Friday, October 20, 2017

Adria Switzerland to focus on ACMI, reduce fleet


Adria Airways' Swiss subsidiary, Darwin Airline, operating as Adria Airways Switzerland, is likely to become a pure ACMI (aircraft, crew, maintenance and insurance lease) provider following what it sees as mismanagement by the former majority shareholder Etihad Airways. The revelation comes following reports by local media that the carrier will lay off a quarter of its workforce and is in a difficult financial state. Speaking to "Austrian Aviation", Klaus Platzer, the CEO of Adria Switzerland, who also acts as a financial advisor to the Slovenian national carrier, said, "We have made a strategic decision to act as an ACMI provider in the future, which is why we can only guarantee scheduled flights until the end of the year". The airline currently maintains two scheduled services from its base in Lugano, to Geneva and Rome.

Under its restructuring plans, Adria Airways Switzerland will cease operating ATR72 aircraft at the start of 2018 and will only retain six Saab 2000 turboprops. The four ATRs were brought in by Etihad Airways in 2014 from Nordic Aviation Capital in order for Darwin to expand its operations out of Geneva. Darwin has also been hit by the loss of its two main ACMI partners, Air Berlin and Alitalia, with the former to cease all operations by the end of the month and the latter declaring insolvency. However, the airline has secured an ACMI contract with Swiss start-up PowdAir from December and has been operating its aircraft on a number of Adria Airways' flights within the region. "Darwin complements us perfectly. Our fleet now ranges from the 140-seat A319 to the 50-seat Saab 2000. We are thus much more flexible. We now have the right aircraft for every situation. Likewise, we can do better in the wet-lease market because we now have a suitable aircraft for every need", Adria Airways' CEO, Arno Schuster, said recently.

Upon the Slovenian airline's takeover of Darwin, the now former Adria-appointed CEO of the Swiss company, Heinrich Ollendiek, said that the carrier would grow out of Lugano but would not limit its operations just to the one city. While layoffs were not ruled out, Mr Ollendiek said at the time that some jobs would be spread between Lugano and Ljubljana, while there was also a possibility for new employment opportunities. Zvone Petek, the Honorary Consul of Slovenia in Zurich, who previously served as Adria's Country Manager for Switzerland for over two decades, noted in a recent editorial for the "Travel Inside" magazine that, "4K Invest [owner of Adria Airways] purchased Darwin in order to merge it with Adria and become a reliable future partner for Swiss and Lufthansa. 4K would be weary of acting against Lufthansa or buying airlines without their blessing. Rather, it seems that 4K is purchasing airlines in Central Europe of strategic importance to Lufthansa". Since then, Lufthansa has pounced to purchase parts of carriers formerly owned by Etihad Airways, including Air Berlin and Alitalia. Adria Airways acquired a 99.1% stake in Darwin Airline in July this year through its subsidiary Adria Airways Switzerland. The Lugano-based Darwin operated as Etihad Regional for the past three years, after the Arab airline acquired 33.3% of its shareholding.

122 comments:

  1. Another one bites the dust. With Air Berlin gone as well the market is becoming less and less competitive.

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    1. Since Lufthansa is the one that will benefit, no one will care. The EU certainly won't. Consumers will be the one that will loose out in the end.

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    2. Luckily Swiss failed in Geneva so there is at least one city in the tri-state region that will see some sort of competition.

      Flying from Vienna/Zurich to most cities in the German speaking world is crazy expensive. For example, VIE-CGN is rarely below €500 on Austrian Airlines.

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    3. I happen to fly VIE-CGN and VIE-DUS regularly and its actually never that expensive: unless you buy your ticket 2 days before the actual flight.
      Also, this route (and the one to DUS) is predominantly served by EW- average cost of a flex ticket: eur 250-300-if you buy the tickets without luggage or the option to change dates etc it costs even less.

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    4. Hmm you obviously seem to be blind or book 30 Min before flight departures. Flights from VIE to CGN cost on average 150€ return.But if you are enjoying these stories ok, your story.

