Saturday, July 29, 2017

Air Serbia steps up internal consolidation

Air Serbia has confirmed it will be reducing its headcount and is considering other measures as the airline transitions towards a hybrid business model. It comes just days after its part-owner, Etihad Airways, posted a 1.87 billion dollar net loss for 2016, fuelled by the underperformance of its equity partners (primarily Alitalia and Air Berlin) and one-off impairment charges. The Chairman of the Air Serbia Supervisory Board, Siniša Mali, said yesterday that thirty employees have been made redundant in its commercial sector. "This is part of a business plan which will boost profitability. All of these measures are standard and part of a process where you try to reduce your losses on one side, and increase profits on the other. Air Serbia is a stable company. We have improved in all metrics compared to last year, both in profitability and passengers carried".

Local media have reported that further redundancies are expected among the airline's flight crew. Mr Mali added, "We are working on outsourcing ground handling and catering in order to reduce costs and increase revenue". Asked whether the carrier's New York service, which is believed to have put pressure on finances, could be cancelled, Mr Mali answered there are no such plans as the route has proven popular with passengers. As part of its internal consolidation measures, Air Serbia will also close its retail stores in Novi Sad, Niš and Užice in Serbia in the coming days. So far this year it has also suspended several routes, refitted its narrow-body Airbus fleet with slimline seats, reduced its on board catering offer and introduced ancillary revenue streams such as a Belgrade Airport check-in fee and Premium Lounge passes at a fee for economy class passengers or those flying on other airlines. The carrier also plans to lease out three Airbus A319 aircraft over the winter.

In a statement issued yesterday, Air Serbia said, "It is true that a number of changes are taking place at Air Serbia with the aim of achieving a more economical business, bigger savings and increased profitability in a very competitive industry, which faces numerous challenges. This is not only occurring at Air Serbia but at a number of airlines worldwide. The rules of the game are changing and the ones that best adapt to them will come out successful". It added, "The consolidation measures will contribute to better organisation, in addition to the optimal use of human resources and savings. The aforementioned measures will in no way affect the timely conduct of business activities and will not impact on the quality of service offered to guests". Furthermore, the airline drew attention to its stronger operational performance for the first half of the year.

Air Serbia rebuffed media reports that the airline is in the process of becoming a low cost carrier. It said, "Air Serbia is not transforming into a low cost company. Air Serbia serves and continues to serve primary global airports, such as JFK in New York, Heathrow in London, Charles de Gaulle in Paris and others. Low cost companies mostly use smaller alternative airports. Air Serbia also boasts a state-of-the-art Premium Lounge at Belgrade Airport, the best in the Balkans, which is not the case with low cost airlines. Air Serbia has its own frequent flyer programme - Air Serbia Etihad Guest - which now counts over 110.000 members. Low cost companies fly from A to B (point-to-point), while Air Serbia offers tickets to 42 destinations via its hub in Belgrade, as well as hundreds of other cities through its codeshare partners. Therefore, Air Serbia cannot in any way transform into a low cost company".

Friday, July 28, 2017

Zagreb Airport set for busy winter

Zagreb Airport is preparing for a busy winter season, which will see it handle more flights than ever before, following on from what is set to be a record summer. A number of carriers have already committed to increasing both frequencies and capacity to the Croatian capital when compared to last winter, with El Al Israel Airlines recently announcing it will extend its seasonal summer flight programme between Tel Aviv and Zagreb by a month, until the end of November. Services will be maintained once per week. Furthermore, as previously reported, Croatia Airlines has upgraded its seasonal flights to Barcelona and Lisbon to year-round operations, while Qatar Airways is expected to uphold its two daily service throughout the winter, up from last year's ten weekly flights.

Carriers that will be operating to Zagreb Airport this year, but were not present last winter, include Emirates, with a five weekly service from Dubai, Monarch Airlines, with services from London Gatwick and Manchester, as well as Norwegian Air Shuttle, which will maintain its recently launched flights from Stockholm to Zagreb throughout the winter. Furthermore, Lufthansa's low cost unit Eurowings will add its fourth destination to the Croatian capital, from Dusseldorf, starting October 31. Sales for the new route have been encouraging, resulting in the airline's decision to run the service three times per week instead of two, as initially scheduled. Monarch Airlines recently said its decision to extend its seasonal flights to Zagreb over the winter was down to strong loads and bookings over the summer months. "The summer flights and city breaks to Croatia have been selling well and we are always looking for new routes that we can offer all year round, so we are happy to be adding Zagreb as another city break to our winter programme”, Monarch's Chief Commercial Officer, Ian Chambers, said.

