Friday, January 22, 2016

Competition hits EX-YU airlines in Skopje

EX-YU airlines struggle in Skopje as Wizz Air soars

Skopje Alexander the Great Airport registered its busiest year on record in 2015, however, national carriers from the former Yugoslavia have seen their passenger numbers decline in the Macedonian capital over the past few years at the hand of strong completion. Whereas Adria Airways, Air Serbia/Jat Airways and Croatia Airlines could once rely on a sizable share of transfer passengers from Macedonia, new carriers flying out of Skopje now offer travellers more competitive pricing, convenient scheduling and direct flights. In 2015, Air Serbia carried 47.912 passengers to and from Skopje, a decrease of 20.2% on the year before, which is in sharp contrast to 2014s strong growth. The decline came following a notable decrease in the number of operated flights. On the other hand, Croatia Airlines saw a slight boost in figures, with a new seasonal service from Split, in addition to its existing flights from Zagreb, attributing to the growth. Adria Airways' passenger decline steadied at 1.9%, after its numbers dived almost 12% in 2014 compared to the year before.

During 2012, Wizz Air's first full year of service at Skopje Airport, Air Serbia's predecessor, Jat Airways, welcomed 70.000 passengers on board its aircraft to/from the Macedonian capital and was the fourth busiest at the airport. That year, Croatia Airlines managed to handle 60.000 travellers, positioning itself as the sixth busiest carrier, while Adria followed suit with 50.000 passengers. Last year, Adria's CEO, Mark Anžur, said, "In Skopje, our 6% market share is declining as a result of subsidies offered to Wizz Air”. The budget airline handled 734.931 passengers on its Skopje flights last year, up 31.9% over 2014. Its overall passenger share at Macedonia's busiest airport stood at 50.6%.

AirlinePAXChange (%)
Air Serbia47.912 20.2
Croatia Airlines46.809▲ 2.6
Adria Airways46.449 1.1

Performing well on the Macedonian market in 2015 were also Turkish Airlines, Pegasus and Edelweiss. Turkey’s national carrier welcomed 140.638 travellers to and from Skopje, up 3.2% on the year before, while its counterpart Pegasus registered a 12.5% jump in passengers. Istanbul remained the most popular route out of Skopje, followed by Zurich, Vienna, Malmo, Basel, London, Munich, Gothenburg, Dortmund, Belgrade, Zagreb and Ljubljana. Skopje Airport handled 1.452.465 travellers in 2015, up 22.2%, positioning itself as one of the fastest growing in the former Yugoslavia. This year, Wizz Air will launch three new routes out of the Macedonian capital (Bratislava, Berlin and Copenhagen), while Czech Airlines will introduce services from Prague.

AirlinePAXChange (%)
Wizz Air734.931▲ 31.9
Turkish Airlines140.638▲ 3.3
Austrian Airlines97.980 0.6
Pegasus Airlines64.522▲ 12.5
Edelweiss Airlines53.699▲ 17.7

All statistics used in this article have been provided by Portline Airport Media Solutions.

67 comments:

  1. Austrian will suffer the most this year. Their numbers were ok last year but in 2014 they had a huge decrease compared to 2013. As Wizz Air's Bratislava flights are starting up, I think it will really hurt Austrian.

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    1. Higly doubt it. Bratislava is only 2 weekly.

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    2. totally a different market. it will atract the gastarbajters that are busing it down all the way to MK

      Austrian solely relies on transfer passengers from SKP

      Delete
  2. Not surprised. These shares will keep declining as long as are more convenient choices.

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  3. It's amazing how much all of their numbers have gone down since Wizz Air came along. W6 is absolutely smashing it.

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  4. Wizz je sve izmasakrirao ali ovih 70 000 duša koje su letele razorenim brendom je stvarno fascinantno.

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  5. Since Fly Dubai didn't make the list I presume their numbers were even worse than last year. 2 flights p/w this summer says it all really.

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    1. you cannot get on the list with 2-3 weekly, what did u expect?

      Delete
  6. It's silly to say your market share is declining due to 4 EUR per passenger that has already phased out.

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    Replies
    1. It hasn't been phased out. Since last year, 5 routes are still enjoying those, and from this year another 3 will too.

      Delete
    2. Only new routes are enjoying those, and the three new ones are not included. Look it up.

      In any case, the amount is negligible in the grand scheme of things. The fact that there is *any* alternative is what brings their traffic down. Quite sad.

      Delete
    3. The only reason why ASL is losing is because someone lied to them.

      Somebody convinced them that a nice brand, wifi, a posh lounge, and glossed up FAs would convince people to fly on ASL.

      They put so much time and money into completely irrelevant things that they forgot the only two things that ACTUALLY MATTER TO CONSUMERS: price and convenience.

      Nobody is going to fly with ASL when it costs over 100 euros just to get to BEG from SKP or if you have to wait 14+ hours to get on your connecting flight.

      Delete
    4. Or like charging €168 to fly from BEG to SJJ.

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    5. Aleksandar,

      What some customers expect from ASL is to be cheaper than W6 and everybody else. And this is not their business model.

      You may say it is silly to sell a boutique product in an extremely poor and low-yield market but it would be 5 times as silly to try and compete LCCs. This would mean imminent death whereas the boutique model makes it one of possible outcomes.

      I like their product and I am happy it is in the market - because not every customer prefers the lowcost model, secondary airports etc. Lowcost is one of dominant models in exYU, ASL is a niche and I do not see valid reasons to criticize them because they are expensive when compared to LCCs.

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    6. It's not a problem that they are more expensive than the LCCs, it's that they are way too expensive in general. It's only recently that they brought down their fares to about €200 which is ok.
      Last year, durign the slow season you couldn't fly to BRU, AMS or CDG for less than €270 which was a bit too much.

      We all remember their Super Subota offer to BUD when they advertized a promo fare for €170!

      Delete
    7. Thank you for your polite reply, anon 11:07.

      Actually I think there is a misunderstanding. I don't think ASL should attempt to undercut Wizz on price. That would certainly be the end of ASL.

      ASL should aim for prices at approximately 130-200% of those of Wizz. This is because ASL does offer valuable services such as free luggage, main airports, frequency, etc.

      So yes, I agree that anyone who wants ASL to beat Wizz on price is foolish. The reality is that legacy network carriers can not match the low operating costs of LCCs.

      And about the whole boutique product, yeah but how many people in Serbia are like you? How many would be willing to pay more to fly ASL when they could connect for cheap with Austrian or maybe fly direct with Wizz? There are some people, yes, but even Western European legacy carriers don't offer many of the same features ASL does because they realized that even in their wealthy home markets, this doesn't make sense financially.

      Delete
    8. Aleksandar,

      Thank you too. Just to add one point of view: if even the Western European carriers do not offer some features of the ASL product then it is yet another indicator of a niche - and I would try to see it as an opportunity rather than risk.

      Because if ASL goes back to the drawing board and decides that they should align their product with majority of European legacy carriers - then what would be their competitive advantage? They will be just one more small carrier struggling to survive among the big sharks. And no small carrier will survive this, there is going to be a massacre of small all over Europe.

      The boutique niche they have - I see it as a small chance for them to actually survive in the market. Europe has >500 million customers (euromed is nearly 1 billion) and I am certainly not the only one who is willing to pay 100 euro extra for a boutique product.

      Delete
    9. I see your points. Here are my opinions:

      I think ASL does have a very good opportunity to find a niche that both exists and is profitable. There is a space between Aegean/Turkish, and Lufthansa group. This market: Ex-Yu, Bulgaria, and Romania isn't particulaly big or lucrative, but I think that ASL is in a very good position to develop a thriving business there.

      Here are what the specific markets should be that ASL focuses on:

      -intra regional traffic. This region is rather poorly connected, not only in airline traffic. At the right price, having high frequency ATR flights to secondary airports could make travel much more efficent.

      -Region to West Europe, North Africa, and Middle East. Because the ATR can allow ASL to serve smaller airports in our region than other airlines, and with lower costs and more frequency, ASL can have an advantage over other airlines.

      -West Europe to Middle East and vice versa. Basically on all trips that don't start or end in this region, ASL has much less advantage over other airlines, which can offer more choices of destinations, bigger and more efficent planes (A321s, A330s, etc). ASL should attempt to compete where they can use their advantage of operating from Serbia (lower costs), but this ASL should not rely on this market because the competition is so capable.

      The best way to serve the first two points are by adopting as many low cost strategies as possible, because this region is very price sensitive. That is why Wizz is so successful, they are simply supplying what people want.

      So in my opinion, ASL does have a viable niche they can exploit. They don't have to rely on unproven and unsuccessful attempts of creating something that everyone is moving away from.

      If there was room in Europe for a niche carrier that could be profitable, it wouldn't crop up in Serbia.

      Air Serbia can't access 1 billion customers in the Euromed region because there are thousands of airports and ASL is connecting (on a very poor level) a couple dozen of them.

      Delete
    10. Pa kako to Gospodine Aleksandre sad ce vam odma reci to se ne isplati ili ce da unisti ASL .
      Svaka cast za plan ekspanzije +1 :)
      INN-NS

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    11. Sta lupas Marko? Ovde postoji koncenzus da JU mora da se siri i da mora da uvodi nove linije.

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    12. Jos jedan sto ne razume da cita ili ne shvata ironiju .
      Vecina vas kao i vecina Gradjana uvek kaze ne isplati se ne treba to raditi .
      INN-NS

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    13. Huh? Gospode boze sta pricas?!

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    14. I wouldn't mind paying €116 for SKP to BEG, but I'm not getting on those old ATRs.

      Delete
  7. In spite of huge decrease in the number of passengers, Air Serbia was not extremely unsuccessful in flying to Skopje, they have simply complied with the rules of the market. In whole 2015 Air Serbia reached LF 69% when flying to Skopje, which is much better than their annual LF's on most of other ex-yu routes (ie. Podgorica 63%, Banja Luka 59%, Zagreb 61%, Ljubljana 60%...).

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    1. I wonder if a solution for JU in SKP could be to introduce double daily flights on the Atr. Currently due to its split schedule it's practically impossible to offer daily connections to most destinations beyond BEG. Connectivity is rather poor at the moment.

      If we take SKP-CPH, which is a not a small market, we get the following:

      JU: 3 departures per week (2 return)
      OU: 4 departures per week (2 return)
      JP: 1 departure per week (1 return)
      OS: 10 departures per week (13 CPH-SKP)
      LX: 2 flights per week (2 return)

      I used CPH as an example but I am sure the situation is pretty much the same for all other destinations where JU doesn't fly daily or double daily.

      Delete
    2. Nemjee, your example is certainly the rule, and not the exception. Very weak connectivity + noncompetitive prices are the only reason why ASL isn't a top-3 airline at SKP.

      Believe it or not, there are pax to and from SKP that cannot wait a few days until Wizz has a flight to their destination, or they may have to go and return on the same day. This is why legacy airlines still exist.

      ASL has zero excuses for not winning. They have the lowest cost base in SKP. Nobody else is close enough to send ATRs. Nobody else has to pay such low airports fees as ASL at BEG. No other airline is based in a country with average salaries below 370 euros.

      ASL has had, and continues to have, every single opportunity to succeed.

      Delete
    3. Because of poor bookings AirSerbia cancelled 4 flights to Skopje during first half of February. Too much.

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    4. Does anyone know how JU is performing this winter when compared to the last one? All of their regional network should be around €80 for a return flight.

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    5. U tvojim snovima sinko.

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    6. This is not a joke, I know people (who are generaly flying only with legacy carriers) that are avoiding ASL because they dont want to fly with their ATR on the SKP-BEG segment.

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    7. I agree with this. An airline that relies on a higher-end product must have it fleet made of jets only. Whether or not we would admit it, ATRs don't match with higher-end product.

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    8. Are there people that avoid ASL because of ATRs? Yeah. Are there enough of these people to warrant ASL doubling their costs (fuel, maintenence, overflight charges, airport fees, leases) by getting jets to fly ATR routes? Absolutely no.

      Very few people even know what airplane they are riding on, and even fewer care. The difference in trip time for an ATR vs an Airbus on most of ASL's routes is less than 10-20 minutes, and very few people are willing to pay more for the privilage of avoiding an ATR.

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    9. sure, only few know what airplane they are riding on, but how many of them will return to ASL after their ATR experience? Dont underestimate the "normal" pax ;)

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    10. Aleksandre I generally agree with you, BUT, SKP is a luggage-heavy destination and pax get annoyed with cabin baggage limitations on ATR plus they do know - believe it or not, of the difference between a jet and a prop. I know from personal experience a few people in the region who love ASL and fly them provided its a jet-operated flight. Tell them its ATR and they don't go even if for free.

      Delete
    11. I think those who don't know what plane they are on are the most dangerous because they will associate JU with 'a small, noisy and uncomfortable aircraft.' These constitute a considerable share of the travelling public but these are the same people who will fly on JU if the price is right. I highly doubt they will be willing to pay an extra €50 to fly on OS' Fokker.

      One way around it could be to upgauge the noon SKP flight to an A319. I am sure that in summer there are enough passengers to fill a larger aircraft.

      Delete
  8. I don't know why ASL nerfed SKP to 7pw. That is way too weak. Either do 14 weekly or just shut down the airline.

    Basically frequency and network is the only possible way that ASL (or any legacy carrier) could compete against Wizz. When a business man needs to leave for an important business meeting in London and be back in Skopje the same day, they are willing to pay crazy money for that last minute ticket.

    Everything less than 10 pw (at the very least) is worthless when it comes to legacy carriers, especially when it comes to transfer pax.

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  9. I am surprised by the absence of Alitalia. How to find the LF for each airline?

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    Replies
    1. Skopje je prepuno business man-ova. Procitajte nekad te gluposti koje pisete pre nego pritisnete dugme Publish.

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    2. Ne moraju biti poslovni ljudi, ima ogroman broj putnika koji jednostavno nisu fleksibilni da bi se uklapali u red letenja odredjenih aviokompanija.

      Mozda ti mucni glavnom pre nego sto krenes da pises. Mislim da si ti onaj isti koji govori narodu da ne lupeta i tako dalje.

      Delete
    3. @anon 10:36
      I cant even comprehend what you're trying to say. For gods sake, I was just interested how well is Alitalia doing in SKP. It is one of the rare legacy carriers in SKP and it would be a shame to lose them.
      P.S. Maybe I should criticize portline, because they didn't publish results for every airline. Alitalia shouldnt left out since it operates daily.

      Delete
    4. @ January 22, 2016 at 10:36 AM:

      I am sure it is in Serbia that most Businesspeople live and that the members of your nation are the smartest and best people not only of the Region but on the planet, BUT, as anon 10:52 said, not everybody who needs a fast Connection Needs to be a Businessperson: I am not one and yet,I needed to go to Skopje and return to Vienna in one day- the reason being not Business, but the death of a childhood friend and I wanted to make it to her funeral.
      And NO, the connection with ASL did not offer me that Option so I chose OS instead.

      Delete
  10. ASL should even consider putting a 3rd daily flight from BEG to SKP to ensure 100% network coverage and more business and leisure travellers.
    SKP also needs connections to AUH, MOW AT LEAST 1 FLIGHT PER DAY!

