Air Serbia's CEO, Dane Kondić, has said that the carrier is preparing for strong competition from low cost carriers on the Serbian market. Speaking to "Business Insider", Mr Kondić said Air Serbia’s future is framed by the competitive environment of the broader market, which includes significant changes to the airline business in Serbia as well. “Serbia is not part of the European Union and so we don’t have the degree of openness and competitive environment that other countries who are part of the EU would have”, the CEO said. He added, “As a result, we don’t have as much low cost carrier penetration in the market”. However, Mr Kondić warned that the flood of low cost carriers that have waged war on traditional airlines across Europe is on its way to Serbia. “It definitely weighs heavily on our thoughts in terms of our future plans”.
Currently, seven low cost carriers operate scheduled flights out of Air Serbia's hub in Belgrade. They include Wizz Air, which also calls Belgrade its home, easyJet, Pegasus Airlines, Norwegian Air Shuttle and Flydubai, as well as Germanwings and Vueling on a seasonal summer basis. Air Serbia competes directly against its low cost rivals on just three routes - Stockholm, Stuttgart and Larnaca - although this number is significantly greater if secondary airports, to which budget carriers mostly operate out of Belgrade, are taken into account. In addition, the low cost presence in Niš has been growing steadily with both Wizz Air and Ryanair to operate services there by the end of the year. Several other airlines have also expressed their interest in introducing flights to the south-east Serbian city.
Despite the growing presence of budget carriers in Serbia, Mr Kondić believes Air Serbia's future growth should be on par with the trajectory it has set for itself over the past three years. However, he notes any growth the airline experiences will be dictated by what makes commercial sense. Commenting on where he sees the company in five years, Mr Kondić said, "I hope that we can have eight continuous years of profit. We managed to do that in the first two years of our relaunch, which is an amazing achievement in this business. The most important thing is not to have an airline that isn’t making money. We need to keep our commercial mandate, because that’s important for our majority shareholder. But we’re also probably the best example, in terms of the economic agenda, for the economy in Serbia".