Virgin/SN Brussels merger will ‘save millions’

By Anna McLauchlin

Date: 07/10/04

THE boards of SN Brussels and Virgin Express have announced the merger of the two airlines, with an estimated _44 million in cost savings. _30m of these savings will come from limiting excess capacity on some routes, SN said.

The companies will examine where they can cut routes and add others.

"We will certainly avoid tail-to-tail flying, whereby the same airline flies to the same destination at more or less the same time," said a spokesman.

But that did not mean routes would be served by only one of the two airlines, he added, as the companies and their services would remain separate. "If you book on an SN Brussels flight you will not suddenly find yourself on a Virgin flight," he said. Virgin Express will remain a budget airline and SN a full-service carrier.

The spokesman insisted prices would remain competitive.

"It would be suicide to try to gain a monopoly position and, anyway, it would be impossible," he said. "Nice is the only destination I can think of which is not served by any other airlines than SN Brussels or Virgin Express."

The companies aim to complete the deal early in 2005, depending on approval from the German and Belgian authorities. The small size of both groups - SN posted a profit of _1.94m in the first half of 2004 while Virgin Express lost l6.2m - means that the European Commission will not be involved in the decision.

The boards of SN Brussels and Virgin Express have announced the merger of the two airlines, with an estimated €44 million in cost savings. €30m of these savings will come from limiting excess capacity on some routes, SN said.