Lufthansa (LHAB) (LHA) , the largest airline in Germany and in Europe in terms of fleet size and passenger numbers, is allegedly considering to replace top management, including the CEO and CFO, of its wholly owned Brussels Airlines. The rumor, together with surrounding uncertainty on the future business model of the airline, is fueling the already-high tensions within the Belgium flag carrier.

The attitude difference

A board of directors of the SN Airholding, the holding company of Brussels Airlines, is meeting on February 5, 2018, in Frankfurt, Germany. The possible dismissal of the Brussels Airlines CEO Bernard Gustin and CFO Jan De Raeymaeker is on the agenda of the meeting, Reuters reports.

Gustin is well-known to be an advocate for the current "hybrid" form of Brussels Airlines operations. The Belgian airline currently has a developed network of cheap flights across European destinations in addition to long-haul flights to Africa, North America and India.

But, as Belgian news portal VRT NWS notes, Lufthansa (LHAB) (LHA) is believed to have a plan to fully integrate the European network of Brussels Airlines to Eurowings – another LCC within Lufthansa Group.

Opposition in Belgium

Among those who oppose the integration plan are Brussels Airport, Belgium’s business people and, of course, Brussels Airlines employees.

VRT NWS points out, that Brussels Airport is heavily dependent on its “most important customer” – Brussels Airlines. On the one hand, the airline brings to the airport around 9 million passengers annually. The Belgian flag carrier is also a member of Star Alliance and its transfer flights help to bring other international players to Brussels.

“The rumors that the long-haul flights to Africa, North America and India might be phased out or even could partly be moved to Germany are not welcomed in Brussels” is noted in the publication.

Some 100 Belgian business people have written an open letter, urging to sustain operations of Brussels Airlines as they are now, because of their “strategic importance” for Belgium.

It is crucial that Brussels Airlines, together with its many partners, can further develop the hub in Brussels and the network of flights to Europe and the rest of the world,” is written in the letter according to Belgian news portal De Standaard notes. “Belgium and Brussels, the capital of Europe, need this connectivity in order to remain competitive in an increasingly globalized world in which the competition is getting stronger and stronger”.

Strike is a possibility

Brussels Airlines has a fair share of employee-related problems as it is. These include the pilot dissatisfaction with current work conditions such as the “extreme” flexibility demanded from them, an alleged shortage of staff and so on.

In addition, there is also the problem of wage difference between two groups of pilots, which arose following the acquisition of leisure carrier Thomas Cook, together with 160 pilots and cabin crew, by Brussels Airlines in October 2017.

In the context of pre-existing tensions and the newest fear of the possible Gustin lay-off and implementation of airline integration, union strike is not out of the picture. "If the worst case scenario were to take place, and the Germans today confirm that Brussels Airlines would be shut down, there is a chance that people will react very emotionally," said Filip Lembrechts of trade union ACLVB.

And what Lembrechts means by “emotionally” is strike: "The three unions are pulling the same line: we are ready to strike,” Lembrechts is also quoted by De Standaard. “If necessary, we keep aircraft on the ground”.

The Belgian flag carrier Brussels Airlines was founded in 2002 and is owned by the SN Airholding. Since December 2016, Lufthansa (LHAB) (LHA) took over 100% of the shares of SN Airholding. Prior to the move, Lufthansa (LHAB) (LHA) owned a 45% stake.