Elsewhere, LOT Polish Airlines will increase frequencies on its Zagreb flights over the winter. The airline will maintain eight instead of six weekly services from Warsaw, all of which will be run by its 82-seat Embraer E175 aircraft. Furthermore, ČSA Czech Airlines will add an extra weekly flight from Prague over the winter for a total of three with its ATR 72. At this point, the carrier has not scheduled a stop-in-service during the slow month of February, as was the case this year. Czech Airlines recently said that more than a third of travellers who began their journey in Zagreb continued on from Prague towards other destinations served by the carrier and its partners.

Zagreb Airport is targeting passenger growth of 8% in 2017, although it is expected to surpass this figure. During the first half of 2017 it handled 1.335.942 passengers, up 9% on last year. Recently, its General Manager, Jacques Feron, said that attracting new airlines was one of the management's key goals which will, in turn, transform the airport into a true hub. "An airport such as Zagreb cannot decide to become a hub on its own. It is airlines which make the airport a hub. At our concessionaire level, we shall accompany the airlines, and especially Croatia Airlines, in their strategies by being efficient and flexible". Mr Feron said.

Qatar Airways hiring in Niš


Qatar Airways is seeking new Serbian cabin crew members and will hold a recruitment event in Niš, in the country's south-east. An open day will take place on August 5 at the New City Hotel & Restaurant (Vožda Karadjordja 12). Interested applicants are requested to drop off their CVs in formal business attire between 09.00 and 17.00 CEST. Requirements include a minimum age of 21 years, an arm reach of 212 cm on tip toes, high school education with fluency in written and spoken English, as well as excellent health and fitness. Further details for the Niš recruitment can be found here.

Thursday, July 27, 2017

VLM Airlines Slovenia to launch next month

VLM Airlines will commence scheduled operations from its base at Maribor Edvard Rusjan Airport next month. The carrier will utilise three fifty-seat Fokker 50 aircraft, which have all received necessary clearance from the Slovenian Civil Aviation Agency. The trio carry the registrations OO-VLN, OO-VLS and OO-VLI. The airline will initially launch scheduled flights from Maribor to Split and Tivat in August. At the same time, a part of its fleet will operate charter flights on behalf of an Italian tour operator from Ancona, Bari and Salerno in Italy to Brač, Split and Zadar in Croatia, Tivat and Podgorica in Montenegro, and several holiday hotspots in Greece.

VLM Airlines, owned by SHS Aviation, which also runs Maribor Airport, recently advertised for a number of job openings in the company, primarily for the position of captains and first officers for the Fokker 50, Fokker 70 and the Airbus A320 and A330 aircraft, which the airline plans to add to its fleet in the near future. VLM Airlines secured a Slovenian Air Operator's Certificate (AOC) in May. However, the company is also pursuing a Belgian permit for its subsidiary SHS Antwerp Aviation, which local media report could be granted by mid-August. Together with Slovenia's VLM Airlines, the two will commence joint scheduled flights under the common trading name "VLM Airlines". The carrier currently counts 55 employees, 45 of which are based in Belgium. SHS previously outlined that in addition to Split and Tivat, VLM Airlines will eventually operate flights from Maribor to Belgrade, Berlin, Hamburg, London, Podgorica, Zurich, Xi'an, Chongqing and Nanchang.

Meanwhile, SHS Aviation has announced the appointment of Carl Runge as the new General Manager of Maribor Airport, replacing Ladimir Brolih. Mr Runge will be responsible for airport administration and operations including safety, security, facility management, marketing and business development, passenger services, quality assurance and all regulatory compliance tasks. He previously held management positions at airlines and tour operators such as Martinair, TUI Fly, Sunair and TUI Travel. In a statement, the airport operator said, “SHS Aviation would like to thank Mr Ladimir Brolih for his significant contribution and past activities at Maribor Airport and his support for the smooth transfer of ownership. Ladimir Brolih will continue to support the future development of Maribor Airport within SHS Aviation”. The company added, “The new appointment and adjustments illustrate the dedication of SHS Aviation towards Maribor Airport, which is providing quality airport operations. The focus will remain on further infrastructure investment and market development securing a proper and challenging future for the airport”.

VLM Airlines permit issued by Slovenian air regulator

Croatia Airlines last in short-term obligations


Croatia Airlines has been ranked as the worst among European airlines in meeting its short-term debt obligations, according to data compiled by Thomson Reuters Eikon. It is followed by Norwegian Air Shuttle, which is facing mounting pressure to control costs and shore up its balance sheet to weather fierce competition. Short-term debt is made up of any debt incurred by a company that is due within one year. It is usually made up of short-term bank loans taken out by a company, among other types. At the end of 2016, Croatia Airlines’ loan liabilities with local banks totalled eighty million kunas (around 10.8 million euros), of which 46.9 million were long-term (medium-term) liabilities, and 33.1 million were short-term liabilities. The remainder of the principal of the long-term loans owed to foreign banks amounted to 51.800 kunas on December 31, 2016. Long-term liabilities were reduced by 33% as a result of regular loan repayments. However, short-term liabilities were 5% higher due to an increase in liabilities to suppliers.