Why doesn't SN fly to Asia?

[Flanker2]

Discussions are ongoing here and there.
So let's start a new topic.

Arguments pro-Asia:
-African potential in pax + cargo
-can expand SN's Africa traffic significantly
-can make SN's shorthaul fleet less vulnerable to increasing LCC competition
-Market that will expand most and fast in the near-term
-Monopoly routes out of BRU, O&D demand
-TK and EK are hitting a capacity barrier as China is restricting their traffic rights to a minimum = unique opportunity for SN! See article below

Arguments Anti-Asia:
-U.S. is more important (for whatever reason?)
-Too long routes (by SN's standards maybe, it's still closer than the moon)
-No money to start the routes (but there is money to start 2 more unprofitable U.S. destinations...)
-Sabena didn't do so well (but at the time most traffic to Africa was from Europe anyway, now the trafic is shifting to Asia very quickly)
-IST and DXB hubs are located better (For East and Central Africa it's true, but for West Africa, where SN has the most coverage, BRU is located as good or better.)

For all their success elsewhere, the Gulf carriers and Turkish Airlines are looking rather thin in China. This is not by their choosing. Emirates, Etihad, Qatar and Turkish have reached the limit of air rights and slots made available to them.

All are ready to expand, and Turkish has even said it has service to five cities ready to launch if approved. That is probably of little comfort to China. While the country wants a flourishing aviation market, it also wants its airlines to have a fair share. But this is not classic protectionism. The argument is Chinese carriers are still young and need time to gain experience before being on equal footing with peers.

http://centreforaviation.com/analysis/g ... ble-136090

The routes that we have been talking about until now are HKG, PEK, SZX, PVG, CAN, NRT/HND.

[quixoticguide]

SN flies to Israel and that's in Asia

LH/LX flies to HKG,NRT/HND,PEK

[FlightMate]

And there already is competition (or possible partnership) on us routes.
While indeed, Japan or China are underserved.
Even with low load factors, cargo could still compensate.

For the time being, no EK, no ANA, no CX in BRU yet.
But maybe the risk is too big to see these coming to BRU after a succesful route is launched?

[chineseboy]

SN is a dull airline, lack of expansion, airplanes, ambition and money. if you compete with KLM they started several asia destination with success and are expanding in South America eg Buenos Aires and Lima with 5th freedom rights and with success again... Dutch guts and entrepreneurship
not to speak about BRU, also a dull airport squeezed by the almost 4 biggest airports in the world
heart of Europe .... tssss

[b720]

I think that Thailand would have been an option, as many Belgians travel there on vacation. yields are low, however market was served by Jetair. furthermore THAI re-entered the market. BOM and DXB could have been viable before the entry of jetairways to the market. Heavy premium market due to diamond trade in both cities, plus DIAMOND transport that weighs nothing, but brings in a huge revenue.. i.e. for SWISS and LUFTHANSA..
BEY is another lost opportunity for SN, as that market was not served between 2002 and 2010 .. MEA entered and is doing very well on the route. MEA flights into BRU feed into the SN Africa network. As for China, Hainan is covering PEK, and they tried PVG; however that was not a success. Some sort of collaboration with ANA?
furthermore TLV should be shifted into a 330, offering proper C class service. I honestly only see lost opportunities!

[cnc]

if it was up to me its an A332 to HKG

[b720]

for me DXB, fly there once a month at least.. take LX via ZRH..and BEY on ME about 5-6 times a year..

[quixoticguide]

If SN starts with a BRU-DXB service, EK will come fast.

[Flanker2]

DXB...

Pros:
-Some O&D demand but yields?
-Could make EK access more difficult by occupying the route first

Cons:
-EY flies BRU-AUH with a better product
-No feeding at the other end nor at BRU, DXB is already overserved from other European hubs
-Not many synergies with Africa
-Could make EK access easier by building the route for them
-Requires a widebody due to range and prevailing Westerly winds. It would be a waste of a widebody.

For me it's a clear "no" for DXB.


I think that SN really ought to look at China. As the above article shows, China is protecting its market as it doesn't want to give the Middle-East too much room for expansion and will be more welcoming to a small airline like SN who would also be useful for them to get to Africa for trades but also for import/export.