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    5. I book my flights roughly 7 to 14 days in advance and OS/EW are never below €400. The flight is 50 minutes so even a fare of €200 without luggage is too much.

      Also, both airlines double their fares if your stay is shorter than three or four days. Same principle with their BEG flights.

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    6. the prices i stated are dates with either 1 or max. 2 sleepovers or i return the same day- and its never more than eur. 300.
      But i get it Nemjee, u just don't like OS- and its fine ;)

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    7. I don't mind them, just flew on them yesterday. My only concern is that they are too expensive for the product they offer. That's all.

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    8. For my short haul experiences with OS-I couldn't agree more
      I even rather book EW on VIE-CGN/DUS. for the same price, with EW i get a seat with more legroom + sandwich

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    9. Don't know, never flew on Eurowings but I wouldn't be surprised if that's the case. I also heard that the EW crew are quite pleasant.

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  2. I think it is obvious now that Lufthansa is behind all of this. They reached a deal with Etihad to take over Air Berlin, Alitalia and Darwin, which they told 4K to purchase to avoid regulatory issues. I wouldn't be surprised if 4K takes Air Serbia next.

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    1. Are you serious? Swiss killed Darwin long time ago- it survived just because of Etihad. It is still dead. And of course Lufthansa want to get some old Saabs... good joke!

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    2. Austria did launch an investigation into LH owning both Niki and Austrian Airlines. Let's see how that plays out.

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    3. Yes, but Niki and Darwin are quite different calibers, don´t you think?

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    4. @AnonymousOctober 20, 2017 at 9:03 AM:
      Yep, that's what I heard too. JU is next.

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    5. If JU is next it will be interesting what happens. Would they be integrated into Adria, continue operating as a separate brand. I mean these two airlines are really close geographically and do compete for a similar market.

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  3. So how did Adria benefit from Darwin?

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    1. They get their planes and crew without probably paying a thing.

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    2. They got planes for ACMI.

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    3. We will see if they will benefit or not. Still too early. They only bought them 3 months ago.

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  4. ,it seems that 4K is purchasing airlines in Central Europe of strategic importance to Lufthansa".-- hahahahaha the best joke ever! Darwin and Adria of strategic importance to Lufthansa??- Sooo great. Goes to show that the guy has ZERO knowledge of anything.

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    1. I tend to agree with him. Adria has been working with Lufthansa for years, operating flights for them from Albania, Kosovo and Poland to Germany. They develop the market for them and then Lufthansa launches the route and Adria retreats. Imagine if someone else bought them and ended all cooperation with Lufthansa. Certainly would not hurt LH but it is a good airline to have in their back pocket.

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    2. Exactly, Adria has been working with LH for years now, because it is of importance to ADRIA to offer worldwide connections. Do you really think that LH does not fly to LJU or PRN because it is such a high volume and yield market? LH could start these flights tomorrow if they wanted- see the Luxair example. They would kill JP in a second. But in the end they would still not be making money on the route. If there were no flight via FRA, people would drive to VIE and go from there. It is a good think for both Adria and LH. How else would a pax get from say LJU to BCN, instead of going on a half empty CRJ to FRA and choosing 10 daily 321 flights to BCN?

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    3. Ok, can you tell me then what was the point of Adria buying Darwin?

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    4. No I can´t. But the guys from 4K can tell you certainly, but the most important fact is that they easily got ,and quite cheap by the way, some AC they can offer to the ACMI market. They now have 50, 70, 90 and 150 saeters which make the offer to lessees more attractive. Why do you think they are getting rid of the ATR72? Right, because it has the same capacity as the CR7.

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    5. +1 agree with last anon.

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    6. They getting rid of ATR72 because they can not afford lease for it. Saab 2000 they own, ATR72 is on lease.

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  5. Znaci smanjenje flote samo sabovi ostaju. Ne zvuci dobro za Adriu uopste. Mogli su sa takvim avionima pre 20 godina.

