Saturday, June 27, 2015

Air Serbia expects improved results in 2015

Air Serbia rules out expansion until load factor improves

Air Serbia is on track to outperform its 2014 profit figures and passenger numbers while maintaining its current network size until its average load factor improves. Speaking to the media in the United Kingdom some time ago, the carrier’s CEO, Dane Kondić, said, “We will improve our profit and are on target to improve our passenger numbers”. The CEO added that he does not expect for passenger growth to keep up at a rate of 26%, as was the case during the first quarter of the year, but is encouraged by the strong results posted during the first three months of 2015, which saw the airline handle 453.000 passengers and revenue soar 44% to 39 million euros.

Mr Kondić noted that the carrier will work on improving its average cabin load factor before expanding its operations. “It was always envisaged that we would go hard at trying to drive our load factor. Last year we closed at 70% load factor. It shows there is plenty of room to grow in the existing network”, Mr Kondić said. He added, “Unless there are specific opportunities that present themselves, we really need to go fitter and faster with what we have. Once we get to that 80% plus average load factor, then we can look at expansion”.

The airline’s CEO explained that transfer passengers formed the basis of Air Serbia’s significant passenger growth last year. “Our growth from 2013-14 was an incremental one million passengers and the majority of that came from transfer passengers, traveling from, say, Athens to Dusseldorf via Belgrade. Now to do that, you’ve got to have a network that lends itself to that”, Mr Kondić said. He concluded, “The flying is largely in the two to three hour range, and that’s where we think the sweet spot is. So that’s what we do. We connect people north, south, east and west, and that’s how we get efficiencies in network and aircraft utilisation”.

84 comments:

  1. Expanding the network is a method for increasing load factor. Hard to get good feeds when the network is small and your frequencies are weak.

    I would say needs another ATR. Restart Ohrid, make one more Croatian city full year, and also increase frequency on the best performing ATR routes.

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  2. Why not mention that the schedule is so great that it doesn't allow for connections between Istanbul and Paris... ;)

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  3. Does anyone have today's loads on Wizz Air's flight to Nis?

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    1. Malmo - Nis is full with no seats left and Nis-Malmo ~80

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    2. That's truly fantastic! I am really happy for southern Serbia. Belgrade is not that close as some would like to think.

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    3. Nobody ever said Belgrade was close and it was fun to travel 180km to board a flight.

      What was said was that national/legacy carriers do not have a business case to fly from Nis and the only option for INI was to try and attract LCCs. And they did so.

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    4. 180 km? ;)
      Maybe you should check your facts before trying to lecture others and before you try to be smart.

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    5. I saw some €180 fares on JU to CPH for late summer, I guess they are feeling the pinch.

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    6. Anon@9:51
      What is the purpose of your comment?
      ...

      So, INI anticipates 40k pax this year. Is it even possible with only five weekly flights for six months?

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    7. The loads seem to be excellent so who knows?

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    8. I can't wait to hear Basel results. The location of the airport is perfect due to its proximity to countries around it :)

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    9. AnonymousJune 27, 2015 at 10:59 AM
      kraspeedJune 27, 2015 at 10:52 AM

      6 month = 24 weeks x 5 per week = 120 flights
      Wizz 320 = 180 pax

      120x180 = 21600 x 2 (inbound/outbound) = 43200

      However this assumes full LF on inbound/outbound flights. So realistically 40000 pax for Nis is a bigger joke than ASL flying to the US this year..

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    10. Why is it a joke? It's their goal, they didn't say it will happen 100%.

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    11. MMX-INI 177
      INI-MMX 59

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    12. Wait until it all gets started, we will have more outbound passengers.

      When Belgrade people start using it, this would be a blast. Like Sarajevo people go to Tuzla.

      For Basel, Wizz has a lot better departure time then from Belgrade.

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    13. Wow so almost fully booked. I hope numbers out of Nis pick up.

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    14. Number of passinger on outbound flights will pick up the week after the next one.

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    15. There will be 10 full flights from Moscow. 3600 passingers

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    16. Aren't the Moscow flights planned for the winter? There were rumours that they might be some during the summer too.

