Thursday, August 31, 2017

Etihad tells Air Serbia to rationalise business


Etihad Aviation Group's new management team, headed by interim CEO Ray Gammell, has told its equity partner Air Serbia to make greater savings in its business, according to the daily "Politika", as the Emirati carrier continues to review its investment strategy following failed ventures at Air Berlin and Alitalia. The newspaper notes that Air Serbia has been given a list of cost saving recommendations from its part-owner. The Serbian carrier has already rolled out a number of consolidation measures, including the suspension of unprofitable routes such as Istanbul and Abu Dhabi, the retrofit of ten narrow-body Airbus aircraft with slimmer seats, the closure of its sales offices in Serbia outside of Belgrade, and the layoff of some thirty workers, to name a few. The airline is now considering slashing a further 100 jobs, with cabin crew expected to be hit the hardest. "A decision on the possible reduction of the company's workforce, which is made by the Supervisory and Executive Board, has still not been taken", the airline said in a statement, noting that its number of employees varies throughout the year as a result of seasonality. At the end of 2016, Air Serbia had some 2.500 employees, almost a thousand of which staff its subsidiaries - Air Serbia Catering and Air Serbia Ground Handling Services. Several weeks ago, the Chairman of the Air Serbia Supervisory Board, Siniša Mali, indicated that both the catering and handling divisions could be outsourced.

Following the recent departure of Etihad Airways' former President and CEO, James Hogan, who oversaw the company's minority stake acquisition strategy, the Emirati carrier has replaced some of its members within the Air Serbia Supervisory Board. Its members on the board now include Ricky Thirion, Etihad's Interim Chief Finance Officer, Kevin Knight, Etihad's Chief Strategy and Planning Officer, Sultan Mohamed Al Mahmoud, Etihad's Vice President for Corporate Strategy, and Bassam Abdullatif Al Mosa, the Vice President of Corporate Investments and Subsidiaries at Etihad Airways. The Emirati airline has delayed the appointment of its new Group Chief Executive to late 2017 with the hiring of a new boss nearly finalised. "The recruitment of a new Etihad Aviation Group CEO is reaching its conclusion with the successful candidate expected to start no later than the beginning of 2018", an Etihad spokesman said in a statement.

Air Serbia noted last week that its position remains stable. "Despite the serious challenges facing the aviation industry on a global scale, the position of Air Serbia remains stable. As said previously, the Government of the Republic of Serbia and Etihad Airways are fully committed to the strategic partnership with Air Serbia. The national flag carrier has started the process of consolidating its business, reducing costs and increasing efficiencies, in response to changing market conditions", the company said. Some measures undertaken in a bid to boost incremental revenue include the move to Sabre for its reservations and check-in systems, a Belgrade Airport check-in fee for the lowest subclasses (if not previously completed online), additional charges for "preferred seating" on board and Premium Lounge passes at a fee for economy class passengers or those flying on other airlines. The carrier has also placed one Airbus A319 on the leasing market for the 2017/18 winter season. Mr Mali has said that so far in 2017, the airline has improved in all metrics compared to last year, both in profitability and passengers carried. He also noted that there are no plans to discontinue the carrier's flagship service to New York, which is believed to have put pressure on the airline's finances over the past year.

166 comments:

  1. It was obvious that all these consolidation measures were coming from EY and not just something JU came up with all of a sudden.

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    Replies
    1. Had oil prices not come down and the Middle East was still profiting from it nothing would have changed at JU.

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    2. Ironic really.

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    3. Majority of the airlines are celebrating the low oil prices, except the Middle East carriers. Ironic.

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    4. Oil will probably stay around $50 p/b for the next number of years until it slowly starts to drop as the electric car revolution takes place over the next 10 years. Considering the Middle East countries developed their airline plans when oil was around $100 and only imagined an increase in the price they are now having to start introducing VAT plus cutting subsidies to their own people. They certainly won't be money for pet projects, as a matter of fact they will be looking for ROI from the money they invested in the near future.