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    1. Nije smanjenje flote, ako dodas avione iz Svicarske ;)

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  6. Time to sell JU to 4K quick, before it becomes the next victim. JP and JU can become 1. Or maybe Adria Srbija can be born.

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    1. Why would the Serbian government sell JU? We are not in the EU so they can keep the airline operational without any real restrictions.

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    2. At one point the government will have to fill the budget with something. That's why they are selling the airport after all.

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    3. Yes and I highly doubt Adria or 4K will offer them enough money so as to make the sale of JU attractive enough.

      If Air Serbia changes its owner then it will be someone like the Chinese stepping in. However, even if they do come into play then I think they should take Etihad's 49%.

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    4. Etihad will stay with JU at least for the next year. I still think EY will stick with JU for another 5 years because they have a completely different relationship with them then they had with the other airlines. They invest very little and they get some money out of it. The real investor in Air Serbia is the government.

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    5. There is another rumour going around that EY will stay with JU until the agreement runs out on JAN 1, 2019 and then it will be taken by Eurowings. But I think it's all speculation.

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    6. Ha ha, Eurowings would just shut down Air Serbia and that's not going to happen. 4K will not get Air Serbia as 4K is just an extension of LH.

      Governement should just keep investing in Air Serbia as it makes sense for Serbia. When jat deal was made with Etihad many complained that company was given away for almost nothing, but look at what happened to Bombardier: Airbus got C series for free, and government will keep investing as it did so far. It's still a positive outcome for Canada.

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  7. And the guy from Lugano Airport said how the Adria takeover was a good thing. Now they will be left without any flights.

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    1. + there was somebody commenting all the time how now Adria would expand and connect GVA to the Balkans via LJU- what a joke

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    2. The Chairman of the Board of Lugano Airport, Emilio Bianchi, said, "Clearly we are losing one partner (Etihad), but it's good that there is a company that will replace them. Adria Airways is a very serious company and has a very good reputation". He added, "We need to understand their strategy. We will have the opportunity to meet the new heads of the airline in due course, but this seems to us as positive news. It proves that there is still some interest in regional airlines, which are very important for an airport like ours".

      Well so much for that.

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    3. anon 9:21 - 2018 will be big, watch

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    4. anon @1:02 facts or speculation?

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    5. for darwin or adria?

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  8. So Etihad is the bad guy yet all of these airlines operated more or less normally under them.

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    1. Well, when you lose three airlines in a year...

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    2. Etihad did a terrible job with Darwin. They ceased two thirds of its scheduled routes

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    3. To be fair, Etihad wanted Darwin to operate intra-EU flights. But around the time they purchased Darwin, the EU introduced cabotage restrictions for Swiss airlines meaning Darwin could not operate intra-EU flights. That's why those planned Rome-Zagreb flights they were meant to launch never started.

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    4. Interesting. I guess Darwin would have been ideal for routes like ZAG-FCO with its fleet.

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    5. I think so too. They even started selling tickets before the rules kicked in. They planned to operate four times per week on Mondays, Wednesdays, Fridays and Sundays with the Saab. Would have been successful in my opinion.

      But this is why Etihad at the time accused the EU (and Swiss authorities too) of pretty much destroying Darwin because they completely ruined their plans. Remember, Etihad planned for Darwin to have up to 25 planes. So when people say they were not a threat to Swiss or Lufthansa, I agree, they were not, but they had the potential to become. A European Etihad certainly would not suit them.

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    6. didn't know that. Would have been interesting to see how things would have worked out if they were not blocked by regulators.

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  9. I do wonder if AB and AZ paid for the wetlease of Darwin planes or they got them for free.

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    1. Probably free. But if it were Etihad leasing them planes it would be at an inflated over-market price. That's how they operate.

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  10. So Adria now has a four model fleet? Saabs, ATRs, CRJs and Airbuses?

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    1. They introduced those planes quietly into the fleet.

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    2. Nemaju vise ATRove citaj tekst. To zvuci bas bezveze.

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    3. Imaju ih do kraja godine.

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    4. How can it be profitable to operate four different aircraft types?

