Sabena - The Future?

Thu Oct 04, 2001 1:56 am

There's no doubt that Sabena is on its last legs. Management have one month to put a new strategy together.

What makes sense for them?

I'd say that they have four options:

1) Concentrate on regional operations, using DAT as the basis. This was one of the primary objectives of Muller's Survivial Plan

2) Join forces with other carriers - given that Sabena has already had a number of ill-fated unions with carriers including British Airways, British Caledonian, KLM, SAS and Air France - let alone Swissair - the biggest problem is going to be to persuade someone that SN has something to offer.

3) Sell the company - Again, the problem is going to be who would buy it and most importantly who would finance the costs involved with restructuring? Financing an airline today is like trying to raise money for a Synagogue in Nuremberg in 1942!

4) Liquidation - close down the company and sell off the assets.

Any other suggestions?
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RE: Sabena - The Future?

Thu Oct 04, 2001 2:28 am

Well although I think it´s too early for a post/thread like this and I think there´s still a future for SN, I´ll say the following to your 4 options:

-is total rubbish! That´s DAT NOT SN. Dat will survive (pretty likely) but this will not save most of the other SN employees. So that´s equal to option4.

- perfect if this weren´t such ill-fated times.
As I think SN would fit perfectly into the OneWorld aliance AA would be a potential buyer. They already do with TWA what SN would need, too.

- if this happens (let´s hope not) I´m sure someone will buy at least the name SABENA and start something with it.

You (Ceilidh) always seem to forget that there´s indeed a market for low-fare long-haul flights from europe. (Yes, I know that 'don´t upset the majors' theory.)

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RE: Sabena - The Future?

Thu Oct 04, 2001 2:37 am

Unfortunately #1 and #4 seem most realistic.

#1 is probably the best way - to do what Swissair is doing, trying to rebuild itself around Crossair.
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RE: Sabena - The Future?

Thu Oct 04, 2001 2:44 am

Lease Tristars from....  Innocent
Ecoute les orgues, Elles jouent pour toi...C'est le requiem pour un con
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RE: Sabena - The Future?

Thu Oct 04, 2001 2:47 am

Sabena has been a sick dog for decades. The unions are too powerful & mgmt too incompetent.

Liquidation.....time for a clean break.....something efficient & profitable will rise from the ashes.

I dumped at the gybe mark in strong winds when I looked up at a Porter Q400 on finals. Can't stop spotting.

RE: Sabena - The Future?

Thu Oct 04, 2001 2:51 am

We're agreed then that DAT is the only viable part of SN.

AA is in deep trouble of its own and is likely to go into Chapter 11 within a matter of months. They are bitterly regretting buying TWA, and in any case could not buy a European airline. Nor would BA allow them to buy SN - there is nothing that SN does that BA does not!

Why would anyone want to buy the name Sabena? It's one that is synonomous with the problems over the last forty years - logically, any new airline would want to start off with a new name and identity.

Nor do I forget that there is a market for low fare long haul airlines out of Europe - after all, that's what I have spent the last 18 months trying to set up - but the key issue here is that low cost airlines need low operating costs as well. SN has one of the highest costs per passenger of any European airline!
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RE: Sabena - The Future?

Thu Oct 04, 2001 3:19 am

It has been written in the news often that DAT is the MOST viable part of SN. So... why should I doubt it...

I know AA at the moment is in no position to buy SN at the moment and the months to come, though it would be a good and productive marriage. Especially since BA could use SN´s infrastructure and lower it´s own costs if they act wisely.

SN has been arround for many decades... many people have flown them so many may also show what the marketers call brand loyalty.
Highets cost per passenger? Well I guess that´s because they pay their staff better than BA for example. Don´t have any figures on hand.
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RE: Sabena - The Future?

Thu Oct 04, 2001 3:26 am

Stratofish - there's only one month to put this together, so I don't think that anyone will be waiting for AA to buy SN! Big grin Big grin

How, exactly, could BA use SN to reduce its own costs - given that its costs are lower than those of SN?

