over part of the lost jobs. If it's not FR, it's Transavia, U2, Norwegian or a new Belgian carrier. When Ford Genk and its suppliers close, those jobs are gone forever.

Exactly.

[Conti764]

If SN fails, it's most likely that there would be someone to replace them promptly, taking over part of the lost jobs. If it's not FR, it's Transavia, U2, Norwegian or a new Belgian carrier. When Ford Genk and its suppliers close, those jobs are gone forever.

You mean like in the time when Sabena went bankrupt? Those companies stepping in, were competitors (BA, IB, KL, AF, LH back then...) stealing away pax and rerouting them via their own hubs throughout Europe. And it took SN Brussels Airlines and later on Brussels Airlines years to overcome the bankrupcy of Sabena and to have somewhat of a national airline again. Do you really want to relive that story? Or is it just because you're being biassed against Brussels Airlines that you imply just letting the company go bust?

Brussels Airlines creates thousands direct and indirect jobs at BRU and surroundings, in no way you can compare it to the car manufacturers that are leaving Belgium these days. Those manufacturers are multinationals only caring about one thing: trying to build cars as many as possible as cheap as possible. For them it is easy to leave the country and expand in another factory or even start a whole new one, while Brussels Airlines is a Belgian company, creating Belgian jobs and Belgian welth without a real alternative to turn to. They'd have to operate from and to Brussels Airport and cannot just relocate to anywhere they wish. The government should do everything in its power to save a company like Brussels Airlines because we do not want to go over all the shit from the early 2000's again.

[Acid-drop]

Apart from a few pilots and hostess, a foreign airline operating in BRU is also creating a massive load of jobs in Belgium.

[Conti764]

Apart from a few pilots and hostess, a foreign airline operating in BRU is also creating a massive load of jobs in Belgium.

Apart from a few pilots and hostesses? You have to look from a broader perspective and beyond just the airport. You have Belgian suppliers, service companies (like Securitas who guards the SN building, maintenance, cleaning,...) and many other companies serving Brussels Airlines.

Besides that no foreign company would set up a network from BRU the way SN did... You'd only get competitors (from all alliances) connecting BRU with their European hubs (thus loosing intercontinental traffic) and maybe some airline setting up some network from Belgium like FR did from CRL, but to a much smaller extend. In the current economic situation no foreign company would take a huge risk by setting up a hub and spoke system in an airport they don't know serving a market they don't know and where they have little to none brand recognition.

So all in all, many people would loose from a SN bankruptcy. Besides, I find it a little disturbing to speak of just some pilots and hostesses, don't these people disserve a living then?

[Acid-drop]

I'm just saying that if you think on the euro level instead of thinking about the local level, it's not very different.
A belgian pilot can be based in Germany while operating most of the flights from BRU.

[Inquirer]

belgian aviation will receive 20 million of support from the Belgian government
http://deredactie.be/cm/vrtnieuws/polit ... luchtvaart
sorry in dutch only...

It seems the initial plan has been slightly altered:

In stead of the initial 30M euro of financial support for Belgian Airlines in order to level the playing field a bit more, there will be just 20M euro .

The aparent shortfall will be made up by turning attention to CRL and legally forcing it to eliminate close to 10M euro of incentives, dixit A. De Croo.

That surely won't go down well with MOL?

[RoMax]

MOL will not be happy. This is even worse than he probably expected. But it's nothing more than 100% correct. Why does CRL gets support to keep a foreign company happy, while some km's away Belgian airlines which offer MUCH more Belgian jobs and ROI to the Belgian economy are struggling to survive due to unfair competition (and partly/mainly because of their own failures, which are being handled, but also partly because of the unfair competition).
The EU is investigating the situation at CRL for a reason...

[sn26567]

Belgian airlines are not the only ones to benefit from state aid (in fact a reduction of social charges) from their government. The Polish government is working on a much higher level and will provide 100 million euros to LOT. This amount could even reach 250 million euros after some savings are achieved (job cuts and other cost cutting measures). LOT (which is owned at 68% by the Polish State) posted a loss of 35 million euros in 2011 but hopes to be in the black at the end of this year.

http://www.thenews.pl/1/12/Artykul/1212 ... al-airline

[Acid-drop]

belgian aviation will receive 20 million of support from the Belgian government
http://deredactie.be/cm/vrtnieuws/polit ... luchtvaart
sorry in dutch only...

A source in french also :
http://www.lesoir.be/136850/article/eco ... s-airlines
http://www.rtbf.be/info/belgique/detail ... id=7891321

They are discussing the ATC fees.

[airazurxtror]

To what use these 20 millions ?
http://www.dhnet.be/infos/belgique/arti ... erien.html
Le comité ministériel restreint a décidé mercredi de dégager 20 millions d'euros pour soutenir le secteur aérien face à la concurrence déloyale.
La première mesure permettra de rémunérer les pilotes qui, à l'heure actuelle forment gratuitement leurs collègues.
Par ailleurs, le comité ministériel a approuvé une exonération partielle des charges sociales pour les prestations réalisées à l'étranger. Sont notamment visés les vols intercontinentaux au cours desquels le personnel est rémunéré lors d'un séjour à l'étranger. Ce régime sera remplacé par une allocation de disponibilité, sur laquelle aucune charge sociale n'est appliquée.

Which can be translated as :

The restricted ministerial committee decided Wednesday to release 20 million to support the airlines industry facing unfair competition.
The money will be used for training and a partial exemption of social charges. This boost is in line with European rules on free competition, assured the spokesman of the Secretary of State for Mobility, Melchior Wathelet.
The first measure will be to pay the pilots who are currently instructing their colleagues for free.
In addition, the ministerial committee approved a partial exemption from social charges for services performed abroad. Covered are the intercontinental flights during which the staff is paid during a stay abroad. This scheme will be replaced by an availability allowance, on which no tax is applied.

Thus, the instructors who were not paid - will be paid by the government. Where is the saving for the airline ?
The second point is less clear still. Somebody can explain ?

[B.Inventive]

bollocks, this money is not for instructors.
It might be to pay the training facilities though...

[airazurxtror]

http://www.lalibre.be/actu/politique-be ... emble.html

Commenting on the measures taken by the Kern to help airlines based in Belgium to fight social competition judged unfair, Deputy Prime Minister Alexander De Croo (Open VLD) added that the government called for a study to end another competition, judged equally unfair between airports, the Minister felt that Charleroi benefited from unfair regional aid.
His colleague CDH Region, André Antoine did not wait for the development of the case before responding: "Contrary to statements made by Alexander De Croo, the cost structure of the airport of Charleroi, much better than the airport Brussels National, is not aid or unfair competition but a perfectly controlled cost structure allowing it to offer its companies a landing fee of 2 euros against 28 in Brussels Airport national. "Atmosphere.

[RoMax]

Hahahaha, does Mr. Antoine believes what he's saying himself?!