Virgin-SN Brussels sign deal

6 October 2004

BRUSSELS – Rival airlines Virgin Express and SN Brussels Airlines (SNBA) on Wednesday put the seal on plans to join forces.

Both companies announced that thay had signed a binding agreement that will set up a joint management structure for the two firms.

The deal means SNBA and Virgin Express will become sister companies.

Although the pair intend to keep their existing names and brands, the fact that they will be run under a single management should allow them to reduce costs considerably, say both firms.

The idea of the new partnership is that SNBA will continue to target business customers while Virgin will sell to the budget passenger.

The pair also hopes the single management structure will allow them to work out better timetables.

Current scheduling, for instance, sees flights to Rome and Geneva by the rival operators within 10 or 15 minutes of each other.

However, some commentators have expressed concern about the absence of merging planned in many other ares of the two firms’ activities.

They also fear the deal may amount to the “re-creation” of a national monopoly on certain routes from Brussels National Airport at Zaventem, where both companies are based.

That could lead to price rises the analysts warned.

Many critics want to see the arrival at Zaventem of another major low-cost operator, for example EasyJet, to keep flight prices competitive.

Subject: Belgian news