The Serbian Prime Minister, Ana Brnabić, has said that Etihad Airways will continue to be Air Serbia's strategic partner and minority shareholder for the foreseeable future. Speaking in parliament during question time, Ms Brnabić responded to inquiries from lawmakers whether the Emirati national carrier is seeking an exit strategy from its Serbian investment. The Prime Minister noted, "Air Serbia is always a topic that we in government like to discuss. Despite everything you can read about Air Serbia and the disinformation that is being spread in the media, the airline's operational results all point to growth". She added, "Etihad is our strategic partner. It is a devoted partner which has not indicated in the slightest that it plans to divest from Serbia and we are very happy about this".
Commenting on Air Serbia's operations, the Prime Minister said, "I cannot outline Etihad's plans but I can say that we are doing our utmost to make Air Serbia even stronger. Compared to 2013, Air Serbia has increased its passenger numbers by 90%, while its fleet size has grown by 23%. The airline's operations are going according to plan, but it faces strong competition on the market. Precisely because it finds itself in a competitive environment and has a professional management, sometimes it has to make some unpopular decisions, because it is not a company led by politicians. So, Air Serbia is very much in good health".
Air Serbia is undertaking a wide-ranging restructuring in an attempt to boost its key performance indicators, as it tries to keep a lid on costs, growing competition, an over-inflated workforce and the winding down of state subsidies. The carrier transitioned into a hybrid full fare - low cost airline earlier this month. The development came after Etihad Airways ordered its Serbian partner to restructure and mirrors similar policies being implemented at both the Emirati carrier and another one of its equity investments - Air Seychelles. Although there have been suggestions Etihad will divest from the Serbian carrier, the Abu Dhabi-based airline is expected to stay put at least until January 1, 2019 when its five-year investment and management agreement expires. Serbia's President, Aleksandar Vučić, recently held talks with the Crown Prince of Abu Dhabi and its de-facto ruler, Mohammed bin Zayed Al Nahyan, during which the two reviewed the expansion and diversification of the partnership, as well as its continuation. A final decision on the partnership will likely rest on the success of the restructuring process taking place.
Yeah, Dane Kondic was the very definition of professionalism.
ReplyDeleteThese guys are no better .. Alitalia leftovers
To be honest, it's still better than having politicians running the airline or a string of clown we had running the airline in the 2000s
DeleteI agree with you but my problem is that those clowns knew they were politically appointed people and didn't pretend otherwise.
DeleteThese guys we have now are selling themselves as top experts when truth is...
I agree but that is a problem in the west too, where these guys went to school.
Delete"Clowns" from 2005 onwards managed to survive a year with around 10 mil EUR subsidies and have 1-1.4 mil passengers between 2005-2013.
DeleteYep and they brought company down to the bare minimum. Also your passenger fata is not correct. From 2008 Jat had more years handling under 1 million passengers than over. In fact it was even surpassed by Adria. Please don't pretty up the past.
DeleteAgree. It was challenging time with no great management, but truth been told even that management could do miracles with money Etihad received from the Government to run the company.
DeleteI also don't see much sense in them leaving before January with just 9 months left. But what happens if EY doesn't extend its agreement?
ReplyDeleteThey find another partner. BTW they extended their Air Seychelles agreement which was also 5 years.
DeleteWhy would they go? It is a very lucrative management agreement.
DeleteNo they did not. And they will not.
Delete^ what?
DeleteWhat anon 09:04 wrote is not true. Etihad did not extend its agreement with Air Seychelles.
DeleteThey did. Five year agreement was signed in January 2012. Today it is almost April 2018. They still have their stake in Air Seychelles.
DeleteFake news :)
DeleteCould you please send us some link or official statement?
DeleteWhat's fake news? Have they pulled out of Air Seychelles? No. When did they sign a five years agreement with Air Seychelles? January 2012. How many years have passed since? Over 6 years.
Deletealthough the partnership is practically dead (no JU flight to AUH, synergies with AZ and AB lost) it is hard to believe that EY would not extend.
Delete1) EY delivered a list of things to be done and most of them are completed, so they don't have a valid base for exit.
2) EY has very few financial obligations (no obligations more likely) towards JU, so it doesn't cost them a lot to stay
3)according to current agreement EY can exit any quarter they like
4) it is a political deal, it hardly had ever any economic sense in it
5) etihad is practically running JU. now even their management is in place, plus planning and rev management are in AUH
DeleteExactly. It is a management agreement with lots of benefits for Etihad.
DeleteStill waiting for a link to news about Air Seychelles extension. :)
There is no link. Over 6 years have passed and they are still very much involved with Air Seychelles.
DeleteP.S both Air Serbia and Etihad agreement are 5+5 years. No additional documents have to be signed.
Delete"...Brnabić je dodala da, ipak, ne može da zna planove privatne kompanije, ali da je "Er Srbija" sposobna da u svakom trenutku nađe novog strateškog partnera."
