Monday, January 29, 2018

Air Serbia mulls future fleet options


Air Serbia is weighing up options for the make-up of its future fleet as it implements a strategic transformation plan aimed at ensuring its long-term profitability and sustainability. As EX-YU Aviation News learns, the airline currently plans to retire part of its Boeing 737-300 fleet this year and take delivery of the Airbus A320neos. The first of the Boeing jets, all of which are operated under the Aviolet charter brand, was taken out of service earlier this month, with a second expected to follow later this week. As a result, the carrier will have two B737s at its disposal over the summer for its lucrative charter operations. Following criticism from tour operators that the two jets will be unable to handle the high demand for leisure flights this year, Air Serbia deferred its planned new service to Geneva to make available an additional Airbus A319 jet, which, along with the planned cuts in frequencies on several routes, will be able to cater for charters and replace aircraft on scheduled flights in case of technical issues. "Air Serbia has transferred its capacities, originally intended for flights to Geneva, to charter operations. The decision was made due to increased market interest in the past for charter services. Since last year was a record for charter operations, the company has decided to supplement its capacities with an aircraft originally intended for transporting passengers and goods to Geneva", the airline said recently.

Last year, Air Serbia's Chief Operations Officer, Declan Keller, said the carrier could invest in the B737 jets and thus extend their utilisation by a further four to five years. However, such a move would require a costly engine overhaul and cabin refurbishment. Alternatively, Mr Keller noted that the airline would consider the retirement of two B737s by the end of 2017. All four of the Boeing 737-300s are owned by Air Serbia and were delivered new to the airline over thirty years ago. Despite their old age, most have had a low utilisation rate since the majority were grounded for the better part of the 1990s. Air Serbia plans to run three rotations per day with the B737s this summer.


According to current plans, which are subject to change, Air Serbia is expected to take delivery of its first Airbus A320neo at the end of the year, despite initial uncertainty over their future. Several others would follow in 2019, however, the airline is unlikely to take all ten of the Etihad-ordered jets. Another Etihad Airways Partners member, Air Seychelles, which itself announced a major cost cutting initiative last week, has said it will replace its two A320s with next-generation aircraft, presumably the A320neos, that would likely come from the Air Serbia order. The Serbian carrier secured ten of the narrow-body aircraft as part of a major fleet order by its equity partner Etihad Airways in 2013, for up to 117 Airbus jets. They were set to completely replace Air Serbia's existing fleet of A319s and A320s. Instead, the airline now plans on returning two of its leased A320s at the end of the year. The delivery of the neos is slated in between 2018 and 2020. A previous deposit payment made by JAT Yugoslav Airlines for eight A319s in 1998 has been credited against the pre-delivery payment for the neos.

128 comments:

  1. Makes sense. At the end of the day they will have the same number of aircraft in the fleet.

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    1. Not really. They would have 3 planes less than now.

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    2. To clarify I mean they should have 3 planes less at the end of the year than they have now.

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  2. What are the registrations of the Boeing plane which has left and is leaving?

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    1. YU-ANJ left. Not sure which one is leaving next.

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    2. YU-ANI expected to leave on Friday.

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    3. YU-ANI is the next to stop flying.

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    4. YU-AND and YU-ANK will be left in the fleet.
      Dane was so desperate a while ago that he wanted to reincarnate YU-ANF.

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    5. I hope they save one of those B737s for the Aviation Museum near the airport. THey deserve it.

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    6. ^^ Me too! At least YU-ANJ. It featured all the Jat liveries, including the traffic lights with large titles (I think it was the only one with those colours)

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    7. And to think they declared those planes rubbish almost 5 years ago when the new management came and said how they would retire them ASAP only to turn out that those planes have been a savior for JU on so many occasions.

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    8. It's funny how they outlived those people who wanted to retire them. :D

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    9. God I love those timeless classics. I will be sad to see them go.

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    10. Turned out these B733 were just fantastic, really sad they will be gone to history.

