Saturday, May 14, 2016

Air Serbia sees passenger decline in Q1


Belgrade Nikola Tesla Airport saw its passenger numbers decline during the first quarter of the year primarily as a result of Air Serbia and its reduced operations, the airport's Q1 report shows. On the other hand, the busiest foreign carriers recovered following a year of declining figures. 

According to Belgrade Airport, Air Serbia handled 431.067 passengers on flights to and from the city, down 6.7% compared to the same period last year. The airline's passenger share at the airport stood at 49.6% during the three-month period, down from 52% in 2015. During Q1, the Serbian carrier operated 8% fewer flights, the airport says. Air Serbia cancelled its operations to Budapest and Larnaca last October and reduced services to a number of destinations over the winter period, which ran until the end of March. The airline's CEO, Dane Kondić, has defended the decision saying in a previous interview, "Flying empty aircraft over the winter just to keep a schedule is crazy. So, last winter we had two years of experience behind us, meaning to say that we had two summers and two winters, and therefore we knew exactly where the pain points were in the network. As we have progressed on our journey, what has been critical has been focus on profitable operations. The prime goal was to take out capacity to therefore boost our load factors". He added, "We have had far more profitable operations - load factor increase of 4 - 5%, yield increases of about 9 - 10% and RASK (Revenue per Air Seat Kilometre) improvement of almost 20%. By any measure, I think it was a fairly smart, wise and good move".

According to Belgrade Airport, Air Serbia's busiest route was Zurich, which saw strong growth when compared to Q1 2015. The airline welcomed 42.471 passengers on the service, up 21.6% on last year. It was followed by flights to Paris, Podgorica, Amsterdam and Moscow. Despite the dip in numbers, Air Serbia continues to maintain its position as the busiest national carrier in the former Yugoslavia, ahead of Croatia Airlines, which welcomed 315.566 passengers, Adria Airways with 198.084 travellers, and Montenegro Airlines, which handled 84.667 passengers. Air Serbia's figures are expected to bounce back during the second quarter with the launch of five new routes, including its first transatlantic service, and increase in frequencies across the network.

Belgrade Airport's second busiest airline, Wizz Air, continued with its recovery, which began in the fourth quarter of 2015 following almost two years of declining numbers. The no frills carrier handled 87.531 travellers on flights to and from the Serbian capital during the first three months of the year, up 4.2%. The figure was achieved despite the airline operating only five flights more than last year. It's passenger share stood at 10%. Lufthansa's and Montenegro Airlines' numbers rose 2.1%, while Turkish Airlines' passenger figures increased 8.7%. Between January and April, Belgrade Airport saw 1.235.349 passengers use its services, a decrease of 2.7% compared to the same period last year. It recorded a net profit of four million euros, as well as revenue of 14.8 million euros during the first quarter of the year - its best to date.

Busiest carriers at Belgrade Airport Q1
AirlinePAXChange (%)
Air Serbia431.067 6.7
Wizz Air87.531 4.2
Lufthansa58.124 2.1
Montenegro Airlines49.766 2.1
Turkish Airlines40.033 8.7

79 comments:

  1. Decrease is not good but considering how they culled their winter network I was expecting a far worse result to be honest.

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    1. The decrease is not good for BEG airport, but who says the decrease is not good for Air Serbia ? If they carry less people and make more money, then this is exactly what they should be doing and more of....

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  2. Glad to see Wizz recover a bit

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  3. 'Flying empty aircraft over the winter just to keep a schedule is crazy.'

    What's crazy is that their sales department is doing such a bad job at filling those seats in winter time. That's the real problem. They didn't simply reduce the schedule like other airlines do, they butchered it so badly that connectivity became pathetic.

    Another indicator that things are bad is taht the regional additions are only added because of JFK, meaning that if there were no long-haul flights there would be no need for them. Quite sad that they can't fill a double daily Atr flight to SOF.

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  4. Wow... look at TK! Such a shame that they are restricted by the bilateral otherwise they would have 3 daily by now.

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  5. Anyone know how LO is performing in BEG?

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    Replies
    1. LOT
      Q1 / 2016 / 12.482
      Q1 / 2015 / 11.672

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    2. Any info on Aegean and Tarom?
      Many thanks.

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    3. Wow... quite an increase, good for them. No wonder quite a few flights were operated by the E75.

      I hope that they will keep daily flights in winter time.

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    4. ...izvinjavam se, navedene brojke su prihodi arodroma u hiljadama dinara ne broj putnika, sorry.

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    5. LOT- broj avio operacija Q1 - 2015/2016:
      Q1 - 2015 - 105
      Q1 - 2016 - 108

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    6. Znaci ono gore nije broj putnika koje je Lot prevezao?

