SN535
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Lufthansa To Acquire 100% Of Brussels Airlines

Tue Mar 26, 2013 7:59 pm

Christoph Franz stated to the German press (Suddeutsche Zeitung) that Lufthansa will excercise its right to acquire the remaining 55% of Brussels Airlines. This right can be excercised every year in april with the deadline in 2017. But the first objective remains to make SN profitable, which shoul be the case in 2014.

Link to the article in a Belgian newspaper, only available in Dutch:

http://www.standaard.be/artikel/deta...spx?artikelid=DMF20130326_00518456

Personally, having worked at Sabena, I have mixed feelings about this. What will become of the airline once they are fully owned by Lufthansa? I'm sure they will keep the brand however, the business strategy and operations will be what the group wants it to be. On the other hand, SN can't survive on its own as a small regional player.
What are your thoughts on this?
 
Qazar
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Lufthansa To Acquire 100% Of Brussels Airlines

Tue Mar 26, 2013 8:08 pm

This was expected... Over the past few years, LH has either completely absorbed its partial ownership in its airline portfolio (Swiss, Austrian, Germanwings, etc...) or has divested itself completely from them (BMI)... Brussels Airlines and Luxair are the only 2 remaining in the LH portfolio that are not fully owned and quite frankly, had LH not intended to acquire the SN fully, it would have sold its 45% shareholding a longtime ago!

LH management is one of the best in the World and this is excellent news for both SN and LH!!!

Cheers
 
JAAlbert
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Lufthansa To Acquire 100% Of Brussels Airlines

Tue Mar 26, 2013 9:29 pm

It seems that LH is quietly pursuing a strategy to consolidate European airlines for the purpose of preserving market share and dominance in the region. Different than the process employed by the USA carriers, but the end will no doubt be the same. LH intends on being a survivor it's clear.
 
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KarelXWB
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Lufthansa To Acquire 100% Of Brussels Airlines

Tue Mar 26, 2013 9:32 pm

Today in the news:

- LH to launch a long haul low cost carrier

and

- LH to acquire Brussels Airliners for 100%

Hm   
Close, but no cigar http://vine.co/v/OjqeYWWpVWK
 
usctrojan18
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Lufthansa To Acquire 100% Of Brussels Airlines

Tue Mar 26, 2013 9:45 pm

Would love to see more flights from Brussels to the USA. So far SN only serves JFK and IAD, and I would love to see other airports including BOS and ORD. I'm planning a trip to Belgium next year and the more flight options to Brussels, the better.
 
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KarelXWB
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Lufthansa To Acquire 100% Of Brussels Airlines

Tue Mar 26, 2013 9:49 pm

Quoting SN535 (Thread starter):
only available in Dutch

And in English:

Quote:
German carrier Lufthansa will wait until its minority owned unit Brussels Airlines has turned profitable before acquiring the remaining 55 per cent of the shares, its chief executive told a German newspaper.

"A complete takeover will result when the turnaround is complete and Brussels can firmly stand on its own two legs," Lufthansa CEO Christoph Franz said in an interview with the Sueddeutsche Zeitung published on Monday.
Close, but no cigar http://vine.co/v/OjqeYWWpVWK
 
ytz
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Lufthansa To Acquire 100% Of Brussels Airlines

Tue Mar 26, 2013 10:04 pm

Quoting KarelXWB (Reply 3):
Hm

I do think there's potential for SN to be an LCC. They'd make a great LCC. And BRU a great low-cost hub.
 
HB-IWC
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Lufthansa To Acquire 100% Of Brussels Airlines

Tue Mar 26, 2013 11:01 pm

Quoting YTZ (Reply 6):
I do think there's potential for SN to be an LCC. They'd make a great LCC. And BRU a great low-cost hub.

The Africa operation is too high yielding for that to happen.
 
VS11
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Lufthansa To Acquire 100% Of Brussels Airlines

Tue Mar 26, 2013 11:18 pm

I think it is time for LH to start thinking of a new name for itself and all its subsidiaries. I know it will be something very radical for many Europeans from various nations (Swiss, Austrians, Germans, etc.) but it only makes sense to consolidate under one brand, which shouldn't be nation-specific...
 
rlwynn
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Lufthansa To Acquire 100% Of Brussels Airlines

Tue Mar 26, 2013 11:26 pm

Quoting VS11 (Reply 8):
but it only makes sense to consolidate under one brand, which shouldn't be nation-specific...