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  4. Rezultati su se popravili vec dosada i tako da verujem da ce biti mozda LF cak i veci od 80%.
    I onako ce sve biti ostvareno najkasnije do 2016 .
    INN-NS

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    1. Čitaj između redaka, imaju problema sa punjenjem i prije bilo kakvih USA i sličnog će se morati konsolidirati - misliš da je problem natjerati LF na 80%+? Nije majstore, ali napraviti to tako da ne gubiš pare nije lako, pogotovo kada ti je većina prometa transferna, gdje je yield puno niži nego na point to point. A point to point ima problema jer je srpsko tržište malo, siromašno i nije jako po pitanju businessa. Nisu to stvari koje se riješe za 2, 3 mjeseca....to su strukturne stvari gdje se rješenje ne postiže navijanjem na forumu....

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    2. +1 JU's by far and largest problem IMO is that they by now have practiced such vigorous price dumping in order to penetrate new markets (ie attract transfer pax). They will suffer from this sooner or later, when transfer prices go up and transfer pax find other alternatives, driving LF down.

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    3. Well, it is understandable that they entered the markets with heavy promo or price dumping activity - it is an investment. However, since that has been going on for a while and LF is not satisfactory, they really need to consolidate what they have now (or make network changes) before expanding further. Mentioned USA flights can certainly help to increase LF of feeder flights, but since those routes would also be rock bottom price level (as USA has already plenty of cheap or affordable options), that would run the finance further for sure. I wouldn't be surprised to see JU standing still for a while and consolidate current business as making long haul leap might either cost tax payers hell of a lot money or send the airline to the graveyard once current political structures are out of the picture.

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    4. I'm sure there's lot more money to be made on long-haul to China and Asia (recent LO openings) than to the US.

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    5. @12:45
      signing for each and every word you wrote :) +100

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  5. Nedovoljan broj aviona za povecanje mreze za punu sezonu'
    a u zimskoj sezoni tesko je vecu flout profitabilno uposliti, jeste problem vecine Evropskih kompanija. Pogotovu manjih.
    Er Srbija uspesno parira okolnostima gde saobraca. Imajuci u vidu da manje od dve godine od novog establismenta. Za cetiri godine pun profil kompanije ce se postici. Sa time i sposobnost i otpornost izazovima trzista... Rodney✈Sydney✈Kraljevo.

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    Replies
    1. Of which do you speak Nis @ 40000 or ASL to the US?

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  6. OT; Admin, can I kindly ask you to write an article about Brac airport. Several new lines were planned for this summer. Have they materialised? It would be interesting to know more about it.

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  7. Hub and spoke works only if you have 1.) strong O/D traffic 2.) good loads in Business Class 3.) load factors of 85%+x 4.) year round good traffic 5.) high ancillary revenues
    Since none of the above is the case with ASL, I can only guess how high the real losses would be if they were operating under normal accounting rules and not with huge hidden subsidies. Selling tickets ATH-DUS via BUD or PRG for 220€ broke the neck of Malev and CSA. Mr. Kondic please keep this in mind! I prefer the model of a small private national niche carrier like Air Bulgaria, which is small but smart and profitable. The Serbian tax payers and paying a high price for Mr. Vucic's megalomania.

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    1. +1

      Well said!

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    2. You're forgetting that Air Serbia is operating with a much lower cost base than most European airlines utilising the same model, and I mean under "normal accounting rules".

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    3. MA's issues were more than just cheap tickets. MA had many issues from failed privatisation resulting in renationalisation. I dont think their fleet suited them the best, they definitely werent known for a great service, they operated under strict EU rules. Not all changes were positive for the airline or simply came a little too late.

      JU on the other hand seems to be doing well with its privatisation, although things could of been done different as in being more transparent, JU is becoming known for a good onboard service, is some how functioning well with a BEG hub, and seems to be moving into the right direction. Having said that, it isnt flawless and has a long way to go with their improvements, but changes have been positive. Serbian tax payers were paying for JAT lets not forget, and that wasnt cheap either compared to what the Serbian travelling public got in return.

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    4. "JU is becoming known for a good onboard service"

      True, but at the same time vast majority of transfer pax choose ASL primarily due to cheap tickets. Having a decent onboard product is nice but it fades away quickly for pax when it comes to choosing an airline.