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  2. What more can they do to rationalize operations? They have cut routes, downgraded services, let people go...

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    1. There's a fairly obvious one: get rid of the a330 and the NYC route. It's a money pit and pretty much cancels out all these attempts to make the company efficient.

      ... but then too many egos will be bruised.

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    2. Doesn't seem they will be doing that.

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    3. I don't think all their problems come down to JFK.

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    4. Definitely true, but it does contribute to the overall problem as a loss-making route without a feasible long term strategy.

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    5. They simply have too many employees, and they will have too many even after these further reductions of 100 cabin crew. Sooner or later, they will have to start clearing the HQ. Too many back office jobs for an airline this size.

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    6. I was flying Etihad on Monday and talking to the purser during the flight. He said he's really sorry that Air Serbia is stopping flights to JFK. I was like what?? He said that's what he heard - obviously not the highest placed person within EY but still appears the decision might have been made already.

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    7. Read the last sentence of the article.

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    8. The JFK route is here to stay.
      Hubris won't allow it to be cut.

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  3. 2,500 is too huge for a company of its size. They managed to hire 1,600 people in less than four years. What for?

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    1. Remember that they integrated two companies which were separate from Jat before.

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    2. Still 1.615 is too much in core business. During Jat time there was 1.070 workers and Serbia spent 25 million EUR to downsize number of those workers. Hundreds were ask to leave. What fore, if later they hire some 800 more?

      So, why Serbia spent so much money to shrink number of employees?
      Why they ask people to leave? They were not "politically correct" or they were incompetent workers?

      Even Purger said that Air Serbia has 40% too many workers in his Analysis. Croatia has 890 workers including full maintenance with at least 130 mechanics.

      So if Croatia would have just line maintenance like Air Serbia has, they would have just 790 workers. Compering to 1.615 in Air Serbia core business?

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    3. Purger citira Purgera? Znamo sta si pisao i nije tajna da imaju previse zaposlenih. Ovo sada pisu da bi otpustali neke od njih nikakav Etihad tu nije u pitanju.

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    4. Do not shoot the messenger. The point is that Air Serbia fired and the hired loads of people and now are looking to fire again, all within an Olympic cycle.

      I'd say incompetence, but it's not since the government needed to create more jobs for 'family and friends' .

      Not Purger

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    5. SNS kadar! kako ih se otarasiti?

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    6. It is time they sent over some accounts from Etihad to do an evaluation and have them cut who has to be cut. If you leave it up to the local management all the wrong people will be kept and those without connections will be cut.
      Nepotism is just a part of doing business in Serbia.

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    7. Alen Šćuric PurgerAugust 31, 2017 at 11:49 PM

      I quote myself? Hahahaha... congratulation.

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    8. Nick, the local management was appointed and approved by Etihad. Obviously they are clueless and sad as the local ones.

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  4. If anything this shows that Etihad is here to stay.

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    1. maybe, but they are now officially highly unsatisfied with JU's performance

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    2. It shows that Air Serbia's business was never sustainable.

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    3. Why don't they just replace the management if they are not satisfied with JU's performance? They have done it before in other companies.

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    4. If they plan an exit soon, it doesn't make sense to change the management for only couple of months.

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    5. All parties involved - Serbian government, Etihad and Air Serbia have said that they do not plan to exit any time soon. Also they are contractually obligated to stay until 1st January 2019.

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    6. 3rd May 2017: Etihad Confirms Support Air Berlin For The Next 18 Months
      15th August 2017: Airberlin enters insolvency after Etihad cuts funding

      Need I say more?

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    7. You are comparing Air Berlin's problems with Air Serbia.

      Need I say more?

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    8. One thing is for sure if Etihad decides to continue with Air Serbia after 2019 they will surely want to exrtract as many concessions from the Serbian government as they can. Seeing as the government wants JFK to continue I can see Etihad using that as leverage to get more concessions. Any way you look at it the Serbian government will be putting in a lot more money in the years to come. They already showed they are willing to put in $40 million, next year they may be asked for $45 million then maybe $50 million the year after.