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    5. They still operate just 2 types. The other two are wetleased and probably for free.

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    6. How many Darwin planes does Adria operate at the moment?

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    7. 1 Saab and 1 ATR.

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  11. I find it very hard to believe that Adria or 4K didn't know what state Darwin was in when they were planning to buy it. They knew exactly what they were getting themselves into and I tend to believe there is some other motive.

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  12. Seeing as Adria is becoming more and more of an ACMI airline with deals with Swiss, Austrian and now Luxair they will compliment themselves perfectly.

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    1. let´s see where the A/C will fly in the future. Those leases to OS and LX are short term and driven by the need of the two to compensate AB routes. LU from SCN to TXL and OS to some German cities. Will be interesting to see where they will be deployed in the future.

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    2. Exactly! Long term survival is going to be difficult. One has to keep coming up with these ACMI deals in order to keep the income.

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    3. It seems to me that Eurowings will need some aircraft in the coming months too.

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  13. Unfortunate. Their on board product and service were quite good.

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  14. Adria Switzerland will just wet-lease planes, maybe even to Swiss, and operate domestic and regional flights for them seeing as they are putting emphasis on ACMIs. This was a great cover for Swiss not buy into Darwin and avoid regulatory issues while gaining access to the entire Swiss market. Of course this was pushed by Lufthansa during talks with Etihad.

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    1. Swiss had already decimated Darwin on the Swiss market. They were no real competition so your theory does not hold up.

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  15. They should have put an Adria logo on the tail.

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    1. The livery is the least of their worries at the moment.

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  16. OS will send the JP CRJ to BEG btw.

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    1. JP CRJ9 has been operating OS flights from VIE-PRN too for the last couple of weeks or so.

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  17. So much for those synergies Adria was talking about for Darwin.

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  18. I think that they didn't quite have a clear idea what shoul or could be done for the survival of newly purchased asset. Even worse, they were calmly waiting until someone would eventually come up with the viable solution. That didn't happen, obviously. Adrua itself worries me even nore. I expected Lufthansa to jump in and help or direct it's loyal partner. The same goes for Croatia Airlines. One would expect Lufthansa should care more about its partners that have devoted nuch of their block hours to feeding LH's flights at no risk and no cost fir LH.

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    1. It's a bit of a stretch to suggest Lufthansa doesn't cover Adria's back... Try to find 1 single flight of the whole Lufthansa group to Ljubljana... Hint: there is none. Up until recently, when Adria cooled down its prices a bit, it was very expensive to fly directly to Ljubljana.
      Croatia is another story, there is probably another game in question...

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    2. Lufthansa also has a share in Fraport. So in a way, they own airport LJ. Fraport is also not attracting new airlines to LJ... To fly from Zürich to LJ, it's almost impossible to find anything below 300€. It's a cartel, but EU does not mind cause it's a EU cartel.

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    3. +1 last anon. Exactly.

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    4. Hmm... But Switzerland is not in the EU. And neither Fraport nor LH own JP. What kind of cartel is that?

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    5. Star Alliance.

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  19. I do wonder if 4K plans to buy any more airlines. There were rumors about Croatia Airlines, Montenegro Airlines and now Air Serbia.

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    1. If they are all used simply to grow Adria's fleet then I sure hope they don't.

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    2. If they bought OU or JU their focus would move from Adria to there as they are both bigger than Adria.

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    3. 4K = JAT (till 1991) ??? Any comments?

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  20. Still don't know what to think of this arrangement. Leaves a lot of open questions.

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  21. I predicted that they wouldn't be able to finance taking on another airline. With all due respect, Adria is far from a financially stable company.

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    1. I'm interested to know where they found the money to buy Darwin? Less than a year ago they sold Adria's brand name to survive.

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    2. It was bought by 4k invest, not Adria itself.

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    3. The price was probably peanuts. I mean they paid 100,000 for Adria. I can imagine what Etihad asked for a company they just wanted to escape from.

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    4. My guess is, it was free.