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    7. Nije, izvinjavam se.

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  6. Could the decline in passenger numbers have more to do with Air Serbia readjusting ticket prices to the average being offered from Belgrade. Passengers who gravitated to Air Serbia when they were the cheapest option have now gravitated away from Air Serbia to whoever is cheapest today?

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    1. I totally agree with your comment. People are price sensitive. They will fly with who is priced the best.

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    2. JU might have increased the prices for connecting passengers but they have reduced them considerably for O&D.

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    3. I also can confirm that. Ticket prices have risen a lot in the last year.

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  7. If we dig a little dipper we can see that the load factor on 5 busiest routes improved quite great from 61% to 73% which was their goal when they began their winter reduction. The calculation is below:

    If we look at the numbers we can see that the number of weekly flights for different destinations was (Source: http://www.exyuaviation.com/search/label/Winter%202015%2F16 ):
    Zurich 14 (2015) 13 (2016)
    Paris 14 (2015) 13 (2016)
    Podgorica 21 (2015) 21 (2016)
    Amsterdam 10 (2015) 7 (2016)
    Moscow 12 (2015) 7 (2016)
    Number of operations in 1st quarter for each city was (2015 90 days, 2016 91 days):
    Zurich 180 (2015) 169 (2016)
    Paris 180 (2015) 169 (2016)
    Podgorica 270 (2015) 273 (2016)
    Amsterdam 129 (2015) 91 (2016)
    Moscow 154 (2015) 91 (2016)
    If we say that every flight to Zurich and Paris was with A320 (155 seats) and Amsterdam and Moscow A319 (155 seats) and Podgorica ATR-72 (66 seats) we will get available seats for each destination during that period:
    Zurich 55.800 (2015) 52.390 (2016)
    Paris 55.800 (2015) 52.390 (2016)
    Podgorica 35.640 (2015) 36.036 (2016)
    Amsterdam 33.024 (2015) 23.296 (2016)
    Moscow 39.424 (2015) 23.296 (2016)
    From the report we know that the passenger numbers for each destination were (source http://www.belex.rs/data/2016/05/00099020.pdf page 74):
    Zurich 34.929 (2015) 42.471 (2016)
    Paris 34.127 (2015) 31.976 (2016)
    Podgorica 25.363 (2015) 24.790 (2016)
    Amsterdam 19.855 (2015) 18.844 (2016)
    Moscow 22.501 (2015) 18.632 (2016)
    So dividing passenger number with number of seat will give us load factor for each destination:
    Zurich 0.63 (2015) 0.81 (2016)
    Paris 0.61 (2015) 0.61 (2016)
    Podgorica 0.71 (2015) 0.69 (2016)
    Amsterdam 0.60 (2015) 0.81 (2016)
    Moscow 0.57 (2015) 0.80 (2016)
    Great improvements for Zurich, Amsterdam and Moscow.
    To get total load factor we need to calculate ASK (Available Seat Kilometers) by multiplying Available Seats with distance between the cities (Zurich 951, Paris 1415, Podgorica 286, Amsterdam 1408, Moscow 1717, source http://elevate.airserbia.com/Elevate_maj2016/index.html#101/z ) that is:
    Zurich 53.065.800 (2015) 49.822.890 (2016)
    Paris 78.975.000 (2015) 74.131.850 (2016)
    Podgorica 10.193.040 (2015) 10.306.296 (2016)
    Amsterdam 46.497.792 (2015) 32.800.768 (2016)
    Moscow 67.691.088 (2015) 39.999.232 (2016)
    We also need RSK (Revenue Seat Kilometers) that we get for each destination by multiplying ASK with load factor for each destination so that is:
    Zurich 33.217.479 (2015) 40.389.921 (2016)
    Paris 48.289.705 (2015) 45.246.040 (2016)
    Podgorica 7.253.818 (2015) 7.089.940 (2016)
    Amsterdam 27.955.840 (2015) 26.532.352 (2016)
    Moscow 38.634.217 (2015) 31.991.144 (2016)
    So for all destinations total ASK was:
    256.404.640 (2015) 207.061.036 (2016)
    And RSK was:
    155.351.059 (2015) 151.249.397 (2016)
    And load factor was RSK/ASK
    0.61 (2015) 0.73 (2016)

    So they reduced ASK 19% but RSK 3% which is impressive….

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    1. Which can only indicate that the fall in passenger numbers was mainly due to the loss of transfer passengers. JU shifted towards O&D which give higher yields.

