Monday, August 7, 2017

PM: Etihad committed to Air Serbia


The Serbian Prime Minister, Ana Brnabić, has said that Air Serbia's part-owner, Etihad Airways, remains committed to its partnership with the airline despite a review of its investments in Europe. Ms Brnabić noted that recent talks between the government and Etihad Airways went smoothly and that "there is no need to fear for Air Serbia". Recently, the Etihad Aviation Group's Chairman of the Board, Mohamed Mubarak Fadhel Al Mazro, said, "The Board and executive team have been working since last year to address issues and challenges through a comprehensive strategic review aimed at driving improved performance across the group, which includes a full review of our airline equity partnership strategy". Interim group CEO, Ray Gammell, added, "We continue to implement changes across the group as part of the comprehensive strategic review, with a focus on improving revenues and reducing costs". Last month, Etihad sold its shares in its Swiss unit, Darwin Airline, to Adria Airways Switzerland.

The Serbian PM said the recent consolidation measures at Air Serbia were not a cause for concern for either her cabinet or the alliance with Etihad. "Air Serbia is a serious company which has significantly contributed to the state budget. Subsidies had been given in the past, but I am sure we can all agree that if Serbia had not intervened, and had Jat gone bankrupt, leaving all of its employees jobless, then everyone would have asked why the state had not acted and why we no longer have a national carrier. The government has seen strong returns on its investment in Air Serbia. The company has to be effective and compete on the market". She added, "Air Serbia has a professional management, as all companies should. That management is seeking out ways for the airline to operate more effectively on the market. This is good for Serbia, its people and the government. If the management thinks they have to lay off some workers due to changing market conditions, I certainly wouldn't intervene because it is important for Air Serbia to be profitable and for it to constantly improve its results, which it has done year after year. Air Serbia is very important for the country".

Late last year, Etihad said it was “fully committed” to its 49% stake in Air Serbia following reports the Emirati carrier was considering reducing its share in the airline. Etihad and the Serbian government signed a five-year investment and management agreement for Air Serbia in 2013, with the option of extending the deal for another five years. "Our partnership is long-term. The 'five plus five' is about a cooperation agreement but the investment is a long-term investment. So we are here to stay", the former President and CEO of the Etihad Aviation Group, James Hogan, said in March.

Air Serbia plans to continue moving forward with its consolidation plans but seems to have reversed its decision to lease out up to three Airbus A319 aircraft over the winter season. Although the airline listed three of the jets, registered YU-APA, YU-APD and YU-API, on the leasing market, two of the aircraft, YU-APA and YU-APD, have been removed from the lease listing as of last week. In a statement to "Ch-Aviation" the airline said, "One Airbus A319 aircraft has been listed as available for leasing to measure the level of interest in the market. This option is being considered to tackle the high seasonality of the business and especially the lower travel demand during the winter period".

146 comments:

  1. If the deal is five year then it will be up for renogitation next year. Let's see if some of the terms change.

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  2. So much for deinvestment and conspiracies.

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    1. They deinvested form Darwin. Would hardly call it a conspiracy.

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    2. I was talking about Air Serbia.

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    3. "Deinvestment" is not a word in English. The correct term is "divestment". The opposite of "invest" is "divest".

      I see the word come up so often I just had to intervene.

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    4. Wishful thinking by some.

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  3. Interesting about the planes. I doubt they are keeping all three. They probably realized there is no interest so they removed 2 and will ground them over winter instead. They have had 2 planes up for lease for months and 2 weeks ago put another. Now they suddenly remove 2?

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  4. It is good the PM says that. She is a business woman and her job is to care about the returns on the investment. She should change to Etihad management.

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  5. "Our partnership is long-term. The 'five plus five' is about a cooperation agreement but the investment is a long-term investment. So we are here to stay", the former President and CEO of the Etihad Aviation Group, James Hogan, said.

    I'm not sure his successor thinks the same.

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    1. And who do you think the government held talks with? Hogan?

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    2. True. Hogan is not the one who will negotiate conditions for another 5 year deal, but that will be his successor, new Etihad CEO.

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    3. Sheikh has the final word.

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  6. I am just wondering, why do you constantly need to reaffirm the commitment...

