Contributor - Europe

Cathy Buyck

Brussels Airlines plans to cut its workforce and network by about one quarter by the end of the year and reduce its fleet by 30 percent, from 54 to 38 aircraft, as part of a turnaround plan. The airline’s CEO, Dieter Vranckx, said it “urgently” needs to survive the current crisis and to become structurally competitive in the future.

 


Speaking to media after informing union representatives about the downsizing, Vranckx acknowledged the airline already needed to restructure before Covid-19, prompting a move at the end of last year to launch its “Reboot” turnaround program that targets an EBIT margin of 8 percent by 2022. But due to the pandemic “we have our back to the wall now,” he said. “We will not survive in the current structure.” Consequently, the company will deepen and bring forward the execution of Reboot by two years.

 


Brussels Airlines suspended scheduled flight operations on March 21,&nbsp;and its fleet has remained grounded since then. The airline hasn’t decided yet which aircraft will leave the fleet early; much will depend on discussions with lessors on the conditions for the premature return of aircraft and termination of contracts without penalties. The company's widebody fleet—all Airbus 330s—will shrink from 10 to eight units and most likely the two -300 variants powered by Rolls-Royce Trent 700 engines will leave early.

 


The restructuring accounts for only one element of Brussels Airlines’ survival strategy. The support of shareholder Lufthansa Group for the restructuring cost and a €290 million bailout from the Belgian government to alleviate the company’s liquidity crunch stand as the other two pillars. “All three elements are indispensable and are interconnected. They work in parallel and will secure the existence of Brussels Airlines and its growth when demand returns,” Vranckx told AIN. He declined to comment on the progress of the talks with the Belgian authorities, noting only that without financial support the company will run out of cash by the end of the month.

 


Negotiations have so far proved difficult. The Belgian government wants guarantees from Lufthansa that proceeds would not flow to the German group’s flagship carrier and a commitment that Brussels Airlines and Brussels Airport remain essential parts of the group's multi-brand and multi-hub network strategy. Reportedly, the Belgian government would also seek a stake in the group, a condition Lufthansa CEO Carsten Spohr wants to avoid.

News about commercial airlines, including regulations, aircraft orders, safety, acquisitions, and mergers.

Brussels Airlines To Trigger Major Downsizing  

Lufthansa-owned Brussels Airlines remains locked in talks with the Belgian government over a €290 million bailout. 

2024 Corporate Aviation Leadership Summit

Charles Alcock

News and developments about airplanes, helicopters and unmanned air vehicles used in all varieties of operations, including airlines, military, business, commercial, general aviation and private.

News about environmental issues relating to aircraft operations, including noise issues, emissisions, and regulations. See Fuel for biofuel.

News and issues relating to international air transport and cargo carriers, national airlines and regional airlines, including aircraft, engines, personnel, acquisitions, accidents, safety, security and training.

Agreement between start-ups could lead to orders for up to 15 aircraft

Skyhop Plans Island Routes With Noemi's Electric Seaplane

Howard Hardee

Airline plans to gradually replace its Embraer E-Jet fleet

A220’s Performance Drives BermudAir’s Fleet Growth

Partners say eVTOLs could accelerate response times in crowded Indian cities

Air India Backs SkyDrive Emergency Medical eVTOL Plans

News and issues relating to the aerospace industry that are related to the science, engineering and business of flight in space involving civil, industrial and military applications, and similar topics related to flight in the atmosphere of the Earth that are not covered more directly by other AINonline subject channels. In other words, both astronautical and aeronautical subjects, except for those aeronautical topics that are specifically covered elsewhere on this website.

Rival Boeing arguably claimed bragging rights at the Farnborough International show

Airbus Balances Shareholder Returns and New Aircraft

New developments at airports including regulations and noise issues; legal disputes; openings, acquisitions and mergers.

Connections to London Heathrow and Manchester airports will start first

Virgin Firms Up eVTOL Air Taxi Alliance with Joby

News and developments about everything that goes into the cabin of an aircraft, from floor coverings to headliners, with a special emphasis on in-flight entertainment, communications and other electronics for passengers. If it is in the cabin of an aircraft, it’s covered here.

More In Airlines

Skyhop Plans Island Routes With Noemi's Electric Seaplane

Agreement between start-ups could lead to orders for up to 15 aircraft

A220’s Performance Drives BermudAir’s Fleet Growth

Airline plans to gradually replace its Embraer E-Jet fleet

Air India Backs SkyDrive Emergency Medical eVTOL Plans

Partners say eVTOLs could accelerate response times in crowded Indian cities

Airbus Balances Shareholder Returns and New Aircraft

Rival Boeing arguably claimed bragging rights at the Farnborough International show

Virgin Firms Up eVTOL Air Taxi Alliance with Joby

Connections to London Heathrow and Manchester airports will start first

ATR Chases New Regional Markets for Twin Turboprops

Iran war and wider geopolitical pressure stall buying decisions

Embraer Racks Up E-Jet Orders at Farnborough

30 firm orders led by Abra

Gulf Air May Buy JetZero’s Blended-wing-body Z4

Japan Airlines also expresses interest at Farnborough Airshow

AIN Products

SUBSCRIPTIONS

RESOURCES

ABOUT AIN