Lufthansa Integrating Brussels Airlines Into Eurowings

Just as we have the “big three” global carriers in the US, the same is sort of true in Europe, as they have three mega-airlines — Air France-KLM, IAG, and Lufthansa Group. The aviation industry has changed radically around the world over the past decade, and that’s probably even more true in Europe than elsewhere.

Not only are Europe’s three mega-airlines competing fiercely with one another, but they’re having to compete with ultra low cost carriers on shorthaul flights, and ultra low cost carriers, Gulf carriers, and Chinese carriers, on longhaul flights.

In late 2016, Lufthansa revealed their intentions to acquire the remaining stakes of Brussels Airlines, and hoped to close that deal at some point in 2017. Prior to this they already owned a 45% stake, so with this transaction they acquired the remaining 55%. At the time Lufthansa said that they wanted to integrate Brussels Airlines into their Eurowings division, which is Lufthansa’s ultra low cost carrier.

At the time they didn’t fully reveal what that would look like, and whether they’d just use Eurowings’ booking platform and try to reduce costs, or whether they’d actually fully eliminate Brussels Airlines as a brand.

We now have some more information on that front. Belgian media is reporting that Lufthansa is terminating the contracts of Brussels Airlines’ CEO and CFO. According to reports, the two executives received termination letters, but they’ve refused to agree to the terms. As a result, a board meeting is expected to be held on Monday that will see them terminated (given that a majority of the board is controlled by Lufthansa).

Why does Lufthansa want to get rid of them so badly? Allegedly it’s because the two executives want to maintain Brussels Airlines as an independent brand, and want the airline to continue to offer a hybrid business model, as they are now. The current Brussels Airlines management team has been incredibly effective at turning the company around despite the challenges they’ve faced. However, Lufthansa seems committed to integrating Brussels Airlines into Eurowings.

I can see both sides here. On one hand, it seems like there’s merit to keeping Brussels Airlines as a brand. Presumably some people feel a sense of national pride flying “their” airline, so they’d have a hometown advantage by maintaining their identity. On some level I imagine there would be resentment if the national airline were eliminated.

At the same time, Brussels Airlines and Eurowings are quite similar. While Eurowings is an ultra low cost carrier on shorthaul flights, the airline is introducing a real business class on longhaul flights, so they’re not that different than Brussels Airlines. There are synergies from integrating the two operations. Besides, it almost seems fitting that Eurowings would have a large presence in Brussels, based on the name if nothing else.

It’s a shame to see Brussels Airlines’ CEO get terminated, when he has done an excellent job helping the company adapt to market conditions. It seems that’s not enough for Lufthansa, though. I’m sure we’ll find out more soon in terms of the timeline with which Lufthansa intends to fold Brussels Airlines into Eurowings.

What do you make of Lufthansa wanting to essentially eliminate the Brussels Airlines brand, and replace it with Eurowings?

Comments

  1. Terrible news really. Was on an SN flight last night operated by EW. The difference in quality and crew friendliness is remarkable. Also the brand reputation of EW is quite clearly lower than that of SN. On short haul I don’t see a point of choosing EW over Ryanair or Easyjet anymore.

  2. Why does Lufthansa want to get rid of them so badly?

    1. LH probably wants SN’s operation out of *A to save on costs.

    2. Lots of us got free long-haul flights on Brussels using relatively few Etihad miles.

    3. “Was on an SN flight last night operated by EW. The difference in quality and crew friendliness is remarkable.” Funny, my observation has been different. I found Brussels crews to/from Africa to be horrible, rude, and darn near what we would call abusive in the United States.

    4. “While Eurowings is an ultra low cost carrier on shorthaul flights, the airline is introducing a real business class on longhaul flights, so they’re not that different than Brussels Airlines.” Am guessing this is where Lufthansa sees future revenue. There is so much increasing capacity to Africa from other continents, and that’s where the solid revenue is right now. Competing with the Chinese carriers won’t be possible, but competing with e.g. TAP and Ethiopian will be.

  3. Of course there is national pride involved. Sabena was one of the best airlines in the world for a period from the ’50s through to the’80s and Belgium punched above its weight in aviation. Now the last link with Sabena ( however tenuous ) will be gone with these plans and be subsumed within Eurowings, ie disappear without trace.
    Watch out CSA and LOT , they might be coming for you next ( …again).