Similarily, Japan is also protecting its market as EK only recently gained access to the Tokyo market.

Japan would welcome fish and flowers from Africa, as they already do that. Just give the Tsukiji market (world's biggest fish trading market) a ringedinding and they will happily become a big partner of SN who can even make tons as intermediary, as imported fish is in very high demand due to the radioactive leakage into the Pacific.
From Tuna from Spain, to all sorts of fish from the Mediterranean and Africa, you can already find it in the market and it's in high demand with high price tags. But it's difficult to increase volume as full-freight service is expensive and requires a full load everytime to justify the trip, while few airlines offer belly capacity and have the ability to merge capacity.

It's painfull for me to see SN missing out on this huge opportunity, probably because they just don't know...

http://www.bloomberg.com/video/67746266 ... fears.html



http://cdnl.complex.com/mp/620/400/90/0 ... ushima.jpg


It’s early morning in mid-November and Tokyo’s Tsukiji market is pulsating with buyers for fish. Two Japanese employees of “Taiga,” an import business based in New Delhi, are busy packing fresh seafood into carrier bags that are 90 centimeters wide, 45 cm long and 30 cm deep.

The bags are packed with sea urchin, yellowtail, amberjack and other treats. The refrigerated haul, purchased from four or five of Tsukiji’s intermediate wholesalers, weighs around 200 kilograms. The bags will be carried to Narita Airport, checked in and loaded onto an evening flight to Delhi. The next day, the catch will be served as sushi at Japanese restaurants in the Indian capital.

http://ajw.asahi.com/article/globe/feat ... 1401240013

[FlightMate]

They could as well start flying to India, and steal pax from jet airways.
Maybe they could even do "triangular" flights, hkg-bom-bru?

[quixoticguide]

I think that SN really ought to look at China. As the above article shows, China is protecting its market as it doesn't want to give the Middle-East too much room for expansion and will be more welcoming to a small airline like SN who would also be useful for them to get to Africa for trades but also for import/export.

EK flies to (almost) 36 African destinations and the shortest ways from China to Africa is via the Middle East.

Similarily, Japan is also protecting its market as EK only recently gained access to the Tokyo market.

Japan is for LH and NH
Flights from Germany to Japan

to Tokyo-Haneda (HND)
LH716 (NH5854) Frankfurt 18.20 – Haneda 12.15+1
LH717 (NH5853) Haneda 14.05 – Frankfurt 18.45
LH714 (NH5852) Munich 15:45 – Haneda 10:05+1
LH715 (NH5851) Haneda 11.50 – Munich 16.55
NH224 (LH7242) Frankfurt 20.45 – Haneda 14.55+1
NH223 (LH7243) Haneda 11.25 – Frankfurt 16.35
NH204 (LH7236) Frankfurt 12.10 – Haneda 06.35+1
NH203 (LH7237) Haneda 00.55 – Frankfurt 06.05
NH276 (LH7244) Munich 21.25 – Haneda 15.50+1
NH275 (LH7245) Haneda 12.35 – Munich 17.20

to Tokyo-Narita (NRT) via Osaka (KIX)
LH740 (NH6006) Frankfurt 13.05 – Osaka 06.55+1 – Narita 08:55
LH741 (NH6005) Narita 10:25 – Osaka 13:15 – Frankfurt 18.00
NH942 (LH7240) Dusseldorf 18.35 – Narita 13.00+1
NH941 (LH7241) Narita 11.00 – Dusseldorf 16.00

to Nagoya (NGO)
- LH736 (NH6010) Frankfurt 13:30 – Nagoya 07:55+1
- LH737 (NH6009) Nagoya 09:40 – Frankfurt 15:05

(from 30 march 2014)

http://www.lufthansagroup.com/en/press/ ... /2745.html

[Flanker2]

Flanker2 wrote:
Similarily, Japan is also protecting its market as EK only recently gained access to the Tokyo market.


Japan is for LH and NH

Why does it have to be? BRU is not in Germany, and SN has its own network to worry about.
If this poses a problem for LH, then it presents a conflict of interest and SN should walk its own way instead of letting LH tell them where they can or can't fly to until they're done flying.

