Friday, August 27, 2010

Jat and Montenegro join forces

Montenegro Airlines in Niš
Jat Airways’ CEO, Srdjan Radovanović, announced that the Serbian national carrier has struck a deal with Montenegro Airlines, which will see the two co-operate on key routes between Serbia and Montenegro. In a vague press conference on Wednesday, Radovanović said that the two airlines would no longer overlap each other on routes between Belgrade, Niš, Tivat and Podgorica. This way the airlines would cut costs on fuel and fees and as a result ticket prices between Serbia and Montenegro would be significantly reduced. It is unclear whether the new agreement will lead to the cancelation of some Montenegro bound flights.

Montenegro Airlines has suffered a big passenger decrease on flights to and from Serbia. On the other hand, Jat has managed to claw back passengers on the route and report a big passenger increase. Last year, Jat suffered badly on the route when the airline’s previous management signed a damaging agreement with Montenegro Airlines, which saw Jat practically hand passengers over to its rival. In a recent industry evaluation, Serbian tour operators ranked Jat ahead of Montenegro Airlines on flights to Podgorica and Tivat. While Montenegro was firmly ahead in the evaluation when it came to aircraft, comfort and scheduling, Jat moved ahead with connecting flights and additional services.

Most of Jat’s and Montenegro Airlines’ flights between Serbia and Montenegro depart within a ten minute interval from each other. The two airlines have held a monopoly on the route and have had matching prices, around 110 Euros (return ticket with taxes). Radovanović says that the new agreement is the first step in the formation of a regional alliance and called upon all interested to join.

The new look Montenegro schedule will step into force on October 31, for the 2010/11 winter season. Both airlines are yet to release their winter schedules.

6 comments:

  1. Excuse me! So the two companies are going to share the market with a common deal? And the prices will fall?
    What a joke!

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  2. I do not understand Jat. Even with demolished fleet they regain montenigrin market. On the other hand side, MGX obviously oversized its fleet, since they have poor overall fleet`s CLF. For years now it seems that JU is doing its best to boost MGX performances. Is JU Montenegrian company, actually?

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  3. Monopoly anyone ?
    In any other region of the civilized world this could not be done without an investigation to see if the passengers will be hurt by higher fares and decreased competition.
    These are the two government companies effectively steeling money from the very people that own them i.e. tax payers.
    Welcome to the BALKANS

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  4. Jat should have let Montenegro crash and burn. They have poor loads and a lot of money owed. If JAT only let them suffer more, they could eventually buy a large stake in Montenegro when the time is right rather than join forces with it. And it economically doesn't make sense to monopolize the market and claim that the prices will be lower...that is just an outright lie. Jat fucked up big time with this deal. If I were the CEO, I would worry about finding new destinations and more importantly trying to figure out how to get those 12 new Airbus planes!!!!!

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  5. Well I would guess that Jat needs those extra planes elsewhere and like this they can deploy an ATR somewhere else...
    Even if I hate that they are joining forces let's wait and see.

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  6. Radovanović says that the new agreement is the first step in the formation of a regional alliance and called upon all interested to join.

    The devil's in the detail. Incredible that he'd want suddenly a 'regional alliance' - codesharing isn't enough obviously when you're the largest fish in the pond...

    Seriously though, who would actually join with JU across the entire Balkan peninsula? RO? JA? LV? The new OA/A3? I think they may have some serious issues still with JP and OU to deal with before they would consider such an alliance.

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