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    5. Ima jedna stvar gora od klinca na blogu a to ste vi iz udruženja mrzitelja. Mnogo mi vas je žao.

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    6. lol and who is that?

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    7. Mi Srbi smo stvarno stoka-nikada necu ovde cuti bilo kog Hrvata da napise i jednu losu rec o Croatia Airlines-u, dok se mi Srbi utrkujemo ko ce vise da se ispljuje po ASL-u. Daleko je ASL od sjajne kompanije, ali je daleko bolja od pokojnog JAT-a. I za sve JAT-ove nostalgicare, JAT je prestao da postoji pre skoro 25 godina, pojeo ga rat i sankcije i ta ,,zlatna'' vremena nece nista vratiti...

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    8. Don't forget that Bulgaria Air is 99% private company. Don't expect the government NOT to spend our money...

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  8. "Once we get to that 80% plus average load factor, then we can look at expansion”.

    On one side that may sound reasonable but on the other hand how are you gonna fill the seats if you ain't flying to IKA, MAD, GYD, AMM, CAI... With ZAG, SKP and TIA?

    Hardly so.

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    1. I can for one argue that without BEY alone LF would be much lower on many lines.

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    2. If ASL were to close WAW and BUD ( both below 30% LF in May) by how much would CLF improve?

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    3. By my calculation ASL LF would reach 110%.

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  9. So no flights to the US this year then.

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    1. and 2016 too

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    2. "The flying is largely in the two to three hour range, and that's where we think the sweet spot is". Quoted is JU CEO statement. But INN-NS knows better, he knows that "Premijer ne laze". He probably thinks too that Premijer is issuing permits, not the FAA. Not to mention every day stronger voices from Germany about visa regime reinforcement for the "West Balkans", and ruling of the European Comission about "actual control" of the JU. Let me remind as well that the current "profitability" is achieved in general by serbian taxpayers money, directly through taxes, with generous support of NIS and Aerodrom Beograd as well. Conclusion : Not only that 2015 1nd 2016 will JU not see any TATL services and widebodied equipment, but serious possibility exists of drastic shrinking of its (mostly leased) fleet and routes, even ceaso of operations.

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    3. I agree one has to wonder about the profatability of JU when you read little gems like this.

      The Serbian government took over a total of 4.29 billion dinars in debt of the national air carrier in December and settled the first tranche of the debt, amounting to 2.15 billion dinars, at the end of last year.

      http://wire.seenews.com/news/belgrade-airport-operator-q1-net-profit-doubles-476667

      JU make profit, BEG makes profit. From payments out of government coffers. Not a sustainable business model.

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    4. Nemam vremena da vodim raspravu sa vama posto sam dosao na dan u srbiju .
      INN-NS

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    5. Pa sta onda komentarises? Nije da nas je briga.

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    6. nisam znao da je danas poljoprivredni sajam u NS

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    7. Nije nego imam druga vazna posla.

      INN-NS

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    8. Nobody cares. Biće da je inn ns došao da nabavlja A330 za Air Srbiju, kao maja nikolić lokomotive za železnice

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    9. "even cease of operations", are you a fortune teller or something?

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    10. Oooooo INN-SNS ide na poljuprivredni sajam sada..... Jedva cekam da cujem da A330 stize sutra :O Mozda INN sklapa taj A330 u svojoj garazi....

      Go make your own website and throw toys out of the pram there....

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    11. When the govermnent is involved you can't expect aby good thing to happen.

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    12. May be ...2017, not before that!

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  10. Did everyone forget Ex Yu news from 19 days ago? Here it is, from June 8:

    "Speaking to the “SEEbiz” portal, the carrier says, “We are satisfied with our loads on all routes. Our average cabin load factor on our entire network amounted to 67% in 2014"

    In one interview 67% and that's satisfactory, in another 70% and must get to 80%+ to expand. Fans are grasping at straws of information here trying to decipher what the next step will be, hoping for more planes and destinations.

    You can't spill your corporate beans and detailed plans to everyone, so there is some vagueness when it comes to details.