I do not think that makes sense at all.
I can drive faster than you
 
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kordcj
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Lufthansa To Acquire 100% Of Brussels Airlines

Tue Mar 26, 2013 11:34 pm

Quoting VS11 (Reply 8):

I think it is time for LH to start thinking of a new name for itself and all its subsidiaries. I know it will be something very radical for many Europeans from various nations (Swiss, Austrians, Germans, etc.) but it only makes sense to consolidate under one brand, which shouldn't be nation-specific...

UNITED - Europe haha
The most obvious proof for intelligent life in the universe is that they haven't tried to contact us.
 
smc88
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Lufthansa To Acquire 100% Of Brussels Airlines

Wed Mar 27, 2013 12:10 am

I do see this as a good thing for SN but at the same time I can not help but think that the airline will only shrink in size.
 
BommerJan
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Lufthansa To Acquire 100% Of Brussels Airlines

Wed Mar 27, 2013 12:16 am

Quoting rlwynn (Reply 9):
ut it only makes sense to consolidate under one brand, which shouldn't be nation-specific...

For example "Lufthansa"..... the hansa league was a multinational network, Lufthansa's blue and yellow corporate colors are not specific to any of the nations in their group.

I am sure everyone can live with "Luft"  .
 
KaiTak747
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Lufthansa To Acquire 100% Of Brussels Airlines

Wed Mar 27, 2013 12:18 am

Quoting VS11 (Reply 8):

I think it is time for LH to start thinking of a new name for itself and all its subsidiaries. I know it will be something very radical for many Europeans from various nations (Swiss, Austrians, Germans, etc.) but it only makes sense to consolidate under one brand, which shouldn't be nation-specific...

Why? Each individual brand is strong, and are subsidiaries of the Lufthansa Group with some degree of autonomy. One brand would be commercial suicide.

Quoting smc88 (Reply 11):

I do see this as a good thing for SN but at the same time I can not help but think that the airline will only shrink in size.

It's inevitable that the Avro RJ fleet will be retired soon. They have 13 in the fleet and only one A320 on order so in the next few years SN will shrink.
 
Viscount724
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Lufthansa To Acquire 100% Of Brussels Airlines

Wed Mar 27, 2013 12:20 am

Quoting VS11 (Reply 8):
but it only makes sense to consolidate under one brand, which shouldn't be nation-specific...

No it most definitely does not make sense. Countries in Europe are not the same as U.S. states. Residents of each European country have strong brand loyalties to their own airlines and it makes complete sense to capitalize on that.

What you are suggesting is fine for an LCC like Ryanair but for full-service carriers other factors than price are important, especially for high-yield traffic. A carrier like Swiss (and previously Swissair) has spent millions to reinforce their brand image. Losing all of that by changing to some pan-European generic name would mean the loss of all of that investment and would be a very bad idea. One group and multiple brands is the way to go.

[Edited 2013-03-26 17:43:27]
 
VS11
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Lufthansa To Acquire 100% Of Brussels Airlines

Wed Mar 27, 2013 1:07 am

Quoting Viscount724 (Reply 14):
No it most definitely does not make sense. Countries in Europe are not the same as U.S. states. Residents of each European country have strong brand loyalties to their own airlines and it makes complete sense to capitalize on that.

What you are suggesting is fine for an LCC like Ryanair but for full-service carriers other factors than price are important, especially for high-yield traffic. A carrier like Swiss (and previously Swissair) has spent millions to reinforce their brand image. Losing all of that by changing to some pan-European generic name would mean the loss of all of that investment and would be a very bad idea. One group and multiple brands is the way to go.

The idea is to create a global brand, not a pan-European one. The growth in the global economy is not coming from Europe, neither is it going to come from Europe any time soon. While, indeed, the brands are well-established in Europe, the new brand would be really for markets outside Europe. Just think of Coca-Cola (or any other global brand).
 
Viscount724
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Lufthansa To Acquire 100% Of Brussels Airlines

Wed Mar 27, 2013 1:19 am

Quoting VS11 (Reply 16):
Quoting Viscount724 (Reply 14):
No it most definitely does not make sense. Countries in Europe are not the same as U.S. states. Residents of each European country have strong brand loyalties to their own airlines and it makes complete sense to capitalize on that.

What you are suggesting is fine for an LCC like Ryanair but for full-service carriers other factors than price are important, especially for high-yield traffic. A carrier like Swiss (and previously Swissair) has spent millions to reinforce their brand image. Losing all of that by changing to some pan-European generic name would mean the loss of all of that investment and would be a very bad idea. One group and multiple brands is the way to go.

The idea is to create a global brand, not a pan-European one. The growth in the global economy is not coming from Europe, neither is it going to come from Europe any time soon. While, indeed, the brands are well-established in Europe, the new brand would be really for markets outside Europe.

