Wednesday, May 24, 2017

Adria Airways' recovery continues


Adria Airways has continued to make headway this year by growing its passenger numbers and increasing frequencies across its network. According to the "Sierra5" portal, the Slovenian carrier handled just over 320.000 passengers during the first four months of the year, an increase of 11.3% compared to the same period in 2016. The improved results come following a stronger winter season and higher demand for both scheduled and charter flights this summer. Despite the planned closure of its Polish base in Lodz at the end of June, the Slovenian carrier is adding frequencies on a number of routes out of Ljubljana including Podgorica, Sarajevo, Skopje, Pristina and Amsterdam, which were not initially planned for this summer season. The Bombardier CRJ700 aircraft currently based in Lodz will be redeployed to the Slovenian capital.

In a bid to attract more passengers and generate incremental revenue, Adria has recently partnered with Optiontown, a third-party service which offers Adria's economy class passengers the opportunity to upgrade onto business class for a charge of 49 euros, subject to availability on the day of departure. If no business class seats are available on the day, passengers are refunded for their paid upgrade. Furthermore, economy class passengers can sign up for an empty seat option by paying and extra nineteen euros. As a result, passengers are given the opportunity to acquire an empty seat next to them in order to provide themselves with more comfort and privacy. However, this option is also subject to availability on the flight.

Commenting on the airline's performance and its outlook for this year, Adria's CEO, Arno Schuster, recently said, "We believe in the sustainability of the existing business model and financing through higher revenues, which are mostly generated in the summer. In general, we will focus on two areas of our business - both regular and charter flights. We will generate enough revenue in the high season to secure liquidity throughout the year. This is the plan we are pursuing". He added, "We expect a successful year. We are always exploring possibilities for new destinations and new markets but we are currently more focused on improving existing frequencies".

95 comments:

  1. I'm liking more and more some of the new things the owners are doing. Mostly I'm glad they are focusing on Ljubljana and didn't give up like the former management who said there is no market in Slovenia and started unsuccessful ventures in Poland.

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    1. They started Poland because it was subsidised and they needed quick revenue at the time.

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    2. @AnonymousMay 24, 2017 at 9:08 AM:
      Exactly! That is why, Adria is considering launching LJU-PEV flights.

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    3. Are you serious? I actually had to search up that code. So more of the same from Adria.

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    4. @AnonymousMay 24, 2017 at 9:16 AM:
      Yep. Not much has changed, except the new owners have no experience in aviation business and they are still learning. Go figure.

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    5. Well they have a surplus of aircraft now. They have to put it somewhere.

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    6. I thought you wrote PEK instead of PEV :D Would not have been surprised if they were the latest in the region to jump on the China bandwagon.

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    7. No need for that, they can always codeshare with VLM Slovenia from Maribor ;)

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    8. cheers to everyone that googled PEV airport code (like me)

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    9. Just to make things easier for everyone, PEV is Pecs-Pogany airport in SW Hungary. The runway is 1500 m long and it will be quite a handful landing a jet there.

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    10. You can land a small commercial jet like a CRJ/ERJ on 1000m. There may only be TOW constraints for departure if destination is far away and a lot of fuel is required onboard. Many airports of about 1400m handle large Embraer and even small Boeing like EYW - been there recently and they have more than 3hrs flights to Washington and NY.

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    11. Well, at MTOW CRJ 700 needs about 1530 m for landing (considering ISA and SL). So you would need to be weight limited plus have favourable environmental conditions (not too hot, dry runway, ...).

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  2. The paid upgrade option sound interesting but probably not the best to use during the summer since the chances of their being free seats are smaller. Does any other airline use this Optiontown?

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    1. Mostly Star Alliance members.

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    2. Just be aware if you are doing this that Optiontown immediately informs you when you pay during booking that your upgrade has been processed but that doesn't actually mean it has been approved by the airline. The airline approves it at check in. If business is full they put you in economy and refund you the 50 EUR in the next 5 days. I presume its the same case with the empty seat option in economy.

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    3. Thanks for the explanation. Interesting system.

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    4. Very good model! Imagine with JU ex business class product if they kept it as it was and introduced such approach at let's say 100E it would have been a winner! But Mr Kondic and Co are not inventive...

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    5. Does it really make sense to buy an empty seat for a 45 min flight?

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    6. It depends on personal taste, comfort level and of course of budgetary conditions. 45 min flight can be something to debate for but 1-1 1/2 hour and plus it has merits.

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  3. Adria is everything Air Serbia wants to become with their new business model.

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    1. Wouldn't be surprised JU rolling out "buy an empty seat next you" and then presenting it as an "evolution of its product to make Air Serbia more competitive, reduce its costs and drive revenue growth."

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    2. Also: "enhanse customer choise and improve travel personalisation".
      Marketing BS.

