Monday, December 7, 2009

Possible return to Podgorica

Podgorica ... take two for B&H
Almost 2 months ago B&H Airlines suspended flights from Sarajevo to Podgorica, only 4 months after they were launched. The airline’s justification for the suspension were poor loads but it has also been revealed that the airline only had a temporary license which expired at the end of the 2009 summer season, in late October. Flights from Sarajevo to Podgorica were resumed after 20 years and the service continued on to Skopje. However, a return ticket between the capital of Bosnia and Herzegovina and Montenegro on B&H Airlines amounted to over 150 Euros. Flights operated 3 times per week, with the airline’s regional ATR72. The 3 weekly flights to Skopje have also been suspended this winter.

Recently, the Montenegrin aviation authority announced that it has extended B&H Airlines’ flying permit. The license has been extended to January 14, 2010. Soon, a new bilateral air agreement could be signed between the two countries which would regulate air traffic between the neighbours. It remains to be seen if B&H Airlines will give Podgorica a second chance or if Montenegro Airlines would claim the route.

10 comments:

  1. BH Airlines should first fix their IT department before they start launching new routes.

    It has to be one of the few airlines in the world where you can't do online payment of tickets.

    ReplyDelete
  2. BH Airlines wil have online payment from January.

    They are testing there system now and they told me that they wil launch it from January 2010.

    Let us hope that B&H Airlines get the route and they should fix the prices for some cheaper.

    In a week or two B&H Airlines B737-700 will be painted in Istanbul ;)

    ReplyDelete
  3. Haris: That's good news. But again it is end of 2009 and they should have had this 5 years ago.

    If we jump back to the topic it doesn't make economical sense to start new routes on such short distances. Average netto wage in BiH is 650€.

    Just for calculation purposes assume average pay of 800€ and 20 working days / month. This gives us 5€/hour.

    By flying to Podgorica you save approx. 3 hours. This means that you have to choose between wasting 15€ of your employees work time or paying 100€ extra for your employee to fly (+costs of taxis). It is easy, you don't let your employee fly.

    Now consider that most people value their free time even less and it is really easy to see that there is very small market for people that find it economically viable to fly between Sarajevo and Podgorica.

    ReplyDelete
  4. @ ZRAK

    are you joking???? Average salary 650 euros?!!!!! That is a joke! that si 1300 KM! Hahahahahah 90% of people I know earn 500-800 KM (that is 250-400 KM). As for your info, most of my friends are graduates and their salaru is around 450 euros!!!!

    Flight between SJJ and TGD is around 30 min and the price B&H Airlines has for that route is not normal!

    It is pointless talking about better days in Ex Yu region, the sense for economy doesn't exist and makes me really sad!

    Thanking to all Ex YU companies and their monopol i won't be seeing my family this winter! I am off to Gran Canaria for 80 euros return( 4 hours flight!!!!).

    ReplyDelete
  5. @ ZRAK

    are you joking???? Average salary 650 euros?!!!!! That is a joke! that si 1300 KM! Hahahahahah 90% of people I know earn 500-800 KM (that is 250-400 KM). As for your info, most of my friends are graduates and their salaru is around 450 euros!!!!

    Flight between SJJ and TGD is around 30 min and the price B&H Airlines has for that route is not normal!

    It is pointless talking about better days in Ex Yu region, the sense for economy doesn't exist and makes me really sad!

    Thanking to all Ex YU companies and their monopol i won't be seeing my family this winter! I am off to Gran Canaria for 80 euros return( 4 hours flight!!!!).

    ReplyDelete
  6. The "average" salary is not the most important statistic. The "average" person has no reason whatsoever to travel between Sarajevo and Podgorica - both of which are relatively uninteresting places in their own right.

    IF there is some company which has one business or office in one city, and another office in the other city - THEN you have demand for X number of flights/per week and you can work around that.

    For the "average" person in ex-YU, flying is not an option. Bus is the way to go.

    ReplyDelete
  7. I have to agree completely with the above comments - fares are still too high across the region.

    The only exception to this is domestic flights within Croatia (the only exYU country currently offering these?), which prices are cleverly the same as train or bus. However, the perception is that if you're flying you have to be rich...

    Even if the fares between exYU capitals were reduced to €99 return (or less) taxes inclusive, you're still not going to capture, or even inroads to the market. Whilst BiH is a mountainous country where flying does give huge time advantage, its residents do not have high salaries (for the most part) - the cost vs time balance hasn't quite been sorted properly yet by the airline.

    And as far as JA goes, they have the right idea about using AT7s on local routes, but really should be bringing in the € to immediately-profitable destinations such as ZAG and BEG.

    ReplyDelete
  8. Average wage is not the same as the median wage. Bosnian average wage is approx 1400BAM (700€). Median wage probable much lower.

    Anyway people earning 800BAM are probably not what I would call business travelers so they wouldn't be flying at all.

    I would say that most people who do fly are those earning 1200-2000BAM. So my approximation was quite good (imho :)

    Anyways if people are earning even less as you suggest it is even more compelling reason not to be flying these short distances.

    @frequentflyer
    Without knowing too much about Croatian domestic market I am suspecting that it works (zagreb - split/dubrovnik) mostly due to tourism. Lots of foreigners flying in with OU. Then changing in Zagreb for final destination.

    I doubt that regular Croat takes flight from Zagreb to Split.

    ReplyDelete
  9. The Croatian government subsidises domestic flights through a PSO program (public service obligation), that is why they are cheap.

    ReplyDelete
  10. @Anonymous

    Interesting. Doesn't sound like good idea in these time of green washing and sustainability.

    And there are no reaction by train/bus operators for unhealthy competition. I doubt that this will be possible to do when Croatia enters EU.

    ReplyDelete

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