[crew1990]

To me the if SN has to start some operation to Asia it s definitely to india that they must start.

It s a market that SN already know, thanks to 9w.
The flight length are more or less the same than the long haul flight already operated.
Air India could be a good feeder from India. And could do a cooperation with SN in Europe.
Finally, if SN start flying to india i put my hand in the fire that 9w will move away from Brussels witch will make that there will be no competitor in India and less competition to New York area. And SN could even take over Toronto.

[RoMax]

Finally, if SN start flying to india i put my hand in the fire that 9w will move away from Brussels witch will make that there will be no competitor in India and less competition to New York area. And SN could even take over Toronto.

For the time being, 9W will certainly keep BOM-BRU-EWR as it is their only connection with the US and they can't change anything to that because India was downgraded by the FAA recently. Of course it's the question how long this will take, this can take many many years, but if India realises they need to act because US is too important, they will do everything to be upgraded again much faster.

[Flanker2]

India...

Pros:
-O&D and connecting traffic to JFK
-Some diamond trade

Cons:
-9W has been doing it for years and can't seem to make money
-Non-stop flights decreasing as yields are low and costs high
-No connections to Africa
-India is developing too slow to become of any economic significance in the next 5 years.

Verdict: India... a time waster for SN.

SN should focus on maintaining, growing their status in Africa and developping Asian routes that can support that. It's common sense isn't it?
What SN should not do is waste time and money poking around in markets where others are already established and can't seem to make money anyway. Where are all the big dreams of 9W building a 5-star hotel in BRU, providing special catering out of that hotel, expanding to 20 widebodies? That's right, they barely break-even on their longhaul scissor ops out of BRU and all those dreams are far gone.

[crew1990]

i of course agree with that but i think 9w would move the operation to a non star alliance hub to not enter in frontal competition with air india witch will most probably put his code on the flight of sn to india

[quixoticguide]

Flanker2 wrote:
Similarily, Japan is also protecting its market as EK only recently gained access to the Tokyo market.


Japan is for LH and NH

Why does it have to be? BRU is not in Germany, and SN has its own network to worry about.
If this poses a problem for LH, then it presents a conflict of interest and SN should walk its own way instead of letting LH tell them where they can or can't fly to until they're done flying.

LH owns SN, it's simple, so they won't let SN enter the more lucrative markets like Japan.
It would off course be great if they fly to some Asian destinations but unrealistic.

[Inquirer]

There's a reason why Siemens has pulled out of consumer electronics years ago, why Philips is ending its television production, why Sony is going to vacate the computer market and it's called leadership focus.

Very few companies can afford to be active in all business related markets at the same time as it greatly complicates their operations and thus increases their costs: a company needs sufficiently large volumes (in this day and age, I'd dare to say almost market leadership even) to offset the costs from such complicated operations, otherwise, it just doesnt make any sense really.

In the absence of any chance of ever getting to at least the required critical mass on Asian routes, let alone achieve market leadership, it's far better not to start thinking about it as you'll be uncompetitive in the face of competition, just as Siemens, Philips and Sony have all discovered in market segments where others happen to hold the better cards.

Which is why I bet Asian routes will be left to partner airlines, just as those will happily leave the African flights to Brussels Airlines. And why it's very likely that indeed they will grow further on the USA in an effort to achieve the critical mass needed to justify operating on transatlantic routes as I'm not sure if just 2 flights can already pay off their full non-operational costs?

Getting the green light from their shareholders to start up US operations must have been a major achievement if you take into account what I've said above about companies and the need for leadership focus, so it's completely unreal to think they will stop at just 2 transatlantic flights, let alone pull away from it again: if they did that, you can be pretty sure their shareholders are never ever going to give them another chance at adding another marketsegment to their portfolio then, so those who call for Asian operations, better pray on their knees that Brussels is going to perform extremely well on the transatlantic market first!

[flightlover]

There's a reason why Siemens has pulled out of consumer electronics years ago, why Philips is ending its television production, why Sony is going to vacate the computer market and it's called leadership focus.