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    1. Guess why :)

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    2. Because journalists asked the PM about Air Serbia and she had to say something...

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    3. Yeah she was asked by journalists at a press conference. No conspiracy. Sorry guys.

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    4. It's normal since there has been a lot of speculation whether Etihad would leave.

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    5. Because rich daddy ran out of money.

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    6. They haven't run out of money, they've just decided to stop throwing it around.

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    7. Ok, they asked the PM. But then why journalists have the urge to ask this? Because there are some speculations going on for months?

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    8. Because that day news broke that JU is firing 30 people. So it's normal they asked her.

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  7. Do you guys think that the consolidation in JU was ordered by EY or was it an internal decision by JU?

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    1. Most certainly ordered by Etihad. Like they did with Air Berlin.

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    2. Maybe not ordered by them but they probably made clear they would investing much less in any of their subsidiaries. So no money would be given for lease of new planes, service improvements etc. Air Serbia which relied on all of that had to do something to finally make some money.

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    3. Remember that Air Serbia started paying taxes at Belgrade Airport last year and that surely had an impact on their finances.

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  8. Došlo je do nekih novih promena u dogovoru sa Etihadim tako da su se povukla dva aviona koja su bila stavljena na lizing. Mislim da će se objaviti nešto novo u narednih 3 nedelje..Dobre vesti ako sve bude išlo kako se čulo ovih dana u našim kancelarijama.

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    1. A šta se to čuje po kancelarijama osim planova za otpuštanje radnika?

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    2. Anon 10.00

      True.

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    3. Otpuštanje je planirano ranije ali ne ovde u našim kancelarijama. Lepo sam ti napisao da se priča o nečemu novom.

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    4. Ok, daj nam neki hint.

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  9. Where those A/C removed from the list, because they go to Eurowings?

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    1. Or they could possibly be going back to the lessor.

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    2. Or they could have changed their decision and will not lease them out. JU is adding frequencies on a few routes this winter.

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    3. ^ Which routes?

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    4. Thessaloniki, Zurich, New York

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    5. Maybe they would operate the A319 to New York like BA does from LON?

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  10. What does interim CEO mean? He is CEO until they find someone else?

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  11. Ma kakav Eurowings.Jel ti lepo piše nisu više za iznajmljivanje .

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    1. Pise da vise nisu na trzistu sto ne znaci nuzno da nisu za iznajmljivanje. Mozda su vec i dogovorili lease.

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  12. Not sure whather this is good or bad news haha

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  13. EY should play a more proactive role in Air Serbia like they did during the first two years.

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  14. I'm not convinced that EY will invest much into JUs future.

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  15. I assume Etihad stays part of Air Serbia but I doubt under the same conditions and they will probably renegotiate the agreement next year.

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    1. We will have to wait and see.

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  16. Etihad is "committed" to Air Serbia because their investment was not made because they thought it would bring them money (unlike Air Berlin and Alitalia) but because they were ordered to buy them by the Sheikh for political reasons. At the beginning even Hogan said he would never have took Jat if the Sheikh didn't point it out. Later he changed his story a bit and said how they always thought Jat was a great investment.

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    1. So true. Same with AY and AB. Blitz on European economy by the back door.

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    2. Wait wasn't the consensus among experts here that they took JU because of agricultural land the UAE would get? Remember that explanation fondly. Got forgotten in the last few years.

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  17. How much does Etihad actually invest in JU?

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  18. I don't think JU is on the list of their priorities to get rid off. It doesn't cause them that many issues. The next one will be Air Berlin.

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    1. Did Darwin cause them so many issues that they had to sell it?

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    2. No, but it never served its purpose.

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    3. Or it was the easiest to sell so it went first.

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    4. Exactly, they got rid of what they could actually sell. I actually think that Virgin Australia will be next.

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  19. Etihad has zero reasons to get rid of JU. JU is not a threat or a liability for Etihad.

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    1. I agree. The government is paying both debts and loses why they would think of getting rid of that!

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    2. Etihad has invested $100 million into Air Serbia so I don't know where you got that they don't pay anything and that the government pays.

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    3. It actually didn't, all it did was to give guarantees and to secure leases but the money came from the Serbian government.

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    4. Not true. Read the takeover agreement between the two sides.