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  4. I noticed that Adria is now offering tickets to Portoz, Graz and Trieste on their website in cooperation with Goopti. Basically you buy a ticket to say Graz via Ljubljana and the transfer between Ljubljana and Graz is organized for you. Was this always the case with Adria? I just noticed it. Good job either way.

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    Replies
    1. They started collaborating with Adria around 2 yrs ago.

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    2. Didn't notice that. Smart move in my oppinion.

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  5. If the rumors of 4k's interest to buy Croatia Airlines are true, I wonder what it could mean for Adria.

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    1. They will probably merge Croatia and Adria under the same brand - Adria Airway, which is more recognized and has higher value than "Croatia Airlines".

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    2. I think Adria and Croatia are a natural fit. Both star alliance, both EU carriers, both have similar fleets. If they became part of the same company they wouldn't have to remove the Croatia brand. They could keep their separate products.

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    3. Both of them already cooperate. I don't see any other major benefits for either of them through merging.

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    4. They could merge and leave the brands. I doubt that Croatian politics would let go the name Croatia Airlines. But SLO and HR need to work together and improve political relations again. Together they are stromg and nothing more important for a nations prosperity is to hve strong relations to yr neighbours!

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  6. Interesting that the pilot strike didn't affect their numbers too much.

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    1. There were only a few cancelled flights. They wetleased planes to get people to their destination.

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    2. It didn't affect passenger numbers but it most certainly affected their finances.

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    3. Have they said how much money they lost that week?

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  7. Alen Šćuric PurgerMay 24, 2017 at 9:20 AM

    Increase of frequencies are because Adria has too mach overcapacity:

    - no flights from Lodz and other 3 polish airports
    - no flights from Estonia
    - last year one plane was in Belgrade

    So, they must do something with those planes and crews. But I wonder is model of more frequencies, which put company in such a shape, good one? Is there potential for that, enough demand? Can 4K be so better than previous management and make demand?

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    Replies
    1. Agree that this has resulted in the increase in frequencies but I also think it will intrastate into higher costs and losses at the end of the day.

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    2. They did not use their own aircrafts for the flights from Estonia.

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    3. Anon @9:25
      Want to elaborate your statement about higher costs?

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    4. Alen Šćuric PurgerMay 24, 2017 at 10:07 AM

      They did not use their aircraft in Estonia? Really, I had information that 2 Adria planes were in Estonia.

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    5. Purger,

      kako objasnjavate izostanak vece saradnje JP i OU, obzirom na komplementarnost flote ova dva EU operatera. politika, sujeta ili nesto trece ?

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    6. Well, since Adria has extra aircraft available to them (due to reasons mention), they had three options: - - lease the extra aircraft to other companies (in progress),
      - add new destinations (apparently too risky for the new management - they do not want to invest any more money), or
      - add frequencies to existing routes.

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    7. Adria should get rid of their CR7 and lease one CR9 or CR10

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    8. From what I hear they want to get rid of the Airbuses. CRJ 1000 could be a good replacement. They were supposed to be the launch customer for the type but they modified their order.

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    9. Alen Šćuric PurgerMay 24, 2017 at 3:34 PM

      Pa suradnja OU i JP postoji. Kada nekoj od kompanija treba avion u načelu uzimaju od ove druge (štrajk u Sloveniji, tehnički problemi Croatie...).

      No, teško je surađivati kada su im baze toliko blizu (ZAG i LJU su na 130 km). Ne vidim koji bi modalitet suradnje ovdje mogao biti uspješan.

      Da se kompanije spoje moglo bi se napraviti nešto kao što ima Lufthansa sa svojim pulenima (Austrian, Swiss) ili KLM sa Air Franceom. Znači da putnik uzima let iz SKP do BRU, a da ni ne zna jel to preko LJU ili ZAG, pa npr. do tamo ide preko LJU, a vrača se preko ZAG.

      No, za to treba daleko veća sinergija, više zajedničkih destinacija (sada imaju samo dvije SJJ i SKP), tj. Adrija bi morala otvoriti barem svakodnevne letove za SPU i DBV, a CTN za PRN, TIA i TGD. Uz to svaka od kompanija bi morala otvoriti po tri tjedna leta za OMO, OHD, TZL (eventualno kasnije INI, OSI i TIV, te JP za ZAD). Naravno sve destinacije bi morale biti u sinkronizirane (da se ne leti u isto vrijeme za feeding destinacije, te za zapadne destinacija).

      I onda je upitno kako bi to prošlo obzirom da se baze međusobno ne mogu komercijalno spojiti.

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  8. They should try INI 2 times per week. Could work.

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    1. I'm not so sure. They used to fly Banja Luka with a CRJ200. Had barely 10 passengers per flight.

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    2. That was at a time when they were crazy expensive. With their current model of baggage free tickets, basic on board service and generally lower fares I think it could work.

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    3. It could have worked before Swiss started flying. Now there is no point because all the transfers will go via Zurich and there is definitely no market for just P2P traffic between INI and LJU.