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  3. What about the regional fleet? Are there any plans to replace the ATRs?

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    1. A replacement for the ATRs is much needed as well.

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    2. Shouldn't be a problem to replace at least the three oldest props with newer ATRs.

      Mihael

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    3. It is more expensive. As far as I'm aware JU owns 3 ATRs so they don't have to pay any leasing fees.

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    4. They don't have to pay if they fly,but if they need to send other planes duo their breaks then this is not so cheep

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  4. They will probably get a few new planes, getting 10 would be unrealistic. Etihad will probably give them 3-4 IMO, the rest will go to other airlines in need.

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    1. It will probably be 4 for JU, 2 for Air Seychelles and the rest would go to Etihad.

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    2. It is interesting indeed that a couple of days ago I read that Air Seychelles will be retiring their 2 A332 and replace them with A320s. As they also said they would replace their A320s by A320 neos it indicates that they will take at least 4 A320s or probably in my opinion rather 5 to compensate for the greater number of seats lost. Currently they often even serve islands such as Mauritius with their wide bodies which is only a flight of less than 3 hours from Mahe. That would leave JU with up to 6 or 5 A320 neos maximum if no-one else from EY partners gets some of these 10 ordered planes too.

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    3. There is no one else among EY partners left :D

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    4. There is Jet Airways and Virgin Australia.

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    5. In Virgin Australia VAH and Hainan has more shares than Etihad, also Singapore has same share as Etihad. So, it is not that Etihad has to much power there, for sure can not decide about fleet, strategy.

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  5. So basically Serbia's deposit was used to secure two A320neo for Air Seychelles? How nice.

    'Last year, Air Serbia's Chief Operations Officer, Declan Keller, said the carrier could invest in the B737 jets and thus extend their utilisation by a further four to five years. However, such a move would require a costly engine overhaul and cabin refurbishment. Alternatively, Mr Keller noted that the airline would consider the retirement of two B737s by the end of 2017.'

    This paragraph shows how clueless Declan Keller is. He is making random statements without first making contact with reality.

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    1. I seriously can't believe they considered another 5 yrs for those planes.

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    2. Why does anything surprises you? The only thing that stayed the same from the beginning was the livery. Chaotic management style.

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  6. big news,
    it seems that someone finaly cut the knot!

    taking neos, taking pre-delivery payments, returning a320s....

    it will be even more interesting to watch JU financial statements in years to come. interest rates on and returning loans for those neos will be huge.

    wondering how they made a deal concerning installed wifi and new seats in those plane?
    lessors ussualy want a/c in the original state and avoid paying any additional stuff that was built-in them

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    1. Who are the A320s leased from. Leasing company or some airline?

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    2. i've lost login to such databases to check that info

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    3. E Petre vidi se da ti je znanje stvarno " odlično" . Kada si toliko pametan ajde da nam kažeš koliko će da bude kvartalna kamata i sa kojom finansijskom ustanovom je potpisano ugovor o financiranju ovoga projekta ? Ajde molim te da čujem taj "huge " kamatni procenat?

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    4. Ma ne Hot Line, pa ovo avioni su jako jeftini, dobiš ih doslovce za džabe. Kupiš kilo krumpira u trgovini i jedan A320neo ti teta da usput. Pa što zna malo djete što je to 100 miliona. Koji milijun gore-dolje. To si svatko može priuštit. Eto, baš ću sutra da uzmem jedno tuce-dva. Nek se nađu. Da neidem na godišnji sa tuđim avionima.

      Pa, čovječe, nemoraš znat koliko je to u detalje. Skupo je i da su izvukli "dobar deal". Puno preskupo za Air Serbiu.

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  7. And will the two other B737s be retired after summer or will they keep them for next year's charters as well?

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    1. I think they are being kept for next summer, which will probably be their last.

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  8. Air Seychelles is terminating long haul flights. Could the 330 which leave the fleet come to JU to expand long haul ops?

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    1. Too late for this year. Maybe 2019.