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    5. Despite what's written in the agreement EY has not placed a single Euro in the airline's account. All the investment was through different channels and ways.

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    6. Apsolutno netačna informscija. EY je uloži čak 12% više keša nego šta je prvobitno potpisano i planirano. To odgovorno tvrdim i stojim iza toga .

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    7. Хахах ако ти одговорно тврдиш и стојиш иза тога онда то мора да је тако... ти си овде познат као врло поуздан извор.

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  20. Let's say EY hypothetically leaves JU (not saying it will happen), what could Serbia to then?

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    1. Find another investor or keep throwing money at it. I think if the government invested this much in the old Jat it would have survived without a problem. With a few state owned companies the government brought in a foreign professional management but didn't sell any shares.

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    2. The airline is in a much better position to get sold again now then it was 4 years ago during Jat era.

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    3. If EY leaves JU, Serbian government can get Hogan to run Air Serbia :D

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  21. Why does "Etihad remains commited" comes from Serbian government instead of Etihad themselves?

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    1. It did.

      “Speculation about a change to Etihad Aviation Group’s investment in and support for its equity partner, Air Serbia, is totally inaccurate and wholly unfounded. Etihad is and remains fully committed to Air Serbia and to the strategic partnership with Air Serbia’s majority owner, the Government of Serbia”, the Etihad Aviation Group said in a statement. It added, “Since its relaunch, just over three years ago, Serbia’s national airline has been transformed into a profitable, sustainable, and best-in-class, airline”.

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  22. U novim okolnostima konkurencije Low Cost prevozioca, Er Srbija ima perspektivu sirenja mreze srednjih linija od oko deset sati letenja.
    Uz dolazak koncesionara na Teslu i mnogo obimniji saobracaj, Er Srbija ima novu sansu ekspanzije. Svakako da nema balast prekobrojnih na svom platnom spisku. Za zdravo poslovanje, sistem kontrakta je resenje prezaposljenosti, svuda. Pa valjda i u Srbiji posle "samo upravljackog raja". Trziste je iznad monopola. Jedini pravi uspeh privredjivanja jeste da se ne zavlaci ruka u dzep poreznika da bi se prekobrojni uhlebili. Jesu li ta vremena prosla? Bar u Er Srbiji.🛫🇷🇸🛬🗺🛫🇺🇸🛫🇨🇦🛫🇭🇲🛫🇨🇳
    Rodney and aviation enthusiast group
    Sydney

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    1. Vi ste odrasli u 'samo-upravljackom raju', i šta je tada vama mnogo falilo?
      Jel danas mnogo bolje u ovom surovom kapitalizmu?

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    2. Da do dvadeset prve godine. U Srbiji jeste tezak zivot. Iz mnogih razloga. Bio je uvek tezak zivot i siromasan narod u zemlji Srbiji. Bice jos dugo vremena. U Srbiji su uvek bedno placali rad. Stanovnistvo masovno zaobilazi propise, zakone. Zakoni do sada birokratski. Da se milion puta rodim, toliko puta bih puta otisao u napredniju zemlju zbog mogucnosti boljeg zivljenja i slobode zivljenja... Moze se knjiga napisati o tragedijama, zabludama i tegobama zivota do danasnjih dana. 50 godina uspesno i pristojno zivim na petom kontinentu. Do sada sam doletao u Srbiju punih 76 puta. U zadnjih 7 godina od kada sam u penziji, provodim 6 do 7 meseci godisnje. Ako me pitate sto onda dolazim, kada napisah toliko negativnog. Iskreno zbog manastira, pojedinih ljudi, dobrih kao Dusa Bozja. Oprostite, zbog ovakvog iskustva koji nosim decenijama iz Otadzbine mojeg rodjenja. Srbije. Uvek smatram da svaki covek je "kovac svoje sudbine". Zbog toga sam i otisao na drugo mesto i druge uslove.
      Vama svako dobro. I uspesno gajite uspomene na ideologiju revolucije i svega sto je se dogodilo. Ostajte u miru.
      Rodney Marinkovic
      Sydney AUSTRALIA

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  23. The entire Etihad Partner Airline project is toast.

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    1. It turned out to be a huge financial failure.