Same arguments apply. Brands like Lufthansa and Swiss are very strong in other parts of the world. Many Asians flyiing to Europe prefer to fly Swiss than their own national carriers because of the brand image. Many Africans fly SN because of their long history (including the Sabena heritage) in many African countries.

All of that is lost with a global brand. Millions of people buy Volkswagens, BMWs, Audis and Mercedes all over the world because of their association with German quality and engineering, although the cars are built in many parts of the world. You don't see them coming up with a new "global" brand to replace their names.

And, using the LH Group anaology, Volkswagen owns Audi, Porsche, Skoda, SEAT and Bentley but you don't see them trying to replace all those brands with one global brand, although many vehicles are built on common platforms under the skin. I see many of the same reasons for the LH Group to maintain their separate brands.

[Edited 2013-03-26 18:26:49]
 
Senchingo
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Lufthansa To Acquire 100% Of Brussels Airlines

Wed Mar 27, 2013 1:35 am

Quoting JAAlbert (Reply 2):
It seems that LH is quietly pursuing a strategy to consolidate European airlines for the purpose of preserving market share and dominance in the region

Agree

Quoting VS11 (Reply 8):
I think it is time for LH to start thinking of a new name for itself and all its subsidiaries

No way. Lufthansa is a brand that is known for different reasons. There's a reason why they didn't change their livery for such long time - recognition value. Same goes for the name, just changed from Deutsche Luft Hansa to Lufthansa because of different, very deep political reasons after a dark time for Germany.

Quoting Viscount724 (Reply 14):
No it most definitely does not make sense. Countries in Europe are not the same as U.S. states. Residents of each European country have strong brand loyalties to their own airlines and it makes complete sense to capitalize on that.

Exactly. We Europeans can never understand why people would make countries here all the same... Italy, France, Germany, Spain, Belgium etc etc are about as different in culture as they can be.

Quoting YTZ (Reply 15):
Lol. Here's my suggestion:


Quoting VS11 (Reply 16):
The growth in the global economy is not coming from Europe, neither is it going to come from Europe any time soon

Huh? Germany is the leading market in Europe. Some of the worlds biggest car manufacturers, technology companies, research institutes, pharma industries and so on are located in Germany. In total the European market is one of the biggest, except Asia and the US (plus growing ones like China (who declare themselves as "development country" so they can keep on getting founds) and India (mainly pharma/chemical and IT)).
Don't quite understand why Europe would not be a major player here?

P.S: I'm keeping out of the political debate why the Euro is losing value as Germany keeps feeding other, dying economies to survive just to make the Euro Zone "more stable"...

Quoting SN535 (Thread starter):
Personally, having worked at Sabena, I have mixed feelings about this. What will become of the airline once they are fully owned by Lufthansa?

Well, my 2 cents: They will end up like all the others: Keep the brand, but restructure it and make it belong to Lufthansa. Fight with Flight and/or Cabin Crews, come up with new cost saving contracts and make it work  

Cheers/Sen


[Edited 2013-03-27 12:49:41 by Luxair747SP]
 
VC10er
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Lufthansa To Acquire 100% Of Brussels Airlines

Wed Mar 27, 2013 1:41 am

One day, perhaps 50 or 100 years the world will see global carriers as if LH, UA, AC, ANA, Avianca, Thai, China will all just merge into one - same as with AA, BA, TAM, Cathay etc etc. The yet to be born A.netters will talk about the good old days (today) look at all the old cool liveries and vintage 787's that ran on fossil fuel!

Remember in 2001 PanAm flew to the space station.
The world is missing love, let's use our flights to spread it!
 
VS11
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Lufthansa To Acquire 100% Of Brussels Airlines

Wed Mar 27, 2013 2:33 am

Quoting aloges (Reply 20):
Why create one if you already have one? "Lufthansa" may be German, but doesn't even include the name of the country in any language.

Well, for sensitivity reasons, it may be difficult to rename Swiss and Austrian to Lufthansa, even though that would be a natural step. So while "Lufthansa" could very well be the unifying brand, and I think it is a strong brand, it might be more acceptable for some of the subsidiaries (and the respective countries) to have a new brand.
 
commavia
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Lufthansa To Acquire 100% Of Brussels Airlines

Wed Mar 27, 2013 2:42 am

Quoting VS11 (Reply 21):
Well, for sensitivity reasons, it may be difficult to rename Swiss and Austrian to Lufthansa, even though that would be a natural step.

