Tuesday, February 17, 2015

Eurocontrol debt threatens B&H operations

B&H Airlines’ days numbered?

B&H Airlines is likely to officially suspend all operations tomorrow, February 18, after the Federation government of Bosnia and Herzegovina failed to secure promised funds to bail out its cash-strapped carrier. The European Organisation for the Safety of Air Navigation (Eurocontrol), which regulates air traffic across the continent, will forbid the Bosnian airline to fly after February 18 due to outstanding debt amounting to 92.000 euros, Elvis Žiga, the head of B&H Airlines’ employee union, says. In a statement to EX-YU Aviation News, Eurocontrol said it does not wish to comment on individual cases involving airlines. The outgoing Federation government, which two weeks ago approved a bailout package for B&H, says it cannot provide any funds for the airline until a new budget is adopted, which is unlikely to occur prior to Eurocontrol’s deadline and the formation of a new cabinet, expected in March. Furthermore, last Friday, Zurich Airport urged B&H to settle its 35.000 euro debt promptly, otherwise it will no longer allow the airline to operate flights to the Swiss city. Besides Zurich, B&H only flies to Belgrade and Copenhagen.

B&H Airlines has temporarily suspended the sale of its Belgrade flights while its services to Copenhagen are still bookable, although its flight to the Danish capital yesterday was cancelled. The service to Zurich is still scheduled to depart Sarajevo tomorrow morning and tickets are on sale. Macedonia’s former national carrier MAT faced similar problems with Eurocontrol prior to its demise in 2009, as it was banned from flying over several European countries due to unsettled debts. B&H Airlines was initially founded as Air Bosna in 1994, but declared bankruptcy in 2003. Two years later the Federation government revived the carrier and renamed it B&H Airlines. Turkish Airlines purchased a 49% stake in the carrier in 2008 with a promise to expand its fleet and operations. However, in 2012, it withdrew from B&H’s ownership structure, citing disagreement sand problems with the government. Last month, the President of B&H Airlines’ Supervisory Board, Goran Jovanović, said that the airline must continue flying because any stoppage would lead to bankruptcy. “We cannot stop flying until this situation is resolved, because we would immediately loose our license”, Mr. Jovanović said at the time.

B&H Airlines has outstanding debt towards HETA and the Hypo Alpe Adria Bank for the financial lease of its two ATR 72 aircraft, one of which has been grounded in Germany since the carrier is unable to pay for its maintenance. Furthermore, the airline owes money to Sarajevo Airport, several local and international suppliers, as well as its staff which haven’t been paid in months. The management of Sarajevo Airport met with representatives from B&H last week to discuss ways in which to reprogram the airline’s debts and unblock its accounts. The carrier’s acting CEO, Amir Jažić, painted a bleak prospect of the carrier’s chances for survival in late January, stating he fears it’s “too late to save the company”. B&H counts some 100 employees. 

84 comments:

  1. Feel bad for the workers who are honest. Personally, I don't see much loss other than that. I wonder who the planes will go to.

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    1. +1 although Eurocontrol ban is not permanent. They could just pay them. We are not talking about huge sums here. Unfortunately (or fortunately), B&H's share was so miserable it will have no major impact on Sarajevo Airport.

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  2. Banja Luka is going to loose the most from this. Swiss will replace B&H on Zurich flights to Sarajevo, Air Serbia will take over all Belgrade flights (now I understand why they have started sending A319s to SJJ). From what I hear B&H had about the same number of passengers from Banja Luka to Zurich as it did from Sarajevo.

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    1. Swiss has given up on offering BNX flights.
      Seems like BNX will be served only by Air Serbia from Belgrade. The good thing is that JA's demise will not have an impact on JU or on its ticket prices.

      As for JU in SJJ, the A319 is being sent there due to decent enough loads, about 75 passengers per flight.

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    2. I suspect now Swiss will give it a second thought. With no competition, flights to BNX with one of their Dash8s leased from Austrian might become an option again swiftly

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    3. Or even Helvetic's Embraer could do it just fine.

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    4. Never understood why they scheduled A320 for BNX. They should have gone with the Bombardiers from the beginning.

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    5. Probably a lack of a/c at that time... I am sure they would have adjusted it eventually.

      I mean, if JU can't fill an A319 to BNX then LX surely can't do it to BNX.

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    6. Tokom prve dve nedelje februara, prosečna popunjenost Er Srbija u Banja Luci je bila 41.5%. Što se tiče Zagreba ona je bila 60%.