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  24. Regarding JU it's true EY instantly started to gain return on investment, but that has nothing to do with the commercial conditions. It came from subsidies.

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    1. The government mostly freed JU from paying fees at BEG for the first two years. How did EY instantly gain from that?

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    2. Easy. JU got state support trough subsidies, claimed profit, EY took its share of the profit.

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    3. Yeah because Air Serbia's profits are so huge and EY took it. LOL. From this partnership Etihad gets extra passengers and shuttles people through AUH. That's their biggest benefit.

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    4. there was no dividend payout? what profit?

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  25. I knew this would have no impact on their investment in Air Serbia because A) it is the only one that has had any sort of success since it was taken over B) it was political and not a financial investment

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  26. I don't get it to be honest. Etihad is divesting yet they are bidding for Alitalia again! Where is the logic?

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    1. If they take over AZ then essentially it's a new company and they start from scratch with jew management, new processes, and staff will have to resign new contracts that they didn't want to in the past. It wouldbe a win for EY

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  27. Anyone know why was YU-AND yesterday in Niš?

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    1. It diverted because there was a storm in Belgrade. It was operating a charter from Palma to Belgrade. They continue to BEG around an hour later.

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    2. Massive storms around BEG. Was in hold for quite a while and had to divert.

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    3. So is INI now the official alternate airport for BEG?

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    4. Alternate airports are chosen by pilots/airline. There is no such thing as "official alternate airport" whatsoever. It can be Nis, Budapest, Timisoara, Podgorica... Whatever is found suitable for the given flight.

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  28. Interesting times ahead. I hope Etihad finds a solution that does not affect Air Serbia.

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  29. Sooner or later, all EX-yu airlines will become part of Eurowings.

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    1. Seems most European airlines will become part of Eurowings. They even signaled last week that they will end the Brussels Airlines brand and make them Eurowings too.

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  30. I'm very disappointed with Etihad.

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    1. I'm sure they are distraught by that.

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  31. I don't share a lot of these gloom and doom scenarios with you guys. I think eventually Etihad will bounce back (remembera few years ago Qantas posted a massive historic loss, introduced some measures, and posted a record profit the following year). As Etihad bounces back so will Air Serbia.

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    1. If oil prices go up so will Etihad's fortunes (ironically). The government of UAE and Abu Dhabi in particular live from oil and when there is enough cash they throw it at all of their loss making business - one of them being Etihad.

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  32. Well she is right in saying that if the state had not found a partner, Jat would have gone bankrupt and then everyone would have complained.

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    1. Not really. Other airlines would have rushed to fill the void.

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    2. You would never be able to fill such a void. Remember, Air Serbia instantly added a million passengers to BEG in one year.

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  33. It will be very interesting to see how the BEG concession will impact on Air Serbia. I can assume that the new concessionaire will be much more business friendly and do much more to attract new airlines and customers, which will hurt Air Serbia. Similar like the concessionaire in Zagreb did.

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    1. Or maybe they will be like the concessionaire in Ljubljana...

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  34. Off topic:
    Does anyone know anything about this flight? https://www.flightradar24.com/DTR207/e62a8ce I've seen it multiple times on FR24 but its not shown on SKP airport page http://skp.airports.com.mk/default.aspx?ItemID=358

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    1. That's probably cargo flight

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  35. Drama as usual. Everything will be fine.

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  36. It would be good for the entire region if Etihad stayed in Air Serbia's ownership structure.

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  37. So much for some people claiming here that they will pull out after 5 years.

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  38. Tarom going long-haul with 3 aircraft!
    https://www.ch-aviation.com/portal/news/58409-romanias-tarom-issues-lease-rfp-for-three-widebody-jets

    this is gonna hit ASL deadly.

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    1. Sure it is. They have been annoumcing plans for widebody leases for 10 years now.

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    2. RO have been looking for widebodies for years. Last I recall was for B777 or B787, before that it was A330..

      Romania itself is a large, growing market. RO caters for a different market compared to JU, who have since the launch of JFK taken Albanian speakers due to transit traffic for example.

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    3. TAROM will be getting 2 B777 by the end of the year. This is official information from the Romanian transport Minister.

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    4. They will get 2 B777 in winter and start flying them? Right.

