Belgian low-cost airline Virgin Express and its former full-service local rival SN Brussels Airlines ceased to be competitors last week after they officially signed off their merger plan. They aim to complete their merger in the first quarter and start optimising networks, but will retain their identities and continue to target different markets.
The 5 October official agreement came after over two years of on/off discussions over a merger. It brings the two airlines under common ownership of SN Airholding, the Belgian group that controls SN Brussels Airlines, the successor carrier to Belgium's now-defunct national airline Sabena.
The two carriers - which between them carry around 40% of all passengers using Brussels airport - will continue to target different passenger groups. "The excess capacity which has existed in the Brussels market for some time has meant consolidation in the European short-haul market is essential," says Virgin Express's parent Virgin Express Holdings (VEX).
SN Airholding chairman Etienne Davignon says the move will enable excess capacity on certain routes to be reduced: "The partners, which have set up a four-strong integration committee, say the first priority will be to plan a network based on 'optimising' the flight programmes of the two carriers."
Under the agreement, VEX will transfer its shares into SN Airholding for an agreed value of €54 million ($67 million). In return VEX will receive 29.9% of SN Airholding. After completion of the transaction, SN Airholding will hold all Virgin Express's stock, and 92% of the shares of SN Brussels Airlines, with 8% held by the Sabena Interservice Centre. Several conditions still have to be fulfilled, with clearance from the competition authorities awaited. After consultation with the European Commission, the file will go to the Belgian and German competition authorities.
HERMAN DE WULF / BRUSSELS
Source: Flight International