      In a few years it might be worth it just to kick Etihad out and put in all of your own money, atleast it will stay in the country and won't be sent back to the Middle East.

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    9. Etihad is not here to stay, neither they will do so in any other partner company if ROI is not feasible ASAP.

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  5. What a surprise...

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  6. Po mom misljenju potrebno je otpustiti oko 1200 ljudi. Nije normalno da avio kompanija ima preko 100 zapolenih po avionu

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  7. So if they outsource catering and ground handling it will mean that all those 1000 people loose their jobs?

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    Replies
    1. No a private company would take over and do the same job with only 300 people, plus the numbers in Aie Serbias books will look better.

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  8. Etihad keeps on showing how clueless they are. If they really wanted to help Air Serbia then they would have given them €300.000 for marketing purposes to promote its brand in markets that are currently underperforming.
    If austerity was the precursor for prosperity then Greece would have been one of the riches countries today.

    They want Air Serbia to strip its model to the bone and then what? In stead of selling the catering division why not put new management that can actually make the company profitable by offering its services to other companies?

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    Replies
    1. Kojim drugim kompanijama kad su sve ukinule servis u avionima?

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    2. I said companies, not airlines. As in catetring events.
      Catering business is booming.

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    3. Nisu oni u poslu keteringa vec u avioprevozu. Ako smanjuju taj sektor znaci otpustaju ljude kuvare i pomocne koji traze posao u drugim kompanijama. Svadbe i sahrane ne rade se sa kamionima sa nadgradnjom koje je MAN njima isporucio pre nekoliko godina. Neki pametnjakovic je pokusao da njihove obroke prodaje u lancu Maksi ili IDEA. Ne ide avio hrana uglavnom nije jestiva na zemlji. I nije u redu da dotirana aviokompanija konkurise drugim na drugim trzistima.

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    4. I never said it was the ideal solution. I merely pointed out that this could have been another source of income.
      Furthermore, ASL has other trucks than the MAN. If there is a will, there is a way.

      My point was that they want prosper if they start cutting left and right.

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    5. Caterimg is not core to JU. It should be sold and the new owner can diversify into weddings.

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    6. Maybe it's not at it's core but equally so it doesn't have to be a burden to the airline. Like I said, selling things left and right won't solve their problems.

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    7. Selling non-core should be top of the list. Perfect timing too, shouldn't raise too much contraversy in the press.

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    8. at Anon 12:12

      Please stop blaming Kurir.

      Copy & Paste from Aug 21st (credit to person who posted it first)

      1. http://pretraga2.apr.gov.rs/pretragaObveznikaFI/

      2. u pretraga "po matičnom broju" upišeš "07044275"

      3. "Javno objavljeni finansijski izveštaji"

      4. u "vrsta finansijskog izveštaja" izabereš "konsolidovani godišnji finansijski izveštaj"

      5. 2016

      6. bilans uspeha

      7. tražiš liniju "ПРИХОДИ ОД ПРЕМИЈА, СУБВЕНЦИЈА,

      ДОТАЦИЈА, ДОНАЦИЈА И СЛ."

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  9. And how long will these measure be in force?

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    1. I doubt they will ever go back to the previous model.

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    2. When their finances improve they will resume their expansion strategy.

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    3. Their finances should be in good standing. They showed a profit every year even if it was small. I guess we now know the truth about that.

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    4. good standing? with 40 mil $ from the country for last year?

      sure in that case, med i mleko

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    5. To je informacija iz Kurira bezveznih novina koje su od pre neki dan navodno "opozicione".

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    6. Informacija je iz finansijskog izvestaja Air Serbia. Ponovo o Kuriru. Znas kako ako bapises laž 100 puta ne postaje istina. Vrlo lako se moze proveriti i formacija. Sigurno nece RTS 1 da objavi istinu u Dnevniku 2.