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  9. Last year JU was given the chance by Etihad to pick and choose any aircraft they wanted from Alitalia's grounded fleet at the time. JU declined.

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    1. Do you have any more info?Never heared about this

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    2. There isn't much to it. Management declined because of the increased costs of leasing and operating the planes and that was the end of that.

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    3. Management primarily turned them down because they were struggling to fill the A319s they had in the fleet.

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  10. I actually think they need a regional jet plane. Something with the capacity to seat 100 passengers. Jat and now Air Serbia never filled the void of getting rid of the DC9/B727s which were actually the backbone of their fleet. They retired all those planes over night and had no alternative planned. 100-seaters would be perfect for many routes.

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    1. C series would be great addition.

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    2. Imamo u okruzenju kompaniju koja ih kupuje godinama. Ne pocinji tu pricu i sa AS.

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  11. What about the ATR fleet? Don't forget they are aging too.

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    1. my guess is that replacing owned atrs with the newer aircraft which they will have to pay for will be postponed as much as possible, since it will burn another hole in Air Serbia's pockets.

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  12. Are they going to be owned by ASL those NEO's?

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    1. No, they will be owned by the company that pays for them - Etihad.

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    2. They wont be paid by Etihad but by Air Serbia.
      Etihad will be the one leasing them to Ar Serbia and collecting the lease payments.
      Lets hope that our management will make a better deal that they did with the A330 and the leases wont be so much above market rates.

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    3. No they will be paid for by Etihad. Air Serbia leasing them afterwards does not mean they were paid by Air Serbia, otherwise they would own them.

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    4. Based on what do you claim A330 was leased "much above market rates"?

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    5. I am talking about who will be paying their leases.

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    6. @Anonymous at 10:02 AM
      Based on widely available info about A330-200 lease rates for 8-9 year old frames.
      And to make matters worst JU leased the aircraft that needed a D check only after 18 months.
      Do you know how expensive that is?

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    7. That's so sad when your goals (air Serbia's) are depending on the permission of another (Etihad)

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    8. Well they are a shareholder of 49%. Of course they have a big say in what happens.

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    9. Yes but there is someone with more shares who has invested much more than those desert leeches. ;)

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  13. Zasto su oba ta dva 737 penzionisali?

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    1. Zato sto su stariji od Biblije.

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  14. Interestingly, the two older B737s are staying the fleet.

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  15. Instead of returning two A320s to lessors why not keep them as replacements for the remaining 737s?
    Why not standardise the fleet, have aircrews able to work on all its jets and increase aircraft availability since you will no longer have to fly with 30+ year old 737s?

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    1. Because the B737s they own and for the A320s they have to pay expensive leasing fees.

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    2. Leasing rates for 10 year old A320s and especially A319s are a lot cheaper nowadays.
      With oil going towards 60-70$ a barrel it is the smartest move to do.

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    3. @
      Anonymous January 29, 2018 at 10:00 AM
      +1000
      Oil is almost 68$ today and raising. It is stupid to keep old aircraft with high consumption in this environment.

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    4. My guess is the A320 lease contract is expiring and they don't want to sign another 5 year deal for the planes while the remaining B737 will probably be retired in a year.

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  16. The issue with Air Serbia is that in 2-3 months when a new CEO comes he could completely change the fleet plans. God only knows how many different strategies have been tries in the past 5 years.

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    1. I am afraid you are right...

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  17. What is the capacity of the A320neos?

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    1. 165-195 depending on seat configuration.

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    2. What on earth are they going to do with such large aircraft when they have trouble filling A319s.

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    3. Who said they have trouble filling the A319s?

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    4. Looking at average CLF for a mainly ATR/A319 fleet, moving to A320neo fleet will be a tough challenge to make sustainable.

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    5. Anon 10.42

      Take a look at their yearly LF and you will see for yourself.

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    6. Truth be told they have the highest LF out of the ex-Yu airlines, although that's not difficult but do keep in mind they have the A330 in the fleet.

