Air Belgium continues to fascinate me. Air Belgium is a startup that intends to operate flights between Brussels Charleroi Airport and China using four Airbus A340-300 aircraft that they acquired from Finnair.
I’ve covered the airline extensively, and even had the opportunity to fly with them in business class to Hong Kong, and had a surprisingly great flight (it’s hard not to when you’re one of only two dozen passengers on a longhaul flight).
The airline was supposed to launch operations in April, but ended up pushing back their inaugural flight to June, due to a lack of demand, as well as lack of permits to fly over Russia (both of which seem like pretty major problems).
The airline continues to confuse the heck out of me. Air Belgium already has three A340-300s, and is taking delivery of a fourth one. However, as of now the airline only operates a single flight between Charleroi and Hong Kong three times per week. This is fewer frequencies than they were initially expecting, and on top of that they were supposed to announce additional destinations by now, but haven’t.
Air Belgium was supposed to start flying 4x per week between Charleroi and Hong Kong starting in the fall, though the airline has now reversed that. Air Belgium will continue to operate the route 3x per week throughout the winter schedule.
So we now have an airline with three longhaul aircraft, yet only a single longhaul route that operates 3x per week, with no plans for expansion.
I continue to cover the changes at this airline because I just have no clue what they’re thinking. The frontline staff at the airline are fantastic, and I wish them all the best. But management is really letting them down with their lack of a vision. The flights still aren’t even bookable in the GDS, so it’s no surprise that they have longhaul flights going out with just a couple of dozen passengers.
As I’ve said repeatedly, if the airline has any chance of surviving (at least in the near future), they should simply fully operate as a charter airline operating flights on behalf of other airlines. With the issues we’re seeing with the 787 at the moment, as well as all the short term needs airlines often have for planes, I could see Air Belgium turning into something like Hi Fly. That’s of course completely different than what they initially intended.
Air Belgium currently operates one flight on behalf of Air France between Paris and Lagos, and they’ve also requested permission to launch charter flights to the US.
So this update doesn’t come as much of a surprise. While I think I have a good sense of Air Belgium’s future, I can’t help but wonder when they’ll finally announce major changes. Will Air Belgium continue to operate 3x weekly flights to Hong Kong? Will they announce another destination in China? Will they just cancel flights to Hong Kong and become a full-on charter airline, realizing that with their current setup they can’t make money?
What do you think?
@Alpha - fully agree on the money laundering here. Someone commented on this previously with regards to Air Belgium and I fully agree. Basically, the whole concepts is not about failing business, there is much more behind it.
Majik,
I'm not so sure I agree that an A340 can "easily" be converted, despite it having been talked about for well over a decade. I know that LCF Conversions in Malta have been touting this at an estimated cost of $8m per aircraft, but as far as I can recall, there haven't been any examples produced so far, although I do stand to be corrected. If it was that straightforward and made good financial...
Majik,
I'm not so sure I agree that an A340 can "easily" be converted, despite it having been talked about for well over a decade. I know that LCF Conversions in Malta have been touting this at an estimated cost of $8m per aircraft, but as far as I can recall, there haven't been any examples produced so far, although I do stand to be corrected. If it was that straightforward and made good financial sense, where are all these A340Fs? Quite why AB would consider the expense of conversions and all the hassle of certification, on a very fuel inefficient base aircraft at a time of rising fuel costs, is beyond me. And if that is indeed their end game, why not go straight for it, rather than trying to play passenger airlines with the big boys and blowing their bank balance?
Maybe the team behind AB are all ex-TNT and very skilled in the cargo world, but perhaps that's led to overconfidence and complacency about the skills needed to run a successful passenger airline. No Russian overfly permission in place before intended launch date; no GDS links; only 4 (now down to 3) flights per week on a single route for a fleet of 4 aircraft, with only vague talk about opening up other possible Chinese destinations. Even a link between a Chinese motor manufacturer and a production plant in Ghent couldn't possibly generate sufficient business to build a strong case for a whole airline. It's all seemed very amateurish and naïve right from the word go. I have read a quote from AB that talks about additional aircraft for a cargo operation for unspecified routes, but that “cargo operations are seen just as an addition to the underlying profitability of the passenger operations”.
I suspect that their main cash flow at the moment is coming from the CDG-LOS operation on behalf of Air France and occasional transatlantic subs for carriers like Eurowings and Surinam Airways, and it’s this that’s just about keeping them alive - certainly not CRL-HKG which must be haemorrhaging money hand over fist.
Lucky's right - their future probably does lie in the sub-charter area, just like HiFly, but once the current 787 engine problems are resolved, there might not necessarily be room for them both in the market, and I know which one of the two I would put money on (as opposed to into!).....
An A340-300 can be converted easily to main deck cargo with the LCF conversion concept. No exterior modifications required. Seating removed, section of main deck replaced with a palette lift. Palettes loaded as normal through lower deck doors then lifted internally onto the main deck. This is one of many ways to adapt an A340-300. Maybe AB are doing it or maybe not, I cannot predict the future, but the team assembled to run the airline are all ex-TNT.