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    7. at Anon 12:12

      Please stop blaming Kurir. 

      Copy & Paste from Aug 21st (credit to person who posted it first) 

      1. http://pretraga2.apr.gov.rs/pretragaObveznikaFI/

      2. u pretraga "po matičnom broju" upišeš "07044275"

      3. "Javno objavljeni finansijski izveštaji"

      4. u "vrsta finansijskog izveštaja" izabereš "konsolidovani godišnji finansijski izveštaj"

      5. 2016

      6. bilans uspeha

      7. tražiš liniju "ПРИХОДИ ОД ПРЕМИЈА, СУБВЕНЦИЈА,

      ДОТАЦИЈА, ДОНАЦИЈА И СЛ."

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    8. O čemu ti to molim te? Svi znaju istinu da nikakve subvencije nisu bile donirane a kamoli 40 miliona. Jedino u budžetu Srbije se vidi da je mali deo para uplaćen u plate ljudima koji su u izvršnom odboru AS a po zakonu im se plata finansira iz budžeta na osnovu 51% vlasništva države Srbije u AS.

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    9. O čemu ti to molim te? Svi znaju istinu da nikakve subvencije nisu bile donirane a kamoli 40 miliona. Jedino u budžetu Srbije se vidi da je mali deo para uplaćen u plate ljudima koji su u izvršnom odboru AS a po zakonu im se plata finansira iz budžeta na osnovu 51% vlasništva države Srbije u AS.

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    10. Have you actually bothered to read the financial reports ? If so, please explain the entries over the years under subsidies, donations, etc.
      I haven't reconciled Air Serbia's reports with the budget of Tep of Serbia, to be honest

      So if you are correct, financial situation at Air Serbia is great.

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  10. I don't really care if they are axing 100 jobs. That's not a lot for a company of its size. What I have a problem is that Etihad came with the story how they are successful managers who will create a successful company, at the same time spitting on all of Jat's legacy (until this year when they suddenly seemed to be very proud of it). 4 years later the people they put in charge are implementing crisis management measures. Why if they are so successful? They constantly talked how they are bringing "know how" from Abu Dhabi from a company which existed for less than 10 years at the time. Just a handful of "prevaranti" and "prodavci magle" as we would say. And in a year they will move to another company after destroying the other.

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    Replies
    1. EY je i dalje ok kompanija za razliku od krseva koje su kupovali po Evropi ukljucujuci i JAT. JAT koji su oni kupili nije imao nista sa JATom koji je imao interkontinentalni saobracaj u 80im

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    2. This comment has been removed by the author.

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    3. Kako ok kopmpanija kad su prosle godine imali onakav gubitak?

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    4. Ti ne znas da citas godisnje ekonomske izvestaje? Morali su da otpisu ulaganja u Alitaliu i Er Berlin.

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  11. So what next for Air Serbia?

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    Replies
    1. It's all in one of their 5 year development plans :D

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    2. Ahahahaha best comment ever! 5-year plans! :D

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  12. And people were throwing rocks at Serbian government for Air Serbia's problems, while in fact it is now more than obvious that all the measures AS was taking lately were instructed from UAE.

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    1. Remind me again whose decision it was to launch JFK please.

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    2. Of course it was EY's initiative to start flights from BEG to JFK. Didn't you see James Hogan every week in the media stating how this is "a strategic route for Air Serbia"

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    3. Not really. Etihad didn't care that much as long as the government helped. But what I do know from a few sources inside the company is that Kondic was very much against it. But it was the government that pressured them for the flights to start. Even if you look at some news here from earlier in 2015 you will see Kondic's remarks that no decision has been made about US flights and all his statements seemed very skeptical towards this route. It changed when they announced it but I am certain that the Serbian government was the main culprit for this route.

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    4. Vucic, Kondic and Hogan announced flights to the US for 2015 or 2016 during the takeover ceremony in August 2013. It was always part of their plan.

