Brussels Airlines’ Future Brought Into Question By Lufthansa

Advertisement:

Struggling Brussels Airlines has been dealt another blow today, as reports have surfaced suggesting its parent Lufthansa Group is willing to pull the plug. Anonymous sources have told local media that the airline could be sold or left to go bankrupt, although the airline says these reports are ‘pure speculation.’ The rumors come as the airline is still awaiting a decision on a bailout package from the Belgian government.

Brussels Airlines
Could Brussels Airlines be left to fail? Photo: Brussels Airlines

The fate of Brussels Airlines to be decided on Monday

Sources have today told Belgian publication ‘La Libre’ that the Lufthansa Group is questioning the future of Brussels Airlines. Despite the carrier resuming flying on Monday following three months of grounding, it now seems that the fate of the airline is hanging in the balance.

The unnamed sources told La Libre that the management of Brussels Airlines will meet with Lufthansa Group on Monday to determine its future. Suggestions are that Lufthansa may either allow the carrier to go bankrupt or could even sell the airline.

Brussels Airlines employs around 4,200 people, and is the flag-carrying airline for the small European country. Last month, it said it would reduce its fleet by around 30% and its workforce by 25% in order to weather the coronavirus crisis.

Stay informed: Sign up for our daily aviation news digest.

brussels-airlines
The flag carrier is struggling due to its lengthy grounding. Photo: Brussels Airlines

A spokesperson for Brussels Airlines has told Simple Flying that there is no truth in this rumor. They told us,

Advertisement:

“The reports are pure speculation. Lufthansa has continuously said, and also gave a reaction in that sense today, that it has no intention of selling or dropping Brussels Airlines.”

No bailout yet

As yet, there has been no bailout from the Belgian government, although it said last month it would support the airline if its future was guaranteed. However, talks over the approximately €300m ($336m) package have stalled.

The issue seems to be the requirements of the Belgian government, which would see it becoming a larger shareholder as part of the deal. It has also been pushing for growth guarantees for Brussels Airlines. Neither of these have gone down well with Lufthansa.

Brussels airlines
The state is looking for more involvement than Lufthansa is happy with. Photo: Getty Images

Lufthansa has been resistant to state involvement in its airlines throughout the crisis. Back in April, CEO Carsten Spohr threatened to make the parent airline Lufthansa insolvent rather than accept state interference in the carrier. The move got him what he wanted, and the €9bn ($9.8bn) bailout offer came with only ‘silent’ participation of the German government.

Advertisement:

The issue at Brussels Airlines, however, is something rather different. A bailout amounting to €300m or thereabouts would take the airline years to pay back, given its modest profitability. This would mean Lufthansa would get no return from the airline for many years to come.

Unions unmoved by the threat

Whether or not today’s allegations are true, the workers unions aren’t worried. Secretary of the General Confederation of Liberal Trade Unions of Belgium (ACLVB), Filip Lemberechts, told Nieuwsblad that the union doesn’t expect anything earthshattering to happen on Monday. He said,

“We are not going to panic. Brussels Airlines has been dead and buried ten times in recent weeks. I think they will eventually take their responsibility and not embark on a wild adventure.”

Lemberechts believes that the workers at the airline deserve to have a future, saying that unions have been involved in negotiations every day for the past few weeks. He says that talks remain constructive and believes that an agreement will be reached in the coming days.

Advertisement: