Tuesday, August 25, 2009

Who is where?

Money is the root of all evil ... not so for the aviation industry
Nearly 9 months of the year have already passed and all airlines within the former Yugoslavia have been hit by the global financial crisis. There are now signs that the world economy is slowly recovering but signs also show that the aviation crisis will continue as oil prices are steadily but surely rising.

The three leading airlines of the Ex-Yu, Croatia Airlines, Jat Airways and Adria Airways have all been hit by the crisis. All three of them are part of the Association of European Airlines (AEA), which brings together 33 European carriers, mostly national airlines. In passenger terms Croatia Airlines has come out of the crisis mostly unscathed. Despite the fact that tourism figures have significantly decreased in Croatia, the national carrier is expected to keep its lead position in terms of passengers by the end of the year. However, the cabin load factor on Croatia Airlines aircraft has significantly decreased compared to last year, mostly due to the introduction of larger Dash aircraft. The airline is also expected to report a big financial loss by the end of 2009.

Jat Airways on the other hand has suffered greatly in terms of passenger figures. Its high scale passenger slump can largely be blamed on the massive reduction of capacity compared to the summer of 2008. The airline is serving far less frequencies and destinations, all in part of the airline’s cost cutting policy introduced in October last year. The airline is also operating with 4 aircraft less but has managed to fend off a big reduction in cabin occupancy.

Adria Airways, the only airline in the Ex-Yu which is serving a country in recession (officially) is also seeing a reduction in passenger figures and is recording massive financial losses. However, unlike its Serbian counterpart the airline is not seeing drastic reduction in passenger figures and is in a battle to take over the number 2 leading Ex-Yu airline position, passenger wise.

Other airlines in the Ex-Yu which are not part of the AEA are not doing any better. B&H Airlines, which has been developing intensely this year, is recording a hefty cabin occupancy decrease, namely due to the introduction of a Boeing B737-400 aircraft. It is also facing a financial loss as many of its newly launched services are yet to become profitable. Montenegro Airlines, which will became an AEA member by October, started the year of steady with similar results as last year. However it has been revealed that the airline is recording a large financial loss and the airline’s management has halved the value of the airline’s shares. Finally, MAT Macedonian Airlines is no longer flying although its problems can hardly be blamed on the financial crisis.

The AEA, which is yet to report its July results, says that it expects smaller passenger losses for airlines than previous months and expects that August might see more airlines reporting positive growth. It remains to be seen whether carriers from the Ex-Yu will follow the trend.

1 comment:

  1. I'm pretty sure that the AEA won't be in existance in 10 years time - or they will have to rename themselves the 'ABA':
    Association of Bankrupt Airlines


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