The new SABENA

[ATC Watcher]

Watched tonight a sad program on Belgian (Walloon ) TV : Mr DAVIGNON the white Knight who will save Belgian aviation has apparently now convinced the Walloons to pay some 16 Millions Euros into the New DAT, when asked how were the talks with the other 2 regions : he replied "Brussels agreed to pay 4 Millions but the Flemish Region will not contribute."
The talks with Richard Branson did not bring anything but : "will continue..."
Is 20 Millions enough to start a new airline ? No answer.
In the meantime the Government has set up special Sabena crisis centers to help ex-SN employees find new jobs. One of these Centres said they had just an office , no Telephone, no PC and no Fax.
The Belgian police has agreed to take ex-SN employees to help receive people in their police stations...
It appears than some some SN managers held a position in different subsidiaries in order to recieve multiple salaries. This is investigated by the Justice Ministry.

The whole thing looked like a farce...

Poor Belgians....

[The Guvnor]

See <a href="http://www.pprune.org/ubb/NonCGI/ultimatebb.php?ubb=get_topic&f=1&t=017314" target="_blank">this thread.</a>

DAT needs over €500 million to stand any chance of success - €20m (with the Walloon Government still saying that they have not decided whether or not they will invest their €16m - indeed it looks as if it is unlikely that they will) will simply not be enough.

The 15th was the deadline given for the financing to be in place, and on the information currently available I have to say that it looks like the final nail in the coffin for DAT and the 'rebirth' of Sabena.

At the same time, it seems that the much vaunted launch of VG Airlines will not happen either.

I think this clearly proves that there is not a commercial case to be made for a Belgian national airline; leaving Ryanair and Virgin Express as the largest airlines in Belgium.

[LROPS]

ATC Watcher,

It appears than some some SN managers held a position in different subsidiaries in order to recieve multiple salaries. This is investigated by the Justice Ministry.

I've seen this info but the journalist has made an error, he mistook Sabena and SNCB/NMBS (the railroad company)

Ceilidh,

I don't believe in the VG project but it seems to be more and more concrete. VG has announced today he has engaged 20 ex-SN pilots and begin to hire f/a's. He is just waiting for AOC and don't exclude a cooperation with dat and or virgin express.

LROPS

[mirifly]

Well LROPS, I don`t think the journalist did get it wrong, I think the Guvnor is right. Also heard that the BeCA are trying to set up their own Airline too. Interesting situation that would be. They can go on strike when they please then, without management interference. Such amusing news !!!!!

[The Guvnor]

LROPS - the Belgian CAA have made it clear that Freddy van Gaever is regarded by them as "a cowboy" (quote from De Morgen)- which doesn't bode well for any future airline!

The fact is that in order to get an Operating Licence (the piece of paper that says that your CAA says you're financially fit to operate) you have to submit a business plan, which has to include detailed financial projections. This is then used to determine capital adequacy - three months worth of expenses assuming nil income plus all start-up costs.

van Gaever is on the record as saying that "business plans are for people who not know their market and who are not sure about, believe and conviced in their own goals and targets. Setting up a businessplan costs millions of francs; wasted money."

As an amusing footnote, he bought collapsed airline CityBird's business plan from a farmer that had purchased a filing cabinet full of documents from the liquidators. How he thinks that will work - especially given that CTB didn't operate A330s and in any case went bankrupt, obviously proving that their business plan was fatally flawed - I don't know! <img src="eek.gif" border="0"> <img src="rolleyes.gif" border="0"> <img src="eek.gif" border="0">

So, what about VG using DAT or VEX?

Allegedly, van Gaever is a major investor in VEX. However, I can't see VEX being too happy at having to put in place the infrastructure to support an additional aircraft type (the A330) as well as the ETOPS certification and management. In any event, VEX's AOC does not cover long haul operations; nor do they have the necessary route authorities nor the DOT402 issued by the US Department of Transportation that gives foreign carriers clearance to operate into the United States. Even if VEX were willing, none of this could realistically be accomplished in under six months.

Piggy-backing on VEX is, therefore, a non-starter.

That leaves DAT. DAT was given Sabena's route authorities and other designations, though as a completely seperate legal identity DAT has the same AOC and ETOPS problem that VEX would have. Also the DOT402 is not transferrable so that would have to be applied for.

DAT's problems are more serious insofar that if it doesn't get its funding in place Tuesday it doesn't have much of a future.

Nevertheless, as well as recruiting staff van Gaever has paid his deposits on the three A330s from ILFC, and is saying to all and sundry that he will start operating on the 1st March. As the Belgian CAA says, though, he seems to think that the rules don't apply to him.

He's going to be in for a nasty shock!

