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photoshooter
Topic Author
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Is There A Future For Brussels Airlines?

Sun Dec 22, 2013 5:35 pm

Title says it... Is there a (bright) future ahead for Brussels Airlines, another stay of execution or are they facing the end?
Belgian government agreed to financially support this airline. Why isn't there any financial help from Lufthansa AG and/or other share holders?

Also, there are no official plans to replace the Avrojet fleet and older Airbus planes. Long haul fleet is getting old as well. I wonder how this airline can and will survive with tough financial times ahead.

Isn't it more efficient to replace older planes with modern and fuel efficient regional jets? Even if you don't have the cash for it, I'm sure there's a way out. Looks like this airline is bleeding to death.

Please feel free to share your opinions!


http://www.hln.be/hln/nl/942/Economi...stoppen-dreigt-tweede-Sabena.dhtml



[Edited 2013-12-22 09:38:51]
'A lie gets halfway around the world before the truth has a chance to get its pants on.' - Winston Churchill
 
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KarelXWB
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RE: Is There A Future For Brussels Airlines?

Sun Dec 22, 2013 6:40 pm

Fuel efficient planes might help but those require a high capital investment while those old Sabena A330s are relatively cheap to lease.

Quoting photoshooter (Thread starter):
Even if you don't have the cash for it, I'm sure there's a way out.

They could lease 787s instead of buying but the lease rates are much higher than an old A330.

Perhaps Brussels Airlines needs a better business plan in the first place.
What we leave behind is not as important as how we've lived.
 
photoshooter
Topic Author
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RE: Is There A Future For Brussels Airlines?

Sun Dec 22, 2013 7:02 pm

Quoting KarelXWB (Reply 1):
Perhaps Brussels Airlines needs a better business plan in the first place.

Couldn't agree more. I think the Ryanair Base at BRU will be the coup de grace for SN. those 330s are indeed cheap to lease and create the biggest profit.

Quoting KarelXWB (Reply 1):
They could lease 787s instead of buying but the lease rates are much higher than an old A330.

I wonder if there are any available. They are currently having long haul fleet problems, using Euro Atlantic 763s and Hifly 343s to fill the gap. Too bad LH can't help them out with a spare plane...
'A lie gets halfway around the world before the truth has a chance to get its pants on.' - Winston Churchill
 
senatorflyer
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RE: Is There A Future For Brussels Airlines?

Sun Dec 22, 2013 7:46 pm

I am no expert neighter have I ever flown with them. I did fly a couple of times with Sabena during the Swissair aera, it was nothing to write home about.

I think the problem there is that Brussels is squeezed in between CDG, AMS, LHR and FRA. All of those airports have the far better connections, their home carriers do have a better product and are less that 1 hour away. I think that says it all.
 
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Ab345
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RE: Is There A Future For Brussels Airlines?

Sun Dec 22, 2013 8:21 pm

Quoting senatorflyer (Reply 3):

With all due respect to SN I have to admit you are right. AF, KL, LH, BA are so close to fill the gap for long haul and since Brussels is the heart of European Union all of the member states' carriers cater to BRU in general.
I also have to state that at one point I was trying to book a ticket for ATH-BRU and the competition was a no-brainer. A3 was around 220€, KL was about 350€ and SN was at 450€ (at that at a discounted rate)     I am more of a Star Alliance passenger between A3 and SN wasn't much of a choise. LH was also at about 350 (via MUC/FRA)
 
Lufthansa
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RE: Is There A Future For Brussels Airlines?

Mon Dec 23, 2013 12:59 am

I think you're answers pretty obvious if LH isn't willing to throw more money at it.
That was their answer at BMI and we all know what happened there. I guess the question is how
much does it add to the LH frequent flyer base? Is it worth LH keeping some kind of small operation going there
and then funnelling all the other traffic through its own hubs?
 
blueflyer
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RE: Is There A Future For Brussels Airlines?

Mon Dec 23, 2013 2:01 am

Brussels Airlines needs to carefully continue playing on its strength (its African network) and take advantage of possible partnerships with other airlines in the Lufthansa group. Closing one station in Africa where Swiss was stronger and funneling the traffic through ZRH in exchange for Swiss reciprocating for another destination is the kind of mutually beneficial consolidation that should be implemented whenever possible.

Come 2016, EU measures will supposedly eliminate the (unfair in my opinion) advantage Ryanair has by paying social charges for some of its Belgian employees in Ireland instead of Belgium, and the Belgian government's plan to offset this advantage for the next three years may be all that Brussels Airlines needs to survive. After all, its management does claim that on equal footing, they can compete profitably with Ryanair.

Of course, the irony is that this government plan is a remedy to a problem allowed to exist by the government to begin with. Due to political calculations, the Belgian government will not follow the French government's example and use the courts to force Ryanair to pay social security charges for all its Belgium based personnel out of fear a legal victory might mean the closure of Ryanair's CRL hub, which would be a major upset for one of the political parties in the government coalition.

Quoting photoshooter (Reply 2):
I wonder if there are any available. They are currently having long haul fleet problems

Temporary problems. One A330 is out for scheduled maintenance, another is AOG at IAD with engine troubles.

Quoting photoshooter (Reply 2):
Couldn't agree more. I think the Ryanair Base at BRU will be the coup de grace for SN.

I'm not so pessimistic. For one thing, Ryanair's expansion is undoubtedly targeting Vueling first and foremost, matching all but one destination that Vueling intends to serve from BRU in 2014.

For another, with the exception of IBZ, all the destinations Ryanair will serve out of BRU are already available from CRL. There are very few price-above-all Belgian customers for whom CRL is too far an airport, and these do not use BRU, they go to MST or EIN where Ryanair also operates instead!

To be sure, Brussels Airlines will lose some low-yielding passengers to either Ryanair or Vueling and may have to adjust capacity or even close a marginal route, but I believe this is nowhere near the proverbial nail in the coffin because passengers that would fly Ryanair to these destinations were lost years ago!

Quoting Ab345 (Reply 4):
I also have to state that at one point I was trying to book a ticket for ATH-BRU and the competition was a no-brainer. A3 was around 220€, KL was about 350€ and SN was at 450€ (at that at a discounted rate

This is an anecdotal observation that means nothing without context. You imply that Brussels Airlines is too expensive, and you might be right, but among the many other possible explanations is that Brussels Airlines was already sold out of its cheapest tickets while KLM wasn't...
 
flyguy89
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RE: Is There A Future For Brussels Airlines?

Mon Dec 23, 2013 3:25 am

I can't read Dutch, but running the article through Google Translate, it seems the article the OP linked to is about possible labor action but not about SN's financial performance. I had been under the impression that SN had turned a corner and their financial situation improved, does anyone have details?
 
smbukas
Posts: 337
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RE: Is There A Future For Brussels Airlines?

Mon Dec 23, 2013 10:32 am

I do not see bright future for Brussels Airlines after LH decision not to take full control of Brussels Airlines.

With LH strong back-up, Brussels Airlines could finance fleet modernisation and get strong access to LH customer base + passengers funnelling through different hubs.

What now I can see, that LH Group are more interested in developing ZRH as hub for Africa.

Brussels Airlines are in strong competition almost in all European routes and in most cases they have more then one competitor. That ends up that O-D passengers are low-yielding for them, when for AF, KL, LH O-D passengers are usually higher yield then transfer passengers. Transfer passengers are low yielding in most cases.

Brussels Airlines Africa network is not to big enough not sustain all feeder routes. For one flight, lets say to BJM they have 2 pax from BHX, 2 pax from CDG, 1 pax from MAN, 2 pax from LHR, etc. They are in situation they cannot cut European feed routes, because cuts will hurt their Africa result. Most European legacies are loosing money in European network and, I'm afraid, SN is loosing much more then LH, AY or BA.

Their "va bank" strategy could be:
1) new fleet for regional network,
2) big network growth in Africa (where they have better know-how then anybody else),
3) fast development of USA flights connecting them to Africa.

But they need a lot of cash to go with such strategy.
 
xdlx
Posts: 972
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RE: Is There A Future For Brussels Airlines?

Mon Dec 23, 2013 1:37 pm

Should have taken the fight to Chereloi... And not allow Ryanair to suck the traffic away from them...
 
airbazar
Posts: 10297
Joined: Wed Sep 10, 2003 11:12 pm

RE: Is There A Future For Brussels Airlines?

Mon Dec 23, 2013 2:17 pm

Quoting blueflyer (Reply 6):
Brussels Airlines needs to carefully continue playing on its strength (its African network) and take advantage of possible partnerships with other airlines in the Lufthansa group. Closing one station in Africa where Swiss was stronger and funneling the traffic through ZRH in exchange for Swiss reciprocating for another destination is the kind of mutually beneficial consolidation that should be implemented whenever possible.

Unfortunately for SN, LH/LX are not interested in doing that.

