Lufthansa to acquire all remaining shares in Brussels Airlines


(Posted 15th December 2016)

Lufthansa and Brussels Airlines: Shaping the future together

As of 2018 will Brussels Airlines be fully integrated into the Lufthansa Group and join the Eurowings Group. The unique characteristics of Brussels Airlines, including its attractive Brussels market, its well established Africa network and its advantageous cost structure which has allowed the leading Belgian airline to successfully compete with the tough low-cost competition in the Belgian market, will further strengthen the Lufthansa Group and Eurowings Group market position.

After the agreement of Lufthansa and the shareholders of SN Airholding on the modalities of the complete take-over, Deutsche Lufthansa AG’s Executive Board decided yesterday to exercise the call option for the outstanding 55 percent of the shares. The call option comes into effect by 31st of December 2016. The closing of the transaction will happen by the beginning of January 2017.

The price for the take-over of the remaining 55 percent of the shares had already been part of the agreement for the call option in 2008. The price for the acquisition of the remaining 55 percent of the shares is 2.6 million euro, which will be transferred to a consortium of 30 shareholders.

Following the acquisition of the 45% share of SN Airholding eight years ago, we now want to take a next step in our already very solid and successful cooperation. As a longstanding shareholder and partner of Brussels Airlines, we are already closely linked to each other. Therefore we value Belgium and especially Brussels as highly attractive markets that perfectly complement our offer in the heart of Europe. In addition, Brussels Airlines already has a very competitive cost structure and brings a well-established long-haul network, especially to and from Africa, to the Lufthansa Group portfolio. We also very much appreciate the high qualification, motivation and performance of the 3,500 Brussels Airlines employees

— Carsten Spohr, Chairman of the Board and CEO of the Deutsche Lufthansa AG

After the acquisition, Brussels Airlines will operate its 23 long-haul destinations as well as 79 destinations in Europe under the umbrella of the Eurowings Group. The brand Brussels Airlines will over time be complemented by the mention: ‘Member of the Eurowings Group‘. The common goal of Lufthansa and Brussels Airlines is to further strengthen the market position in the Belgian aviation market.

Brussels Airlines’ current fleet harmonization towards an Airbus A320 family fleet for the European network will be continued. With its fleet of 42 short- and medium-haul aircraft, including two on wet lease, and nine A330 long-haul aircraft, Brussels Airlines has significantly increased its passenger numbers. Between 2013 and 2015, this number has increased by 30% to a total of 7.5 million passengers. Medium-term investments are planned to further improve the fleet efficiency and increase the capacity on the short- and long-haul networks.

Over the past three years has Brussels Airlines reduced its overall costs by 15% and established efficient sustainable structures. For the fiscal year of 2015, the leading Belgian airline generated an operating profit of 43.4 million euros. With the full integration of Brussels Airlines, synergies will add up to a mid-double digit million euro amount per year.

Over the past eight years, our collaboration with Lufthansa has proven its potential to create perspectives and safeguard jobs. More than ever, consolidation in the aviation business is key. Joining the Lufthansa Group allows us to further increase our synergies, while keeping our specificities. Operating under the umbrella of Lufthansa will help us to further strengthen our competitiveness within a tough market environment and develop our long-haul and short-haul operations. Furthermore, the Lufthansa Group power enables us to expand our Africa-reach, by positioning Brussels as the Sub-Saharan Africa Hub of the Lufthansa Group‘.

— Viscount Etienne Davignon, Chairman of the Board of SN Airholding

With its expertise and experience and based on its hybrid focused hub model, Brussels Airlines will assume an important role in the further development of the Eurowings Group into a pan-European platform with a large long-haul and short-haul network. In order to personally follow up the integration process, the Chairman of the Board of the Deutsche Lufthansa AG Carsten Spohr will join the Brussels Airlines Board as Co-Chairman, next to Viscount Etienne Davignon. In 2017 at which stage Lufthansa will hold the majority on the Board.

However, during this period, the Board will make its decisions by consensus. Concerning the three current Belgian directors of the Brussels Airlines Board, the Board co-opted Bernard Marchant, CEO of the Group Rossel, as replacement for Luc Coene, who presented his resignation for personal reasons. Etienne Davignon said this morning: ‘We wish to thank Luc Coene for his exceptional contribution to our company and this from the start and welcome Bernard Marchant as new member in our Board‘.

The Brussels Airlines Management Board remains unchanged under the leadership of CEO Bernard Gustin but in addition will an Advisory Council be established and will support the integration process.

As the leading aviation group, we have already demonstrated on several occasions that, during the expansion process of our airline group, we fully respect the interests of the respective domestic markets. We want to further sustainably strengthen the important aviation location of Brussels and continue to improve the connectivity of the European capital. Based on its successful development, Brussels Airlines is able to play a leading role in bringing our pan-European point-to-point offer under the brand of the Eurowings Group to new successful heights. Together, we will be successful for our customers, shareholders and employees – and this especially for Belgium‘.

— Carsten Spohr, Chairman of the Board and CEO of the Deutsche Lufthansa AG

With this development do plans to relegate Brussels Airlines into a low cost carrier unit within the Lufthansa Group structure appear to be off the table as only a full service airline, though with a range of tariff products, can effectively serve the Belgian market and be the home airline serving the European capital city of Brussels most effectively.
Brussels Airlines, as mentioned before, presently flies to Bujumbura / Burundi once a week via Kigali / Rwanda, which receives six flights a week in total. Five of those route via the Ugandan main international airport of Entebbe where Brussels Airlines, since the days of predecessor Sabena, enjoys a high reputation among travelers for the impeccable inflight service, the superior Business Class cabin with several single seats, their Economy Privilege Class adjoining the forward cabin, an award winning wine and beer selection on board and menus created by some of Belgium’s highest ranked Michelin Star chefs.