The Brussels Airlines management has presented its turnaround plan to its social partners. With the plan, the Belgian airline wants to pull the company out of the crisis that severely hit its financials. At the same time, the airline focuses on structural profitability in order to enable solid growth. The carrier therefore needs to reduce its overall costs, increase efficiency and productivity.
A sufficiently positive EBIT margin will allow the airline to secure its future, invest in its fleet and to further develop its hub at Brussels Airport. Furthermore, the Belgian home carrier will make sure to continue playing a pivotal role for the Belgian economy and to remain one of the core airlines within the Lufthansa Group.
The main measures of the turnaround plan include:
The review of the network by focusing on the market needs and by optimizing the route profitability.
The adaptation of the fleet according to the network optimization: from 54 to 38 aircraft (-30 percent)
The reduction of the personnel costs by reducing the number of jobs by 25 percent.
Together with the social partners, the number of forced redundancies will be reduced to a maximum extent.
The reduction of overhead, operational costs and the increase of operational efficiency, among others by improving productivity and further standardizing the fleet.
The simplification of the employee reward set-up, aiming at remaining an attractive employer while controlling the future cost evolution.
Brussels Airlines’ intention is to investigate as many solutions as possible to limit the number of forced dismissals. The company therefor invites its social partners to assess together all alternative measures allowing to reduce the social impact to a maximum extent; measures like seasonal contracts, pensions, part-time work, unpaid leave, volunteers who would seek their future elsewhere - to name just some options.
“The strength of our company are our employees and we do everything we can to protect our staff as much as possible. The way how we deal with the social impact is for us as important as the end goal itself. It’s the management’s responsibility to make sure that our company can survive the crisis. But let’s be clear, the intention is not only to survive but to build a healthy company with a long-term structural profitability and growth perspectives. We strongly believe in the plan and herewith in the future of Brussels Airlines,” said Dieter Vranckx, CEO of Brussels Airlines.
While the turnaround plan is indispensable to overcome the crisis, the ongoing discussions with both the Belgian government and Lufthansa remain essential. The Belgian home carrier hopes for a positive outcome of the talks with the Belgian authorities on the financial support that is needed to overcome the consequences of this unprecedented crisis, while it seeks for assistance of Lufthansa for the restructuring costs.
On February 28, the company announced for the first time an impact on the demand for air travel. The situation deteriorated week by week, with days where the number of cancellations exceeded the number of incoming bookings. Still today, demand is very low and according to analysts and experts, demand for air travel in 2021 is expected to be 25 percent lower than before the crisis and the industry can only count on a demand back at 2019-levels by earliest 2023.