Quoting smbukas (Reply 8):
Brussels Airlines Africa network is not to big enough not sustain all feeder routes

Much is said about SN's African network but when you look at the details it's not that strong at all. A lot of their African destinations are served as triangular or tagged routes, and with very low weekly frequencies. What all of this amounts to is low yield VFR traffic.
 
Azure
Posts: 624
Joined: Mon Dec 17, 2012 8:34 pm

RE: Is There A Future For Brussels Airlines?

Mon Dec 23, 2013 4:04 pm

Quoting airbazar (Reply 10):
Much is said about SN's African network but when you look at the details it's not that strong at all. A lot of their African destinations are served as triangular or tagged routes, and with very low weekly frequencies.

Agreed. And this not so strong African network is threatened by the growth of another *A carrier in the region, TK.
For connections to the rest of the world, AF/KL too offer many more possibilities to the African passengers than SN.

I have always been pessimistic for stand-alone carriers in Europe, but now I am starting to believe that not of all them will succeed in finding an industrial partner.

We have seen that Croatia Airlines did not find any buyer, that Alitalia is struggling to find one, that even TAP privatization failed last year, that LOT has been on the market for a while with no offer so far, let alone Malev that went bankrupt.

Due to the pressure of the LCCs on the short/medium haul, feeder flights within Europe are often unprofitable which undermines the sustainability of the long-haul network.

For those who will not merge, what would be their chances to survive ?
 
photoshooter
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RE: Is There A Future For Brussels Airlines?

Mon Dec 23, 2013 4:20 pm

Quoting blueflyer (Reply 6):
For another, with the exception of IBZ, all the destinations Ryanair will serve out of BRU are already available from CRL. There are very few price-above-all Belgian customers for whom CRL is too far an airport, and these do not use BRU, they go to MST or EIN where Ryanair also operates instead!

To be sure, Brussels Airlines will lose some low-yielding passengers to either Ryanair or Vueling and may have to adjust capacity or even close a marginal route, but I believe this is nowhere near the proverbial nail in the coffin because passengers that would fly Ryanair to these destinations were lost years ago!

There are a fair number of passengers disliking airports such as CRL, MST, OST,EIN and really want to stick with BRU. I should have added that not only SN but also Vueling and Jetairfly will get some heavy punches. SN already took a beat from CRL which kept on expanding. Having your favorite regional airport is convenient but major airports still offer more flights and better flying times, reason why they want to stick to BRU.

Quoting blueflyer (Reply 6):
Temporary problems. One A330 is out for scheduled maintenance, another is AOG at IAD with engine troubles.

I see OO-SFW is back into service again, been out for more than a week. Still pretty sad they have to lease Hifly/Euro Atlantic for that and LH has no spare for them.

Quoting flyguy89 (Reply 7):

I can't read Dutch, but running the article through Google Translate, it seems the article the OP linked to is about possible labor action but not about SN's financial performance. I had been under the impression that SN had turned a corner and their financial situation improved, does anyone have details?
Quoting smbukas (Reply 8):
Brussels Airlines Africa network is not to big enough not sustain all feeder routes.

They have increased some frequencies and another A330 will arrive shortly so I'm guessing we could see a new North American destination or more frequencies in Africa. SN is complaining that other airlines such as TK, EK, AF/KL are tough competitors and can't keep up with them. So I'm not sure if investing in Africa is really worth it if you are competing with EK. I would say, focus on North America and possibly Asia, downgrade activities in Africa.

Quoting smbukas (Reply 8):
new fleet for regional network,
Quoting smbukas (Reply 8):
But they need a lot of cash to go with such strategy.

Amen to that! They will receive financial support from the Belgian government but not sure what they will do with it. They are still leasing DHCs from Austria and Flybe. Of course not enough to replace older avrojets. I still think CRJ/Embraer jets would be the prefect replacement for SN's avro fleet.

Conclusion; SN is trying to win a war with too many generals and too few soldiers.
'A lie gets halfway around the world before the truth has a chance to get its pants on.' - Winston Churchill
 
flyguy89
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RE: Is There A Future For Brussels Airlines?

Mon Dec 23, 2013 4:25 pm

Quoting airbazar (Reply 10):

Much is said about it because it is the largest *A carrier between Europe and Africa. And no, that does not amount to low-yield VFR considering Africa is by far their strongest, most profitable area of operations.
 
boysteve
Posts: 890
Joined: Sun Apr 25, 2004 7:02 am

RE: Is There A Future For Brussels Airlines?

