LH to take over 100% of SN

Old Jun 19, 2020, 5:19 am
  #91  
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Didn't I say they were bankrupt?
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Old Jun 19, 2020, 5:31 am
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Originally Posted by oliver2002
Et maintenant en anglais:

Originally Posted by Brussels Times
Lufthansa could let Brussels Airlines go bankrupt: reports

The Lufthansa group could let its subsidiary Brussels Airlines go bankrupt if no rescue agreement is reached with the Belgian government, La Libre reports.

Citing several inside sources, the Francophone newspaper said that the German company is no longer excluding the option of dropping Brussels Airlines and letting it file for bankruptcy.

Last edited by irishguy28; Jun 19, 2020 at 5:43 am
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Old Jul 15, 2020, 6:32 am
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Schedule for August will be revised due to unstable financial situation. As there is still no agreement with the Belgian gov, the situation is getting extremely precarious. Operational aircraft will be reduced for both short and longhaul routes.

Time will tell if 2001 will repeat itself.

More on that on vrt NWS (Dutch)
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Old Jul 15, 2020, 9:58 am
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Originally Posted by flyvinci
Schedule for August will be revised due to unstable financial situation. As there is still no agreement with the Belgian gov, the situation is getting extremely precarious. Operational aircraft will be reduced for both short and longhaul routes.

Time will tell if 2001 will repeat itself.

More on that on vrt NWS (Dutch)
The key part of the article is near the end: nobody wants another Sabena-style collapse which many of us remember from 2001. But I would argue that the Belgian federal government wants this less than anyone- they didn't look good then, especially in the eyes of Belgian voters, and they wouldn't look good now if they had to pick up the pieces.

As the article also says, the politicians have already set money aside for a rescue plan. So those politicians should now think carefully about whether their ongoing demands are realistic. They should ask themselves if LH are really going to issue guarantees on jobs, future hub status for BRU etc, when they have promised nothing similar to LX and OS. If De Croo and co. push too hard, LH may walk away. And what would happen next ? The Belgian federal government would have to pick up the pieces. What are those pieces ? It's worth remembering that the current Brussels Airlines route map is really just scraps of the old Sabena network: some African, some European, and a bit of sunshine stuff picked up from Virgin Express etc. Although the old Sabena is remembered affectionately by some (mainly its huge former workforce), it almost never made a profit and had a terrible reputation for arrogant, state airline customer service. So my feeling is that if a failed SN is thrown back to the Belgian federal government due to no deal with LH and bankruptcy, then LH won't lose much sleep. It's not as if any major airline needs Bamako and Cotonou on its network, and LH can still send plenty of A320s into Zaventem for connections. That will be fine for the Belgian home market such as it is, and pax from EU institutions hardly use SN anyway. It's worth noting that BUD is still perfectly well served after years without Malev.

On the other hand, bankruptcy would see the Belgian federal government facing a big dose of unemployment and the second failed flag carrier in 20 years. A nostalgic view of history may be pushing them to show their electorate that they are not taking instructions from the German national airline. They should overcome this outdated sentimentality and hand over the cash sooner rather than later.
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Old Jul 16, 2020, 4:38 pm
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Good post. I have no emotional attachment to Brussels Airlines whatsoever and I think it is just awful in terms of service inside and out, just like its predecessor, but I don't want to see it disappear. We need competition and diversity up there in the air, whatever people say, otherwise it will just be easyJet, Ryanair and Wizz. And really, who wants that, except their CEOs (and other well paid people)? We should do what we can to avoid Europe becoming like the US, because nothing could be worse than those carriers that operate there. Brussels won't survive without LH or being in an alliance, it will just go like VLM otherwise.
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Old Jul 16, 2020, 5:42 pm
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Originally Posted by Concerto
I don't want to see it disappear.


We should do what we can to avoid Europe becoming like the US.
I fully agree with both these statements!! I dont want SN to fail either, but Mme. Wilms and her colleagues need to get real...
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Old Jul 17, 2020, 7:23 am
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Being completely neutral on SN, having only flown them a limited number of times, I can only say that they were better than many but worse than some.

However, why do we all accept the assumption here that SN can only exist within the LH Group. I really cannot believe that that is in the best interests of the Belgian public or Government. LH Group would take the support of the Belgian Government and use it to the advantage of LH Group shareholders only. The German Government only provided aid with a capital participation. Why should the Belgian Government think differently?

It might possibly be the case that a controlled bankruptcy and either a Governement rescue, sale to another party or combination of the two is a better alternative and better serves SN’s passengers and the Belgian state.