Okay, but you do realize that those "sensitivity reasons" apply to virtually every other country and every other national airline brand in Europe, especially with Germany (and Lufthansa). Therein lies the problem with your theory of unifying under one pan-European or "global" brand. It just doesn't work.

For better or worse, national airlines are intensely tied to national identities, probably even more so in Europe than some other places. People don't care about it as much for Ryanair or EasyJet because those truly have become pan-European brands. But people still associate Lufthansa with its homeland, see Swiss Air Lines as a symbol of Switzerland, and define Alitalia as definitely Italian.

This phenomenon is not going to change any time soon.
 
aloges
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Lufthansa To Acquire 100% Of Brussels Airlines

Wed Mar 27, 2013 2:46 am

Quoting VS11 (Reply 21):
Well, for sensitivity reasons, it may be difficult to rename Swiss and Austrian to Lufthansa, even though that would be a natural step.

Why on earth would it be a natural step? You really need to stop thinking of European countries in terms of American states.
Don't cry because it's over, smile because it happened.
 
VS11
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Wed Mar 27, 2013 2:53 am

Quoting commavia (Reply 22):
Okay, but you do realize that those "sensitivity reasons" apply to virtually every other country and every other national airline brand in Europe, especially with Germany (and Lufthansa). Therein lies the problem with your theory of unifying under one pan-European or "global" brand. It just doesn't work.

For better or worse, national airlines are intensely tied to national identities, probably even more so in Europe than some other places. People don't care about it as much for Ryanair or EasyJet because those truly have become pan-European brands. But people still associate Lufthansa with its homeland, see Swiss Air Lines as a symbol of Switzerland, and define Alitalia as definitely Italian.

This phenomenon is not going to change any time soon.

Yes, I do realize the sensitivities - I am myself from Europe. That's why I suggested a new name - so no one feels like losing. The point I am making is that from a global perspective it is better for all these airlines to be perceived as one by people outside Europe e.g. consumers in the Americas, Asia, etc.
 
VS11
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Lufthansa To Acquire 100% Of Brussels Airlines

Wed Mar 27, 2013 2:57 am

Quoting aloges (Reply 23):
Why on earth would it be a natural step? You really need to stop thinking of European countries in terms of American states.

It is a natural step because LH bought them - that's all, otherwise they would have become bankrupt sooner or later. (And I don't think of European countries as American states - I am from Europe)
 
point2point
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Lufthansa To Acquire 100% Of Brussels Airlines

Wed Mar 27, 2013 4:51 am

Well, all the best to LH here, and may they make SN profitable very soon, so that LH may do its acquisition, and then SN could get anti-trust TALT along with the other *A members.

With then with all of that........ it would be time to see an SN hub-to-hub DEN-BRU nonstop flight.

Just my    thrown in for fun.....

 
 
JU068
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Lufthansa To Acquire 100% Of Brussels Airlines

Wed Mar 27, 2013 5:47 am

Quoting Senchingo (Reply 18):
P.S: I'm keeping out of the political debate why the Euro is losing value as Germany keeps feeding other, dying economies to survive just to make the Euro Zone "more stable"...

Funny that you ask others to keep some of their opinions to themselves, maybe you should do the same, especially since you want to keep out of the political debate. Danke.


Back to the topic, I do not see why anyone would be worried about this takeover. Austrian Airlines seems to be doing fine and they were a major mess until recently. Their fleet grew and so did their network.
If you think about it, Lufthansa consolidated Austrian's position in eastern Europe and I am sure that they are purchasing SN Brussels, not because of its base in Brussels, but because of its network in Africa. Lufthansa is well aware that Africa is about to boom and they must think it is easier to conquer the market by using a brand that is relatively well-known there rather than to spend a ton of cash to promote their own.
The rise of African consumerism will result in passenger growth as more and more Africans will afford to travel abroad. Not to mention the ever increasing number of European companies doing business all across the African continent.
 
1400mph
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Lufthansa To Acquire 100% Of Brussels Airlines

Wed Mar 27, 2013 6:58 am

Quoting Viscount724 (Reply 14):
One group and multiple brands is the way to go.

Well yes and we also wouldn't want the rest of Europe thinking they were getting a bit overly controlling now would we......................
 
IndianicWorld
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Lufthansa To Acquire 100% Of Brussels Airlines

Wed Mar 27, 2013 7:36 am

Interesting that they state that they will take the 100% stake in SN only once it becomes profitable.

It better do that in next few yewars or I am sure LH won't be so inclined to buy. It certainly left its options open there.
 
okay
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Wed Mar 27, 2013 10:01 am

Even if the idea is to create a global brand (which I'm not absolutely sure is the ultimate goal), basic marketing ideas still apply. "Think global, act local" is an old marketing term, which also Coca-Cola uses, by for example using Cyrillic and Asian languages signs to write their name. Also, I have understood the taste of Coke indeed varies according to places to cater local taste preferences. But I do not know if this is true.

