Monday, May 2, 2011

B&H on the rise

First quarter passenger growth for B&H Airlines
Bosnia and Herzegovina’s national carrier has had a good start to the year. In the first quarter of 2011, B&H Airlines handled 27.513 passengers, an increase of 59.4% compared to the same period last year. In December last year, citizens of Bosnia and Herzegovina were freed from visa restrictions to some 27 European countries, which is believed to have contributed to the passenger rise. The airline operated almost the same number of flights as it did over the same period last year, yet it carried 10.000 passengers more. B&H Airlines’ average cabin load factor is amongst the highest between the former Yugoslav national carriers, standing at 80%.

Meanwhile, the three main national EX-YU carriers - Croatia Airlines, Jat Airways and Adria Airways, also reported passenger growth in the first quarter of 2011. Croatia Airlines remains the front runner, followed by Adria Airways in second place and Jat Airways in third, 3.000 passengers behind its Slovenian rival. If the same pattern continues as has been the case the past few years, Jat will overtake Adria during the summer, while Croatia Airlines will significantly increase its lead over the other 2 carriers. Financially, the national carriers all reported multi million Euro losses in 2010 and the trend is set to continue this year.

15 comments:

  1. How big were B&H's losses?

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  2. Good job, increase in pax numbers, decrease in routes and finaly an increase in losses!

    Sounds like another success story. But I have to say B&Hs Airbus A319 looks quite smart in that livery I like it.

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  3. Yes, any word on how much money the airline is still bleeding?

    And any word on the 2nd 319 which was supposed to arrive last month for the start of summer schedule?

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  4. frequentflyer makes a good point, I forgot they still had another 319 planned to entre service. I am guessing this one will be from Airbus itself or maybe from Turkish Airlines again? If so what will the next 319 serve? Increases in capacity I assume.

    Although the carrier as been very dramatic with its routing in the past few years.

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  5. There are 2 A319 orders according to Airbus http://www.airbus.com/fileadmin/backstage/documents/orders_deliveries_table/Airbus_OrdersDeliveries_March_2011.xls

    Delivery date not published yet, But not seems to be delivered this month. There are 2 A319 delivered to TK last month and 4 to be delivered this month. Little chance to shift one to JA, until JA's A319 delivered.

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  6. BH Airlines will not undertake charter flights to Antalya with Tour Company as last year. Corendon Airlines took BH airlines job so I dont think that new aircraft is needed and certainly it wiil not come this year.

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  7. @ Air Koryo

    I think BH's livery is probably one of the worst ones out there. In general, all ex YU airlines have very boring liveries with the exception of Montenegro Airlines. If drawing squares, triangles and circles is the best thing that the logo designers in ex YU can come up with than out our airline better fly plain white and save themselves from embarrassment.

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  8. @frequentflyer

    Why would you like to see them getting second A319? I really do not see any need for that. They could easily squeze in 1-3 more flights / day with their current fleet if they planned a bit better.

    Imo additional A319 would just increase their losses better to concentrate on 1) learning some basics, i.e. how to sell tickets, scheduling, code-shares...

    2) marketing - how to build working internet site, how to market routes etc.

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  9. Great news, nice to hear B&H is on the rise! :)

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  10. @Sam

    "In general, all ex YU airlines have very boring liveries with the exception of Montenegro"

    Hang on. Montenegro Airlines? Isn't that the carrier with the all white fuelsalage and basic blue tail with basic titles? Come on, B&H has a decent livery I can give them that it loos quite smart! Compared to JAT and MAT I mean really. Croatia Airlines is also professional at the least.

    @TK777
    Maybe the ordered A319's will replace the leased unit from Turkish Airlines. Although I don't understand what the point of adding more 319s would be if they have no expansion plan, or do they?

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  11. @ Zrak

    I completely agree with you that the fleet is underutilised, but I wonder how much of that is in fact problems with route planning (or lack thereof), or with management. And their lack of marketing is incredible!!

    The 319 is the right size bird for the airline (that 734 was just too big, with lots of empty seats to fill).

    I would see the two 319s operating each day 3 rotations (which is European industry standard, many LCCs operate 4), and have the AT7s operating regional routes (max 75-90mins). FRA and ZRH could move to 319s, and ZAG and BEG operating daily (or even more if required) at times which are of use to the traveller, unlike their last dismal attempt at ZAG.

    This is an airline which could sustain more European destinations at 3-weekly, but the fleet has to be more smartly operated. And considering how seasonal travel can be, leasing out one plane each winter to recoup costs.

    With TKs expansion, JA could even take over the 2nd daily IST flight, and down the track the route may even sustain a 3rd daily service...

