Monday, February 27, 2017

Croatia Airlines to launch Bucharest and Helsinki

Croatia Airlines will commence services to the capitals of Romania and Finland this summer as part of its planned expansion from Zagreb Airport. Bucharest Henri Coanda Airport and the operator of Helsinki Airport, Finavia, confirmed to EX-YU Aviation News that the Croatian carrier will introduce flights this summer season, with tickets to go on sale this week. Croatia Airlines has never operated scheduled flights to the two cities and faces no direct competition on the two routes. The launch of flights to Helsinki will form part of the airline's push to extend its coverage in northern Europe, with plans to commence operations to Stockholm this summer as well. Interestingly, Air Croatia, a failed 2015 start-up, planned to introduce flights from Zagreb to Bucharest, Helsinki and Stockholm, however, the airline went out of business several weeks following its launch. Croatia Airlines has said it plans to unveil all of its new destinations for 2017 this week.

Bucharest has been identified as an unserved destination with great potential from Zagreb since 2007 when over 8.000 people travelled between the two cities. In 2009, the Romanian national carrier TAROM made plans to launch three weekly flights between the two cities using its ATR72 aircraft, however, the service never materialised. Furthermore, Croatia Airlines intended on introducing operations to Bucharest in 2011, but the onset of its restructuring program put an eastbound expansion on hold. The carrier has previously said, "At first, Eastern European countries within the European Union are our priority. At a later stage we intend to fly east outside of EU boundaries”.

Finland will become a new market for Croatia Airlines, where the carrier will attempt to tap into the growing tourism demand. Finnair itself has not ruled out introducing services to Zagreb and has eyed operations to the Croatian capital for some time. The Finnish carrier recently told EX-YU Aviation News, “The Croatian market serves as a great destination for Finnair customers from Northern Europe and Asia. We have also seen increasing numbers of passengers from Croatia using Finnair on their trips. Demand for Croatian destinations has been growing year by year and we have increased our flights to the area consequently”. Currently, Finnair operates services from Helsinki to Dubrovnik, Pula and Split on a seasonal summer basis.

Pristina Airport launches new incentives


The operator of Pristina Airport, Limak, has announced a new incentives scheme in a bid to attract more carriers. In an agreement with the Unit for Public Private Partnership within the Kosovan Ministry of Finance, and other relevant authorities, Limak will reduce handling fees by 50% for airlines that launch new routes out of Pristina or boost frequencies on existing destinations. The new scheme is primarily aimed at low cost carriers as it will be applicable only for airlines which do not carry cargo or require loading or offloading services. The new incentives will come into effect from the start of the 2017 summer season on March 27. The General Manager of Pristina Airport, Haldun Firat Kokturk, previously said, "We are willing to increase flight numbers and extend our network with additional routes, and we are using our incentive plan to attract airlines in order to catch this growth at a sustainable level".

Sunday, February 26, 2017

No foreign interest in Montenegro Airlines

Montenegro Airlines has been removed from the list of state-owned companies slated for privatisation this year due to low interest. The carrier has struggled with financial problems and mounting debt over the past year. "Despite the fact that no privatisation is planned, we can include it to the list when there is sufficient interest. There are a number of sale models possible with Montenegro Airlines. It does not necessarily have to be privatised through the sale of shares but also through recapitalisation or a strategic partnership, depending on what would be of interest to the investor", Branko Vujović, a member of the Privatisation and Capital Investment Council of the Government of Montenegro, said.

According to the Council, the liquidation of Montenegro Airlines would be a last resort and would negatively impact on the country's tourism industry. "A solution is possible if a partner was to be found. We need an airline that will offer direct flights to several major European cities. This is in the country's interest and should be the strategy for any future talks going forward. Interest shown towards Montenegro Airlines over the past few years was such that it didn't warrant the launch of tender procedures for its sale", Mr Vujović noted. Montenegro's Prime Minister, Duško Marković, recently said, "The government holds a 99.9% stake in Montenegro Airlines and can offer 50% minus one share to a foreign partner. In the coming period, the government will work on stabilising and improving the company and consider privatising it. A minority stake would be offered through an eventual tender".

Previous attempts to privatise Montenegro Airlines have all failed. In 2009, Israel’s national carrier, El Al, teamed up with the European Bank for Reconstruction and Development in order to purchase a stake in Montenegro Airlines. El Al was interested in the carrier only if it gained control over Podgorica and Tivat airports as well, which the government deemed “unacceptable” at the time. In 2011, the Montenegrin government offered a 30% stake in its national airline. Arkia Israeli Airlines, El Al and Etihad Airways all purchased tender documentation but never made a takeover bid. Later that year, the government announced that Turkish Airlines was close to taking over both the carrier and the country’s airports but added it would not sell its national airline at any cost. Plans to privatise the carrier in 2014 did not materialise either. Montenegro Airlines is dealing with debt of over sixty million euros and in 2015 recorded an annual net loss of over ten million euros. As of last year, the European Commission has barred the state from providing further financial aid to the company.

