BRUSSELS AIRLINES TAKES SUBSTANTIAL AND INDISPENSABLE MEASURES TO ENSURE ITS SURVIVAL AND CREATE A SUSTAINABLE FUTURE FOR THE COMPANY

The severe financial impact of the coronavirus epidemic and the persisting, extremely low demand for air travel force Brussels Airlines to take important and necessary steps to ensure the company's existence. Brussels Airlines must systematically cut expenses to a level that is competitive if it hopes to survive. Additionally, the business requests assistance from both its shareholder Lufthansa and the Belgian government in order to get through the current, unheard-of difficulty. Brussels Airlines is restructuring its cost structure as part of its turnaround plan, optimising its network by removing marginally lucrative and unprofitable flights, and reducing its fleet by 30%. The workforce will be 25% smaller as a result of the company's overall size being 25% smaller. Brussels Airlines will collaborate with its social partners as a socially conscious company to cut the number of forced layoffs to an absolute minimum. As soon as the demand for air travel has returned to a new normal, which is anticipated as of 2023, the company is sure that with its turnaround plan it will be able to safeguard 75% of its employment and grow again in a profitable fashion. In order to safeguard the company's future and new investments while also being able to defend itself against any new headwinds, structural profitability is crucial.

The global coronavirus outbreak is estimated to have a revenue impact of over €240 billion, placing airlines under unprecedented pressure. More than 60% fewer new reservations were made, and cancellations rose to all-time highs. As a result, numerous airlines in Europe and elsewhere are forced to implement significant job cuts. Unfortunately, the crisis has not spared Brussels Airlines. Due to revenue losses and expenses that cannot be avoided, such as aircraft lease and maintenance costs, the company has been losing one million euros per day since the temporary suspension of all of its flights (beginning on March 21st).

The corporation first disclosed an impact on the demand for air travel on February 28th. Week by week, the situation got worse, with some days seeing more cancellations than new reservations. Air travel demand is still very low today, and experts predict that it will be 25% lower in 2021 than it was before the financial crisis. The industry can only anticipate that demand will return to 2019 levels at the earliest in 2023.

In terms of passengers and revenues, we had a great start to the year 2020. For this summer, we planned a robust leisure offer in an effort to make up for some of the lost business as a result of Thomas Cook Belgium's insolvency. Brussels Airlines, meanwhile, is being severely impacted by the coronavirus outbreak. As of March 21st, we were forced to temporarily halt all of our flights and implement technical unemployment for the whole company. Our financial condition has gotten worse as a result of this unprecedented catastrophe, forcing us to take important and necessary action. In order to survive the current crisis and maintain structural competitiveness in the future, the restructuring is urgently required.

A strategy for turning things around that puts the company's survival first and lays the groundwork for structural profitability

The management of Brussels Airlines is currently outlining their turnaround strategy for the social partners. With this strategy, the Belgian airline hopes to rescue the business from the financial crisis that has badly impacted Brussels Airlines. In order to support strong expansion, the airline also places a strong emphasis on structural profitability. Therefore, the carrier must lower total expenses while boosting productivity and efficiency.

The airline will be able to safeguard its future, invest in its fleet, and expand its hub at Brussels Airport if its EBIT margin is sufficiently positive. Additionally, the Belgian domestic carrier will take care to maintain its position as one of the key airlines within the Lufthansa Group and its crucial contribution to the Belgian economy.

The turnaround plan's primary measures are:

• network evaluation with an emphasis on market demands and route profitability optimization.
• The fleet was modified to reflect network optimization, going from 54 to 38 aircraft (a 30% decrease).
• decreasing the number of jobs by 25% will lower the human costs.
• The number of forced layoffs will be minimised in conjunction with the social partners.
• the improvement of productivity and greater standardisation of the fleet, among other measures, to reduce overhead, operational expenses, and increase operational efficiency.
• The goal of the employee reward setup's simplification is to maintain employer appeal while keeping future expense growth under control.

The goal of Brussels Airlines is to look into as many potential options as possible in order to reduce the number of forced layoffs. In order to minimise the social impact, the company hereby encourages its social partners to jointly evaluate all alternative alternatives, including but not limited to, seasonal contracts, pensions, part-time employment, unpaid leave, and volunteers who would pursue other career paths.

Our staff members are the backbone of our business, so we go above and above to safeguard them. For us, the social impact we manage is just as crucial as the aim itself. It is the management's duty to ensure that our business can weather the crisis. But let's be clear: the goal is to create a strong company with long-term structural profitability and development prospects, not just to survive. We have a high faith in the strategy and consequently in the future of Brussels Airlines.

While the turnaround plan is necessary to end the situation, continued talks with Lufthansa and the Belgian government are still crucial. The Belgian domestic carrier is looking to Lufthansa for help with the costs of restructuring and is hoping for a successful outcome of discussions with Belgian authorities regarding the financial support required to deal with the effects of this extraordinary crisis.