View Full Version : DAT/Virgin Express merger in doubt.

15th Jan 2002, 18:14
Article in The Times today.


Airline merger plan in doubt


PLANS to merge Virgin Express, Sir Richard Branson’s Brussels-based airline, with a unit of Sabena, Belgium’s bankrupt national carrier, were teetering on the brink of collapse last night after a group of creditors said they would reject a crucial part of the rescue plan.
Under the merger talks, Sir Richard is proposing to merge Virgin Express with Delta Air Transport (DAT), a Sabena subsidiary responsible for the airline’s still profitable regional operations. However, DAT owes €100 million (60 million)to another subsidiary of the airline, Sabena Interservices Centre (SIC). The merger talks are contingent on creditors of SIC agreeing to write off half that debt and convert the rest into equity in the newly formed company. The creditors have until 12pm today to approve the plan.

A spokesman for a consortium of Belgian investors backing the rescue, said the signs were not encouraging. “We’re very worried that it will not go ahead. The mood among the creditors is very negative; there is much disagreement among them.”

If the bailout fails, DAT will face mounting pressure to repay the €100 million loan. If it is unable to come up with the money, Sabena’s administrators would likely take control of the regional airline.

“The merger talks will end if we can’t reach an agreement with the creditors. It will be a domino effect. Without DAT there is no reason to pursue an arrangement with Virgin,” the spokesman said.

Virgin Express refused to concede that failure by DAT’s backers would end the merger talks. “There are several possibilities, and I’m not going to say what they are. We will see what happens tomorrow,” said Yves Panneels, a spokesman for the airline.

Anyone know what happened at 12pm?

15th Jan 2002, 18:20
15 jan 2002, 15.15

Ordeal reported to 1400pm today, still waiting.
Belgian News at noon reported that arrangements were in the good to be made (they called it a 99 percent chance for a go decision) with airplane owners actually agreeing to let the aircraft at a lower price, further agreeing as well to pass some of their eventual future benefits to the japanese shareholders... another belgian story, where we might see again another trick come out of the hat... I just pray the gods that VEX wont fall into a dead trap!!
More to come as soon as I know it.

15th Jan 2002, 19:09
Just heard on the radio that all creditors have agreed to the BusinessPlan for DAT

16th Jan 2002, 22:18
Sorry for the late reply,

indeed all creditors found an agreement but that doesn't mean the end of all worries for DAT, questions still arise. As for a merger between DAT and VEX, Branson's 24,7 million euro isn't into this project yet! (According to belgian newspaper LE SOIR today's edition). For the moment, they are still codesharing togheter on some routes.

18th Jan 2002, 01:19
Hi again,

just to pass the information (is anyone reading it though?), it seems now that Branson is about to put money into DAT trough its airline Virgin Atlantic, but this investment is postponed to the day when VEX and DAT will actually merge...
Dear few readers, good night!

No Mode Charlie
18th Jan 2002, 04:10
Don't worry, <img src="confused.gif" border="0"> or do? I'm reading just don't have anything to say on the subject. So why did I anyway? To show 2low2fast that i for one read this subject! Still a bit sceptical on the whole thing though!

How can an airline with so much debt (360mil euro's) and a forecast 50 or so mil. loss in its first year look good to anyone?

Anyway, keep the information coming, Thnx.

18th Jan 2002, 14:46
Well, charlie, thats exactly what I wonder, and all belgian non sabena pilots do the same! Since so many years we are complaining about this gouvernement/political sponsored airline that never had to worry about making profit until a couple of months ago. Many of us actually think that, with such acrelss attitudes, they broke the little belgian market by forcing competitor carriers to lower prices at an acceptable level, trying desperately to compete with this loss-making-no-worries guys. So our fear remains to see this start all over again, and we can already see a bad result of what we were all frightened of: although the demand is there, nobody is planning to start an airline in here to fill the gap while foreign carriers make a drastic increase of their rotations to Brussels. A couple of days ago I saw Lufthansa come in with a A310!!! Soon there might be no airline in belgium at all... <img src="frown.gif" border="0">

19th Jan 2002, 03:08
2Low2Fast -
Please keep posting updates on the DAT situation as it is of importance here in the USA for AA pax. AA and SN were partners in the "OneWorld" alliance and lots of AA pax flew on SN to BRU rather than AA to LGW. Reaon - they earned frequent flyer miles on SN. AA here in USA are STILL offering tix & bookings on "SN" for March/April and later. If DAT really isn't going to get the long-haul off the ground, then AA pax with "SN" bookings need to know this as soon as possible to make changes to their itineraries.