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    7. They also have six Atrs with 66 to 70 seats. It's not hard to fill those and secure a high LF.

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    8. So? All ex-Yu airlines have 70-seaters but none have a 230 seat plane.

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    9. A 70% filled A320neo might have similar operating costs as a 90% filled A319 so that's not a big deal.

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    10. Sure if you get them for free. But you still have to find way how to finance 100 million for each plane.

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    11. It's not 100 mil EUR. They were a part of the huge order, the discount is probably 30-40% with very low interest rates thanks to Etihad funding.

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  18. Just to remind people what was planned with the A320neos some years ago from various interviews:

    "As one aircraft enters the fleet another will exit it. However, these aeroplanes give us the possibility to access new markets, for example Iran or Central Asia or North Africa. These are destinations that are within a two and a half-hour radius. The Far East is also a potential market for us if you consider relations between Serbia and the People's Republic of China", Mr Kondić said. He added, "We believe that Serbia has enormous potential. When we grow we aim to do it responsibly".

    "The new fleet of A320neo aircraft are a key part of our strategy with which we intend to redefine our position on the market, with the most modern and comfortable single-aisle aircraft. As we expand our destination network throughout Europe, we will set new standards with the A320neo both in comfort and quality of service". He added, "It is the best option from the A320 family of aircraft and features new engines as well as sharklet technology, allowing added efficiency”.

    The new jets, which the airline believes will give it "more flexibility", are all expected to arrive by 2020. "Within a period of five to ten years I can see us with a fleet of perhaps 25 or 26 aircraft. It's a process we will be continually evaluating", Mr Kondić said.

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    1. Yeah... and we all know what happened to Mr Kondic.

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  19. This sort of fleet plan is indicative to me that Etihad will keep its share in JU.

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    1. That is bad news for JU.

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    2. Bad or not, there would be no JU today without them.

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    3. Etihad is in a major restructuring/turn-around phase at the moment and they have not announced what their new strategy will be yet. From what others are saying on other forums like airliners, it will be announced by years end so this is when we will know if their partnership with Air Serbia stands.

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    4. Airliners is full of fictitious rumors but they will certainly have to announce something regarding Air Serbia by the end of the year since their partnership agreement expires on 1. Jan, 2019.

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    5. How will the furlough of pilots and grounding of aircraft at Etihad affect AS in the future.
      There are rumours of Emirates taking over Etihad on some of the other boards..

      https://www.reuters.com/article/etihad-airways-strategy-restructuring/etihad-grounds-5-cargo-planes-pilots-asked-to-take-unpaid-leave-idUSL8N1PJ2SD


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  20. And still no plans for regional fleet expansion?

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    1. It should be one of their highest priorities in my opinion.

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  21. 1) Živo me zanima ko će kupiti 733 pošto imaju malo sati i mogu još leteti. Afrika, Avganistan? Da je pameti jedan bi dali vojsci ili avioservisu da se koristi kao državni avion.
    2) Što su kog đavola pre par meseci imali konkurs za pilote sa TR za 737 a sada ih penzionišu?

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    1. Мислим да и сами знају да се ти Боинзи не могу продати сем ако је у питњу нека компанија којој су потребни резервни делови.

      Пилоте су вероватно запошљавали јер су одређени отишли у пензију или су прешли на Ербас.

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    2. All the new Boeing pilots, like last year, are hired on contracts for the summer. Then they leave.

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  22. A320neo capacity is perfect for their charter ops actually.

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    1. if only they didn't pay for that capacity, since 737s were free of ownership cost

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    2. True what Petar says.

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  23. So I'm guessing that 5 year plan they were making is out the window now?

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  24. The article mentions frequencies on some routes will be cut during summer. Anyone know which ones?

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    1. TXL, DUS and STR were cut in order to launch GVA. Given that GVA was axed I guess those mentioned above.

