Saturday, May 23, 2015

Belgrade - Zadar route decision in a few months

Zadar Airport, Air Serbia and Etihad discuss potential new service

Talks between Zadar Airport, Air Serbia and Etihad Airways were held this week in Abu Dhabi regarding the potential resumption of commercial flights between Belgrade and Zadar following a 25-year hiatus. A decision on whether the service will be launched is to be made in a few months time. Zadar Airport’s Managing Director, Irena Ćosić, announced the talks and travelled to Abu Dhabi last Sunday. However, Etihad Airways is reportedly annoyed that the talks have been leaked to the press, the “Zadarski list” daily says. Etihad is well known for keeping its plans secret, a measure which has also been adopted by its partner Air Serbia, which, more often than not, has issues with news reports being published outside of its official press releases.

Following the three-way talks, Ms. Ćosić said in a short statement, “I can only say that we had our first meeting. A final decision will be made in a few months and we will announce the outcome whatever it may be". News of the potential resumption of flights between the two cities has generated significant interest and has been greeted favourably by the public. Prior to the talks, the head of Zadar Airport said, “This is a great opportunity for Zadar because we know this route would have excellent loads. Today, new routes are secured by offering your product on the market. You can’t sit with your hands crossed. As a result, we have to present our offer to carriers that could be interested in our market and Air Serbia is one of those”.

The possible resumption of flights between Zadar and Belgrade next year would mark the first commercial service between the two cities in 25 years. JAT Yugoslav Airlines operated its last service from Zadar to Belgrade on August 3, 1991. Air Serbia already flies to four destinations in Croatia - Zagreb, Split, Dubrovnik and Pula, the latter three of which are maintained on a seasonal summer basis. Zadar Airport handled 496.542 passengers in 2014, an increase of 5.1% compared to the year before. The airport hopes to handle charter flights from China starting this September. Earlier this year, the CEO of Ryanair, Michael O’Leary, said his airline, which maintains a seasonal summer base in Zadar, has “big plans” for the city, more of which will be revealed next year.

Friday, May 22, 2015

Montenegro Airlines posts strong results

Montenegro Airlines sees improved results during first four months

Montenegro Airlines has seen its passenger numbers improve during the first four months of the year, positioning itself as the fourth busiest carrier in the former Yugoslavia. The Montenegrin airline welcomed 119.713 passengers on board its aircraft, some 8.020 travellers more than the same period last year, or an increase of 7.2%. Fuelling the growth were charter flights, as well as new services to Lyon, Dusseldorf and St. Petersburg. During the first quarter, the airline posted strong figures on flights to its main market - Serbia. It handled 48.730 travellers on services from Podgorica, Tivat and Belgrade, an increase of 16% compared to last year. At the same time, the carrier has also increased the number of operated flights to the Serbian capital by 19%.

The airline saw its passenger numbers more than double on charter flights, with an increase of 54.3%. Montenegro Airlines also noted that passenger numbers on its codeshare services improved 4.5%. The Montenegrin carrier has codeshare agreements with Air France, Adria Airways, Alitalia, Austrian and S7 Airlines. It foresees further passenger growth in the coming months. “Montenegro Airlines has been encouraged by these results which represent an excellent start to 2015. This success comes as a result of charter flights, where out of the planned seventy services for this season, we have already carried out twenty”. The carrier adds, “Further assisting these results was the launch of new services to Lyon, St. Petersburg and Dusseldorf. By the end of June, the national carrier will launch new charter flights to Baku, while flights to Yerevan will operate once per week between July and August”.

The encouraging trends come as the Montenegrin government prepares to sell its national carrier this year. In a few weeks, the airline is expected to sign a strategic partnership agreement with Etihad Airways, which will see the two airlines codeshare on each other’s routes and provide Montenegro Airlines with access to various services used by Etihad Airways at airports across Europe. Last year, the Montenegrin carrier handled 557.000 passengers, a decrease of 5% on the year before. Furthermore, its losses amounted to 9.5 million euros. The airline has been leasing out one of its Embraer jets, as well as crew, in an attempt to generate additional income. The carrier recently began settling part of its 68 million euro debt and has agreed to repay debt owed to the operator of the country’s two international airports - Podgorica and Tivat - amounting to 6.423.390 euros. The debt repayment will start on March 1, 2017 and will be payed off in installments over 108 months.