Deletehttp://rs.n1info.com/a375628/Biznis/Brnabic-Etihad-se-ne-povlaci.html
ah OK so it is basically keeping both lucrative management agreements with possibilty to pull out on a quaterly basis if they wish. Good deal for them :)
DeleteYes, she is a good PM but she cannot have a clue regarding the EY internal decisions. EY is making heavy losses and literally ruined many European airlines. The reputation has really gone down especially after the Air Berlin and Alitalia fiasco.
ReplyDeleteI wish JU all the best of course, but would never rely on EY starting 01/01/2019. The government needs to find alternatives and not wait until the end.
It's quite unfair to state that Etihad ruined many European airlines. Most of those airlines were in ruins to begin with, Etihad just didn't manage to save them, and oftentimes didn't even have the power to do so (Air Berlin, Alitalia).
DeleteAlthough there is no doubt that Etihad's strategy didn't work out, I doubt this alliance wide collapse would have occurred had oil prices remained high. Simply said, UAE had money to throw several years ago. It no longer does.
DeleteIt was very naive to believe that you can run company policies and treat employees in the same fashion as it is done in the Gulf. These are decades old and powerful structures, especially in Italy.
DeleteAir Berlin and Alitalia have been dangling over the bankruptcy barrel for quite a while. Alitalia ever since their separation from KLM some 15+ years ago. They only took from Etihad who chose not to give anymore. As an investment partner you are giving as much as the other party is. How much did Etihad get out of Alitalia or Air Berlin, probably nothing. Alitalia is still receiving 100’s of millions in funding from the government. How much is the other shareholder investing still? Germany cut it’s losses with Air Berlin and is lucky that they are gone and they don’t have to fund it any longer.
Deletethe way they talk a demise is certain.
ReplyDeleteno longer mention of fleet renewal and expansion.
Disagree. Vinci is constantly mentioning Air Serbia's long haul expansion next year.
DeleteI noticed that as well. I assume Air Serbia presented them with their plans for next year. I do wonder which routes they are considering.
DeleteToronto. Even someone from Toronto Airport was quoted here as saying they are working with JU for the route to be introduced next summer.
DeleteShe says that JU is not run by politicians? I disagree. They are behaving like fantastic politicians. Selling hot air as if it's the next big thing in the aviation business.
ReplyDeleteJU is spiraling out of control because of Mr Kondic and his team. He ruined the airline.
This government would never let Air Serbia collapse. Never. Simply because it's their baby and their pride. Even if Etihad were to leave, they would find an alternative.
ReplyDeleteNo government would ever allow for JU to die.
DeleteI'm not so sure. Don't get me wrong, this is not an endorsement of this government but I think the others didn't care much about Jat.
DeleteThey didn't care about its welbeing but they prevented it from shutting down.
DeleteTrue
DeleteAbsolutely. This is one of their main projects that seems to be working. They must keep AS operating at any cost.
Deletethey even got 500mil for concession, so they have a very good explanation why they keep JU alive... besides ridiculous oxford economics impact report
DeletePetar, do you think that the money from the concession would go directly to JU and further investing in it?
DeleteDepends on the long term revenue/cost structure of the JU. At the end Government might end up spending much more on saving JU than it was received from the concession. We have not seen the agreement and have no clue whether there are clauses on penalties if JU goes bankrupt or decrees no pessangers dramatically.
DeleteThis comment has been removed by the author.
Deletei don't know what it will be exactly spent on, but half billion is too big for JU.
Deleteto me it looks like they think that already enough is spent on JU and that they look to lower the loss of JU to some more acceptable levels with current business model (by this i mean keep on leasing planes), then to invest further.
Around 410 mil the government will get could be spend on 4 planes for JU. That would reduce cots for JU somewhat.
DeleteCan investments involve the A320neo introduction ?
DeleteGovernment might invest in the company. But that would not be wise.
Deletewhat about new planes? something smells bad here.
ReplyDeleteOne to two new planes will come in November/December. But definitely not the entire 10 planned because Air Seychelles will now get some of them.
DeleteIs that sure?
DeleteDanas newspaper wrote about this a few days ago. They said that JU quietly abandoned plans for getting any new airliners.
Deletehttps://www.danas.rs/ekonomija/er-srbija-odustala-od-kupovine-novih-aviona/
Danas has so far written many wrong things and half truths about Air Serbia, mostly influenced by politics. I remember that in December 2016 they wrote that Etihad was pulling out of Air Serbia in January 2017. So much for that. Also the linked article is wrong in the fact that EY-JU did not aign a partnership agreement in summer 2013 but on January 1, 2014 which is visible by viewing the actual document which is available online.
