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| Management and ownership issues affecting Belgrade Airport |
At a time when Belgrade Nikola Tesla Airport is experiencing strong growth and seeing record traffic, Serbia’s busiest airport faces many challenges in regards to its management and ownership. The airport’s CEO, Velimir Radosavljević, is set to be replaced by the end of the week and is being investigated over an alleged benefits deal with low cost airline Wizz Air, made in 2011, which, reportedly, was not approved by the supervisory board, as practice dictates. At the same time, the government is running late with the allocation of a dedicated passenger terminal for Air Serbia.
According to the Transaction Framework Agreement between Etihad Airways and the Government of Serbia (GoS) last year, “The GoS shall ensure that either Terminal 1 or Terminal 2 of Belgrade Airport, as the Parties may agree, is allocated to JAT for its exclusive use by no later than 1 January 2014. The GoS shall fund a portion of the costs of the refurbishment of Terminal 1 or Terminal 2, as the case may be, to a standard acceptable to JAT within 2 years of the date hereof, that is proportionate to the size of its shareholding in JAT after the completion of Etihad's acquisition of JAT shares:. The Framework Agreement also states, “The GoS shall ensure that space for a JAT lounge is allocated to JAT in Terminal 1 or Terminal 2 as the case may be, with sufficient capacity to meet its actual and projected business passenger requirements”.
Late last year, the Serbian government unveiled plans to grant Etihad a concession over Serbia’s busiest airport over the next twenty years under the condition it builds a new passenger terminal, runway, airport hotel and car park. The airport’s trade unions responded angrily to the proposal, arguing Etihad would have a complete monopoly over the Serbian aviation industry. However, it is believed the government will finalise the airport’s sale by the end of the year. Earlier last month, the Greek based Copelouzos Group expressed interest to purchase a stake in Belgrade Airport, which is one of Serbia’s most profitable state owned companies.
So far this year, Belgrade Airport has recorded unprecedented passenger growth of 30%. In addition, the airport is in the process of expanding and refurbishing its Terminal 2 facilities. Recently, the airport launched tender procedures for the construction of a hotel near the airport. Despite the added traffic, the airport says, “While the workload has been significantly increased over the past few months, all departments continue to carry out their duties successfully”.
Comments
What annoys me the most is their incompetence. They added remote stands (C7/8/9/10) but they have added only two (soon three) bus gates which clearly do not meet the basic demands. At one point when JU starts flying 5 Atrs they will not have enough remote stands and they will not have enough bus gates. I know there are also B stands but they are not practical and servicing aircraft there takes so much time since the road to reach them goes all around the tarmac.
Airport company is profitable, so they simply need to invest larger chunk of their profits, finally complete the upper level of T2 and build more bus gates. Hotel and other stuff can be done in cooperation with other investors, but they don't have to be Etihad...
1. Force the army to allow the transformation of Batajnica into a commercial airport, or at least a part of the airport.
2. Include a clause in the concessional agreement that in case Etihad introduces unfair and immoral business practices that will chase away other airlines (mostly competition), then there would be penalties or even that the government has the right to terminate the concessional agreement.
3. Give them land next to the existing terminal to build their own infrastructure which they can run as they please.
Still, Etihad seems to be doing a fine job with Air Serbia. I am sure they would do the same with the airport.
Tesla Airport development/expansion (investing without borrowing money) strategy has become inadequate, for it has not been modeled for a situation in which there`s a two-digit increase in passenger numbers.
Something important has to be done, and it has to be done soon.
First, all works envisioned by the Master plan, that refer to widening or refurbishment of the existing terminals should begin in no time.
I`d suggest implementing as many bus oriented gates as possible, and also doubling of the luggage-claim area by expanding the subterranean level underneath the T1. Thus, we get the opportunity to create a vast new check-in area above.
Any of the two terminals could be assigned to "Air Serbia"`s operations.
While that is being done, with T1 closed, additional capacity would have to be offered. There are two solutions:
1) Build a simple and cheap, low ceiling and somewhat claustrophobic low cost terminal on ANT.
2) Move low cost flights to Batajnica airport, which I strongly advocated on another forum.
Also, the planning stage for T3 has to commence now, too. It has, nonetheless, to be said that THERE CAN BE NO T3 WITHOUT A SECOND RUNWAY, at least under the existing Master plan, as the usage of the old runway alone would prove to be uneconomical for airlines operating from T3.