Thursday, May 21, 2015

Future partners for Croatia Airlines by October

IFC to find Croatia Airlines' strategic partner by the end of October

Croatia Airlines’ privatisation process is advancing with its external consultant, the International Finance Corporation (IFC), expected to seek out potential new investors by the end of October this year. The Croatian Minister for Sea, Transport and Infrastructure, Siniša Hajdaš Dončić, who heads the carrier’s privatisation committee, said yesterday, “Following the stabilisation of the airline’s business, the Ministry signed an agreement with the World Bank, more precisely its fund [IFC], which is assisting us in the search for a strategic partner. By the end of October, they will list potential investors”. Mr Hajdaš Dončić admitted that the government has not selected a privatisation model for the airline. “We are looking for partners that would enter Croatia Airlines in any way. By that I mean, either through recapitalisation, with the expansion of the carrier’s destination network, or through the purchase of a 49% stake”. It is the first time the government has mentioned recapitalisation as an option.

Croatia Airlines’ CEO, Krešimir Kučko, has repeatedly called on the government to recapitalise the company, rather than sell a controlling stake. Recapitalisation would entail changes to the airline’s capital. This may occur, for instance, when a creditor exchanges a loan for a stake but does not require changes to the company’s management structure. Commenting on the privatisation process recently, Mr. Kučko said, “An ideal partner would be someone that would recapitalise the company. A takeover, like the ones we saw in the region and beyond, would not benefit Croatia Airlines”. He added, “It will be difficult to find a partner from the Far East as they generally do not buy European carriers. On the other hand, companies from the Middle East could show interest. In our view, a strategic partnership should be purely financial. As a company, we no longer have losses and neither are we producing any. Both our international and local suppliers are payed for on time”.

Last October, the government formally relaunched the airline’s privatisation process, following a failed attempt in 2013. Minister Hajdaš Dončić is adamant that the carrier will have better luck this time around. “We are not backing down. Each year ten airlines declare bankruptcy and a fifty new ones are established. Our aim is to empower Croatia Airlines but this is only possible with a strategic partner”. Over the course of last year, both Turkish Airlines and Etihad Airways ruled out any interest in acquiring the Croatian carrier. On the other hand, Qatar Airways says it is again pursuing acquisitions in foreign airlines, preferring a similar model to the one proposed by Croatia Airlines’ CEO. Croatia Airlines posted a profit for a second year running in 2014, boosting its prospects of a successful privatisation.

Wednesday, May 20, 2015

Croatia too expensive for Wizz Air

High airport fees deterring Wizz Air from Croatia

Low cost airline Wizz Air has said its limited presence on the Croatian market comes as a result of high costs at the country’s airports. Speaking to EX-YU Aviation News, Wizz Air’s CEO, Jozsef Varadi, said, “Croatia is very expensive. If Zagreb Airport becomes more reasonable we will certainly consider that airport as an opportunity for expanding our network but this is not yet the case”. Wizz Air suspended operations to Zagreb in 2011. “Nevertheless, we have continued discussions with a number of airports at the same time, so hopefully, at one point, we can go there [Croatia]. I think the market is good”, Mr. Varadi told EX-YU Aviation News as the low cost airline marked its eleventh birthday by rolling out a new and rejuvenated brand.

Wizz Air, which has quickly become the fastest growing low cost airline in the former Yugoslavia, with bases in Skopje, Belgrade and Tuzla (from June 22), currently serves the Croatian market with seven weekly flights to Split on a seasonal summer basis only. The airline will resume its daily service from London Luton to Split starting June 14 until September 12. Last year, flights were maintained four times per week. However, over the years, Wizz has also operated a number of services into Croatia including Dubrovnik and Zagreb. The airline initially launched operations to the Croatian capital in 2009 with flights from Dortmund. It also ran services from London to Dubrovnik, which were suspended in 2012. In 2011, Pula Airport said Wizz Air had expressed interest to fly to the city from two destinations. However, these never materialised.

Meanwhile, the no frills carrier celebrated its eleventh birthday yesterday with a special flight between Budapest and Warsaw, uncovering a new livery and uniforms, introducing seat allocation across its network and new fare types. During the year, the airline will also upgrade its website and introduce a mobile site, take delivery of new aircraft and introduce the Airbus A321 jet to its fleet. “Over the course of the last decade, Wizz Air has had significant success in revolutionising an entire industry, and we have exceeded our ambition to make reliable and affordable air travel available to everyone in Central and Eastern Europe as we extended operations all across Europe and beyond”, Mr. Varadi said. He added, “The launch of our refreshed brand is another one of our many measures to constantly improve passengers’ travel experience. We remain focused on developing our pan-European network”.