As for the brand loyalty - I agree with you that that would normally be the case but the reality is that recent actions have upset so many passengers it will take a very long time - if ever - for them all to come back.

Next suggestion?
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RE: Sabena - The Future?

Thu Oct 04, 2001 6:13 am

Honestly, if you ask me, the future looks very dark for Sabena beyond the one-month timeframe. And the only possibilities for survival would be extremely painful.

(1) Effective immediately, cut EVERY route that you can't make profitable (with *realistic*projections) within a 30-day timeframe. This is even more difficult considering that (a) global traffic levels are down post-September 11 (b) the winter is very tough for transatlantic markets and (c) travelers are likely to book away from Sabena given the pilots' strikes and uncertainty that their tickets will retain value. But Sabena certainly can't afford to continue throwing money at money-losing routes. This will more-or-less require a focus on routes that work mainly on traffic with a destination or origin in Belgium, I suspect.

(2) Whether the various employee groups like it or not, Sabena MUST substantially reduce pay levels AND staffing (the two are related; after all, certain routes might be made marginally profitable if employee costs can be reduced - this would save some jobs). The choice here is between losing some jobs and lower salary levels and losing ALL jobs with resulting salary levels of ZERO. And yes, Sabena absolutely must reduce its management ranks to have any credibility with its employees.

I doubt that you'd find anyone interested in purchasing Sabena until it can be made into a profitable entity, especially considering the current financial condition of most carriers. NONE of the American carriers can afford to take on Sabena's debts even if the purchase price for the airline were $1. They're all trying to conserve cash to ride out the crisis in the American market. The stronger European carriers really don't gain anything from a Sabena purchase. Moreover, even though this may sound callous, you could likely do better simply by cherry-picking Sabena assets in a liquidation.

Though the Sabena name once carried some value, I suspect that today few would have a strong interest in preserving it (outside of those who would wish to do so motivated by Belgian nationalism). They gained enough of a reputation for poor, unreliable service that they felt a need to advertise themselves recently as And in light of recent news, the public views them as financially troubled with an uncertain future. I don't think I'd want to book tickets in advance without knowing they'd still be in business to honor them. TWA was dogged by this problem for many years.
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RE: Sabena - The Future?

Thu Oct 04, 2001 6:17 am

My next suggestion?

Let´s wait and see!
We can´t do anything about it anyway.  Wink/being sarcastic

I just hope to be able to fly SN again as I always enjoyed the good service on longhaul flights. Well at least compared to what I paid.  Smile

And I hope that those responsible get what they deserve! I know we have different views on who that is, so let´s not discuss that further here.

The Metro might be the Sub(optimal)way
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RE: Sabena - The Future?

Thu Oct 04, 2001 6:24 am

'Sabena The Future?'-
one month
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If I Was Emperor Of Sabena...

Thu Oct 04, 2001 6:35 am

1. Keep DAT. Rename it DIS (Division Internationale de Sabena). Then make up jokes about DIS or DAT.
2. Beg Virgin to buy half the 737's for its Australian operation.
3. Sell half the airbus fleet to KLM/Martinair/Transavia
4. Sell the other airbus half to either Aerolyon/Air France/Air Lib/ Corse Air- basically any French speaking speaking company around... provided the Flemish will agree!
5. Sit back and wait for DIS to go on strike, citing the need for an EU cash injection.

Sorry, that was naughty of me, but I have trouble feeling sympathy for an airline that forgets to load my baggage onto a flight when one checks-in 2 hours in advance at their home base.
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RE: Sabena - The Future?

Thu Oct 04, 2001 7:28 am

You at least have some REAL complains....
Sabena ... Never to be forgotten (15 years already , what a shame !! )
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RE: Sabena - The Future?

Thu Oct 04, 2001 7:31 am

And as a pilot I have nothing to do with your lugages....but be sure I'm very sorry about that. Receive my apologies.
Sabena ... Never to be forgotten (15 years already , what a shame !! )
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RE: Sabena - The Future?

Thu Oct 04, 2001 7:32 am

Hey, I had the "sorry, your luggage is still in Brussels" experience too.
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