Last edited by Tafflyer; Jul 17, 2020 at 7:36 am
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Old Jul 17, 2020, 8:44 am
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They might be better off with Air France KLM, but that will mean a Skyteam stranglehold on the Benelux and France. But since IAG is going to buy AirEuropa and create a quasi monopoly in the Iberian peninsula, that shouldn't matter. Maybe overall a better fit for Brussels Airlines would be with British Airways and IAG.
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Old Jul 17, 2020, 8:52 am
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Originally Posted by Tafflyer
However, why do we all accept the assumption here that SN can only exist within the LH Group.
Hmm.. Kind of difficult to see any alternative. I don't think IAG or AF/KL would be very interested in a few slots at Zaventem, and the long-haul routes have never been worth much since Belgian influence declined in central Africa from the 60s onwards. If the odd route is or became profitable, then LH could easily do it from FRA/MUC and wouldn't have to worry any more than SN does now about competition from AF, ET, TK etc.

Would there be any other serious candidate to take SN as the sick patient of the LH Group ? If there wouldn't, maybe the Belgian state could have another attempt but it tried that for many decades with the old Sabena and we witnessed the result in 2001...

Originally Posted by Tafflyer
LH Group would take the support of the Belgian Government and use it to the advantage of LH Group shareholders only. The German Government only provided aid with a capital participation.
... You may well be right. But which would cost more? Paying the ransom to LH and remembering that the Second World War really was a long time ago now, or paying for thousands of unemployed Belgians (mainly), and then paying a whole lot more to attempt Sabena Part Deux ? (Or, I suppose, for courtesy to all, Part Deux/Part Twee/Part Zwei...!!)

Originally Posted by Tafflyer
It might possibly be the case that a controlled bankruptcy and either a government rescue, sale to another party or combination of the two is a better alternative and better serves SN’s passengers and the Belgian state.
... Well, if the Belgian state keeps on as it is doing we may well find out. I hope you're right but as you see I remain a little doubtful...!
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Old Jul 17, 2020, 9:18 am
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Originally Posted by Concerto
Maybe overall a better fit for Brussels Airlines would be with British Airways and IAG.
I think SN wouldn't mind ... But IAG has IIRC tended to steer clear of sick airlines. In the past IAG has eyed up Swiss, Malev before it went under, TAP, I think LOT as well but I may be wrong... Nothing came of those... They were even very hesitant about Iberia. And they have tended to be very centrally focused on "core business" at LHR and over the Atlantic (all UK regional departures axed except to London, getting rid of BA Connect etc...) But of course, times may have changed now.

It's doubtful that there is really a role for a national Belgian airline- the train gets you to airports like CDG, CGN, FRA and AMS so quickly now. There is plenty of coverage without SN at Zaventem and probably still Charleroi and even Deurne a bit by LCC, P2P sunshine flights etc. And SN just isn't a brand which anyone has been able to warm to really. It's a pity, especially if you compare the really sovereign effort the staff at LX/Swissport have made in ZRH and GVA (and elsewhere) to promote their national carrier as a fabulous brand- so much it is now in a way the niche premium carrier of the group. SN staff at Zaventem (old Sabena and the new ones now) are instinctively sour and incredibly quick to tell you what they can't do to help you, and the network is made up of old bones. Maybe things will change.. As a fan of Belgium, I hope so !

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Old Jul 17, 2020, 9:30 am
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......

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Old Jul 17, 2020, 2:10 pm
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Sabena collapsed as Swiss did not fulfill their contractual obligations.
The problem with Sn , lufthansa played it very dirty. They even tried to merge it within Eurowings which has had a bigger loss.
Sn was never given a fair deal, despite making a profit for 4 years (15-18), till lh tried to eliminate Sn. Only if lh had delivered what was promised to Sn.
Lufthansa shall never dare to merge Lx or Os in Ew, then why with Sn?
Even today Sn has a very good presence in Africa , lh only wants the routes & traffic.
Lufthansa has shown time & again that it cannot be trusted.
Would be glad if it were nationalized or sold of to IAG .
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Old Jul 17, 2020, 3:37 pm
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Originally Posted by diamantaire
Sabena collapsed as Swiss did not fulfill their contractual obligations.
It's true that Swissair pulling out of its agreement with Sabena at the last minute didn't help the ailing Sabena. But even the Belgian courts haven't declared Swissair fully responsible for the bankruptcy in 2001. Sabena was in a hopeless situation long before Swissair came on the scene. It was a classic example of an inefficient state airline. Its strategic decisions were terrible- for example, it focused on the former Belgian colonial destinations long after African independence at the expense of the emerging North American market. Its staff were arrogant and unhelpful (a long tradition which today's SN staff proudly uphold). IIRC it only made a profit once in the 78 years of its existence, and while Sabeniens might have formed a circle and sung sad songs around the last A340 to arrive back at Zaventem in 2001, I don't recall much real sadness in the Belgian population. Mostly, I think, they found Sabena expensive and disappointing. The history of what followed (DAT, Virgin Express, SN-Brussels, Brussels Airline, Lufthansa) has been so confusing that few have developed any real attachment to it. That's partly why it's in such poor condition now.

