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".

PHOTOS: Belgrade Airport overhaul


The overhaul of Belgrade Nikola Tesla Airport's Terminal 1 building, as well as the hall connecting it to the Terminal 2 facilitiy, which will feature a new passenger registration area, is ongoing.

The new check-in area will feature 475 square metres of additional space, ten check-in desks, two self bag drop-off points, three self check-in desks and one oversize baggage desk. Work is expected to be completed by May 1.

New check-in area

Future look

Terminal 1 overhaul

The overhaul of the check-in area in Terminal 1 is also ongoing. It entails capacity expansion, new commercial space and a new automated baggage sorting facility.

Future look
By the end of the year, the airport anticipates to complete work on a new observation deck at Terminal 1 and the reconstruction of its remaining four departure gates (illustrated below). This will include the overhaul of 2.640 square metres and the construction of an additional 6.360 square metres of space. The work will include the installation of five new jet bridges, with the last gate to cater for wide-body aircraft. Furthermore, an additional two ground floor gates will be opened from which passengers will be bussed to the aircraft at remote parking positions.

Thursday, February 23, 2017

Croatia Airlines to announce expansion

Croatia Airlines will announce its expansion plans for the 2017 summer season in the coming days. In a statement to EX-YU Aviation News the carrier said, "By Friday, or the beginning of next week at the latest, we will announce novelties in our summer 2017 timetable". The airline is considering new services to Stockholm, Moscow, Dublin and Oslo. In 2016, the carrier rolled out four new seasonal routes out of Zagreb (Lisbon, Prague, Milan and St Petersburg), which are all to resume this summer and will be extended into the winter months. "The new destinations all proved so successful, that we are going to keep them all", the company said recently. It is also likely that the airline will introduce seasonal flights between Split and Milan.

Croatia Airlines has previously operated flights to both Stockholm and Moscow. The two weekly service to the Swedish capital was maintained during the 1990s with a Boeing 737-200 aircraft but the route was later suspended. Yesterday, Norwegian Air Shuttle announced it would introduce up to two weekly flights between Stockholm and the Croatian capital from June 10. On the other hand, plans to launch flights to Moscow were initially made in 2011, however, the implementation of the restructuring program put an east-bound expansion on hold. Currently, Aeroflot maintains flights between the two cities. Late last year, Croatia Airlines operated charters between Osijek and Dublin to evaluate the route's potential. There is a growing Croatian diaspora in Ireland. It is unclear whether the planned new destinations would run on a seasonal or year-round basis.

The airline has previously said it is looking to add a 100-seat regional aircraft to its fleet, which would be required in order for the carrier to expand its network. The company will lease a Trade Air Fokker 100 jet for a second year in a row, however, it is uncertain whether additional planes will be taken up. Meanwhile, the Croatian carrier will continue to maintain nine weekly flights to London Heathrow Airport this summer despite selling its slots to Delta Air Lines, with the deal to come into effect from April 1. As EX-YU Aviation News learns, Croatia Airlines has leased back the slots until the end of October.