|One year on...|
Today marks the first anniversary since Etihad Airways and the Serbian government signed a five year strategic partnership deal which saw the national carrier Jat Airways rebranded to Air Serbia in October. Earlier this year Etihad Airways took over a 49% stake in the airline. The partnership has transformed the Serbian carrier which was, at the time, facing declining passenger numbers, a chronic fleet shortage and a dire financial state. Since the strategic partnership was inked on August 1, 2013, Air Serbia has leased seven Airbus A319 aircraft and two A320s and has ordered a further ten A320neo jets, for delivery from 2018. Furthermore, the carrier has launched eleven new routes: Abu Dhabi, Banja Luka, Bucharest, Budapest, Beirut, Ljubljana, Prague, Sofia, Tirana (from September 23), Varna and Warsaw. Speaking in the Serbian Parliament yesterday, Prime Minister Aleksandar Vučić said Air Serbia has increased its passenger numbers by 70% when compared to 2013. Furthermore, the airline is expected to contribute 1.5% to the country’s GDP by the end of the year, according to the Prime Minister.
Over the past year the airline has rebranded itself, signed codeshare partnerships with Etihad Airways, Etihad Regional, Air Berlin, Adria Airways, B&H Airlines and TAROM and employed new cabin crew members trained at the Etihad Crew Training Academy. Furthermore, it has launched a new charter brand, Aviolet, which utilises five Boeing 737-300 aircraft to popular holiday destinations. In addition, the carrier has been increasingly focusing on handling transit passengers, shuttling them through its Belgrade base. It has also managed to become the busiest airline in the former Yugoslavia so far this year. Speaking yesterday, PM Vučić said Air Serbia has a clean balance sheet and will operate with a profit this year. Furthermore, he added the airline has expanded regionally, boosting ties with neighbouring countries. “In a year we will be flying to New York and Chicago with our aircraft”, Mr. Vučić added. In late June, the United States Federal Aviation Administration granted Serbia a category one rating, allowing Serbian-registered airlines to operate flights to the States.
Air Serbia will today resume flights to Istanbul’s Ataturk Airport after resolving slot allocation issues with Turkish authorities. The airline was relegated to the city’s secondary Sabiha Gokcen Airport since late October. In another sign of Jat’s passing legacy, Air Serbia will today retire the “Review” in-flight magazine, launched in March 1975. It will be replaced by a new publication from today entitled "Elevate". Yesterday, the Serbian carrier announced it will launch flights to the Albanian capital Tirana on September 23, resuming services to the city for the first time in six years. Commenting on the anniversary, Air Serbia’s CEO, Dane Kondić, says, “Today the airline that has inherited this rich history is forging ahead and making unparallel inroads into the industry. With regular services to an increasing number of destinations, a growing fleet of first-class aircraft, a global network of partners and increasing passenger numbers and revenue, Air Serbia is proving its worth as the successor of JAT’s heritage”. He adds, “Air Serbia is well and truly here to stay and will undoubtedly play a big role in the future of Serbia. Its success is intrinsically linked to its past, which is why I would like to extend my heartfelt thanks to everyone who has helped make this great airline what it is today”.
However, it hasn’t all been smooth sailing for the airline. Since August 1, 2013 the Serbian government has not published the takeover agreement it signed with Etihad, which has been a sticking point with both the public and opposition parties in the Serbian parliament. While the government has made several promises that the deal will be made public in early March, it has not kept its word. The Serbian carrier has also experienced delays in its schedule as it continues to face operational problems at Belgrade Airport. In addition, the airline was to have eight Airbus A319 aircraft in its feet by late March but bureaucratic and technical procedures have delayed the arrival of its last jet. Meanwhile, low cost airline Wizz Air has labelled Air Serbia and Etihad Airways as “wannabe monopolists”. “Etihad/Air Serbia will use a non-transparent incentive scheme, which has been tailored to protect the Etihad/Air Serbia business model which is focused on transit passengers, so as to reduce airport taxes by 100% and thus allow this full fare airline to pay airport taxes to the amount of zero dinars”, Wizz Air said in a statement early last month.
Both of Air Serbia’s owners are upbeat on the airline’s prospects. Speaking to EX-YU Aviation News in June, James Hogan, President and CEO of Etihad Airways, as well as Vice-Chairman of Air Serbia said, “Danny Kondić and his team have done an excellent job in running Air Serbia. Results in the first quarter have exceeded the business plan. Air Serbia will break even at the end of 2014”. It remains to be seen what the future holds.