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    5. I will never understand why do people on here think JFK is the only reason why AS is struggling. There are many things, NYC is just one piece of the puzzle.

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    6. Government handed the control to Etihad, hence it bears the ultimate responsibility.

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  13. They have ordered all of their partners to do this. Earlier this month Air Seychelles announced it is suspending its flights to Düsseldorf, and reducing its Paris operation.

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    Replies
    1. Suspending one or two routes is hardly an indication that the company is in trouble. Airlines do it constantly.

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    2. It is for a company Air Seychelles size especially since they launched Dusseldorf just in March this year! And they also suspended Durban. So yes, I think they have also been told by Etihad to cut their costs and Air Seychelles was purchased in a similar state sponsored arrangement like Air Serbia, not like Air Berlin or Alitalia.

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    3. Of course they'll be suspending DUS now that Air Berlin is in its death throes. Why keep flying?

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    4. Jat used to fly to Dusseldorf before Etihad came or any deal was done with Air Berlin. The route is self sustainable and not there because of Air Berlin. So no, they won't suspend DUS.

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    5. I was talking about Air Seychelles.

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  14. Why did Etihad tell them this when Air Serbia had 900,000 EUR profit. LOL!

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    1. Ti mislis da je to veliki profit? Joj.

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    2. Big enough not to start restructuring of the entire company. The problem is they had no profit.

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    3. 100 per cent agree

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    4. U cemu je vas problem? ASu je vise od dve godine falilo promena i angazovanja. i sad ste protiv toga. I dalje nisu resili flotu, barem turboprop deo flote da su obnovili to nisu silni milioni dolara.

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    5. Because they want them to change their course before they start selling slots and engines.

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    6. Mislis da su sad kao LH?

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  15. Replies
    1. they will be just fine. Don't you worry.

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    2. They sure will. Just as they are now. "Fine". Everything's fine. Air Berlin is also "fine".

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    3. Air Serbia is not going anywhere. Etihad is another question.
      The Serbian government set a precedent by giving money to cover the losses and will have to continue in the future if it wants to have a national airline.

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  16. Interesting times coming for Air Serbia. I think they will weather this crisis but we will see.

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  17. It will be interesting to see if some sort of Serbian Wizz air will emerge after the death of Air Serbia.

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    1. Sad that you are cheering for the demise of a company. Don't worry. They still have slots and engines to sell if needed to survive like some other companies in the region.

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    2. At least we know nothing will ever emerge from your hate (except maybe more hate).

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    3. I am not cheering just being realistic.

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    4. Sure you are.

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    5. We have already seen expert predictions that Adria will go bankrupt, that Croatia Airlines will go bankrupt, that Montenegro Airlines will go bankrupt, now that Air Serbia will go bankrupt. They never do and they never will.

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    6. Isn't that the problem? That the airlines are allowed to survive no matter how incompetent and inefficient their management, marketing and operations are?

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    7. If you're just being realistic, then you better turn your attention to literally every other ex-YU airline, because they're much closer to the end.

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    8. Air Serbia will be fine. It only lost Euro39.1m last financial year. Probably the worst financially performing airline in the Balkans but it still has engines, planes and slots for sale and burgeoning tourism industry.
      It will be interesting not if but when EY pull their financial equity in the airline

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    9. You have confused Air Serbia with another airline in the region.

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    10. No not confused. Definitely Air Serbia, JU former JAT Airways living on a wing and a prayer and the Serbian tax payer.

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    11. I seem to recall that another airline in the region sells engines and slots and has a burgeoning tourism industry.

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    12. Bad news for financially troubled Air Serbia. Good luck and I hope you manage to lease out those a319s during the winter.

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    13. I would say all ex-yu airlines are financially troubled. Some more than others. Had you read the text rather that troll you would see that 1 A319 is up for lease, so I don't know which "those" you are referring to.

      PS Adria is leasing out two planes at the moment but didn't notice your concern for that.

