Brussels Airlines CEO Vranckx: ‘going for it 100%’
Brussels Airlines fights to survive amid the corona crisis, but Dieter Vranckx shows himself combative. “I’m going for it 100%.” The newspaper Het Laatste Nieuws interviewed the CEO of the Belgian airline, which is part of Lufthansa.
No new Sabena scenario
Since March 21st, the 42 Brussels Airlines’ airplanes have been on the ground in Zaventem. And it will remain that way until at least May 15th. An expensive problem, because the costs keep rising. Dieter Vranckx (47) became CEO of Brussels Airlines on January 1st of this year, and wants to avoid a new Sabena scenario.
The whole airline sector is in turmoil because of the corona crisis. “I have experienced September 11th, the financial crisis, the bombings at Brussels airport. More than once there was a crisis that revolved solely around aviation. But then the rest of the world went crazy. This? Unseen,” says Vranckx.
Vranckx saw the first consequences of the corona crisis on February 24th. “The virus had already been in Italy for a few weeks, and suddenly our new bookings dropped 6% below the normal level. From then on, it got worse every day. That’s why we were one of the first to stop a series of flights from March 11th.”
Brussels Airlines has a flexible system for people who saw their flight canceled. “Customers whose flight was canceled get until April next year to use their ticket still, and even change their destination. Anyone who still travels this year will receive 50 euros in travel credit. This option is currently popular.” Reimbursement is also possible, but due to technical unemployment Brussels Airlines reports delays in processing applications.
The current situation costs a lot of money, also because the airplanes of Brussels Airlines are leased, and the insurance continues to run. “In addition, airplanes are not made to stand on the ground. Certainly, the planes we keep ready to fly again have to be maintained daily. Also, our Service Centers also continue to work on rebooking,” says Vranckx.
Some planes have been wrapped up because they will remain on the ground for more than three months. After all, bookings come in very slowly. “In the last six to seven months of 2020, we expect to sell half as many tickets as in the same period last year. In the whole of 2021, the demand will reach about 75% of the normal level. We’ll drag this along for another 12 or 18 months.”
Brussels Airlines has been loss-making on average for the last 10 years and wants to reach a profit margin of 8%. Before the corona crisis, Brussels Airlines was already in the process of restructuring. This is now being accelerated, with fewer aircraft and less staff, says Vranckx.
“The old plan was based on 100% of normal demand, so I think everyone understands that the new plan has to look different. It’s too early to say how many personnel it will affect. We’ve already canceled five planes that would normally fly for us from the summer.”
“Il faut reculer pour mieux sauter, they say in French. In the end, the goal is to grow profitably from 2023. But first, we have to survive the coming weeks.”
Brussels Airlines counts on state aid to survive the risk and has regular consultations with the Belgian political world. After all, the economic impact of the company cannot be underestimated.
“We employ 4 200 people, and there are another 40 000 jobs directly dependent on Brussels Airlines. That’s four times more than if the flights to Zaventem were operated by a foreign company. Tourists who come to Belgium also spend an average of 650 euros, not counting airline tickets.”
According to Vranckx, Brussels Airlines also provides a hub effect. By bringing people to Zaventem via shorter European flights, large airlines choose the airport for their international flights. “Including our parent group, Lufthansa, we have a market share of more than 50%. Thanks to us, Brussels is a hub, and I’m sure it will continue to be so.”