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  12. No matter how smartly operated, 'one jet' policy operations are severely limited, coupled that with destinations that are on far reaches of European network, there will always be a struggle. Only, and only if, they acquire another jet they wil be able to do some proper routing.

    [SK]

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  13. @frequentflyer

    Good analysis! Combination of all three imo (route planning / management / marketing). It is amazing that you can start and cancel a route in under 1 month.

    When it comes to increasing frequencies on some routes I am doubting that they will be able to do that without learning how to code share with other airlines & do proper scheduling.

    I am not aware what load factor they currently have on their AMS route but it seems plausible to me that frequency on this route could be increased if they were able to sign code share agreement with KLM in a same way JAT is doing and start shipping passengers to North America that way. Also consider that there is currently not a single Sky Team member flying to SJJ and this could be potentially very good thing for B&H airlines.

    On FRA & VIE I have seen some cancelling (especially VIE) so I doubt of any frequency/capacity increases there. It would be good if they could as a start, stop cancelling flights.

    BEG/ZAG/ZRH - agreed.

    On new routes I can only see one possible addition and that is London (LGW I guess, as slots at LHR would be too expensive). I am not aware of load factors at the time BA was flying 3/week, but I am guessing that BA did proper analysis and obviously thought they could sustain this route. As B&H probably has lower employee costs it should be sustainable.

    Maybe attack DY on summer route to OSL? Certainly possibility.

    Am I missing anything? :)

    I gotta admit I am on thin ice here but just for the sake of discussion I see two interessting ways forward for B&H.

    1) Start actively working on OMO. They have good relationship with management there as I understand and there is currently infrastracture work going on which entity government is financing.

    a) As a first step start targeting tour operators for Medjugorje area. If there is a market for MEA flying in religious tourist from Lebanon there is then definitevely market for flights to Warszaw, Milano & Madrid. Majority of religous tourists are indeed Poles and Italians not Lebanese.


    b) As a second step and this one is much less probable than the first step is to start targeting some of the tour operators in Makarska area. OMO is indeed closest airport here and with right fees they should be able to steal away few flights from DBV/SPU.

    2) Another thing I am thinking of is, if addition of small aircraft could be way forward. I am thinking ATR-42. With 42-50 seats I can see how it could be used to do

    a) domestic sweeps TZL/OMO/BNX. In itself I doubt that these domestic routes would bring any money but they could be used as a way to fight DY (ARN, OSL) and OS (VIE). By actually being able to ship pax to their end destination I can definitively see that passengers bound for say Tuzla would prefer B&H instead of DY. Also passengers from these areas would be more likely to choose SJJ as transit destination instead of ZAG (Banja Luka), SPU (Mostar) and BEG (Tuzla).

    b) During summers it can be utilizied by tour operators for shorter destination on Adriatic. Dubrovnik & Split may only be 200-300 km away but it is still 5 hours with queues and screaming children. During winters I am sure that you could do it other way around and bring few Dalmatians in for skiing.

    c) Try targeting smaller airports in the area. Trying Podgorica or Pristina could interesting.

    Anyways as I said, I am on thin ice here, just thinking loudly and they would definitively need to solve management & marketing problems and do proper analysis before......

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  14. @ Zrak

    I think we agree on much in terms of what the airline is capable of. And yes, very poor how flights are cancelled or hastily planned with no thought into building their success.

    I like the idea of JA operating shuttles to/from the other cities in the country, though for smaller planes to work (and I think perhaps a pair of 30-seater props would be even more effective), a series of flights must be offered in waves connecting to the destinations on offer. Unfortunately, the break-even factor is just too high on an AT4 when compared with other props.

    (Assuming 4 planes, 3 waves: 2 319s/2 AT7s)
    Morning wave connects IST, ZRH, ZAG, BEG
    Afternoon wave connects LHR/AMS, CPH/ARN, VIE, FCO/PRN (new)
    Evening wave connects IST, FRA, ZAG, BEG

    This is what makes OU and JP tick as carriers of choice for our part of Europe: efficient 1-stop connections to a variety of destinations to/from northwest/southeast. ZAG is now constrained by the dilapidated terminal building, growth there could be incredible, at cost to other airports in the region.

    You are right that OMO has enormous potential, and i'd love to also see other operators flying there. Wasn't there an on-again-off-again proposal that OS would start services to VIE? Pilgrim flights could also work from TLS (Lourdes) and FCO (Rome)

    Finally, BA only stopped SJJ because of the high 2008 fuel prices on the only available plane they had: a thirsty old 734. Had they been operating the similar-capacity 319 with 10-15% lower fuel consumption, it may have had a different outcome. 3-weekly frequency obviously worked, would love to see someone operate the route again.

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  15. I wonder is this new THY strategy for BHA to improve load factor, and than to start new routes, instead of adding new routes all the time, as it was previous case within BHA?

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