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    4. The only reason they flew to BNX is again because it was subsidised. As soon as the subsidies ended they stopped flying. Same with Air Serbia which only flies to BNX because of subsidies but there are no plans to end those in the near future.

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    5. That says more about Banja Luka Airport and their management then about Adria/Air Serbia.

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    6. I think they would have much more success if they tried the Croatian coast. Dubrovnik, Split, Pula. There is big demand for these. Don't understand why they don't start it. Seasonally of course.

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    7. Easy for Banja Luka pax to drive to ZAG and take flights from there

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    8. Dubrovnik and Split yes!
      PUY? It's less than 2.5h by car!

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  9. So the Lodz crew lost their jobs? Or will they transfer them to Ljubljana?

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    1. Definitely won't be transferring them to LJU.

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    2. They are in talks with the management.

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  10. Great news Adria! Congratulations.

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  11. OT Serbian CAD has denied Tunisair's request for the series of charter flights on the route MIR-BEG-MIR during this Summer season.
    The argumentation for such a decision was that the airlines registered in Serbia had confirmed to CAD that they had sufficient capacities for the flights of the requested services.
    Tunisair have been operating charter flights from Belgrade to Tunisia for years. It is the first time in newer history that the request for such kind of operations was rejected.

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    Replies
    1. Yep, ultimate protectionism!

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    2. No different to most other countries

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  12. What's happening with Adria's fleet renewal?

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    1. What fleet renewal? They have the youngest fleet in ex-Yu and they have added CRJ900s and 700s over the past two years. Don't think they need any new aircraft or replacements at the moment.

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    2. Several leases expire next year. Management is looking at renewal options.

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  13. I'm glad they are getting their act together. I think competition at LJU will become bigger and bigger now. The management there is trying to attract new airlines so Adria will have to deal with this too. So making themselves more competitive and offering new services is a positive development.

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    1. JP responded well to Transavia launching Amsterdam. Fares went down a bit and they introduced more frequencies on the route.

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  14. Financial results for 2016? Financial results for Q1 2017?

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    1. Results for 2016 are being audited. As for first quarter financial results they never publish quarterly results except for passenger numbers.

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    2. According to the CEO they managed to reduce losses and increase revenue in 2016. They will still record a loss. As for 2017 we will see if they manage to turn a profit.

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    3. The loss for 2016 will be around 2 million euros.

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    4. And in 2015 it was 4 million euro loss. So they managed to halve it.

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    5. The loss in 2015 was 9.192.781 euros.

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  15. Super glad for JP. Anyway, the eurozone is officially out of recession anyway. The crisis hit many EU countries including SLO. Good times ahead. And please focus on LJU only.

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    1. Agree. Focus on LJU and make it work :)

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  16. It's always good if numbers went up. Does anyone know the load factor?

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    1. They say it increased 4% from Jan-Apr but they haven't reported their actual LF.

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  17. Good news! Hope the numbers continue to rise.
    Does anyone know where I could get the numbers for Q1 of 2015? I think they would be more relevant as there weren't any cuts back then (last year they slashed a lot)

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    1. Ex-Yu has the numbers

      The Slovenian carrier has recorded a strong start to the year, handling 203.633 passengers during the first quarter, an increase of 8% compared to the same period in 2014.

      http://www.exyuaviation.com/2015/04/adria-airways-to-lease-third-a319.html

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    2. So strong growth on Q1 15 as well. Good work.

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  18. Good work for Adria. Happy to see them expand again after so many years of cost cutting.

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  19. They are going back to the strategy that worked for them during the 1990s and early 2000s.

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  20. JP should fly to SPU and connect it like they do for other ex YUs but maybe they hve an agreement with OU not to open SPU anymore

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  21. 4K seems to be doing a good job with Adria.

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  22. I am glad they are done with Poland. It never made much sense. It would be better if they focused on developing Pritisna as a secondary hub before it gets too much competition and Wizz eventually opens a base.

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  23. Since nobody has mentioned it so far... I wonder what they can do when Ryanair eventually comes to LJU. With them trying all of this "big airlines" things (connecting flights, flying from FRA, selling Air Europa tickets), it's just a matter of time when they will open a base in Ljubljana.

    And then what happens with JP?

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    Replies
    1. JP has had a long time to adapt and work out a strategy for when LCCs come along to Ljubljana (sure there is Wizz and easy at LJU but they have only a few weekly flights). Unfortunately, they haven't really thought of anything or have a plan when the inevitable happens and Ryanair comes along.

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    2. Few? London is 3rd by destinations per weekly departures from Ljubljana.

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    3. Would be nice to define a few :) There are 4 flights to 3 different airports in London just on Sunday, 18 per week.

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  24. Nice innovations from Adria.

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  25. Good job Adria. Keep it up!

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  26. OT.

    Ryanair is getting busy with connecting flights.

    http://uk.reuters.com/article/uk-ryanair-transfers-idUKKBN18K282

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