As for the financing, we should not be afraid of bank loans in this business, and I guess that Tesla airport is a perfect spot for public-private partnership. Therefore, I would not even consider giving a concession to EY - then again, it might occur to be their condition for remaining in "Air Serbia" business (in that case... well, the concession should be considered).
With a modest annual increase rate of 7%, starting from 4,5 million pax, we`ll pass the 7 million line within 6,5 years!
Major construction works at ANT must start immediately!
The whole damn thing is cramped.
Where will you squeeze a second runway ?
How will you extend the runway?
Whats with all the illegal building around the runway?
One way to read this is that GoS plans with EY regarding BEG airport did not go through for some reason and GoS is now looking for a new partner and that search might take additional time.
Otherwise there is no interest for GoS and Etihad to delay closing their deal until the end of 2014 especially in current environment of rapid growth.
OT - has anyone looked into the commercial deal that the airport signed with DUFRY ? It is scandalous that this company has a 15 concession to own and operate ALL retail businesses at the airport ... I'd hate to imagine what sort of deal was done with this company and how much money those crooks at URS have made from this deal ...
There are countless airports in the world with much higher traffic that operate with a single runway. E.g. Gatwick with 250,520 operations/year and more than 35 million pax.
People should get real before posting here.
Nonetheless, the airport (along with it's major customer Air Serbia) should plan for the future. But the future is still uncertain: will the airline make it, will it launch longhaul service, etc. Only then will the airport be able to plan for the long run.
p.s have you traveled recently somewhere? e.g. Frankfurt, Lufthansa check in in the peak hours.. at least 20 min waiting time, at the airport with full infrastructure comparing the Belgrade's imitation ...
Da je Er Serbija ozbiljna kompanija već bi imali online check in.
Nemoj da ih braniš jer ta služba, to jest ASGS, je sve sem dobro organizovane. Pošto si tako dobro upućen pogledaj malo bolje koje su sranje napravili na letu za London pre neki dan.
The 7 million doesn't take into consideration seasonality. The airport needs to be able to cover PEAK demand, not average demand. 7 million divided by 12 months is about 590.000 passengers per month. This August will probably be over 500.000, so there really is not much more room for growth.
I think a concession for the airport should be made as soon as possible, in this agreement, the existing two terminals must be improved, a third terminal must be built for JU, Etihad, and gang, and a second runway should be built according to the long term airport plan.
Ako bi nas uputio u to kakvo je to sranje bilo na letu za London - mozda i za to kao i vecinu stvari postoji logicno objasnjenja, samo je pitanje koliko ko zeli da prihvati i razlikuje objektivno od subjektivnog.
Daleko je od idealnog, ali je najlakse pljuvati po svemu... Kada se ceka kod stgranih kompanija, onda je to normalno , samo je sve nase sranje i svi smo mi budale....
Da odlicno poznajem zemaljsko opsluzivanje jer sam to radio tek nekih 25 godina i da obisao sam bas mnogo aerodroma tako da ne pricam napamet, prijalo to nekome ili ne...
Kada hocete da uvedete A380 prvo treba da se obezbedi odgovarajuca infrastruktura, isto je i sa povecanjem saobracaja od xx pct za par meseci.. Nece samo od sebe...
Prijatelju ima dovoljno izbora, AS ostaje onima koji moraju da lete sa njima
no self check-in...
but still huge queue because there is no enough educated personal and no enough check-in desks...
Welcome to Air Serbia... dreaming company for African standard.
Darwin failed because their prices were much too high. 325 euros to Switzerland on a turboprop is insane.
Montenegro failed because Fokker 100s are not good planes for such a short hop. ATRs would have been much better.
Remember that only about ten years ago, Nis had hundreds of flights per year to Zurich, on two carriers.
If Tuzla made it, I know Nis could also.
And what's up with this troll and his peculiar racist hate for Africa? In airline industry Africa is ahead of all ex-Yu airlines in terms of size, growth potential and capability. "African experience" is actually a great thing if you ever get to travel on brand new Ethiopian Dreamliner or for example business class on SAA A340. It will be a long time before any ex-Yu airline will be able to offer this kind of airplane experience.
It is up to ex-Yu admin to determine if this particular troll's posts are racist, but I would say they are.