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    2. PRG will be decreased from 14 to 10 but capacity will actually increase because they will be using A319s on the route too. I think Ohrid is being suspended though, not sure yet.

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    3. OHD is suspended. It was the worst performing route in the network last summer with average LF being 42%.

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    4. Poorly thought out sales. There are a lot of connecting passengers from Ohrid to Scandinavia.

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    5. It is quite incredible that GVA (wasn't it only planned with 2 weekly flights?) was cancelled completely now just to have an A319 for 2 charter flights a week.

      I try not to think about the fact that JU is letting two Boeings go without any replacement for the summer. Two B737 which are good for 42 weekly charter departures and they seriously cut GVA which equals just 2 departures. So what about the other 40?

      And then they talk about how important charters are for them when the phase out 50% of their charter metal.

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    6. Maybe the idea of re-using YU-ANF wasn't that bad after all?

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    7. Why not the DC-9 while we are at it?

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  25. Those 737s have certainly had a long life. You have to congratulate JAT on keeping them in good flying condition for so long.

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    1. Well, there was also Jat we should thank.

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    2. Yes, JAT and Jat Airways.

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  26. Maybe they could have leased the two B737s they are retiring to Montenegro Airlines? Didn't they lease one last year for a short while.

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    1. They leased for like a day and it was grounded in Podgorica because they didn't pay for it.

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    2. They probably used them as long as they possibly could avoid a major check or engine overhaul. That means if anyone wanted to keep flying these birds they would need to heavily invest first check/overhaul. Not cheap at all.

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  27. Will be nice seeing the neos in Air Serbia livery. Hope it happens.

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    1. Unfortunately I don't think it will happen anytume soon. They don' t even have money for sandwiches not to mention Neo's.

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  28. Order for 10 neos is still without engine choice. It makes delivery this year unlikely.

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  29. Why doesn't EY simply transfer all the Air Seychelles fleet of 4 aircraft to JU and forget about the drama?

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    1. What you are suggesting would be drama.

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    2. because those two 320's of HM are better to be sold for spare parts...

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    3. And you know that from what? Their age is 15 years, still have atleast 10 years of flying. They have IAE engines, just like JU A320.

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    4. It's not so much about the age as is about the environment they flew in. Salt from the sea and ocean speeds up the deterioration of the fuselage. This increases the costs of the maintenance and reduces the lifespan of the aircraft.

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  30. OH, how IN love when I read that "Despite their old age, most have had a low utilisation rate since the majority were grounded for the better part of the 1990s." Come on, the war and embargo did not last for 10 years. Plus, most of them were leased out to various airlines, including MAT (JAT's Macedonian airline) and were flying a lot. Don't get me wrong, I adore 737, I have many hours working aboard them (cabin crew here) but they are not as fresh as they try to make it sound with that statement for many years now. Oh, I wish the airline name is different and that they went for 737 Max, but that's something else... :)

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  31. Skoro sam leteo sa asl b737 iz beograda za bec. Planiran let atr72 izmenjen je b737. Leteo sam i sa a319 (stara sedista i nova) i sa a320 er srbijom, ali naj udobniji i najlepsi zvuk i dalje ima b737 er srbije. Posle 30 godina i dalje mi je zadovoljstvo da letim sa njima. Molim vas samo da ako niste leteli sa njima, ne pisete nebuloze ovde o b737.

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  32. I totally understand this gradual retirement for the 737. However it is important for JU’s history one or maybe two are preserved at the Belgrade Aviation Museum

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  33. Cut 737s from service gradually as NEOs come in and use the current A319s / A320s as replacement. Leave a few for backup. Problem solved.

    I can see the reduction to 8 NEOs as part of the cost cut. They can justify this by claiming that the 1997 deposit was for 8 jets.

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  34. And why is there an add right now for the 737!!??? This company is just a big scam. Probably they are planning to sell the company presenting figures that are not accurate. It probably has already gone bankrupt so the airport has been sold , CEO fired and now they need to polish the remains and sell it to the highest bidder...

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