Even if your operations might be global, it does not mean you can forget local influences. It would be silly to kill strong "local" brands when the money still keeps coming to the mother company.

[Edited 2013-03-27 03:04:25]
 
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Paolo92
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Lufthansa To Acquire 100% Of Brussels Airlines

Wed Mar 27, 2013 10:08 am

Quoting KaiTak747 (Reply 13):
It's inevitable that the Avro RJ fleet will be retired soon. They have 13 in the fleet and only one A320 on order so in the next few years SN will shrink.

Edward Russell on twitter, yesterday:

I see something like this in the long term:
Q400
CS100
CS300
A320neo
A330

They seem to like the wet-leased Q400s, so they could easily take over some used a/c, like the Augsburg Airways ones that will be available after October 31, as German news suggest IQ to cease ops after the termination of the contract with LH. Otherwise, they could manage to get some at cheap price if they sign for some CSeries.
For the 100-150+ seat segment the CSeries would do the job, LH expressed additional interest when Bombardier announced the extra capacity option and they seem to avoid the A319neo...
For the over 160 seat segment, their A320 are still quite young, but on the longer term they could easily get some neos from LH. (of course, if BBD launches a longer CSeries, I totally see them abandoning the A320-family)
Don't know if the 321/321neo are considered at SN, they seem to focus on the 70 to 170 -seat segment for short-medium haul.

Just my   

Regards,
Paolo
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ytz
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Lufthansa To Acquire 100% Of Brussels Airlines

Wed Mar 27, 2013 12:23 pm

Quoting Senchingo (Reply 18):
Quoting aloges (Reply 20):
Not funny.  Not now, not ever.

I wasn't attempting to be funny entirely. I have Austrian relatives. Indeed, my godsister's boyfriend works for OS. How do you think they feel about LH buying out OS and cutting destinations? Ditto for a whole host of industrial takeovers in German-speaking countries.

There may well be some validity to this idea of creating a pan-European brand. There seems to be too much bitterness over the past on virtually everything in Europe. Including airlines. I can't imagine the suffering LH's board must go through. Running so many different airlines, with different brands and different products.
 
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American 767
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Lufthansa To Acquire 100% Of Brussels Airlines

Wed Mar 27, 2013 2:27 pm

Quoting VC10er (Reply 19):
One day, perhaps 50 or 100 years the world will see global carriers as if LH, UA, AC, ANA, Avianca, Thai, China will all just merge into one - same as with AA, BA, TAM, Cathay etc etc. The yet to be born A.netters will talk about the good old days (today) look at all the old cool liveries and vintage 787's that ran on fossil fuel!

And some will say:

"Do you remember the A380?"

" I want to fly one last time on the A350 before they are gone"

"A350 final flight. When and where?"

"Is it true that Belgium used to have its own flag carrier?"
Ben Soriano
 
drgmobile
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Lufthansa To Acquire 100% Of Brussels Airlines

Wed Mar 27, 2013 2:49 pm

Quoting VS11 (Reply 8):
I think it is time for LH to start thinking of a new name for itself and all its subsidiaries. I know it will be something very radical for many Europeans from various nations (Swiss, Austrians, Germans, etc.) but it only makes sense to consolidate under one brand, which shouldn't be nation-specific...

Couldn't agree more. And Lufthansa is not a bad base from which to start. After all, Holland America,Norwegian Cruise Lines, Southwest Airlines demonstrate that even geographic brands can be broadened.

If not full integration than at least a move to a branded house of carriers with a more consistent look and feel across the carriers would be a good step in the right direction. Does it really make sense to have Lufthansa, Swiss, Austrian, Brussels all working on separate in flight products, for example? I don't think so. Standardize on the strengths of each.
 
ytz
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Lufthansa To Acquire 100% Of Brussels Airlines

Wed Mar 27, 2013 2:50 pm

Quoting American 767 (Reply 34):
"Is it true that Belgium used to have its own flag carrier?"

If I were Belgian, I'd be more worried about people saying, "There used to be a country named Belgium?", 50 years from now.
 
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SKAirbus
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Lufthansa To Acquire 100% Of Brussels Airlines

Wed Mar 27, 2013 3:18 pm

Whatever happened to IAG's strategy of challenging LH's dominance in Europe??? I thought they were on the war path and going to buy up various airlines.

