Wednesday, August 7, 2013

Adria planning 2014 expansion

Adria to launch, Prague, Warsaw and Tirana - Frankfurt flights

Adria Airways CEO, Mark Anžur, has announced plans for the Slovenian carrier to expand its operations next year after two years of network downsizing and cost cutting. Speaking in an interview to the Slovenian Press Agency, Mr. Anžur said Adria will relaunch flights to Warsaw next summer and introduce services to Prague. Furthermore, the Slovenian airline will inaugurate flights from Tirana to Frankfurt, in line with earlier announcements to place more focus on the Albanian market following its success in Kosovo. Currently, Adria’s most profitable destinations are Frankfurt, Zurich, Moscow and Brussels. Its worst performing routes are Belgrade and Sarajevo. In addition, the airline sells the greatest share of discounted tickets to Paris, London, Amsterdam, Pristina, Skopje and Copenhagen.

Mr. Anžur admits Adria will have to change its business model if it is to operate successfully. The airline is willing to adopt a hybrid low cost - full fare business model, similar to the one used by Air Baltic. “It is essential that in the long run we change our business model and focus on getting passengers from point to point. If, for example, a passenger travels with us from Ljubljana to Frankfurt and then with Lufthansa to New York, Adria earns much less than if the passenger travelled only between Ljubljana and Frankfurt”, Mr. Anžur explains. Adria’s current cost cutting measures are proving successful with the airline expecting to post a profit in 2013 for the first time in several years.

However, despite Adria’s plans to introduce new routes next summer, it will also reduce frequencies on several destinations. “We must reduce our frequencies on flights. Our strategy is to operate larger aircraft and fewer frequencies. This way we can offer cheaper prices”, Mr. Anžur says. Adria’s CEO has also noted the airline has sold one of its Airbus A320s while a Bombardier CRJ200 has been grounded and is to be sold. Furthermore, the airline is selling its property and flight school in an attempt to solve its liquidity problems.

Mr. Anžur refused to comment on why the initial agreement to lease two of Adria’s A319s to Jat Airways this summer fell through, adding that Adria does not feel threatened by the newly launched Air Serbia. “We fly to Belgrade and we will see how things play out. At this moment Adria is not threatened”, Mr. Anžur concluded. The Serbian carrier will launch flights to Ljubljana later this year.

Mark Anžur, who has led the company on a temporary six month basis from January to June was recently re-elected as the airline’s CEO.

55 comments:

  1. Factually wrong as JP doesn't fly to London.

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    1. In original interview Anzur mentioned London Gatwick as well

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    1. Belgrade and Sarajevo are worst performing routes?

      SURE !!!

      1. Flying with JP via LJU is as expencive as via MUC with LH!

      2. JP just flies to FRA, MUC, ZRH, VIE, CPH and AMS as important routes.
      Sarajevo and Belgrade are mostly connected directly with those cities - so why should someone travell via LJU?

      JP needs a low cost concept in order to survive!

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    2. SJJ-VIE via LJU is very attractive because the prices are lower than Austrian 300€ ripoff for a 50 min flight. The same is actually true for VIE-SJJ via BEG, they had a great connection when Niki was flying VIE-BEG but now JAT/AirSerbia is offering the connection VIE-BEG at 10:45 and BEG-SJJ at 21:05. Ridiculous! I contacted them about this but never got a reply...

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  3. These days also the Croatia Airlines CEO made comments about expansion in 2014 and even considering the launch of long haul. Well this is clearly a reaction to the creation of a strong Air Serbia and the hub in Belgrade. While Serbia is out of EU, I am curious how JP an OU intend to cover the losses from expansion, when EU is forbidding state subsidizing. "Mother" LH will also not rescue them, since the CEO Franz does not want to invest any penny in foreign airlines.

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    1. It's amusing how OU is talking about long haul just after Hogan said it's a mid/long term possibility for YU.

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    2. All OU need to do to counter any threat from air Serbia is go dubai daily with code share on Emirates. I'm sure they'll welcome the 100,000 pax potential market of Australians traveling to Croatia yearly. Long haul North America makes no sense.

      Q400

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    3. Yes but the real question is if they can. If they do this Austrian Airlines and Lufthansa might respond by either increasing their own presence in Zagreb or by increasing the onward fares for OU passengers. This will make OU far less competitive which would make their DXB route unprofitable on a larger scale.
      That said, I find it stupid that they rely so much on Lufthansa.

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    4. Well, in this case LH will risk loosing OU transit pax to the more affordable Dubai stop or even to air Serbia / airberlin among others.

      Q400

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    5. But at this point the real question is not what would Lufthansa lose but what would Croatia Airlines lose.
      I am sure that Lufthansa will live to see another day if a share of Croat passengers are funnelled via DXB rather than FRA/MUC. The real question is can OU live to see another day without Lufthansa?