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  39. Im not convinced JU has the right management leading it. I get a sense that alot of the work is incomplete and at times rushed and improvised, however much they talk about their 5 year plans.

    - Onboard product, initially was decent for the airline, however then had some room for some minor touches. With the down grade, I dont think its planned out well and customers, juding by lastest reviews, are not too keen on it. JU simply misses out on the minor details, which make a big difference.
    - The idea behind a 'boutique' product was nice, however I think the service was very much EY influenced and not suited for the European, especially Serbian market. A more modest product could of still made them 'boutique' compared to the other Euro carriers.
    - It was great to see JU suddenly refleet with 10 newer Airbuses, but looking at their overall CLF and their struggle to push it over 80% the past 4 years, struggle with seasonality, I dont think the management understood the market very well, more like quick work by a team from EY. For years I have mentioned that JU's biggest problem is not replacing the DC9. This is going to be exasibated now with the increase in capacity on its smaller Airbus fleet. Dropping the 2 A320's and 2 A319's could of made room for 5-6 ERJ's, a size and fleet JU in my opinion needs. A320 routes can easily be done with A319's and not all A319 routes are well suited for the aircraft nor the ATR. ERJ in this case would free the ATR for routes it was made to do and not 2h flights to PRG and VCE.
    - JU has improved marketing compared to Jat however alot is left to be desired. I think alot more can be done in cooperation with the Serbian Tourism Board, maybe some joint work in running some advertising campaigns and quick stop over tours.
    - JU should improve staff travel to take in revenue for the unsold seats in its aircraft. Minor changes were made but its a hassle at times to get tickets and to make a listing, with at times random restrictions.

    Im skeptical as to if EY would stay on regardless of what was said above, things could change very quickly, however no doubt would things be worse if JU was under full government management. I think Kondic did a decent job in turning around Jat I just dont think he can bring it forward and think its time to see someone new.

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    1. Agree 100% JATBEGMEL.

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    2. +1
      Great post!

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    3. What more is there to add when Tarom manages to outperform Air Serbia on the BEG-OTP market. This winter JU will have 6 flights while RO will operate 8!

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    4. ^Not true at all since capacity wise Air Serbia outperforms TAROM which sends ATR42 on the route. So while JU may have two flights less it offers more seats each week than TAROM.

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    5. Actually it won't because JU will once again cut its OTP flights like last year. On average Bucharest on JU will be on average 4 times per week

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    6. Again not true. It has 6 flights per week scheduled during the winter.

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    7. Yes, they were scheduled as six but then frequencies were cut once winter season started. Remember how they operated a total of three flights during teh whole of February despite it being scheduled as 4 weekly? ;)

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    8. And you have a crystal ball and know if and by how much they will deviate from the schedule next winter?

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    9. It's based on their previous behavior so no need for a crystal ball.

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    10. That is despite Tarom not having virtually any transit passengers.

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  40. Dejan MilinkovićAugust 7, 2017 at 4:44 PM

    B748 is about to land at BEG (and might be exYu) for the first time.

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  41. Replies
    1. Dejan MilinkovićAugust 8, 2017 at 9:26 AM

      Silk Way West Airlines

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  42. Off topic: The landings of Iberia and Titan Airlines today in SKP, carrying the football players of Real Madrid and Manchester United, photos included https://www.facebook.com/SkopjeAirport/posts/1619044264774362

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    1. Looks good :D https://scontent.fskg1-1.fna.fbcdn.net/v/t31.0-8/20728946_1619023334776455_8191819633433385705_o.jpg?oh=f155be68e3502dba856a9f08046d4e91&oe=5A32A826

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    2. Are all gates at SKP capable of handling wide-body plaines?

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    3. Yes but only the last gate is used as you would be unable to use a lot of gates if you parked widebodies elsewhere.

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    4. Can SKP handle B773 or A333 is biggest which can be handled with gate, excluding the open parking next to the old terminal?

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  43. wow guys reading all of your comments, I wonder how Etihad didn't snatch you all up as their advisors.

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    1. How do you know they didn't?

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  44. I like what the Serbian PM has to say. It sounds confident and consistent with what's been happening at Air Serbia. If Etihad is considering selling any airline investments it'll be either Air Berlin or Virgin Australia.

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