I guess the EU will be looking at LH's expansion very carefully for competition purposes.
Next Flights: LHR-OSL (738), OSL-CPH (320), CPH-LHR (321), LHR-HEL (359), HEL-LHR (359)
 
sierra3tango
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Lufthansa To Acquire 100% Of Brussels Airlines

Wed Mar 27, 2013 4:06 pm

Quoting SKAirbus (Reply 38):
Whatever happened to IAG's strategy of challenging LH's dominance in Europe??? I thought they were on the war path and going to buy up various airlines.

I guess the EU will be looking at LH's expansion very carefully for competition purposes.

Well they bought BMI from (err was it?) LH at a knock down price
 
sierra3tango
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Lufthansa To Acquire 100% Of Brussels Airlines

Wed Mar 27, 2013 4:51 pm

Quoting SKAirbus (Reply 38):
Whatever happened to IAG's strategy of challenging LH's dominance in Europe??? I thought they were on the war path and going to buy up various airlines.

Oh and here's another one I forgot

IAG Increases Offer For Vueling Shares (by LHRFlyer Mar 27 2013 in Civil Aviation)
 
vv701
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Lufthansa To Acquire 100% Of Brussels Airlines

Wed Mar 27, 2013 6:12 pm

Quoting VS11 (Reply 8):
I know it will be something very radical for many Europeans from various nations (Swiss, Austrians, Germans, etc.) but it only makes sense to consolidate under one brand, which shouldn't be nation-specific...


This will only be possible when all the international routes operated by the various airlines are either covered by an EU Air Services Agreement or by a Bilateral (National) Air Services Agreement modified to allow routes between country A and country B to be operated by any airline that is registered in any one of the EU member states. As some major countries such as the Russian Federation have rejected proposals for any such modification, the prospects for a single airline to operate are not currently positive.

Quoting sierra3tango (Reply 40):


Quite. And neither the purchase of BD nor the proposed purchase of VY by IAG are qualified. One has been finalised. The other is a firm offer qualified only by price. Both are relatively new.

The Lufthansa Group purchase of SN will not even happen unless SN becomes profitable. So it is only planned and is not a firm bid. Since as long ago as 15 September 2008 Lufthansa Group has had this option to buy SN at any time between 2011 and 2017. We are in 2013 and it has not yet exercised that option.

This Lufthansa Group announcement has changed nothing except we now know that they will not exercise their option unless SN becomes profitable. They say it expects that will happen in 2014. So they seem to be discounting any purchase of SN until its 2014 Annual Report is published in 2015. So watch this space!
 
VS11
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Lufthansa To Acquire 100% Of Brussels Airlines

Wed Mar 27, 2013 9:47 pm

Quoting VV701 (Reply 37):
This will only be possible when all the international routes operated by the various airlines are either covered by an EU Air Services Agreement or by a Bilateral (National) Air Services Agreement modified to allow routes between country A and country B to be operated by any airline that is registered in any one of the EU member states. As some major countries such as the Russian Federation have rejected proposals for any such modification, the prospects for a single airline to operate are not currently positive.

There are very easy ways around this. All they have to do is change their name, or not even that - keep their existing legal names but paint the planes in the same livery. Think of it as a mini-alliance of all LH-owned airlines. Not very different from what alliances currently are doing by having alliance liveries.
 
Viscount724
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Lufthansa To Acquire 100% Of Brussels Airlines

Wed Mar 27, 2013 10:50 pm

Quoting VV701 (Reply 37):
Quoting VS11 (Reply 8):
I know it will be something very radical for many Europeans from various nations (Swiss, Austrians, Germans, etc.) but it only makes sense to consolidate under one brand, which shouldn't be nation-specific...


This will only be possible when all the international routes operated by the various airlines are either covered by an EU Air Services Agreement or by a Bilateral (National) Air Services Agreement modified to allow routes between country A and country B to be operated by any airline that is registered in any one of the EU member states. As some major countries such as the Russian Federation have rejected proposals for any such modification, the prospects for a single airline to operate are not currently positive.

However they could do what LAN does with separately registered subsidiaries in multiple countries other than Chile (LAN Peru, LAN Argentina, LAN Ecuador, LAN Colombia, LAN Uruguay) all operating under the bilaterals agreed with those countries but appearing to customers as a single brand and with integrated schedules and interchanging aircraft as needed.

Air Asia is doing the same thing with carriers registered in various Asian countries to meet local regulatory requirements but marketed under a single brand.