      Furthermore, I think that Lufthansa would not lose as much if OU would launch DXB. I think they would annoy TK more then LH.

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    6. You would like to think LH would realise any move like this by OU would be to counter Etihad move into thd region. Better for both OU and LH

      Q400

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    7. Well, Croatia Airlines is unresponsive to any kind of change in the region. They were incompetent when faced with Turkish Airlines in a market with a considerable O&D market. Are you telling me now that they are competent enough to face Etihad, even less defeat it. lol

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    8. Turkish is a Star alliance airline too so OU just gave up Instanbul to them and code share on the flights.

      I never said they seem competent,
      I'm just making suggestions based on observing how other airlines have responded to similar situations. I don't have much faith they will respond anyway at all.

      Q400

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    9. Yes but at the same time they bled money on the route. I am sure that there is enough demand for both OU and TK to coexist in this market.
      Furthermore, Adria is also a Star Alliance member but that has not stopped them from flying to IST, even if they also face TK. Even the crippled B&H Airlines manages to keep flights to IST despite facing fierce competition.

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    10. 21@AnonymousAugust 7, 2013 at 9:22 AM

      Come off it, Croatia Airlines has never had long hull plans and and had no expansion plans of any sort for 2014 oe 2015, the earliest OU can plan anything is 2017 when 4 new airbus neo's are joining the fleet, as part of the fleet renewal and expansion on summer routes.

      until 2016 OU must return $180 million with first $60 million tranche being paid this year, and last in 2015. OU has decided to cut some of its costs and overheads to pay what it owes and airline should be back to profit in 2014, but its not the end of the world and no long Hull flights, for that Croatian travelers have a choice, a really great choice of airlines to choose from.

      Air France, KLM, Austrian, Lufthansa, British Airways, Iberia.... and via Hubs in London, Paris, Amsterdam and Frankfurt, list is endless.

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  4. Well, with Jat launching daily flights with the far more economical Atr, there won't be anything left for Adria in Belgrade. Can't say I am sad, their presence was pathetic and their fares were expensive, well, at least up until the worst crisis. One had to pay €160 in order to fly between BEG and LJU.

    As for the comment above, there is no way in Hell that OU will ever come close to any long-haul service. Especially not now as it will have to have its own regional network, which with Austrian and Air Serbia around will not happen.

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  5. Croatia, Adria, YM should merge and should cover SKP,PRN,TIA,MN,Croatia and Slovenia. Carrier Name neutral should remain Adria. To Keep the Croats happy, Headquarter of Adria should be in Zagreb

    drastically cutting costs and operate somehow as a LCC which still offers some Business Class seats. Back in Y everything against cash.
    If they want to remain in Business with the harsh competition now from BEG they need to consolidate their Forces
    all CRJ out and take the 5th CR9 instead

    btw ZRH is already 2nd best Station after FRA for JP

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    1. This will never happen, primarily because neither one of these carriers will want to give up some of its independence.
      Furthermore, it doesn't make sense for YM to enter this alliance when its sole decently sized market in Belgrade. It would just bleed money in the above proposed alliance/merger.

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    2. that s typically for our Region. Rather stay remain in the shit but Independent
      look at France, England with Germany. 70 years ago they were enemies. In no times after the war economical ties were established. Today they build succesfully Airbus airplanes and sell them to the world...

      but of course in ex YU, being Independent is more important than welfare or consolidation forces

      this thinking understands no one in the world except maybe the local People in the Balcans..

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    3. So maybe in 40 or 70 years they will cooperate.

      Q400

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    4. @JU520 BEGLAXAugust 7, 2013 at 9:41 AM

      I am sure it would be interesting to see merger of the two, but considering the fact that both airlines have similar networks with similar niche market I can't see it happening.
      Croatian Airlines is looking at reducing its overheads at this point, Adria plans to expand, not sure how this would pan out but It doesn't bode well if airline has concerning issues over finances and long short term debt.

      Days when regional hubs had a role are long over, in Europe you have clearly set of major airline hubs, Frankfurt, Madrid, Paris, London, Amsterdam and Rome, with secondary hubs at Vienna, Stockholm, Copenhagen, Oslo, Brussels, Zürich, Munich and Barcelona.
      I can't see this set up changing any time soon, simply smaller countries have no market or anything to offer to attract more passengers, we really can't compare middle east hubs such as Doha, Dubai and Abu Dhabi with European hubs or airline hubs in general, reason why not is simple, UAE and Qatar are heavily subsidizing their own airlines and hubs, pouring billions in to them and hoping for a miracle, yet these countries are highly unstable (due to the nature of despotic and autocratic regimes that rule these states) I simply can't see how this can be sustainable in a long term, and should another Arab revolution take hold in Gulf region that you can bet their model of expansion will come to an swift and untimely end.