The only way I see Nis having a legacy carrier is if Air Serbia launches flights the same way it did with Banja Luka. Naturally loads would not be as great as there would be zero O&D passengers.
The only airline I see potentially having flights out of Nis is Ryanair.
I just do can not understand why would all these airlines ignore Nis if there really was a market to be served. Look at Osijek, they are a relatively small town but they still get some sort of flights. Airlines do their homework and I am sure some carriers have already screened Nis.
Do you remember when Montenegro tried to set up Master Airways? They were not doing it so they could fly empty planes.
Nis has just had very bad luck. All of their previous services have failed for one reason or another. It is also a very low yielding market, so only low cost carriers have a good chance of success.
Now, the problem is that the two destinations that have the biggest chance of success, Zurich and Vienna, don't have any true low cost carriers.
Today the Serbian aviation market is very much liberalized and the government would be more than happy if an airline showed interest in flying into Nis (or even Kraljevo). I am just not buying the whole argument that there is something stopping them or that it is some sort of market that is left untapped. Nis is sandwiched between Belgrade and Sofia and that is its biggest problem.
Lowcost airlines are extremely aggressive when it comes to expanding and like I said it before, if there was a market there then they would have launched flights already.
By the way, Vienna can be served through Bratislava which is roughly 60 km away.
I remember a few years back, I spoke with a friend of mine who works in the aviation industry and he told me that one of the reasons why Thompson did not return to Nis was because, not only were the hotels getting expensive, but the airport charged them way too much for what they were offering. So here we come across the typical example of Serbian mentality where they try to rip off the foreigners as much as they can. Naturally the aviation landscape has changed since and unfortunately this change did not go in favour of Nis, or of its limited travelling public.
I still believe that the relatively large number of carriers that have failed in Nis is enough to prove to all of us that Nis can not sustain flights at this point in time. Maybe when the economic situation improves in the south more people will be able to afford air travel.
In 2008, JAT flew 104 times to Zurich, and there were on average 70,3 passengers in the cabin.
I don't either buy into the argument that there is some kind of block stopping airlines from flying to Nis.
Here is why each carrier failed on the Zurich route:
JAT: Weak carrier. was not profitable to base an aircraft there for only a few flights per week.
Montenegro: Was forced to suspend profitable route because of loss of Serbia as domestic market.
Darwin: Poor loads (26,1 passengers per segment) because of insane prices (325 euros)
The reason why there is nobody flying this line where there clearly is a market is because Air Serbia is focusing on BEG, and there is no suitable lowcost carrier in Zurich to fly to Nis.
As far as Montenegro Airlines go, they had Master Airways which was based in Belgrade and which flew between Belgrade and Zurich up until the dissolution of Serbia and Montenegro in 2006. Their loads were not that fantastic, around 65%.
After Montenegro went independent, they had plans to launch flights from Nis (as it was obvious they could never return to Belgrade with Master Airways) using the same brand however the airline initially planned flights to Budapest and Paris. There was no mention of Zurich, at least not in the beginning.
As we all remember, the Serbian government rightfully banned YM from setting up this venture.
Now, when it comes to Zurich, there is actually an airline which could have launched flights to Nis and that's Helvetic. They have a fleet of 100 seat Fokker 100s which in theory should be perfect for this route. If we take your statistics that would mean they could secure a loadfactor of over 70% by solely relying on the O&D market. Now, they ignored the city for a reason, even after the market was liberalized.
We can also add that Atlasjet flew from Istanbul to Nis for a short time. These flights were also a disaster and here we are talking about a market which is very popular from Serbia. Just look at the amount of people that travel to Istanbul from Belgrade airport.
Bottom line is that there are potential airlines to operate Nis flights from all the markets you have mentioned. The thing is that none of them has actually bothered to do it because they could see a plethora of airlines failing there. Even Mistral Air which got subsidies from the EU to operate these flights gave up. If I am not mistaken this summer season the airport will have one weekly charter flight. This is the best indicator of how weak the local market is since summer charter flights are usually easy to sell.
Vreme je najveci svedok. Sa zadnjim javljanjem iz Evrope za sada, kao i uvek svako vam dobro, sa mnogo let0va i letenja. Prijatno Evropsko leto. Uzivajte.
Rod. Marinkovic, AME. Kraljevo / Sydney, Griffith.