Is "VG" and "VX" the same thing (Richard Branson money)? Or is VG something else in this DAT situation. AA is actually booking on "VG" for Spring-02.

Thank You for any info and please keep posting as time goes by. dAAvid -

19th Jan 2002, 04:21
18 january 2002 (from flight international latest)
Virgin Atlantic Group has conditionally offered to invest 24.7 million ($21.7 million) in Sabena successor Delta Air Transport (DAT).

A Virgin spokesman says: "Sir Richard Branson has committed to invest in the holding group of DAT [Airholding]." He confirms that Branson has been directly involved in discussions with the group of investors led by Maurice Lippen and Etienne Davignon as well as merger talks between DAT and Virgin Express.

The spokesman says: "He has been personally involved in the process. He has been over to Brussels a number of times. [Merger] talks are being led by the two principals at Virgin Express - David Hoare and Neil Burrows, executive chairman and CEO, but Richard is clearly involved."

He stresses that Virgin Atlantic is "just one of several potential investors" and that the investment depends on a number of factors but declines to give details.

DAT management stated earlier this week that the airline was investigating the possibilities for a merger with Virgin Express and that more details regarding the merger would be available at the end of January, beginning of February.

19th Jan 2002, 13:52
Last precisions, again from the same source, "LE SOIR" newspaper, from friday 18th. Indeed, Branson is up to make the investment into DAT through Virgin Atlantic, but the money isn't supposed to reach DAT's account until the merge with VEX is fully complete... We'll see!
On the other hand, it seems like there is a whole story going on behind this with Virgin atlantic willing to take back slots owned by DAT at EGLL, and DAT pretending to have a long haul potential with Virgin Atlantic, the show goes on...

By the way, the person speaking to me about "VG", is that the belgian project Van Gaever? If yes, then it has nothing to do with VEX...

19th Jan 2002, 14:49
2Low2Fast, yes VG Airlines is the Freddy van Gaever project

BTW isn't DAT going to sue Richard Branson if he withholds its investment? I read something like that on Bloomberg.

19th Jan 2002, 19:50
I guess nobody knows whats going on.Monday the talks beginn and RB`s Atlantic has denied on Friday and confirmed on Saturday, but with conditions the Datties can not except ,because they need the money from Atlantic desperately.They lose about 1 mio Euros a Day.I can not believe VS will give the money and see it drained in 25 days.


25th Jan 2002, 03:47
Just read this in a Belgian newspaper online :. .During the last weeks, Virgin Express achieved. .record results, even better than during the top summer season.. .And also : Richard Branson shall in any case invest in Brussels. If not in a possible merger with DAT (according to Neil Burrows the best sollution for both partners), then in an expansion of Virgin Express).

Billy the Kid
26th Jan 2002, 06:22
Pleased to hear things are at last looking up for VEX.. .Will they be needing Pilots in the near future?

26th Jan 2002, 14:44
Not really, they actually have too many crews because of the DAT/VEX codeshare. They are getting rid of the contract pilots and freelances. Baseline pilots are encouraged to work part-time.

29th Jan 2002, 11:58
There aren`t any contract Pilots at VEX.

29th Jan 2002, 14:27
As I hear from Belgian press, there are some problems in the future merge between DAT and Virgin because of the following facts:. .* Virgin Boeing deals are too expensive compared with the leasing contracts DAT can get on the ex-SN airbus.. .* In case of merge, DAT would have to ground some of their AVRO RJ's, meaning again some DAT pilots getting fired.