Quoting majik....
"It looks like they’ve already had inquiries about main deck cargo and it seems like it’s part of their long-term strategy. Passenger flight may not last for long or will only be minor part of their offerings."
But their current fleet of 3 (soon to be 4) passenger A340s are not suitable for main deck cargo, so what's the point of so many aircraft now, with so little commercial passenger viability, if the...
Quoting majik....
"It looks like they’ve already had inquiries about main deck cargo and it seems like it’s part of their long-term strategy. Passenger flight may not last for long or will only be minor part of their offerings."
But their current fleet of 3 (soon to be 4) passenger A340s are not suitable for main deck cargo, so what's the point of so many aircraft now, with so little commercial passenger viability, if the end game is cargo, requiring different aircraft?
I still don't buy it, or the theories about money laundering from China (why bother if you lose money hand over fist?)....
HKG companies are probably China owned . China has restrictions on transfering money out of the country so ownership of an airline will probably get approval from Central Bank ( People Bank of China ) for a large amount of fixed capital and working capital to be moved to HKG. Once there, it can be moved anywhere .
This and the Geely/Volvo issue mentioned by Malik, now it is starting to make sense to me .
Seed money for the venture came from two HKG based holding companies, Pioneer TopWorld Ltd. and Skymaster Holdings. Without their multi-million dollar capital infusion AB would not have been able to lease aircraft.
I suspect that one of their intended customers is the Chinese Geely Group. They own Volvo who happen to have a plant up the road in Ghent. Next year the first Chinese branded car to be built in Western Europe, under the...
Seed money for the venture came from two HKG based holding companies, Pioneer TopWorld Ltd. and Skymaster Holdings. Without their multi-million dollar capital infusion AB would not have been able to lease aircraft.
I suspect that one of their intended customers is the Chinese Geely Group. They own Volvo who happen to have a plant up the road in Ghent. Next year the first Chinese branded car to be built in Western Europe, under the 'Lynk & Co' brand, will be assembled at the Ghent plant.
It's all about cargo. All key personnel are ex-TNT.
https://www.cargoforwarder.eu/2018/06/24/freighter-services-an-option-for-newcomer-air-belgium/
It looks like they've already had inquiries about main deck cargo and it seems like it's part of their long-term strategy. Passenger flight may not last for long or will only be minor part of their offerings.
Money laundering or smuggling. What else could it be, seriously?
Any idea who owns the company?
Oh, look, Debit has a new handle.
I give them two more months - three max - before they fold and go the way of the previous airline called Air Belgium in the 80s and 90s.
Oh, and nobody will want to take over ownership of their gas guzzling A340s.
A total basket case that was doomed from Day 1.
I agree with @Alpha - My first thought, money laundering (EU scam). ..probably other unmentionable things that not even I have the desire to go into in public.
There are many things in this world/fake reality that I wish I didn't know.
I got the news a while ago that Eurowings wants to use Air Belgium for their longhaul routes, so I am not so sure about the money laundering here... :-)
My theory is that airlines which put a country in their name have a habit of being more irrational than those which don't
Doesn’t take a genius to figure out there is some kind of smuggling going on.
Can someone say “money laundering operation?”
Diamond and gem smuggling. China->Antwerp.
My thoughts exactly - who owns Air Belgium and where's the funding coming from.
Charter is the way to go for this airline.
Looks like a good business class product - similar to Brussels Airlines. Wondering if Brussels Airlines would acquire the aircraft (airbus family) or the routes as they do not currently fly to any Asian cities. Acquire/charter and fly out of BRU instead would make sense.
This has to be a cover for something, right? Though I can’t possibly think of what kind of laundering operation would require flights between China and Brussels. Very bizarre, to say the least.
Other charters operate out of BRU. People don't want to fly out of Charleroi unless they are paying €20 or less. Full stop.
Money laundering operation.
There's two types of Russian scams you see all the time - one is a pump and dump (Baltia) meant to perpetually kick the can down the road, the other is a money laundering operation (Air Belgium). This type of stuff is super common, unfortunately. With just enough corrupt western 'fixers' in the room it becomes a way for the ex soviet con men to store assets and establish a presence in...
Money laundering operation.
There's two types of Russian scams you see all the time - one is a pump and dump (Baltia) meant to perpetually kick the can down the road, the other is a money laundering operation (Air Belgium). This type of stuff is super common, unfortunately. With just enough corrupt western 'fixers' in the room it becomes a way for the ex soviet con men to store assets and establish a presence in Western countries. It's doubly common now that the U.S. president is arguably one of the biggest propagators of this (yeah, why do you think you haven't seen a tax return?).
Unless Air Belgium massively changes their business model, I think that it is only a matter of time before they go bankrupt, as they can't be making any profit running empty flights to Hong Kong.