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    14. No concerns re. Adria. Acquired, profitable and expanding.
      Air Serbia on the other hand is loosing approximately Euro769k a week which is a lot for such a small airline and with an equity partner that is pulling away from loss makers.

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    15. Profitable? Where did you pull that one from?

      Over 9 million euro loss in 2015. In 2 weeks it will post another loss for 2016. So tell me, how are they profitable?

      Your approximations, guesses and speculations are irrelevant. You can open Adria's financial report and see that they are a loss maker.

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    16. As for expansion, Adria is still smaller than it was 2 years ago. It still has fewer destinations than it had 2 years ago and is just now trying to catch up in the number of operated flights.

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  18. Will we ever see a commercially viable national airline in ex-Yu?

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    1. Phrases "commerciable viable", "national airline" and "ex-yu" are mutually exclusive.

      Why would you need a government-owned national airline anyway? Plenty of countries seem to do OK without: Spain, UK, Belgium, Switzerland, Norway, Hungary, Slovakia, etc.

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    2. In today's free market it is highly unlikely.

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  19. Lmao are people honestly thinking that JU is going anywhere? Serbia has 90+ years of commercial aviation during many wars, sanctions, government changes, etc.

    JAT still existed during the most severe sanctions when they could only fly domestic routes such as Belgrade-Uzice-Tivat. Jat didn't go anywhere when they had to hide the planes in Romania during the '99 war. Jat didnt go anywhere when we could count all of their airworthy planes on one hand and when they didn't have money for maintenance to keep planes flying.

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  20. With all these issues for all the national airlines in ex-YU, approach like SAS has for Scandinavia or what once was JAT for Yugoslavia is the best, only if the ppl here think like Scandinavians...which will not happen anytime soon...

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    1. SAS has hubs at three airports with 25 million+ passengers. All of ex-yu together isn't equal to Copenhagen. SAS has hubs which are seperated by distance. A theoretical ex-yu airline would have hubs within stone throwing distance.

      BEG with 5+ mil is a midget compared to them. But then let's not even mention LJU, SJJ, ZAG.

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    2. You have to take into account that SAS has had it's share of issues exactly because the way it's set up with multiple hubs etc. The setup they have it's not something you'd like to replicate.

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    3. It could probably work better than each of tiny nations having it's own, but impossible politically, if for nothing else.
      Anyway, case of Croatia, which has by far the biggest demand shows easily that we dpon't even need national airline. Growth is anyway fueled by foreign airlines which easily step into markets that have potential. They use it better than ex YU companies anyway. And it doesn't come at such a big cost for states as it does having JU, OU etc...

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  21. This will all blow over.

    Like with Adria you were all shouting how they are doomed, how they are selling their brand name to survive and then they buy Darwin and you all started shouting how they are amazing.

    Like with Croatia Airlines you were all shouting how they are doomed, selling slots and engines and then they wet lease two planes and start 4 routes and you all started shouting how they are amazing.

    Same will be with Air Serbia.

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    1. Unlike OU and JU, JP has found an investor who is funding their growth.

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    2. Sure through the government paying a monthly multi-million euro lease for the Adria brand name. They are funding Adria the same way Etihad is funding Air Serbia.

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    3. Sorry, it isn't. I will tend to believe people in the higher up management than you.

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    4. Things like this don't get unnoticed in Slovenia. The news would hit the media in 5 minutes.

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    5. Yep sure. Slovenian media did a novel job at scruitinizing who 4k actually is. A ghost company which turns around companies, only issue is no one knows a single company they have turned around. Btw it was published in Swiss media this week.

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    6. They wrote a lot about 4k but found nothig wrong. Maybe you have more information? I'd like to see this "news" and forward it to slovenian government. So less talking and more hard facts please.

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  22. Is Air Serbia maybe testing some "NO BAG" fares? I just booked BRU-BEG return for only 111€ (mid-October dates, via external booking site). When I accessed my reservation and the fare rules on the JU's website, it said something like "Air Serbia PROMO NO BAG fare" which I found strange because even their cheapest option on the website "economy sale" apparently includes 1 checked bag. Will be travelling with hand luggage only anyway so it doesn't make any difference but it would be nice to know if we can really expect these great prices for suitcase-free travel in the near future.

