Brussels Airlines, as part of the Lufthansa Group, in a press release today has decided to take substantive and essential measures to ensure the company’s survival. Impacted heavily by the continuing development of COVID-19, the airline has been met with ongoing extremely low demand and worsened financials, forcing the carrier to structurally reduce its costs to a competitive level in order to grant a future for Brussels Airlines. With the airline’s turnaround plan, Brussels Airlines will be cutting marginally profitable and unprofitable routes in an effort to tack its cost structure. The plan would result in a fleet reduction of 30% and a 25% smaller workforce. The airline is confident in its ability to safeguard 75% of its employment and grow back to profitability when expected air travel demand bounced back to normal by 2023.

The coronavirus crisis is exerting unprecedented pressure on airlines worldwide, and its total revenue impact is expected to exceed 240 billion euros. The number of bookings received fell by more than 60%, and the number of cancellations reached a record high. As a result, many airlines in Europe and elsewhere have had to lay off employees. Unfortunately, Brussels Airlines was not spared from this crisis. Since the temporary suspension of all flights on March 21st, the company lost 1 million euros a day due to loss of revenue and inevitable costs such as aircraft leasing and maintenance.

On February 28, the company first announced the impact on air travel demand. The situation deteriorated week by week and the number of days cancelled exceeded the number of bookings received. Today, demand is still very low. According to analysts and experts, the demand for air travel in 2021 is expected to be 25% lower than before the crisis, and the aviation industry can only expect to return to 2019 levels as early as 2023.

“We started the year 2020 with positive results in terms of number of passengers and revenues; and for this summer, we planned a strong leisure offer as we could compensate part of the business we lost due to the bankruptcy of Thomas Cook Belgium. But the Coronavirus pandemic is hitting Brussels Airlines extremely hard. We had no other choice than to temporarily suspend our flights as of March 21st and introduce technical unemployment for the entire company. This unprecedented crisis has worsened our financial situation obliging us to take substantial and indispensable measures. The restructuring is urgently needed in order to survive the current crisis and to become structurally competitive in the future”

Dieter Vranckx, CEO of Brussels Airlines

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Brussels Airlines management plans to focus on achieving structural profitability after pulling the company out of the crisis, this will enable solid growth. The carrier plans to reduce its overall costs while increasing efficiency and productivity. Full positive EBIT margins will enable the airline to ensure its future, invest in the fleet and further develop its hub at Brussels Airport. In addition, Belgian domestic airlines will ensure that they continue to play a pivotal role in the Belgian economy and remain one of the core airlines within the Lufthansa Group.

The main measures of the turnaround plan includes:

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%)

The reduction of the personnel costs by reducing the number of jobs by 25%

Together with the social partners, the number of forced redundancies will be reduced to a maximum extent.

The reduction of overhead, operationa...