      Pozdrav iz pustnje aka AUH :)

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    7. For ZAG it is not true, for BNX I don't know. Even with so many cancelations (every 1/3 flight) which makes other flights with better LF, ZAG-BEG route had 48% LF. I work for MZLZ.

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    8. Čovek reče za prve dve nedelje februara.

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    9. I ja govorim za prva dva tjedna veljače.

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    10. I believe OS will look into possibilities to offer regular services to BNX / INI / OMO / OHD (case studies presumably rather in this order) with their Q8-400 a/c after end of their restructuring process, I suppose from 2016 onwards.

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    11. @Anonymous 2:02 koliko je onda bilo ne realizovanih letova?

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    12. My friend, Zagreb's loadfactor for the first two weeks in February was 59.8% so basically 60%.

      Maybe you are looking at different statistics, this one is for 01.02.15 to 14.02.2015.

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    13. My friend I am not!

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    14. Then I guess someone made a mistake in your statistical department. :)

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    15. @anon 12:28 PM kazes, da je u proseku otkazan svaki treći let, koliko je otkazano letova do sada?

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  3. I flew ZRH flight couple of times last year, and there were more passengers from/to BNX than from SJJ. Ratio was 3:2 in favour of BNX.

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  4. Since I am not an aviation expert, I could never figure out why they have never tried to fly SJJ-BNX. Plenty of gvt officials working and dealing business in SJJ...They would love to fly, on govt cost, rather then drive...

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    1. I don't know the reason why but I can only guess- bureaucracy

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  5. OT:

    About Qatar airways loads from Belgrade, forgot to write it yesterday.

    My close friend lives in Qatar, with his mother.

    He and his mother visits Serbia about 4 times a year, and they never used Qatar airways!

    They use Pegasus that is killing it on that route. Tickets are up to 150 euros cheaper. And sometimes (20% percent of their travels) they use Turkish, flydubai, Etihad/Air Serbia.

    Also our Serbian colony there (most of them in Energoprojekt) use Pegasus all the time...

    So no wonder if the normally have 20-30 pax from Belgrade, as someone said.

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    1. Thank you for that detail. It's a pity cause Qatar is a great airline. All while their prices to DXB are very reasonable (flew them there many times), the tickets to DOH are way overpriced, no wonder other airlines are taking the greatest share. Last time i flew them in late November there were like 20 pax. Will use them again in March/April and will report on the load-factor once the route operates via Sofia.

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    2. My friends who live in Dubai for many years, never ever managed to get a decent fare on QR. Even with a DOH transit and ESB landing, QR is always much more expensive than direct FZ. Seems to me that QR's pricing team need a reality check in BEG...

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    3. +1, from my personal experience a few years back, I can say only positive things about Qatar Airways. I have never flown them out of BEG since they never really offered anything cheap to destinations I want to go. I can see that now they are the cheapest option to DXB so if it stays this way I might give them a try during summer. Actually Flydubai is 30-40 euros cheaper for April but I would rather try Qatar since its more unique route. btw Aэrologic what where the loads on other flights? Was there any improvements in summer time?

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    4. @ Aэrologic

      You are welcome.
      Looking forward to your insight.

      Also friends of the Serbs who live there, never use Qatar, they use Pegasus as well...

      Sad story... Such a classy airline.

      I wouldnt like if they decide to leave.

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    5. "My friends who live in Dubai for many years, never ever managed to get a decent fare on QR. Even with a DOH transit and ESB landing, QR is always much more expensive than direct FZ."

      That is not true actually. All up to very recently, Qatar was consistently cheaper even than FZ with a stratospheric difference in service compared to the later. The simple thing is that your friends won't even check the prices of Qatar, they go directly to book on Pegasus or FZ website cause those are "low-cost" and therefore "they should be cheaper". More often than not, that is completely wrong, especially in the case of FZ which was cheap only at the time of their launch. I even remember some period when OS was cheaper than FZ to fly to Dubai. Now they seem to have gone down and introduced food service cause of the pressure put on them by EY/JU.

      "Seems to me that QR's pricing team need a reality check in BEG..."

      Well, i would say the same if they weren't often cheaper than TK and almost always the cheapest to Asia/ME with one way tickets. A thing i really liked and made me choose them many times, their OW ticket was like 55-60% of the round-trip which is extremely reasonable whereas it was like 80-90% with other airlines (standard extortion practice). In the meanwhile, TK with extremely high fares is still filling their planes full in Belgrade.