I strongly disagree that it's the correct thing to do for LH Group carriers but it could certainly be done under existing bilateral constraints.
 
senatorflyer
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Lufthansa To Acquire 100% Of Brussels Airlines

Thu Mar 28, 2013 12:27 am

What would exactly be the benefit to have one brand? So far I only hear it would be a good idea without any real advantage. Lufthansa Group is working on standardising the products behind the scene (same specs for future aircraft orders, centralisation of purchasing, standardisation of IT-infrastructure and many more areas). From a cost perspective that will achieve the same results as the various LAN businesses for example.

An airplane needs only to be painted every so often; does it make a difference if you put some red and white on it or blue and yellow? No it doesn’t. Brown seats instead of grey? Still the same price. Ordering 5000 uniforms in a different cut and colour? It will be the same price if you order it at the same manufacturer. Marketing, you probably will spend a bit more, however you still need to publish local ads as in most countries you still speak different languages, it’s not all Spanish like LAN has the advantage of. Again, do it in red and white or blue and yellow, doesn’t cost more to print it.

However, there is a big difference in products at all of those Lufthansa carriers. I am Senator and can tell you, the Lufthansa business class is nowhere near as good as Swiss’ business. If you were to create one single airline, then you would need to lower expectations for Swiss and Austrian customers to the same level as Lufthansa. In return you would need to increase service levels at Brussels. This is not going to work as loyal customers will fly with another airline if they don’t get the service they are used to. Keep in mind; most Asian carriers are way better than most European carriers. The most important reason to fly your home carrier is loyalty; all other passengers are already flying Qatar, Emirates etc. Furthermore, Swiss for example is more profitable than Lufthansa itself and its ¼ of the size of Lufthansa. Lufthansa can’t even achieve an 80% Load factor. Do you really want to destroy the brand of your cash cow? I don’t think so.

So going back to square one, what would be the real advantage of having one brand? It is not going to be cost savings. If you build up a new brand from scratch, like Easyjet, Ryanair, that will be a different story. Destroying well established brands is suicide.
 
VS11
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Lufthansa To Acquire 100% Of Brussels Airlines

Thu Mar 28, 2013 1:47 am

Quoting senatorflyer (Reply 40):
So going back to square one, what would be the real advantage of having one brand? It is not going to be cost savings. If you build up a new brand from scratch, like Easyjet, Ryanair, that will be a different story. Destroying well established brands is suicide.

I think you answered your own question - well, partly. Having a consistent product would be one advantage. Just imagine people like you knowing that LH business class has become to the level of Swiss. It does not have to be applying everything LH to all other carriers. It is not going to be destroying existing brands - it can be picking up the best from all of them and applying them to achieve a consistent product.

The bigger advantage, I believe, is marketing. Just combining the marketing budgets of all three airlines can create enormous brand awareness.

Besides, isn't SAS something very close conceptually - a system of airlines from different countries operating as one brand?
 
senatorflyer
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Lufthansa To Acquire 100% Of Brussels Airlines

Thu Mar 28, 2013 1:58 am

Ahm, raising the standards on LH will cost a lot of money. Seriously, we are talking of a quality brand with a fleet of 100 airplanes. So apply the same service levels to a fleet of 600 aircraft? That would achieve a cost increase. You still can manage the marketing budget centrally, even with different brands. Again, no advantage.

SAS is a mess, it is the same brand but again, there are 3 governments involved with different ideas. In theory a nice idea but clearly it is not working and personally I think it never will.
 
VS11
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Lufthansa To Acquire 100% Of Brussels Airlines

Thu Mar 28, 2013 2:06 am

Quoting senatorflyer (Reply 42):
SAS is a mess, it is the same brand but again, there are 3 governments involved with different ideas. In theory a nice idea but clearly it is not working and personally I think it never will.

In the case of LH, you will not have 3 governments, only LH calling the shots.
 
SCQ83
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RE: Lufthansa To Acquire 100% Of Brussels Airlines

Thu Mar 28, 2013 2:21 am

Quoting senatorflyer (Reply 40):
However, there is a big difference in products at all of those Lufthansa carriers. I am Senator and can tell you, the Lufthansa business class is nowhere near as good as Swiss’ business. If you were to create one single airline, then you would need to lower expectations for Swiss and Austrian customers to the same level as Lufthansa. In return you would need to increase service levels at Brussels. This is not going to work as loyal customers will fly with another airline if they don’t get the service they are used to. Keep in mind; most Asian carriers are way better than most European carriers. The most important reason to fly your home carrier is loyalty; all other passengers are already flying Qatar, Emirates etc. Furthermore, Swiss for example is more profitable than Lufthansa itself and its ¼ of the size of Lufthansa. Lufthansa can’t even achieve an 80% Load factor. Do you really want to destroy the brand of your cash cow? I don’t think so.