    Instead of getting all worked up about this, I'll keep looking for funner things like wifi and A330 and take this as a bit of _________
    (for last word see the picture: http://s29.postimg.org/6w76s4r5z/image.jpg

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  11. USA service has been delayed UFN

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    1. All that hard work on FAA Cat I and Serbia-USA bilateral was just for fun?

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    2. And what is the source of this morsel of data? Or do we just take your word for it?

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    3. At the same time, since you question the delay, could you please let us know when was the official start of ops to exact US cities actually announced? So, delay of actually what...? :)

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    4. Maybe something government promised but failed to do? Something that JU/EY needs to be able to fly to the USA?

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    5. Has the Canada service also delayed until further notice?

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    6. @Anonymous 4:17

      You are right, Air Serbia never officially announced start of US ops. Other sources from PM to Hogan repeatedly mentioned Air Serbia would start US, likely dates were late 2015 or early 2016.

      Sooner or later, media will look at Air Serbia to provide official update, and repeating that "it was never officially announced" or that "feasibility study is still underway" does not sound like ideal response any more. Air Serbia will have to craft new response soon. "We are getting A330 anyway" statement is what fans are looking forward to!

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    7. Not before 2017 or early 2018... Don't ask me from where I know.

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  12. Wise decision : not to go further, but improve LF. Once got additional ATR, ASL downgraded from jets to ATR all flights to LJU,ZAG,PUY,SOF;TIA,OTP and majority of flights to TGD and VIE.

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    1. Etihad didn't wait to get to 80% to start expansion.

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    2. It will be extremely difficult not to surpass but even to get close to 80% LF. In 2014 ASL LF was 67%, while in 2015 : January 57%, February 57% as well, March 61%, April 68% and May 69%. In June LF will surely be over 70% taking into account all charter flights.

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    3. In which Disney fairy tale you live in?

      Etihad has gazzilions of oil money pumped in...

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    4. Following same logic, Etihad can spare few billions out of those gazzilions to fund Air Serbia expansion, but they don't. Something wrong with that logic?

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    5. I onako ce doci 1 ATR 72 u ASL.
      INN-NS

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  13. Wow! The innocence!
    Sweetie...Etihad is here to drain not to invest. LOL.

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    1. Hahaha! You say they already have gazzilions but now you say on top of that they need to squeeze few dinars from Serbian tax payer, LOL! Major Fail!

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    2. Sure. Emirates are usualy like Mother Teresa...Only giving. No (corporate) interest whatsoever.

      Grow up mate...and we'll continue.

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    3. +1 Beograd na Vodi, generally a lot of people in Serbia believe that Arabs are here to help and hand out money which of course is not the case. If there is economic benefit for them they will come, otherwise they will stay away. How some people dont get that amazes me.

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    4. Interest is not in quick 1st or 2nd year relatively miniscule profit (or plain loss as in case of Alitalia), but in long term airline presence in Europe and a hedge against ME3 backlash policies. If there were just after quick buck they would invest in anything else but commercial airline as Warren Buffett would say. You two are really ******, aren't you?

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    5. I ponovo frustrirani ljudi na jako dobar uspeh ASL.
      INN-NS

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    6. @Beograde na vodi, što ne šetaš patkicu po keju, bolje ti ide...

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    7. Evo opet moj report al ovaj put TXL-BEG leg.. prosto da covek ne poveruje avion je bio toliko pun da su ljudi (your truly), upgrejdovani u biznis klasu. Ukupno je bilo 2 mesta u J klasi free... fenomenalna usluga sve na vreme. Ali 100% LF me je shokirao posto je u odlasku u ponedeljak bilo oko 50%

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    8. Hola amigo, to je najbolji način da probaš biznis klasu a da ne potrošiš mucho dinero. Da li imaš neke slike por favor?

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    9. Imam, al sem slike jela uglavnom na svima ima mene hahah

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    10. Relativno cesto letim FRA-BEG-FRA i avion je uvek oko 95% popunjen

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  14. Hello Ex-YU Aviation fans. Hoping to fly JU later this year. I would be flying on a staff travel pass and wondered if anyone who posts comments here or on the forum is either a JU employee or is able to check passenger loads for availability? Any help or info would be appreciated. Pozdrav do site!

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