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    1. wow that's a great price to BRU.

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    2. I think the same. I've booked BEG-LHR-BEG for EUR 148, mid-November, same fare, via external site - no checked baggage included in the fare

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    3. Please share the site.

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    4. Yes, they started the campaign with no luggage using extrenal sites, but not on their site.
      On their site you can still see fares with luggage included.

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    5. Anonymous at 12:15 PM: I used momondo.com as search engine which then offered several booking sites for this fare to choose from.

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    6. While this has been anticipated since the move to Sabre, i wonder if the timing is related to Wizz dropping the carry-on charges.

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  23. Some people like to deflect JU criticism by pointing at OU, JP, YM.
    'Leader in exYu region' is not much of a prize.

    How much money can be saved bu these measures ? Can they plug the hole to ~eur 5m by end of 2018 ?

    JU should not have more than 1000 employees with this level of operations.

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  24. So sad to see that further develop,ent ill become difficult and itturned to be what jat used to be: connecting diaspora with homeland.
    in my opinion they did a big mistake in the beginning already. driven by national interests they branded the company AS instead of looking at the region and chose a more intelligent name to further expand in new markets. Look at wizz air: base planes, having local crews and expand in other markrts. Could youthink of doing this AS to Albania, with albanian staff? Od to crostia? With that name you have natural limitation, which is really a pitty. politics...

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    1. Tell that to Norwegian.

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    2. Right, because Norway shares the same recent past with it's neighbours as Serbia.

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    3. No matter how neutral the name might be all these planes would be flying to Belgrade (or we should find some "less nationalistic" name as "city on 2 rivers"?) and all the passenger would know where the company comes from.

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    4. Užasno ste dosadni sa tom potragom za imenom koje neće uvrediti ničije tanane osećaje.

      Delete
    5. TIA is one of the most successful JU routes, with lots of transfer pax. Last time at BEG transit area I saw a group of pax in Albanian football jerseys, fans of some sort, so they are feeling very safe and welcome to wear them in Belgrade. As they should.

      People are looking for good service and cheap tickets. That's all.

      Delete
    6. Get rid of the Aviolet brand and re-introduce the JAT. The JAT name is still very well known and can be used across some of the Ex Yu.

      Delete
  25. I find these instructions from Etihad a bit problematic. Here is why:

    There are 3 things that are highly irrational in JU's business operations at the moment:

    1. Interest rates they have to pay to Etihad (I have never seen a 49% shareholder ripping off its own company like that)

    2. Consultant fees they pay to Etihad (same remark)

    3. JFK route


    Item No. 1 is by far the craziest and costliest one, so our goodfellas form Etihad should have advised something on that before they issued any other cost-cutting orders.

    What a bunch of street bullies. In less than two years they transformed from the world's most wanted airline partner into the scariest one.

    ReplyDelete
    Replies
    1. When something is too good to be true, it often is. Too many people were blinded by the pomp of a new livery and some second-hand a319s. Etihad wants their pound of flesh, and now that Alitalia and Air Berlin are gone, the magnifying glass moves over their other "investments".

      Delete
    2. What are the rates paid by Air Serbia?
      It's not good if they are significantly above the cost of funding for Gov't of Serbia.

      Delete
  26. Ironic how EY is pushing JU to rationalize considering it is part of the problem. EY after all has people in JU. I wouldn't be surprised if JU is paying EY expensive leases for its A319/A320 fleet.

    I don't think proper thought was put into Air Serbia during its rebranding, and the execution of its plans seems to be rushed and incomplete.