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  11. Stvarno zvuči ludo ova polemika oko AS u Makedoniji. AS odrađuje dosta dobar posao u Skplju i popunjenost kabine je dobra (trenutno je oko 68-71%). Naravno bilo bi dobro da je 80% ali kada imaš kompanije koje prodaju karte po 60 eura i nude nikakve usluge to je ono što većina nas Balkanaca može da priuštiti i naravno da uzimamo takve karte pa makar i stajali na avionu. Mnogi bi od nas volili da možemo putovati boljim prevoznicima i da imamo mugoćnost da imamo net , dobru hranu i selekciju besplatnih pića ali to nije uvijek moguće. Baš nas obične putnike briga da li je ATR boing ili Airbus, Bože gluposti, daj nam super cijenu i uslugu i to je sta svi vole.Bitno je da se AS ne spušta na nivo nisko budžetni kompanija tako kad skupimo love imamo mogućnost da i sa njima letimo umjesto ovih krševa na čijim avionima je gore nego u autobusu.

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    Replies
    1. Ludo je i to sto saljete dva ista posta i pisete apsurde, tipa "stajanje u avionu". Vasa pristrastnost je vise nego ocigledna. Podaci o broju prevezenih putnika sve govore.

      Delete
  12. I'm really surprised OU did so poorly considering they introduced a whole new route. Although from what I hear it bombed and is not resuming this year.

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    1. the new route barely existed and it was suspended right after the start (after two rotations from what i can recall). no surprise with their exorbitant prizes, SKP-ZAG-SPU was more then 50% cheaper then the direct flight.

      Overall, I'm positively surprised that OU has +2.6 pax. With better scheduling they could improve their pax numbers at SKP. I have no clue why they dont introduce daily flights to SKP (on some days they have two daily ,some days no flights at all). Its very inconvenient when u book flights that include transfering at ZAG.

      Delete
  13. All those were benefitting from the bad connectivity of Skopje, thanks god, this has changed and we will see further declines. Yeah!

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  14. ASL -20%. So, now you can see that it is true that ASL have more than 50% decline in transfer passengers vie BEG. From 50 to just 25% this winter.

    To get 20% less passengers is huge decline. In same time main competition Croatia Airlines made better result this year. So we can predict next year, after introducing regional jets and new routes Croatia Airlines will have better results in Skopje that Air Serbia.

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    Replies
    1. In this moment Croatia is much better in Skopje, Sarajevo, Split, Dubrovnik and Pula, so in all airports where they compete against Air Serbia.

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    2. In Sarajevo:
      Croatia 61.215 passengers (13x Q400)
      Air Serbia 28.842 passengers (7x ATR 72)

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    3. At the end of the day JU had 700,000 passengers more than OU in 2015.

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    4. Vi mislite mene provocirati sa tim imenom ali niste uspeli.
      INN-NS

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    5. Yeah but it's still interesting to compare their performance in regional markets. It certainly shows a flaw within JU's pricing and sales department.

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    6. ASL da ima 8 ATR 72-500 i da ima povezanost sa Balkanskim gradovima da ih poveze cena karte ne bi trebala da bude veca od 110€ i uspeh je zagrantovan.
      INN-NS

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    7. Pa da, da se desi... a oboje znamo da necemo jos skoro videti 8 Atr-a u floti JU. Ako dodje jedan kao zamena za one matore kante onda da pewamo.

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    8. Pa da se nadamo da ce biti vecih promena u letnjoj sezoni .
      INN-NS

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    9. Ne treba se nadati dokle god ne stignu tri nova Atra kao zamena za ALN, ALO i ALP.

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    10. @5:12PM Neko je celu flotu "razorenog brenda" zvanog Jat Airways nazvao starim kantama, a sada Vi nazivate ta tri renovirana ATR-a matorim kantama ?! - Nenad R.(12:47PM): "...Baš nas obične putnike briga da li je ATR boing ili Airbus, Bože gluposti,..". Vidite takvim gostima je ATR cool, a ni Wi-Fly im ne treba.

      Delete
    11. Ta tri sam nazvao kantama zbog stanja kabine i nepouzdanosti zbog starosti.