  4. Purely on personal preference and not from LH perspective, I like SN because it is a *alliance member. No BS about lounge access or not and I earn miles if it’s a paid ticket. SN is often available on united.com in conjunction with award itineraries. I have flown EW and was underwhelmed.

  5. Shame but SN service is very indicative of Belgian service in general: rude and unfriendly (Everything else Belgian is wonderful though!) Having said that I would still rather fly them than EW.

  6. Very sad to see SN go (if they do), I liked them as a brand, especially over EW. By the way, I think it should read “the airline is introducing a real business class on long-haul flights, so they’re not that different TO Eurowings any more”. Sorry to be picky…

  7. @IAC I’m guessing your British? This is one of those pesky differences between US English and other English dialects.

  8. Does a decision like this get made in consultation with Lufthansa’s close partners?

    United, for instance, has close code share relationship with SN just as it does with LH. On Brussels Air flights to IAD many people are usually transferring to United metal domestically. And on United flights to BRU many people are transferring to Brussels metal on to Africa.

    I’m having a hard time seeing that kind of tight relationship between United and Eurowings….and even wonder whether Lufthansa will use those SN aircraft for transatlantic flights out of BRU at all.This seems like a bigger-than-meets the eye change in the transatlantic market and the Europe-Africa market.

  9. At any rate and as published in the same blog today, the “National Airline” opportunity is not wasting time to be picked up by Air Belgium. It is much too early to know what will come out of it but I find it difficult to see a coincidence in the two developments, especially when the Belgian flag is draping the whole fuselage of the new airline.

  10. Just booked an Aeroplan ticked on SN BRU-YYZ for Sept 2018. Will this have any impact? Is there any fixed timeline for this changeover?

  11. This could be a very smart move for Lufthansa. If they integrate Brussels Airlines into Eurowings I will be really sad because I have always loved SN but it also gives them the possibility to acquire Air Belgium. They could then have another hub airline in Brussels. Although it’s probably unlikely. However the terminating letters could just be Lufthansa wanting to get new CEO and CFO for Brussels airlines. But I believe that SN will just operate as a subsidiary for Eurowings. I also believe that Niki may join the Lufthansa Group but I don’t hold out much hope for it. Anyway it will be interesting to see what happens in both Belgium and Austria

  12. @grizzly
    You are correct!
    I have given up considering American-style English to be even approaching ‘real’ English. It isn’t~ by any stretch of the imagination! That’s alright with me; I can still understand what they are getting at despite misspelt words, made-up words and mangled grammar.
    Curiously though, all American published authors have a comprehensive grasp of the English language. They are eyeing an international market I expect.

  13. @Professional Editor:
    “I’m guessing your British?” tsk, tsk !
    It’s “you’re”, as any professional editor would tell you!

  14. No star alliance awards if Brussels Airlines if it’s integrated with Eurowings. Or lounge facilities unless you’re travelling biz on Eurowings internationally. I notice the Eurowings seating for international flights looks like LH’s Seats which I believe they are. Worse than the current biz seating on Brussels Very sad that this is happening as Brussels Airlines has been turned into a decent carrier and profitable I believe. SABENA was a horrible government airline that never made a profit and the service was terrible. The Alitalia of Northern Europe UGH!!

  15. This is a real shame. As seen from the UK, Brussels Airlines has been able to build up a reputation for decent connection options in particular for medium-long haul flights into parts of Africa not offered by many other airlines. It seems a shame to clip its wings, so to speak, so soon into its transformation.

    I am also still haunted by the Germanwings incident and I don’t think I’m the only one…

  16. @Noah Bowie ‘I also believe that Niki may join the Lufthansa Group but I don’t hold out much hope for it. ‘

    It’s good that you’re not, because there is absolutely no chance European antitrust regulators would allow the LH Group to establish a virtual monopoly in Austria.

  17. Well, as a Belgian “m&m senator for quite a few years, this will turn it down totally and I will move to air Belgium for my Asian trips and Delta for the US bound traffic.. I won’t put my a.. in a Germanwings flight.. no way !

  18. To bad for Brussels Airlines. Despite some issues if was the best crew and service I received last year, non low cost included

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