    - JU has a fleet that doesn't suit it. They have for the past couple of years struggled to push CLF over 80% while the cabin configuration was smaller. During the winter months they didn't have many places to send the A320 at 150 seat capacity, now all 8 A319's is only a few seats behind that number.
    - JFK still doesn't connect well to its regional destinations. This doesn't help when the ATR fleet is not reliable yet the A319's are too large on almost all regional routes.
    - JU seems to launch routes last minute and timetables are late to be released.
    - BEG doesn't seem to be a hub that does JU well. A lot of customer complaints stem from luggage being damaged, delayed, and often with items missing from within. This goes onto the taxi mafia that greets you to Belgrade stopping short of pulling you into their car, all while the police office who stamps your passport throws it back at you annoyed by the fact of your existence. Smokers had to, until recently, pass passport control and exit the terminal, while food and retail was mostly closed during their midnight wave. And Ive just scratched the surface.
    - Elevate Play via wifi yet no where to charge personal devices.

    Not to mention on the big, unnecessary expenditures.

    - Installation of wifi in the Airbus fleet, which doesn't seem to be very popular, amongst the fact it has to be one of the most expensive wifi products I have seen.
    - Refitting and reconfiguration of the entire Airbus fleet after only 3 years.
    - Amenities such as blankets and pillows on short haul, which ends up being taken home as a souvenir.

    A lot can be said, however without numbers and figures its all just ideas and speculation on what is wrong and what is the solution. As an armchair CEO I believe that JU should:

    - Cut back 50% of its employees.
    - Drop 2 x A320's and 2 x A319's in exchange for 5-6 ERJ's. Not only does this help their CLF, it would also help keep frequencies in the winter, keep destinations that are seasonal, as well as free aircraft for other, better suited rotations.
    - Put thought into the onboard offering. Wifi at a fixed price for 24 hours, edible and presentable catering on their short haul...its small details that is always noticed.
    - Increase marketing through social media, tourist agencies, tourism boards, expos and locally based business firms. JU have staff that speak a few European languages that it could use to its advantage.

    ReplyDelete
    Replies
    1. '- Amenities such as blankets and pillows on short haul, which ends up being taken home as a souvenir.'

      These have been removed ages ago. I fly regularly on JU to LCA and they haven't had them for over a year now, maybe even more.

      Delete
    2. at JATBEGMEL

      Good points !

      Re- fleet. AirBaltic has moved to CS300 replacing all 733 and 735s.

      I bet AirSerbia could secure a sweet deal with CS100/300 and Q400 orders from Bombardier, rightsizing and renewing the fleet.

      -employee cuts are a no-brainer, but politically a difficult one. Nevertheless, elections are far down the road so it's a good time to do it.


      Delete
    3. First employee to go should be Dane

      Delete
  27. Replace Etihad, they don't seem to know how to run other airlines.

    ReplyDelete
  28. The Air Serbia stand is rocking...

    ReplyDelete
  29. Replies
    1. a ti se radujes...

      Delete
    2. Tesko, posto sam i ja jednom radio u kopaniji sa slicnim problemom. Interesatno je da ono sto je pricano ovde i analizirano jako dugo vremena sada uslo u medije i postao mainstream stav prema etihad grupaciji, pa i ersrbiji.
      Interesantno je i kako su analiticari promenili pricu koja vise ne ide u pravcu pohvala.

      Delete
    3. Do skoro si se radovao. Proradila savest?

      Delete
    4. @7.40PM Yes, winter is coming and frying for employees. I love snow in winter.

      Delete
    5. @11:15
      Koje ti meni etikete lepis i zasto je valjda samo tebi jasno

      Delete
  30. The point is that quality of service has gone down in all segments, the proof are recent comments about JU on Skytrax. They is a need for a stricter QC in all segments of the business.

    ReplyDelete
    Replies
    1. What's QC? Quality control? The thing is that all good people leave the company

      Delete
  31. My frend went to USA via Air Serbia-u for only 300 euros. Air Serbia-u is the chapest Air company, but it is way for bankrot.

    ReplyDelete
    Replies
    1. My frend, your English is perfect. Ahahaha.

      Delete
    2. Volim engleski po Vuku :)

      Delete

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