Originally Posted by diamantaire
SN was never given a fair deal
Originally Posted by diamantaire
Only if lh had delivered what was promised to Sn.
Well, many would agree with you. Many feel that SN has not been given a platform for success by LH... On the other hand LH has, I believe, argued that it needs to see a successful operation first before it will invest (further), otherwise it could be throwing good money after bad. As LH is a business answerable to its shareholders and not a Belgian job retention scheme, its stance has to be understandable.

Originally Posted by diamantaire
Lufthansa shall never dare to merge Lx or Os in Ew, then why with Sn?
OS I can't explain- they have been very unsuccessful too. LX has been highly successful, and has built on its tradition over the decades of high quality. It's a really strong brand in its own right- merging it would make little sense.

Originally Posted by diamantaire
Even today Sn has a very good presence in Africa , lh only wants the routes & traffic.
Hmm... Are those African routes profitable? They must be pretty high cost... Flights often nowhere near full IIRC. Premium traffic must be much more limited on those routes than a few years ago. And even if they are profitable, LH could try to do the routes from FRA/MUC and run decent connections from Zaventem... Why would the traffic you mention (such as it is) not follow? Otherwise it's AF/TK/ET etc. or maybe MS if they're really desperate for a taste of Hell...

Originally Posted by diamantaire
Would be glad if it were nationalized or sold of to IAG .
Maybe Willy is interested, and maybe we will see it happen ! But for all the reasons I've suggested- I for one would be surprised...

Last edited by FlyerLX; Jul 17, 2020 at 3:54 pm
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Old Jul 17, 2020, 7:19 pm
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Actually many routes that were served by SN to Africa were profitable. Especially the ones to Kinshasa, Douala, Yaound and sometimes West-African cities Conakry, Freetown and Monrovia were full. If not, they filled the plane with goods in the cargo hold. In fact, Brussels Airport was a fairly good hub for American citizens travelling to/from "non-touristic" Africa. A lot of employers from SN were afraid that LH would take over those routes and let SN serve more flights to their own FRA/MUC hub. Luckily this was not executed by LH. However, the situation with SN does not look good. SN asked their employers to participate in a voluntary termination of their employment. They're hoping for at least 1000 people to leave and if not enough people leave, they'll probably have to fire employees. We all know that SN cannot survive without LH anymore and we can't be certain if the (temporary?!) Belgian government will actually fix the situation for SN. Swissport Belgium asked for help too and they went bankrupt in June, leaving 1600 employees on the street. All employees were notified 1 day beforehand by e-mail. It won't come to a surprise to me if the same happens in August or September for SN.
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Old Jul 18, 2020, 3:57 am
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Originally Posted by unusualtravelblog
Actually many routes that were served by SN to Africa were profitable.
Thank you for the clarification- always interesting to know these things ! But as so much has changed (inevitably) in the 20 years since Sabena went under, I wonder if those routes are still profitable now...?? I'm guessing there is less church / charity / NGO involvement... And is there much business travel there or is it mainly VFR ? And I think many business pax (including many from EU institutions) are not allowed business class these days because those flights are relatively short.

Originally Posted by unusualtravelblog
A lot of employers from SN were afraid that LH would take over those routes and let SN serve more flights to their own FRA/MUC hub
I think this would make lots of sense- connx into FRA/MUC are always going to be better than into Zaventem, and similar moves have worked well before. Many years ago BA moved the old British Caledonian West Africa routes from LGW to LHR (principally LOS and ACC) - everybody said it would be a disaster but increased connectivity has made those routes stronger than ever.

Originally Posted by unusualtravelblog
we can't be certain if the (temporary?!) Belgian government will actually fix the situation for SN.
I still cannot believe they won't fix it- really nobody wants a Sabena-style downfall once again. And as we know most Belgian federal governments are temporary most of the time, so it shouldn't make too much difference

Originally Posted by unusualtravelblog
Swissport Belgium asked for help too and they went bankrupt in June, leaving 1600 employees on the street. All employees were notified 1 day beforehand by e-mail. It won't come to a surprise to me if the same happens in August or September for SN.
Maybe De Croo and co will wait for this to happen before handing over cash they have already earmarked. If job losses are inevitable, better from the federal government's point of view for them to happen before they hand over the cash than after... Otherwise it's "Thanks for your cash, now here's the list of job losses".
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