SN Brussels and Virgin Express team up at last

12 April 2005

BRUSSELS – The long awaited tie up between Belgium’s SN Brussels Airlines and Virgin Express has finally entered into force.

The deal, which was announced last year, came into force on Tuesday, Etienne Davignon, one of the founding members of SN Brussels Airlines (SNBA) announced.

SNBA was created from the ashes of the bankrupt Belgian flag carrier Sabena.

Re-stressing the details of the agreement between SNBA and Virgin Express, Davignon stressed the two companies would still remain independent of each other.

There will be no change of brand names or business strategies but the companies will have joint shareholders, brought together under SN Airholding.

A number of private companies, including Tractebel, KBC, Fortis, Dexia, GBL and ING, belong to the airholding.

The Brussels and Wallonian regions also belong, and 30 percent is owned by British billionaire Richard Branson through Virgin PLC.

The deal should create an airline group of two companies, two brand names and two market positions.

It aims to be a flexible “full service” linking Brussels to Europe, Africa and America, sharing business with American Airlines.

There will also be a budget airline in Europe through Virgin Express.

Both airlines will continue to land separately at Zaventem airport but the closer ties between the companies will lead to a rationalisation of flight routes, SNBA and Virgin say.

SNBA and Virgin Express planes will not be taking off every five minutes for the same destinations.

But the new business model, which was preceded by a similar deal between Air France and KLM, has left some observers sceptical about the relatively insignificant level of integration between the two companies.

Challenges ahead will include developing a management regime to implement the new structure and keeping ‘social harmony’ between staff at the two airlines who will have different pay and conditions.

Subject: Belgian news