Very few companies can afford to be active in all business related markets at the same time as it greatly complicates their operations and thus increases their costs: a company needs sufficiently large volumes (in this day and age, I'd dare to say almost market leadership even) to offset the costs from such complicated operations, otherwise, it just doesnt make any sense really.

In the absence of any chance of ever getting to at least the required critical mass on Asian routes, let alone achieve market leadership, it's far better not to start thinking about it as you'll be uncompetitive in the face of competition, just as Siemens, Philips and Sony have all discovered in market segments where others happen to hold the better cards.

Which is why I bet Asian routes will be left to partner airlines, just as those will happily leave the African flights to Brussels Airlines. And why it's very likely that indeed they will grow further on the USA in an effort to achieve the critical mass needed to justify operating on transatlantic routes as I'm not sure if just 2 flights can already pay off their full non-operational costs?

Getting the green light to start up US operations must have been a major achievement if you take into account what I've said above about companies and their desire for leadership focus, so it's unreal to think they will stop at just 2 transatlantic flights, let alone pull away from it again: if they did that, they can be pretty sure their shareholders are never ever going to give them another chance at adding another market to their portfolio then, so those who call for Asian operations, better pray on their knees that Brussels is going to perform very well on the transatlantic market first.

Quite a comparison you make: service vs goods. It's like saying you don't have to fly to Asia because a TV costs to much to make.

Unlike in developing TV's setting up a service is something you do not have to do over and over again.
Once established a service will almost be self-supporting and only little tweaks will have to be made.

Whereas TV's will have to be re-invented in quite a high sequence to make people buy the latest and best offer.

The thing they have in conmen:
After R&D are over, they both have a pretty stable cost pattern. Both on basic production prices and advertising.

One last thing: You say SN should not think about starting Asia because other concerns are also concentrating on their core business. But the core business of SN is to connect city's all over the globe through their BRU hub. The more city's they connect in a convenient manner, the better the system works. Gambling on a 3 continent strategy is playing Russian roulette to me. One they are not playing as is anyway. As they code share on many routes to have a virtual network, for now.

[Inquirer]

Quite a comparison you make: service vs goods.

I think you are distinguishing too much between the 2.

Just as mobile phones, laptops, television sets and other small consumer electronics have become sort of a commodity, so have plane tickets these days: you know you are really talking about commodities rather than services or goods if the market treats all sellers as equivalent (or nearly so) with no regard to who offers them: you can increasingly see Lidl or Aldi sell small consumer electronics -often from unknown manufacturers- without any problem which is clear proof of them being just commodities these days, just as you can see plane tickets being added as a give-away to facilitate the purchase of another product for instance, so you can say they are increasingly becoming just a commodity too: at present its just on medium haul I agree, but it's just a matter of time before transatlantic flights or indeed flights to Asia are dealt with in the same way, especially in economy class.

A commodity has one important characteristic which makes it a completely different game to sell than when it's still perceived as a real product or a real service: its price is set not by the seller, but by the market and so costs become a very important element in turning a profit on selling a commodity, hence the increased focus on market leadership by all those actively selling commodities: market share is known to drive down costs and can make the difference between turning a profit or a loss.

One last thing: You say SN should not think about starting Asia because other concerns are also concentrating on their core business. But the core business of SN is to connect city's all over the globe through their BRU hub.

The idea an airline needs to serve places all around the globe is outdated the moment you accept air travel is indeed increasingly becoming just a commodity to most people, because then you accept that achieving significant volume on the routes offered becomes more important over serving as many different places as you possibly can.

The last thing you need to do when you are selling commodities is to spread your resources very thin over all too many of them: it's going to make sure you sell a little bit of everything for a while, but lose market leadership on all after which you'll be pushed aside by 'market specialists' in each one of them.

The bottom line is that IF you want to enter a new market, you need to do it big, otherwise don't bother.
Given the proposals I've seen so far, getting to a meaningful volume and market share on them is not very likely, so I wouldn't go for them either if I were having to decide.

As already said before: they have just moved out of their traditional European and African markets by launching first one and then a second US route, so they better focus on adding more of those first before entering yet another and far more difficult to manage completely new market at the other end of the world. It will do much good for their bottom line.