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    2. Here are correct figures for aforementioned 5 busiest routes for Q1 2016 according to JU report :
      AMS 99 flts.(12/320,81/319,6/733) plf 70,9%
      SVO 106 flts. (19/320,87/319) plf 65,0%
      CDG 173 flts. (31/320,142/319) plf 68,4%
      TGD 234 flts. (9/319,26/733,199/AT7) plf 66,8%
      ZRH 175 flts. (92/320,74/319,9/733) plf 83,6%.

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    3. My frieng anonymous 9:57AM, don't get me wrong I agree with you but this is so tiring, you must be obsessed with all this air serbia issue.

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    4. Well at least he offered something to discuss. Anything stopping you from discussion?

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    5. Air Serbia must be more orientated towards the O&D passengers.

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  8. It's funny when you look at the report, and the the revenues from air bridges:

    Revenue from domestic entities (Air Serbia and others which are registered locally): 2.394.000 dinars

    Foreign companies: 41.508.000 dinars

    So much about subsidies :)

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    Replies
    1. So imagine how much the airport lost while JU was not paying anything.

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    2. That was the decision of the owner of both entities. About time you accept the fact that the owner decided to fund the expansion of one entity from the revenues of another, and stop searching for conspiracies.

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    3. And that decision would be ok if JU managed in taht period to become self-sufficient. Given their profit and the amount of debt that was written off I don't think we are there yet.

      Maybe the government should extend the subsidies by another year?

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    4. The state decided to fund JU with the money of foreign airlines.
      Result: BEG is the only airport in the whole of Balkans that has declining passenger numbers.

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    5. It's OK to fund one state owned entity with another as long as return on investment is higher than cost of capital, or NPV discounted by cost of funds is positive. State funds itself at ~5% (foreign currecny denominated debt). Let's take 5yr horizon for the project, which coincides with Etihad contract.
      I suspect that business case rests on less quantifiable benefits which can easily be 'fixed' to arrive at desired rate of return.

      my2cents

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    6. That's all water under the bridge now. Are we going to keep talking about it in 2017 as well?

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    7. Well, look at it another way - how much money has JU lost because BEG just took over their T1 decades ago, without any compensation?

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    8. @ anon 06:30pm

      I can appreciate 'under the water' comment, as it has some basis in finance, referred as sunk cost. So let's start today, forget about all the subsidies of the past two years, take the same 5 years horizon and do the same analysis.

      Does the business case stack up without 'extra' benefits ?


      my2cents

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    9. lol, under the water...

      http://idioms.thefreedictionary.com/water+under+the+bridge

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    10. :-) indeed.

      please excuse me as 'water under the bridge' and 'under water' all apply to ASL pretty much.

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  9. They need more regional jets: 3-5 ones. LJU/SKP/ZAG 3 daily, OTP and SOF 2 daily, OHD and VAR daily all-year around. With LC arriving to TGD, they could easily do up to 7 daily. This is how it works!

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    1. To be honest, I don't think that LJU, SKP and ZAG can go 3 daily. There are not enough transfer pax to fill 3 flights a day, and the O&D pax are very price sensitive, meaning that they would choose to go with a bus or a car if it is cheaper. However, if Air Serbia introduces a "light fare" with only hand luggage, regional operations might see a pax increase.

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    2. No need for 3rd rotation to LJU, SKP and ZAG. With those 2 rotations you have good connectivity, passenger can travel to BEG or ZAG and come back same day, there is more than enough capacity for demand.

      In case demand rise, they should put bigger plane on route, because that brings more money. Bigger plane more money per seat.

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    3. I think that a night flight to ZAG could work so as to offer connections to western Europe but also to places like Warsaw, Prague and Moscow and soon LED and KBP.

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    4. Do you know that Zagreb have direct flights to Prag and Warsava?

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    5. So? Connecting flights tend to be cheaper than direct ones.

      Are you saying that TK carriers only passengers who didn't have a direct flight to their final destination?!?!?

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    6. That flight would need to be half the price of the direct flight, which I really doubt it is.

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  10. I haven't seen the report, but I'm surprised Vienna is not in the top 5.

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    Replies
    1. Ripoff pricing, same as for Prague.

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  11. OT
    Today Qatar flight from BEG to Doha with A321. Is it demand or aircraft availability? Any info on that?
    Thanks :-)

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    Replies
    1. Given that their April passenger numbers grew by 90% I wouldn't be surprised that they sent it because of additional demand.

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    2. Evo, samo sto nisu poslali wide body. Incredible demand or fleet shortage? ;-)

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    3. Fleet shortage otherwise they would operate daily flights.