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    5. If it was for free why didn't the airline management "buy" itself out of EY and do their own thing?

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    6. Because it was free for Adria (4K) to take it from EY (on the much bigger deal that involved Air Berlin and Alitalia), but it was not free for someone else who can make competition to LH Swiss.

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  22. So I'm guessing we won't see Ljubljana-Geneva flights.

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    1. I don't think there would be demand for it anyway.

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  23. Interesting times ahead.

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  24. And people were saying it is a great new beginning for Adria...

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  25. I still don't get it. Adrija could've simply based a CRJ in Lugano and use the smaller aircraft in LJU and increasing frequencies to cities such as SKP or PRN for instance.

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    1. Who knows what's the real plan behind it all ...

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    2. The CRJs arent able to land in LUG.

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  26. I thought Adria would have used Darwin to feed their flights to the Balkans from Switzerland. Guess not.

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    1. Switzerland is pretty well connected to the Balkans. I don't think anyone would fly via Ljubljana to reach places like Pristina, Skopje, Belgrade...

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    2. SKP misses GVA.
      BEG will miss GVA.
      PRN needs Bern or Lugano.

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    3. BEG will not miss GVA. Easy jet has said tickets for Belgrade past April will be on sale soon. You can ask them on Facebook too. And not only that they are increasing frequencies.

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    4. SKP does not miss GVA either- LX used to fly directly and they cancelled the route

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    5. What do you mean that they are increasing frequencies on GVA-BEG? It's going to be 4 weekly?

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  27. This might be a bit left field but reading this about Darwin and the news from Air Berlin and Alitalia, what the hell will happen with that Etihad Shared Services centre in Belgrade. I mean it serves all those airlines plus Air Serbia and Etihad but all are now leaving the Etihad flock so what's the point of having it.

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    1. They will still operate it with a reduced workforce. Eventually it will get closed when Etihad sells off all of its airlines.

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    2. You fail to realise that Etihad is still a sizeable airline itself with a number of call centres - a few in the UAE and one other one in Manchester - which is EXPENSIVE. So they will consolidate these into 1 in the UAE and 1 in Europe - meaning keeping BEG and closing Manchester. BEG gives them a much cheaper option.

      So don't worry about what they will do with their BEG call center - it will be their major and only call center in Europe

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  28. If Lufthansa/Swiss was behind this deal like some suggest, why would they not have done it themselves?

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    1. Because they already own one Swiss airline and regulators would not allow them to own a second one.

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  29. Next up for Darwin - bankruptcy.

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  30. Definitely not a good year for airlines in Europe.

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  31. If they can't meet the leasing costs for the ATRs, then you know the situation is bad.

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  32. Vec su upropastili Adriu sada Darvin zapamptite imena ovih strucnjaka

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  33. OT

    Austrian Airlines will revise its schedule to BEG and they will keep their morning departure from VIE only on Mondays.

    1------

    06.15-07.20 // 08.00-09.25

    123----

    20.25-21.30 // 07.40-08.55

    So far this schedule is only loaded until March so let's see if they keep it.

    These are definitely goods news for Air Serbia which will now take over the business passengers.

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    1. I would like to add that their 06.25 departure from Vienna never made much sense. It had to rely on local traffic only and the times were bad both for locals and businessmen.

      From what I've seen VIE-BEG was always 50% full which the return was packed to the last seat.

      This schedule will work much better for them.

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    2. Zato su cene vec skocile. Austrian izmedju 150 i 180 eur. Air serbia 160-190!! Bravo ali tu se preterane cene vec!

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    3. Actually, Air Serbia is constantly full to Vienna, I think that's why their fares are much higher. Two days ago their evening flight was even overbooked.

      I am sure if they had more Atrs they would have increased Vienna to at least 17 weekly flights.

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    4. Full with the Dash or Embraer? They often send smaller planes to BEG.

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    5. OS is not that full on the morning flight, VIE-BEG, all other flights are fine. JU is constantly full on all of its flights.

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  34. OT

    I see that JU is still flying to DBV, have they extended it this year?

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