      I think that one of the major problems QR has been having in Belgrade is brand-awareness and the fact that Qatar for many Serbs is kind of "abstract", they fail to identify with and it doesn't really fits in their cultural scheme unlike TK (gross kitsch without substance and organization). Well, they might just feel more at home with them. Sad to say but that's it. The predominant type of Serbs i met on QR were like "the petit bourjois" or "mom/dad paid for my ticket" kind of people whose ego was taking so much space that it was disgusting to fly with them even in an almost empty plane.

      To my opionon there are only two things that could improve QR's posture in Belgrade:

      - Transporting regular cargo on their flights, what would improve their yields
      - Launch a TV campaign centered about FOOD

      That way, they might get more people to fly with them. I think they made the strategic mistake by not adapting their marketing approach to the cultural environment in which they operate. Therefore, regardless of their price, for most Serbs QR is "too glitzy and too expensive".

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    6. @Vaske

      I used Qatar mostly when i was living in Istanbul, at the time they even didn't fly to Belgrade. On all flights i flew with them around the world the LF was near-always over 80%, reaching even 100% on some segments such as Doha-Sao Paulo. The only flight when it was bellow 50% was Belgrade and Ankara. Although Belgrade was catastrophic, Ankara wasn't that great either. I used them to Belgrade only once so i have no idea of their loads throughout the year but from what i heard they don't seem much to fluctuate, maybe they get like 35 pax or something in summer on average. That is still very low and bellow sustainable.

      I think that we can conclude from the other post that Qatar suffers from 'market preconceptions' i.e for most of people Qatar = expensive, low-cost = cheap, TK = great - no matter how the reality is. It may take some time and directed effort to change that, i hope they'll have enough patience.

      "I wouldnt like if they decide to leave."

      Don't tell me that, along with MEA they're my favourite airline ;) I do wonder whether they'd be allowed to codeshare on JU's regional routes.

      I didn't check their fares for my upcoming trip cause from now-on i'll be flying as service pax, but now when i check it confirms everything i've written above:

      BEG-SIN one-way:

      Qatar: 566$
      Air Serbia: 693$
      Turkish: 886$

      BEG-SIN round-trip:
      Qatar: 797$
      Etihad: 858$
      Turkish: 1110$

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    7. Those prices, unfortunately, reflect real situation ... I say unfortunately, because Istanbul is still my favourite stop over city (and the airport business lounge is among very best, too) ... Also, the very best Singapore Airlines flies from Istanbul ... :)

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    8. Well the Doha airport and its lounge are in the same league as Istanbul. Turkish and Qatar are also close, although Qatar is slightly better. I still think that the technical stop ,in Anakra or Sofia soon, influences pax to choose other carriers when they are travelling to lets say Dubai. If you are not an aviation enthusiast then Turkish seems like a more attractive option in the case that the price is identical!

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  6. Regular Bosnian passenger would not care if they lose a national airline, and would be happier if the situation is like in Macedonia...

    Wizz should establish a base there as soon as possible.

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  7. Etihads 777 in Belgrade?

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    1. What does it brings, only fair-related material?

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    2. I heard it was full of airplane components with A330 labels on them. Some say they will be assembled in the hangar in the next two weeks and then Air Serbia A330 will be revealed to the world. It looks like INN-NS was right about Air Serbia getting A330 in March.

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    3. ^ not funny at all even thought INN-NS does get on our nerves and so do other ASL fan boys.

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    4. Actually, it is funny!

      Anonymous 7:44 PM,

      +1000

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    5. Najverovatnije ponovo prevozi Zastava oruzije.
      A vama ako idem na zivce zaobidjite me zato sto mi ne znaci vase misljenje nista.
      INN-NS

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    6. Materijal za sajam turizma.

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    7. 103 Tone materijala za sajam turizma doneo , ne to je sigurno Zastava Oruzije.
      INN-NS

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    8. Don't tell anyone just yet, but Etihad sent lifesize A380 Residence display to Belgrade Travel Expo in that cargo plane. Savoy butler will arrive separately.

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    9. Ту је материјал за сајам, не само што ће Етихад бити присутан већ и УАЕ.

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    10. Materijal za sajam je doneo, a misterija je sta je odneo nazad?

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    11. ^ odneo je sve starlete iz Srbije
      Jedva su sve stale.

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    12. Malo bi bio 747 koliko ih ima

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  8. LOL - Atr 72 to AUH tonight, are they for real?

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    1. Its a mistake. YU-APF is scheduled to fly.

      OT: BEG-TIA 55
      TIA-BEG 63

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    2. Wow, those loads are really impresive! They should add some frequences to Tirana!

