Lufthansa to take full control of Brussels Airlines
15 / 12 / 2016
German flag-carrier Lufthansa has confirmed that it will exercise its call option on the outstanding 55% of the shares in SN Airholding, parent company of Brussels Airlines (as had been revealed earlier this year, in September), and also provided further details of the deal.
Having now agreed with the shareholders of SN Airholding the details of the takeover, Deutsche Lufthansa’s Executive Board has confirmed that it will exercise its call option for the outstanding 55% of the latter’s shares.
The call option comes into effect by 31 December and the transaction is expected to close by the beginning of January 2017.
Brussels Airlines will subsequently be “fully integrated” into the Lufthansa Group and join the Eurowings Group.
The price for the purchase of the remaining 55% of the shares was set as part of the agreement for the call option in 2008. That fee, 2.6m euros, which will be paid to SN Airholdings’ consortium of 30 shareholders.
Carsten Spohr, chairman of the board and chief executive of Deutsche Lufthansa AG, commented: “Following the acquisition of the 45% share of SN Airholding eight years ago, we now want to take a next step in our already very solid and successful cooperation.
“As a longstanding shareholder and partner of Brussels Airlines, we are already closely linked to each other. Therefore we value Belgium and especially Brussels as highly attractive markets that perfectly complement our offer in the heart of Europe.
“In addition, Brussels Airlines already has a very competitive cost structure and brings a well-established long-haul network, especially to and from Africa, to the Lufthansa Group portfolio.”
Brussels Airlines operates a fleet of regional aircraft, Airbus 319/320 Family aircraft and widebody A330s. Under its new ownership structure, Brussels Airlines will serve its 79 European and 23 long-haul destinations under the umbrella of the Eurowings Group.
The brand Brussels Airlines will be complemented by the description ‘member of the Eurowings Group’.
Brussels Airport offers its approval
Brussels Airport described itself as “delighted” with Lufthansa’s decision to integrate Brussels Airlines within the Eurowings Group.
Brussels Airport will, as such, become an Africa hub for the Lufthansa Group and the network of Belgium’s home carrier, both intra-European and intercontinental, will – the gateway’s operator observed – remain at the airport.
Arnaud Feist, chief executive of Brussels Airport Company, remarked: “The integration of Brussels Airlines into the Eurowings Group within Lufthansa is a positive evolution, both for the airline and its home base Brussels Airport.
“The integration within an international group such as Lufthansa will give Brussels Airlines more commercial opportunities, advantages to renew the fleet and further develop its network in Africa, North America and India.
“The anchoring and further development of a strong home carrier is crucial to the connectivity, the employment and the economy in general of our company,” Feist added.
“Lufthansa Group has confirmed that it intends to sustainably develop Brussels Airlines’ network at Brussels Airport and sees Brussels Airport as Africa hub for the entire group,” he also pointed out.
Etienne Davignon, chairman of SN Airholding, said: “Over the past eight years, our collaboration with Lufthansa has proven its potential to create perspectives and safeguard jobs.
“More than ever, consolidation in the aviation business is key. Joining the Lufthansa Group allows us to further increase our synergies, while keeping our specificities.
“Operating under the umbrella of Lufthansa will help us to further strengthen our competitiveness within a tough market environment and develop our long-haul and short-haul operations.
“Furthermore, the Lufthansa Group power enables us to expand our Africa-reach, by positioning Brussels as the Sub-Saharan Africa Hub of the Lufthansa Group.”
Carsten Spohr is to join the Brussels Airlines board as co-chairman alongside Davignon and, next year, Lufthansa will have a majority on the airline’s board.
Currently, the Brussels Airlines Management Board remains unchanged under the leadership of CEO Bernard Gustin. However, an Advisory Council will be established to support the integration process.
Spohr concluded: "We have already demonstrated on several occasions that, during the expansion process of our airline group, we fully respect the interests of the respective domestic markets.
“We want to further sustainably strengthen the important aviation location of Brussels and continue to improve the connectivity of the European capital.
“Based on its successful development, Brussels Airlines is able to play a leading role in bringing our pan-European point-to-point offer under the brand of the Eurowings Group to new successful heights.
“Together, we will be successful for our customers, shareholders and employees – and this especially for Belgium."