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    5. FYI Emirates is a profitable company so I do not see which subsidies you are talking about. In addition to that Dubai has no oil for it to give Emirates at a cheaper price. Emirates have created DXB because of professionalism, something most Balkans need.

      Let's be real here, the days of both Croatia Airlines and Adria are numbered. In a few years they will disappear. Other carriers will step in, most likely Wizz Air, taking over routes where there is enough demand to make a profit.

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    6. To anonymous above, good observation but unlike some of the middle eastern countries UAE citizens at least seem very happy with their governments

      Q400

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    7. @AnonymousAugust 7, 2013 at 9:48 AM

      Are you on something???

      Belgrade is a tiny airport, reason why Adria is no longer interested in the route is cause its not profitable, no Slovenes wants to go to Serbia and only Serbs want to fly to Ljubljana for obvious reasons.

      i mean how arrogant and ignorant some of you Serbs really can get!!! Its beggars belief.

      A newsflash, For Adria Airways, most important markets are Frankfurt, Paris, Brussels, Amsterdam and London.

      Should a Slovenian travelers choose to fly to middle east, they have options of flying to Frankfurt and take a number of airlines from there, or fly to Istanbul with a Turkish Airline.

      I'm sure Turkish can compete with any airline out of Middle East if one chooses to travel to ME, in anyone's right mind why would anyone want to go there is beyond me.

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    8. @Q400

      Clearly you have never been to the Gulf (Yes, and I was just in case you wonder).

      Where half of population is kept in permanent slavery there to bare children and be a sex slave in literal meaning, place where human rights are something you can write about but not actually enforce as laws over there recognize only one human right, and that is the right of privileged few to govern as they please. U do know that much of the region was built on slave labor and i mean literally, with workers from India, Bangladesh and Philippines being kept in subhuman conditions and never getting paid, I mean what kind of Islam they preach over there it certainly isn't one that I'm familiar with, or anyone else who read the Quran.

      So when you have half the population in slavery, another 3rd of population used without any rights (minorities) and than massive slave labor force without any rights, yeah I'm sure everyone in Arab Gulf states is really happy and content with things the way they are.

      I'm sure Few rich baronial families in UAE and Saudi are really pleased at how things turned for them, couldn't be happier.



      @AnonymousAugust 7, 2013 at 2:06 PM

      Yeah profitable and cheap, and pigs can fly too.
      Sad that you're so ignorant of few facts, economics in ME loose meaning and any airline that can afford to buy 98 A380 for what is Gross Domestic Product of Serbia is not getting any subsidies and support from the central state and their half empty seats are very profitable and make billions for UAE/Emirates and Dubai who had to be bailed out by Sheik of Abu Dhabi cause no one has purchased any of the properties in Dubai oh since 2008.

      Ethiad btw is a state airline in UAE, its owned by he local Sheiks and is heavily subsides, they do not pay any tax to anyone in UEA and entire country is run on slave labour just as Rome once was, o some 2000 years ago.

      Wake up and smell the coffee.

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    9. Dude I live here so I know what I am talking about when I say that Emirates are a profitable carrier. Yes, they have some advantages in the UAE but at the same time they are running the airline with massive yearly profits. You can check this online, maybe you should before writing nonsense.

      Furthermore, the A380s they ordered, they are not paying for them right away nor will they pay upfront for each and every aircraft. Also, what have Emirates to do with the fact that Dubai went bankrupt?! They are a separate entity and mind you, Emirates contribute 25% of the overall income of Dubai!
      It's not just that they carry passengers, a huge part of their income comes from cargo that is carried in the bellies of their aircraft. That is one of the main reasons why they will be sending the A380s to Italy. It's primarily for cargo.
      In addition to all this, Emirates have a great deal of market between Asia and Africa and they were the first to link these two areas with convenient connections. Can you start to imagine how much cash they are making? Especially with their South African operations.
      Plus, with every passing year Dubai is becoming increasingly attractive for tourists and businessmen.
      When I flew on Emirates' B777-300 from New Delhi to Dubai, there was a group of 220 Indians going to a congress in Dubai.

      So please, get yourself informed before writing on here.

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  6. I think JP should add LED and MAD to its network!

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  7. Has any ex-Yu airline released its statistics for July? I am especially interested in Air Serbia.

    Let's see how they perform in August now that they have a codeshare in place with both Etihad and Air Berlin.

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    1. Jat,01.08-04.08 26.943 passengers

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    2. is that good or bad? Personally I find it good.

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    3. I guess things are looking up now that they have their entire fleet in order. If they keep it up like this then we will have an amazing August month at BEG!

      You don't happen to have their July numbers?

