Air Serbia to focus on merchandising

Air Serbia plans to put a greater emphasis on merchandising in the coming period in order to drive revenues. Speaking to "Amadeus", the airline's Chief Commercial Officer, Veljko Ristić, said, "Air Serbia provides premium and high-quality service, and in a few short years we have succeeded in building our reputation as the leading full service carrier in Southeast Europe. Our efforts have illuminated a new path to achieve the next phase of our growth with a focus on merchandising. Traditional commercial approaches are no longer sufficient in making an airline competitive enough to ensure its long term profitability. Passenger numbers are booming, competition has intensified, and LCCs have made the aviation industry even more dynamic and tougher than ever before. But most importantly, with flights more affordable than ever, travellers are paying more attention to factors outside of price that differentiate airlines". He added, "And this is where merchandising comes into place. It is a vital commercial tool for every airline looking to meet the needs of its passengers. What do I mean by this? Well, for us at Air Serbia, merchandising is all about offering our guests specific, tailor-made airline packages".

Only a few airlines have so far applied merchandising techniques in a comprehensive way, primarily low cost carriers. Several full service airlines are meeting the challenge of LCCs in their markets through ancillary offerings similar to budget carriers in areas such as baggage, seat assignment, packs of services, cabin upgrades, Wi-Fi with in-flight entertainment, as well as boarding privileges. Air Serbia itself has rolled out numerous measures over the past six months such as preferred seating, lounge passes and a Belgrade Airport check-in fee for the lowest subclasses (if not previously completed online). Its Slovenian counterpart, Adria, was the first in the region to begin focusing on merchandising and moving towards a hybrid business model back in 2014. On the other hand, Croatia Airlines has ruled out the strategy. "Many airlines have attempted to adopt a hybrid business model and failed. You have to define yourself in one niche instead of doing a bit of everything. The only real hybrid company in Europe at the moment is the Lufthansa Group. They, however, are big enough to allow themselves to operate different models within the same company. I think that Air Baltic's no-frills product for example, with so many selections available at an extra fee and even business class, is a bit too complex for such a small number of seats", the carrier's former CEO, Krešimir Kučko, said recently.

Mr Ristić noted however that Air Serbia will become more customer-centric, in line with the needs of the market where the national carrier faces strong competition for Wizz Air, and more recently, Ryanair, with airfares falling by almost 40% over the past two decades. "It’s all about unbundling the traditional airline product proposition, and allowing travellers to create or choose their own journey based on their travel styles and preferences. It’s all about making these packages simple and easy to understand for both the market and the sales network. And in short, merchandising is all about that first marketing lesson we are taught in business school: offering the right service proposal to the right passenger at the right price at the right time in the right sales channel. It’s as simple as that", Mr Ristić noted.