Saturday, February 25, 2017

Air Serbia posts improved 2016 results

Air Serbia recorded a third year of operational growth in 2016, driven by the launch of new routes, including New York, and the introduction of a new wide-body aircraft. The carrier handled 2.62 million passengers during the year, up 3% on 2015. Over the course of 2016, Air Serbia ran 33.171 scheduled and charter flights, of which 1.213 were operated by its leisure brand Aviolet. The carrier recorded double digit growth in cargo operations, with 4.913 tonnes of freight and mail uplifted in 2016, representing an annual increase of 31%. The airline's on-time performance (OTP) at its hub in Belgrade was 87.3% (up from 86% the year before), while the overall OTP for the whole Air Serbia network came in at 84% (up from 83.6%).

Network capacity, measured in available seat kilometres (ASKs), grew 11% year-on-year, from 3.65 to 4.06 billion. The average passenger load factor, a measure of seat capacity utilisation, increased to 72.4% in 2016, compared to 70.7% the year before. The growth of Air Serbia’s network capacity was fueled by the launch of services to New York, St Petersburg, Kiev, Hamburg and Ohrid, which widened the airline’s network reach to 44 destinations. At the same time, the Air Serbia fleet grew to 21 aircraft as the airline took delivery of its first wide-body jet, a 254-seat Airbus A330-200. During the year, the company also signed codeshare agreements with another four airlines, bringing its total number of codeshare partnerships to nineteen carriers and expanding its connectivity to 127 cities.

Commenting on the results, Air Serbia's CEO, Dane Kondić, said, "Air Serbia continued to grow its passenger and cargo operations in 2016, bringing more choice and convenience to travelers across Serbia and Southeast Europe. The launch of New York, our biggest operational undertaking to date, really showcased the full benefits of our membership in Etihad Airways Partners in terms of fleet development, training and so forth". He added, “In 2017 we will continue to focus on the long-term sustainable growth of Air Serbia to ensure we continue to hit on the commercial objective set out by our two shareholders, the Government of the Republic of Serbia and Etihad Airways”. The Chairman of the Air Serbia Supervisory Board, Siniša Mali, noted, "2016 was a year for the history books at Air Serbia. The airline achieved major fleet and network milestones and managed to deliver sustainable growth in a tough business environment. The development of Air Serbia is intertwined with the development of Serbia, and was integral to the economic growth recorded last year, the likes of which have never been seen before".

Friday, February 24, 2017

Hainan Airlines eyes Belgrade service

Hainan Airlines, China's largest private carrier by both market share and fleet size, will launch over ten international flights this year with Belgrade likely to be included as well. Speaking at the Belgrade Tourism Fair yesterday, the Serbian Prime Minister, Aleksandar Vučić, said, "I expect for a deal to be reached with a private Chinese carrier for the introduction of flights between Beijing and Belgrade. Air Serbia is not in a position to commence direct flights to China. That is why I asked Chinese carriers to do so and we are very close to reaching a deal with a private airline. Following the good news concerning flights from Beijing, there will be more positive developments from China". Last month, Mr Vučić held talks with representatives from HNA Aviation, the parent company of Hainan Airlines, during the World Economic Forum in Davos.

Hainan Airlines' Senior Vice President, Hou Wei, told the "China Daily" that economic growth campaigns like the Belt and Road Initiative, of which Serbia is a part of, and various bilateral free trade agreements have led to a rise in people-to-people exchanges, which is spurring demand for flights to certain destinations. He added that traffic rights for routes connecting major cities are tight, so direct flights to second-tier cities are practical. "Direct flights between first-tier Chinese cities and second-tier foreign cities, as well as second-tier Chinese cities and top-tier foreign cities, are expected to grow rapidly in the future, given the significant demand for international travel in China. We analyse the markets city by city, to study their economic development models, annual fiscal performance, average income and their demographics, like if the majority of their population is turning into middle class consumers given to wanderlust".

Earlier this week, Serbia's outgoing President, Tomislav Nikolić, noted he would bring "good news that will benefit both Serbian and Chinese citizens" following his state visit to the country next month. He added the news would be communicated to the public by the Prime Minister. Furthermore, earlier this week, Serbia's Minister for Trade, Tourism and Telecommunications, Rasim Ljajić, met with China's Ambassador to Serbia to discuss "concrete steps to increase the number of Chinese tourists". Speaking after the meeting, the Chinese Ambassador said, "We expect for a direct air link between the two countries to be introduced this year, which, together with the abolition of visas for Chinese citizens, is the most important step towards a significant increase in the number of Chinese tourists to Serbia". Mr Ljajić noted that Serbia will present a joint product with Montenegro, Bosnia and Herzegovina and Macedonia for Chinese tourists.

Sino-Serbian relations have soared since the launch of China's Belt and Road Initiative, which has seen the arrival of several large Chinese companies to Serbia and the abolition of visa requirements between the two nations. "We will launch more routes connecting China with countries and regions along these two trading routes to assist our counterparts in building and operating airports to improve local transportation services", Hainan Airlines' President, Sun Jianfeng, said. He added, "In comparison with 2016, a growing number of countries are working on simplifying visa procedures for Chinese travellers, including the introduction of digital visas, lowering of visa fees and shortening waiting periods".