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    4. I will try to check them...see you later..:)

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    5. JU's full July results will be publushed here tomorrow. A minimal pax increase conpared to last year.

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    6. Thanks for the update. Hmm at least better than a fall, which we saw in the first half of the year. :(

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    7. JAT performance in July : PAX +2%, Flights +16%.

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  8. how csn I see a better resolution of that picture of that dc10 at belgrade?

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    1. The usually publish them on their Facebook page once they put a new one up there.

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  9. How many passengers would OU carry if we were to exclude summer tourist flights from the coast?

    It also makes me wonder how come Adria has more balls to stand up to Lufthansa while Croatia doesn't? I am most referring to Adria's wider network in areas which are not Lufthansa-friendly regions.

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  10. This is a non relevant question because you assume without tourism Croatia would have no other industrie. Government has invested a lot in tourism, this money would have directed elsewhere. If anything without tourism, Croatia would have a more centralised economy based around Zagreb with the rest of the country neglected.... Sound familiar???

    Q400

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    1. If you are referring to Serbia then it is a poor comparison which is completely irrelevant to what I asked.
      I was merely curious to see what % of passengers are from the coast. So chill out.

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  11. Well, not really that different than. OU don't really have much of a presents on the coast unless they are flying pax to Zagreb. Most of the coastal tourist flown in from foreign low cost carriers and charter companies.

    Q400

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  13. @AnonymousAugust 7, 2013 at 2:46 PM

    Yeah right, cargo and A380s not paid for up front, sort of like wer give you a $400 million and you can kind of pay us when you feel like, sort of the way Dubai was build, like slave labour innit, arbeit macht frei.

    get of it, Emirates is loosing money left right and center, the London based accountants did a report on the airline (and these should be inclined to these Arab merchants of greed) and concluded that was Emirates operated out of the UK or Europe it would have gone bankrupt long time ago, but clearly books in UAE are cooked and they shouldn't be reliable.

    Airbus for some reason is delivering A380s to Emirates as UEA is a guarantor + hefty deposits at Bank of England also help.

    Much of the entire region is a black hole of misery and corruption, I'd stay well clear.

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    1. I never said cargo wasn't paid upfront. Quite the contrary, I was saying how the airplanes they buy are not paid for right on the spot. There is a thing called instalments. You should look into it.

      I fear your are very biased when it comes to this region. Though what you are saying might apply to places like Saudi Arabia or Yemen, things are much better in UAE, Qatar, Kuwait, Israel, Jordan...
      The only problem is taht Westerners tend to behave stupidly when there.

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  14. That Belgrade is not profitable for Adria doesnt surprise me at all.
    Slovenias economic situation is miserable in the moment
    and this has consequences for Slovenian companies investing in Serbia.
    I guess most pax on the flights are Slovenian businesspeople and
    not people from Serbia .
    Thats the reason i think JU will have from the start problems to make this route profitable even if JP completely leaves.

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  15. I am amazed how discussion about Adria expansion turned into the discussion about the sustainability od Middle East airlines.

    This is why we are all doomed. Instead of fighting useless battles, you should all give suggestions and meaningful comments on Adria.

    Adria is in trouble, serious one, being close to Austrian hub of Vienna will not be of any help to them. Croatia follows close. Same set of problems. How to solve them?

    Best regards from Novi Sad.

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    1. Adria is as good as dead, why should we waste our breath on something that will most likely be shut down by the European Commission, the same way Malev was.

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  16. Maribor aria passenger flies from Graz (just 20 km)
    North and West of Ljubljana flies from, Trieste and Klagenfurt (100 km)
    South of Ljubljana (Novo Mesto, Celje, Krško...) flies from Zagreb (50 km)
    ...and all of them from Vienna, Budapest, Venice and Bratislava (less then 400 km).

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    1. The starting point of your argument is wrong. You should not be saying that they fly from there but that they gravitate towards those markets. That's what Adria needs to understand. If someone from Novo Mesto wants to travel, he will surely check both Ljubljana and Zagreb. Depending on what the price is from both airport he will make his choice. With Wizz Air entering the Slovenia market, less and less Slovenian passengers will opt to head abroad in order to fly by plane. Especially those who used Graz until now, which is not that great tostart with.

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  17. Congratulations to Adria Airways! The cost-cutting effort of the airline company is being paid-off now.

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  18. Adria choose not to have a proude nationalistic name such as "Air Serbia", which can only lead to an unprofitable business. They are "Adria" and they can literaly fly everywhere from everywhere, wihtout that their lines make no sense. Try to fly with "Air Serbia" fro SKoplje to Paris or from Sarajevo to Frankfurt. It just makes no sense, and I'm really fealing angry that people from Etihad followed few narrow minded "consultars" from the Serbian nationalistic community in AUstralia. It will destroy Jat/Air Serbia in quit a short time.

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