I completely agree on Swiss... they are perceived as a more exclusive product, part of the "Swiss" uniqueness in every sense. Changing the name and alligning it with the mass-market efficiency of LH would be a bad choice. And I don't think the local Swiss customer would like to see their national airline branded as "German" as a guarantee of quality or service.

However, in the case of SN I see it diferently. Brussels Airlines has not really a story as a brand (if at least it would be Sabena) nor a particular loyalty (they just have long-haul to Africa and now to JFK and soon to IAD... if you live in Belgium you have to rely on other carriers for long-haul anyway). Changing it to Lufthansa Brussels/Belgium could even raise more awareness of the brand, specially in Northern France and Netherlands (quite well connected to BRU... and I can even imagine for some French customers, LH would be better perceived than AF).
 
senatorflyer
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RE: Lufthansa To Acquire 100% Of Brussels Airlines

Thu Mar 28, 2013 2:24 am

Agreed, and hence they have all the freedom to standardise everything behind the scene. Again, keeping it the way it is brings far the better results than creating a new brand. This few bugs you could save in marketing are not worth it. You wouldn't want to buy a Ferrari with a fiat label on it but still pay the Ferrari price, would you? So again, what would be the advantage? We figured out it can't be cost savings. Service levels are consistent for each airline and people know what to expect, some are better than others but none of them are horrible. American carriers haven't managed to offer a consistent product within the same brand.
 
senatorflyer
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RE: Lufthansa To Acquire 100% Of Brussels Airlines

Thu Mar 28, 2013 2:38 am

I think Brussels is a special case. Squeezed between Paris, Amsterdam and Frankfurt they obviously can't offer an extended longhaul network since the population in the Brussels area is not too big to justify it. Sabena couldn't manage it and SN just focuses on niche market with Africa. Same as Swiss does in a way, they only fly to business destinations.
If the SN brand is important to Belgium, I can't tell. Belgians seem to have too many problems themselves. Rename it in Lufthansa, not sure it will make a difference.
 
SCQ83
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RE: Lufthansa To Acquire 100% Of Brussels Airlines

Thu Mar 28, 2013 2:44 am

Again, I think for the case of SN, it would be benefitial for them to get the whole Lufthansa brand and name to get more relevance both at home and abroad. Certainly not the case for Swiss.

IMO, having lived in BRU for a while, SN is not really well established among residents and businesses in Belgium (when you compare it to let's say, BA in LON, AF in PAR or LH in Germany). Their network is very limited (other than their particular African destinations) and, from my experience, for many ppl the main advantage of SN is the M&M and then access to LH. It is also a company that probably not many people has ever heard about abroad (if you are to book a flight from NYC to BRU and you see Brussels, United or Delta... probably you would have heard of Lufthansa). It is a brand that is about 10 years old only.

Belgium is a Star Alliance / LH oasis between AFKL (AMS and CDG). In Benelux (and particularly with the future connection AMS-Brussels with high-speed train and the BRU-Antwerp link under construction) there are quite a lot of passengers flying from other airports (from Brussels South Station to CDG is 1 hour by high-speed train; Lille might be equally distant from CDG and BRU; Southern Netherlands from BRU and AMS). Lufthansa is quite a powerful brand in Central Europe (contrary to SN), and it would probably attract more customers (specially when you consider that both AF and KL are not the most look-after air carriers in Europe).
 
senatorflyer
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Joined: Tue Jul 24, 2012 10:57 am

RE: Lufthansa To Acquire 100% Of Brussels Airlines

Thu Mar 28, 2013 2:56 am

I hear you, the only problem is that SN is not going to offer a massive longhaul network. So, if you want to go anywhere on Star you will have to change in Frankfurt, Munich or elsewhere if there are no flights to brussels. As you just confirmed, Amsterdam and Paris is not far away, all Star carriers are flying from AMS and Paris too. So, the question isn't if SN should change name, it's more like if the excistense of SN is necessary.
 
SCQ83
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RE: Lufthansa To Acquire 100% Of Brussels Airlines

Thu Mar 28, 2013 3:41 am

But as others have pointed there are two points of interest:

- The African network. It can easily be expanded to North America (NA-Africa) with new connections (already JFK, IAD) that are also viable with a strong O&D from BRU. They have high yields and Africa is a potential point of growth in the future, and a nice addition to LH/LX with little overlap.

- The EU. It looks like the European bureaucracy is going to grow on expenses of national governments in Europe, so that should be a growth factor for SN's short-haul network. And those customers are not necessarily looking for the cheapest fare.

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