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    12. Dokazujete samo ne znaje iz vazduhoplovstva starost Aviona nema veze sa sigurnoscu .
      INN-NS

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    13. @Anon.7.33PM: Pojasnite šta znači "nepouzdanost zbog starosti" i "stanje kabina" u ATR? Da li su to Vaša lična zapažanja sa letova? Svaki avion je pouzdan ako se redovno servisira, ATR su renovirani/prefarbani 2014, ili grešim?

      Delete
    14. Ta stara groblja

      1. Trebaju daleko više servisa i daleko češće se kvare. Dokaz tome je da ATR-ovi i 737-ice konstantno ispadaju iz saobraćaja, stalno su u radioni i stalno se radi njih kasni.

      2. Takvo često održavanje, zamjena ATR-ova sa puno skupljim 737 ili A319, "višak" aviona koji stoje nezaposleni da bi mogli uskočiti umjesto pokvarenih, opako puno košta. Svi znamo da ASL ne leti sa svih 20 aviona, već najviše sa 16-17, dok drugi služe za uskakanje kad se neki od 8 starih groblja pokvari.

      3. Tako nepouzani i kvarljivi avioni rade cirkus u operacijama (nije baš samo tako lako zamjeniti ATR sa 737, treba dići posadu, rješit papirologiju, opslužit ga...), stvaraju kašnjenja, još više troškove kada se pokvare u inostranstvu...

      Delete
    15. Ne zaboravimo da na njima leti mehanicar za ne daj boze i to stvara dodatni trosak.

      Od sva tri najgori je ALN, to jest najcesce ispada iz saobracaja.

      A ja ne vidim gde je iko spomenuo da su nebezbedni vec da su nepouzdani, dve potpuno razlicite stvari.
      Eto pre jedno deset dana ALN je morao da se vrati za BEG posto je poleteo za TIV jer mu je otkazao elektricni sistem. Nedelju dana pre toga je isto tako ispao iz saobracaja zbog kvara na motoru.
      Kao sto se kvari stari auto, tako se kvari i stari avion.

      Delete
  15. It's time for ASL to double down or it risks decline.
    Not sure when NY flights will get confirmed, but since it's a political project and it's election year in Serbia, it will happen.
    ASL needs major network expansion to have a remote chance of success on this route. And it has to happen now, as high season is fast approaching.

    Does ASL have enough crews for additional ATRs ? Or would they need to hire new crew or wet-lease planes?

    On the other hand, I don't think it takes a lot of investment to introduce tickets w/o luggage allowance and charge for choosing seats.

    my2cents

    ReplyDelete
    Replies
    1. Extra Charges BlockerJanuary 22, 2016 at 10:13 PM

      "On the other hand, I don't think it takes a lot of investment to introduce tickets w/o luggage allowance and charge for choosing seats."
      While I understand the option of having the ability to pay slightly less for not having baggage, why would you want ASL to charge for baggage? Scroll up and you will see people talking about how ASL is fancy and glamoures airlines and now you think they should adopt a hybrid model. I bet you want them to charge for using the toilet, having a glass of water,etc.

      Delete
    2. :-) I sense a bit of sarcasm, but I'll entertain your question.

      I don't think these two minor changes would dilute the brand. If they cared about the brand so much, they wouldn't use Aviolet so frequently.
      If BA and Lufthansa (both premier brands in the respective groups) do it, why shouldn't ASL. It can be done in rather elegant way (see BA). Price difference could be between 35-50 euros per return flight. Or, in percentage terms, around 10-20% (judging by BA pricing).

      I'd expect net positive effect on revenues.

      I take there are product managers who are crunching the numbers as we speak. :-)

      my2cents

      Delete
  16. We are taleking about a lot of hard factors like schedules and fares. But, I am sure as about 50% of SKP passengers consists of Albanians, there are also soft factors (political) that Albanians irrespective of fares, schedules, comfort etc. just DON'T want to fly with a Serbian Airline.....I know from Canadians of croat origins who posted that even if ASL would offer 100 CAD fares to DBV or SPU, they would never fly it. We should face it, that there are such factors......

    ReplyDelete

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