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    4. Fleet shortage is becoming a big issue for QR since both the A350 and A320 neo deliveries have been delayed. QR decreased frequencies to a number of destinations from Australia to US.
      QR has done a remarkable job in the region and has shown that you have to have patience in a market. In the first year in BEG specifically they had like 20-30 pax on average.

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  12. Flew in from DOH end April, A320, maybe 4 seats were available... We tried changing dates but QR told us flights were full.

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  13. THY IST-ORN diverted to BEG!

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    Replies
    1. Мени је још интересантнија рута авиона на линији Истанбул Оран која иде преко Бугарске Србије, Босне па на Италију и онда ка Алжиру. Преко Грчке и Италије је ем краћа ем јефтинија. Зна ли неко зашто је овако?

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    2. Preko Grcke i Italije je krace, ali su ATS usluge dosta skuplje. U eri jeftinog goriva vrlo cesto se biraju duze, ali u ukupnoj kalkulaciji, jeftinije rute.

      ATCO

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  14. Anyway to see the Wizzair A321 next year in BEG? They can put base 1 a/c and launch Spanish destinations! Still annoyed that there are no flights to MAD, PMI, Canary Islands and BCN all year service...

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    1. Unfortunately there are no chances of seeing it in BEG. I think it makes sense on routes with a lot of demand and frequencies.

      So far the only route that could see it is MMX.

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    2. They cannot base any aircraft in Serbia since they do not have a Serbian AOC. They can however, fly as often and from any point in the EU they want, to any point in Serbia.

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    3. Hahahaha newsflash... it's been years since they opened their Belgrade base.

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    4. What is the range of A321neo ? Can it be used for transatlantic from W Europe?

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    5. It can but Wizz Air won't be launching those as it would require them to have a crew base in Western Europe which is something that won't happen.

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    6. Imagine a 230 seater a/c flying regularly - that's almost a A330 in terms of passengers! OTP,BUD,WAW & SOF will be the first bases enjoying the new beauty...lucky them!

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    7. Just five less seats in economy class than JU's A332. lol

      Horrible.

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    8. Anonymous at 3.22pm.... they are in breach of the law ... so hahahaha, watch the screws get tightened in the coming weeks

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    9. Hahaha nothing will happen so there is nothing to watch for.

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    10. Remember your comment well ....

      Delete
  15. Why don't ASL create a low cost subsidy and use the older 737s? They can launch flights to secondary cities..

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    Replies
    1. That's not how low cost airlines work. 733s are too inefficient and too old for that kind of adventure.

      Delete
  16. JU numbers for flights to Zagreb :
    62445 pax in 2015

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    Replies
    1. Is this good or not?

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    2. well, that comes about to 45 pax per flight, which seems ok, especially for the 1st full year of operations.

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  17. I hope at the end of this month we will see some positive percentage for air serbia or else it's going to be a hell of a party from those so called " haters ".

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    Replies
    1. Дечко ТзарMay 14, 2016 at 6:45 PM

      New destinations will be introduced in June with Jul, Aug and Sep numbers expected to bear the fruit. Haters will have to bear with us until early July. I am also hungry as a bear for increased numbers but will just have to grin and bear it for now.

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    2. Passenger numbers matter less, while profitable flying is THE be all and end all

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    3. Winter is coming... W16 is coming.

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    4. Why is there such an obsession with passenger numbers going either up or down ?

      Numbers are critical for airports and as the above post said, they are less important for airlines. What is critical for airlines, is passenger yield and that their RASK is greater than their CASK.

      Passenger numbers contribute to this, but you can carry less passengers and make considerably more money by flying higher yielding passengers at the expense of low yielding passengers.

      In Air Serbia's case, their winter schedule was all about breaking some connectivity for O&D flows, thereby not carrying low yielding transfer traffic and instead, focusing on growing and carrying more point to point traffic.

      That's what their CEO said they did and i recall he said they grew both their yields and their RASK over the winter - in the end, losing a lot less money.

      Winter is tough for all small ex-yu carriers - the seasonality is extremely pronounced and not one carrier has a flexible fleet where they can bring in fleet when they need it (ie. summer) and then get rid of aircraft in the winter, when they don't need so many.

      They are better off parking a few aircraft over the winter or providing ACMI flying to airlines in the southern hemisphere. That is the only way to overcome the dramatic fall off in demand over the winter and at the same time, minimise costs

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    5. You are so wise. I hope Dane hires you.

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    6. ot: did nemjee stop making comments?

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    7. I made some a few days ago but lately I was busy with work so I couldn't contribute to the discussion. :)

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  18. Bice opet veliki rast sa novim Destinacijama.
    Samo bi bilo odlicno uvesti IKA i jos neku destinaciju.
    INN-NS

    ReplyDelete

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