[LROPS]

mirifly,

The journalist apologies for his error at the end of the broadcast. This info concern the railroad company and not the ex-sabena.

Ceilidh,

Tkx for all those info concerning the AOC. I had doubts about the VG project now I'm pretty sure we will not see an VG aircraft (operating under VG code) on the 1 March. But VG seems to believe his airline will fly, he surely know something we dont. I mean you don't lease aircrafts, hire staff an select maintenance operator (SR technics because SN tecnics future still uncertain)if you are not sure about the future. I still believe in a cooperation with the new DAT. DAT operating short and medium haul and VG operating LH under dat code. What do you think?
Is it possible to get this DOT402 before the 1st of March?

[The Guvnor]

The Department of Transportation say that the process takes at least three months.

The biggest problem they have is that DAT is not ETOPS certified. Actually, I'm not even certain that Sabena was - didn't they use A340s on the routes where twins would have needed ETOPS certification?

Of course, they can get around that by keeping within the rules - but that means longer flight tracks which will increase their costs.

DAT's AOC needs to be extended and also they would have to put the A330 on it - a relatively straightforward process if they use ex SN aircraft but a whole different ballgame if they don't. Remember under JAR-OPS the specific aircraft is certified (and designated on the carrier's AOC) not the type.

I do know that Freddy has threatened 'civil disturbances' if he isn't given the necessary permits.

[mirifly]

LROPS,
Happened to see it on VTM news...... Anyway back to the Guvnor, I`m glad you say allegedly a major shareholder in VEX. Regarding the A330s, I heard it was a Letter of Intent. There hasn`t been too much news of any money or potential Investors. In fact money is neve mentioned by FVG. Feel a bit sorry for all those Pilots though hanging on to another mans dream. And even if he did suceed which I doubt very much, why is he flying to New York and Washington, would have thought it would have made more sense to take up the old Sabena African routes <img src="smile.gif" border="0"> <img src="smile.gif" border="0">

[lgtjanssen]

Last Monday Mr Van Gaever was on the Flemish TV. Again, he stipulated that he wasn't going to write a business plan. Moreover he was lobbying with some Flemish politicians to let him get an AOC. However they told him that the Federal governement is responsible for the airlines and that politicians can't determine who gets an AOC.

Anyway they also showed how he signed the contract for the lease of the 3 A330s (first one due in February). After he signed the guys from ILFC asked him to transfer the funds. However Van Gaever gave them a cheque which they accepted reluctantly.

Anyway for DAT. The reservations systems still show the intercontinental flights (JFK, BOS, FIH, EBB, LAD, NSI, DLA, NBO and KGL). However, it seems that the SN (DAT) flights are only bookable on the American Airlines website (I've been quoted USD 1,631.10 for a return trip JFK-BRU on DAT) and nowhere else. This probably means that it's time to clean up the CRS.

[The Guvnor]

Unfortunately for Freddy, the requirement for a business plan to get an Operating Licence isn't even a Belgian government one but is mandated by the EU as can be seen if you <a href="http://europa.eu.int/eur-lex/en/lif/dat/1992/en_392R2407.html" target="_blank">click here.</a>

Article 5 clearly states:

[quote]Article 5
1. An applicant air transport undertaking to which an operating licence is granted for the first time must be able to demonstrate to the reasonable satisfaction of the competent authorities of the licensing Member State that:
(a) it can meet at any time its actual and potential obligations, established under realistic assumptions, for a period of 24 months from the start of operations; and
(b) it can meet its fixed and operational costs incurred from operations according to its business plan and established under realistic assumptions, for a period of three months from the start of operations, without taking into account any income from its operations.

2. For the purpose of paragraph 1, each applicant shall submit a business plan for, at least, the first two years of operation. The business plan shall also detail the applicant's financial links with any other commercial activities in which the applicant is engaged either directly or through related undertakings. The applicant shall also provide all relevant information, in particular the data referred to in part A of the Annex.

3. An air carrier shall notify in advance to its licensing authority plans for: operation of a new scheduled service or a non-scheduled service to a continent or world region not previously served, changes in the type or number of aircraft used or a substantial change in the scale of its activities. It shall also notify in advance any intended mergers or acquisitions and shall notify its licensing authority within fourteen days of any change in the ownership of any single shareholding which represents 10 % or more of the total shareholding of the air carrier or of its parent or ultimate holding company. The submission of a 12 month business plan two months in advance of the period to which it refers shall constitute sufficient notice under this paragraph for the purpose of changes to current operations and/or circumstances which are included in that business plan.<hr></blockquote>

(my emphases)

Article 5 (3) obviously applies if the DAT rights are intended to be used.

It's very clear.

No business plan = no Operating Licence.
No Operating Licence = no airline.