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  9. Hehe, greška, madam se ;) I posle neko kaže da su u lošoj formi ;) A gde će da pije kerozina usput? ;)

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  10. Nadam se da nece zatvoriti JA zbog neke LCC kompanije.
    INN-NS

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  11. Shame on the Federation of Bosnia and Herzegovina Government.
    This is a clear sign of bribery and corruption and related games behind closed doors. BNX will also lose a lot.
    I wonder if it would be considered reasonable the RS Government buys those 2 aircraft from HETA, give jobs to some guys from BH Airlines and start a brand new airline serving the same airports.

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  12. Good riddance. Bosnian taxpayers have suffered enough.

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  13. OT : Weekly charter Chongqing-Zadar by Hainan Airlines starting May 1st, just confirmed, with negotiations going on for the service to become scheduled year-round twice-weekly Chongqing-Zadar-Rome !

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    1. Koji Avion ce obavljati daj let ?
      Hvala unapred.
      INN-NS

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    2. Q400 with 11 fuel stops.

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    3. @INN-NS
      Hainan Airlines fleet consist of large number of B737-700/800, 3xB767-300, 17xA330-200/300 and 8xDreamliner. I wouldn't say impossible, but it's highly unlikely that 737 operates the service. Dreamliner would be much better option for scheduled services than charter, so my guess would be either B767-300 or A330-200. Cheers!

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    4. Ja mislim da ce let obavljati 738 sa Stop-overom u TSE .
      Njihov 763 ima veci kapacitet nego njihov 788.
      INN-NS

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    5. 1.Technical stop significantly increases operation costs, simultaneously reducing pax numbers willing to pay additional expenses
      2. Hainan 737 operate exclusively domestic and regional operations and lacking comfort and other amenities required for long-haul
      3- Chongqing region numbers 38 million of inhabitants, so filling one widebody weekly is surely not a problem, especially charter trough tour-operators
      4. ZAD can handle both 767-300 and A330-200, both runway&taxiways and apron&terminal
      5.Never mentioned 788 as posibility and don't understand comparison to 763, but it's exactly what I meant - higher capacity aircraft for charter service, and 788 for scheduled

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    6. To ce biti odlicno za ZAD ako se bude letelo sa 763 ili 332.
      INN-NS

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    7. Još bolje ako bude 787

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  14. I swear I clicked on EX Yu Aviation blog but somehow ended up on this Ex Yu Load Factor blog. Guys, give it up on LF already! You can have the same LF when losing money and when making a killing. Look at the chart in the link, this is LCC that has almost the same LF throughout the year but profits are all that matters. So please drop the nonsense about LF:

    http://www.aviationeconomics.com/NewsItem.aspx?title=Fare-data-and-route-profitability

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  15. Bosnian Wand Airlines se sad zove Jubba Airways.
    Steta sto nisu uspeli u SJJ.
    INN-NS

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    1. Aha, tebi kao zao haha. Ko te ne zna.. :)

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    2. Nije to promjena imena, vec druga kompanija uzela ovaj avion na leasing.
      Jubba Airways je kompanija iz Somalije, stara nekih 17 godina

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  16. Ja ne mogu nigdje da nadjem kartu za Zagreb posle 31 marta!

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    1. That's because it's fully booked

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    2. Ne pričajte gluposti. LOT i dalje prodaje karte na direktnim letovima WAW-ZAG-WAW i nakon travnja, te cijeli ljetni red letenja. Svaka budala to može vidjeti ako ode na LOTove stranice i pokuša kupiti kartu. Brojevi leta su LO612/613

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    3. Sta je 'travanj'?

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    4. And then people complain when we write in Cyrillic...

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  17. TK sutra sa A321 u BEG =D
    INN-NS

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    1. so? There was one two days ago.Actually today Lufthansa also had A321. A321 is a not a big plane and no need to spam like this.

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    2. To nije nikakav spam ili nesto lose nego se obradujem kad dodje A321 u FEB .
      I danas sam bio presretan kad je dosao 77F od EY i nadam se da ce dolaziti svaki mesec
      Ne znam sto se iznervirate zbog toga.
      INN-NS

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    3. So then from now on you will have to post every other day how a airbus 321 comes to BEG. It is not a rare plane in BEG anymore that is all what I was trying to say. I am also happy that bigger planes come to BEG, but at the same time if LH and Turkish send bigger planes could it mean that they are beating ASL on those routes ?

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    4. Well, not necessarily, they have more onward connections.

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    5. Yesterday or the day before Swiss also sent its A321.

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    6. TK 321 zbog vremenskih prilika [otkazani letovi], a sto se tice Swiss-a, pre neki dan su slali Avro.

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  18. BH Airlines is on its way to Zurich today.

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    Replies
    1. More than glad they're still flying!

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