As from me: don't let that Virgin even come close to DAT. They came with their low-cost to ruin the Brussles market, they did continue to live with the grace of the SN codeshares they had.. .DAT has always been a good company, flying for Sabena, and mostly profitable. I know they have a lot of costs because right know, they have to do it on their own. Virgin on the other hand is weak as well, and Branson wants to get it's investment back. Well, leave him bleeding to dead with his red fleet... :)

29th Jan 2002, 15:53
mirifly, you may have a word with some of the contract pilots who still work for Virgin Express (VEX) before you give these false statements. If you think that your statement should be seen as rumour, than you may first provide power supply to your brains before jumping into a very delicate situation with absolute unnecessary and useless comments.

30th Jan 2002, 05:35
I have a hard time understanding how a potential merger might work ? 2 options I see :

option 1 : DAT AVRO's + VEX 737's. . they will have to get rid of Avro's. . + pilots. . expensive Boeing leases. . no ex-SN airbus rated pilots will. . join NewCo

option 2 : DAT AVRO's + SN A319's. . VEX pilots dumped . . SN planes & pilots cheap

30th Jan 2002, 14:49
Well FL310, wouldn`t agree with what you say, there are no contract workers with Airlines in Belgium at all. All changed a long time ago, A 'contract pilot' purely does not exist according to Belgian Law. I suggest you do a bit of studying into the Moniteur Belge or perhaps if your Flemish is better than French, the. .Staatsblaad might be more up your street.

Happy Reading !!!!!!!!!! Speak to you in a year. .when you have got your facts right

30th Jan 2002, 15:54
I have heard the following:

-) Thanks to the revised contracts (-37%!), the DAT Avro's cost only about half as much as the VEX B737s.

-) Unlike the owners of DAT's Avro fleet, the leasing companies owning the VEX B737s do not want to reduce their leasing terms substancially as they think current market value of a B737 has not reduced that much. (I believe the maximum offered was -10%)

-) Right now DAT can lease some of the ex-Sabena A319s for 30% less then the average VEX B737!

-) The Sabena A319s are brandnew, whereas the VEX B737s are older and more used.

-) The Sabena A319s are more comfortable then the B737-300/-400 and unlike the VEX B737-300/-400 they have the much needed full business class configuration (seats can be configured to a 2/2, 2/3 or 3/3 seating configuration).

-) The A319 consumes less fuel then the B737.

-) DAT plans to fly to Africa and needs long haul planes for that. In a first phase they will probably start with 2 wetleased B767s, but if the aim is to have an independant operation, then the A330 is the preferred plane (for almost the same reasons the A319 is preferred to the B737). Note that there is cross qualification possible on A319/A330, something not possible with B737/A330 or B737/B767. Cross qualification on A319/A330 has also been formally introduced in the new DAT labour agreements.

In short, I think that a merger between the companies might also include a change of plane...

30th Jan 2002, 19:58
mirifly.... there are no contract workers with Airlines in Belgium at all well..there are still pilots on a contract ,which of course is called Arbeidsovereenkomst voor Uitzendarbeid, and they are supplied by an employement agency based on a contract with the Airline. You may of course call this not a contract because you will call it an Overeenkomst and the Airline you will call Gebruiker and the pilot is a Werknemer.... .It all does not change the fact that some of these contracts still exist.

Almost forgot...the pilots serving these contracts have no reason at all to read and understand the Staatsblaad as they are employed with the contract agency, not the airline.

30th Jan 2002, 21:52

If I correctly understand your information it seems like things dont look to good for VEX pilots as it is more economically viable to use Airbus.. .I personally prefer the A319 over the 737...

30th Jan 2002, 22:32
I don't know, but that's what I have heard other people say about it...

The least you can say is it all sounds logic...

Anyway, time will tell!

I sure hope the best for my friends at Sabena/dat so that they are as lucky as I was in finding a new job quickly!

1st Feb 2002, 16:16
Hey ,there are Contract Pilots at Vex just now beeing phased out,or maybe not.The merged Airline has to be profitable by end 2003 .Guess who is doing it ?Ex-Sabena pilots on Strike with half sized trucks or the workhorse of the industrie.Stop dreaming!