Mon Dec 23, 2013 4:43 pm

My opinion of SN is not a good one. If I have paid £340/€400 return MAN - BRU then I expect a drink and a snack to be included, it is as much as LH charge for MAN-DUS for example. I will happily pay for extras if I get a U2/FR price. The only positive I can have on SN is that I can gain miles & more points!
 
airbazar
Posts: 10297
Joined: Wed Sep 10, 2003 11:12 pm

RE: Is There A Future For Brussels Airlines?

Mon Dec 23, 2013 5:07 pm

Quoting photoshooter (Reply 12):
Amen to that! They will receive financial support from the Belgian government

How is that possible? SN is a European carrier and EU law forbids government financing. What am I missing?

Quoting flyguy89 (Reply 13):
Much is said about it because it is the largest *A carrier between Europe and Africa.

Actually, TK is the largest. SN is second by total cities served but like I said their routes are very low frequency tags or triangular routes. When you look at the details, TP has more non-stop destinations and more frequencies than SN. And I would be shocked if LH/LX didn't have more weekly seats than SN, and growing.

Quoting flyguy89 (Reply 13):
And no, that does not amount to low-yield VFR considering Africa is by far their strongest, most profitable area of operations.

I didn't say they were unprofitable. I said low yield which they are or SN wouldn't be stuffing 272 seats in their A332's.

[Edited 2013-12-23 09:23:59]
 
airbazar
Posts: 10297
Joined: Wed Sep 10, 2003 11:12 pm

RE: Is There A Future For Brussels Airlines?

Tue Dec 24, 2013 2:20 am

Quoting flyguy89 (Reply 13):
Much is said about it because it is the largest *A carrier between Europe and Africa.

  

Quoting airbazar (Reply 15):
Actually, TK is the largest. SN is second by total cities served but like I said their routes are very low frequency tags or triangular routes. When you look at the details, TP has more non-stop destinations and more frequencies than SN. And I would be shocked if LH/LX didn't have more weekly seats than SN, and growing.

Well, even I was wrong. I took some time to research total African destination for each European *A carrier:
TK 36
LH/LX 21
SN 19
TP 15

I don't have the time to look into number of seats or non-stops but like I said earlier, all of TP's destination are non-stop from LIS. So one could easily argue that SN is now the smallest *A carrier between Europe and Africa, and that is exactly why they are strugling. This article is quite interesting:
http://centreforaviation.com/analysi...tion-with-lufthansa--part-2-116851
 
flyguy89
Posts: 3342
Joined: Tue Feb 24, 2009 6:43 pm

RE: Is There A Future For Brussels Airlines?

Tue Dec 24, 2013 3:22 am

Quoting airbazar (Reply 15):
Quoting flyguy89 (Reply 13):
Much is said about it because it is the largest *A carrier between Europe and Africa.

Actually, TK is the largest.

True technically, but then you could get into that whole can-of-worms argument as to whether TK is really a European carrier or could Turkey be considered part of Europe.

Quoting airbazar (Reply 15):
I said low yield which they are or SN wouldn't be stuffing 272 seats in their A332's.

Well...268 actually, but who's splitting hairs?   They're towards the higher end of the density spectrum, but aren't exactly premium-light, and are they not in the process of a major upgrade to their premium cabins as well? The cargo they carry is also mucho-lucrative.

Quoting airbazar (Reply 16):

Well, even I was wrong. I took some time to research total African destination for each European *A carrier:
TK 36
LH/LX 21
SN 19
TP 15

If you're combining LH and LX and include North Africa, yes. But Brussels/Sabena's historical strength has always been in sub-Saharan Africa, the tricky area of Africa most carriers struggle with (except AF that is), and 18 of SN's 20 African destinations (I counted 20) are in sub-Saharan Africa.
 
airbazar
Posts: 10297
Joined: Wed Sep 10, 2003 11:12 pm

RE: Is There A Future For Brussels Airlines?

Tue Dec 24, 2013 12:53 pm

Quoting flyguy89 (Reply 17):
True technically, but then you could get into that whole can-of-worms argument as to whether TK is really a European carrier or could Turkey be considered part of Europe.

Regardless, they are carrying passengers between Europe and Africa and so is ET which is also in *A, not to mention the ME3 carriers.

Quoting flyguy89 (Reply 17):
If you're combining LH and LX and include North Africa, yes. But Brussels/Sabena's historical strength has always been in sub-Saharan Africa, the tricky area of Africa most carriers struggle with (except AF that is), and 18 of SN's 20 African destinations (I counted 20) are in sub-Saharan Africa.

Historicaly yes, no question about that but they have been losing that advantage and will continue to lose it as more and more carriers encroach on their legacy market.
http://www.bloomberg.com/news/2013-0...els-turkish-squeeze-in-africa.html

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