DeleteOn the day Vinci was chosen as best bidder for the Belgrade Airport concession, Danas had a front page article how the concession tender would be voided and that direct talks with Hainan taking over the airport and Air Serbia had already started, which is why Hainan withdrew from the tender. Of course it all turned out to be a load of bull. So I wouldn't trust Danas when it comes to aviation topics.
DeleteLets wait and see. Government and AS should be more transparent about it as public money is invested in the project. Maybe they will reduce the order to 5 A320neo which would make more sense.
DeleteOrder will not be reduced because order has not been made by Air Serbia but by Etihad. Etihad has already said that 2 of the 10 planes will go to Air Seychelles.
DeleteWell order was made by Etihad in the name of AS with deposit of $23 mil from 1998. We should not forget that.
DeleteSo EY used JU money to pay the deposits for aircraft that will be owned by EY instead of JU?
DeleteWOW, this is truly unbelievable!!!
We really do not know details of the deal but yes it was reported that deposit from 1998 is used in the deal.
DeleteI love how all the comments here boarder on absolute hysteria when JU is concerned. I flew JU last week after more than 2 years expecting god knows what after reading comments here for the past year. Turned out to be one of the better flights I've had with great crew and comfortable seats.
ReplyDeleteSame about every national airline. I read comments here "Croatia Airlines will go bankrupt, this is Adria's last summer, Montenegro Airlines will die" etc etc.
DeleteComfortable seats? You obviously don't fly very often.
DeleteOld JU seats were much better.
I fly at least once every two months. I prefer the new seats because there is more legroom and no boxes under the seats like the old ones had.
DeleteTotally agree. Being 1.90m I vastly prefer more kneeroom to more back comfort or whatever. It's not like you're flying long-haul.
DeleteTrue. The JU seats are slim but since most of their flights are 2.5 hours tops it is better to have more leg space like they do. The A330 has the regular seats.
DeleteI am very worried about JU future and critical of new developments, but I like new seats. :)
Deletejer eto premijerka Srbije zna poslovne odluke Etihada...gluposti, baš kao što je glupost da će Etihad izaći iz vlasništva ili isto produljiti. Čekajmo, ne lupajmo bezveze svi skupa što će biti! Jednom će vijest izaći van što će Etihad dalje sa partnerstvom i to je to :)
ReplyDeleteIskreno se nadam da će ostati u Air Serbiji jer je to daleko bolje od AS, no sa druge strane imamo problem Etihad grupacije koja je izašla iz drugih kompanija.
Pozdrav iz Zagreba.
A ti misliš da premijerka Srbije ne komunicira sa glavnim partnerom u jednom od najvećih projekata aktuelne vlasti?
Deletesigurno komunicira, no sigurno ne iznosi odluke Etihada pred domaću, regionalnu i svjetsku strukovnu javnost na svojoj preskonferenciji. Etihad joj za to sigurno nije dao dozvolu.
DeletePeople can say whatever they want, but this government did for Aviation in the past 5 years more than other governments did in ... 20+ years.
ReplyDeleteI disagree. Governments in the 90es help JAT survive collapse of domestic market and international sanctions. In 1998, government backed and guaranteed for the order of 8 A319 but that was followed by the war and new collapse. Government was supporting Jat restructuring and rise in 2001-2004 period. Problems came later.
DeleteThen in 2010 a strategic decision was made to implement Open skies even though it was not yet in force and prices started coming down and airport was again on the rise.
The main problem was unwillingness to hire professional management to restructure a company in 2004-2012 period with a reasonable amount of money.
But the fact is that from 1991 to 2013 JAT was a ruin and there was no sign of recovery. In 2013 JAT was in a terrible state, so, even if there were tries, governments were unable to do anything. Air Serbia is not ideal either, but definitely in a better condition than JAT was for 20+ years.
DeleteNobody denies Jat was in bad state 2013. The question is - was this project worth all the money spend?
DeleteWhat do you suggest was a better solution? No national airlines? Wizz having a share of 50% in Belgrade, like Skoplje? Come on dude, be realistic, Serbia needs a carrier.
DeleteSerbia needs connectivity :)
DeleteYou can have with or without national carrier. Jat was in urgent need of restructuring, but Serbian citizens didnot need a luxury transfer carrier which ended up as a semi LCC. We just needed a decent airline with around 1.5 pessangers providing good connections and member of bigger aliance. There were not only two scenarios, no carrier or this. If there were only two options, then I would opt for no carrier.
Air Serbia has a good connectivity and generally Belgrade is well connected with all major airports. I fail to see what your point is. It does not matter anyway, people have different opinions and that is fine. Have a nice day :)
DeleteYou do get the point- reasonably restructured Jat was sufficient, not all this madness we have seen and wasted money on over last 5 years. Have a nice sunny day too :)
DeleteWell CRL airport is Ryanair airport and nobody complained. So leave SKP alone!!
DeleteHahahaa..Air serbia/etihad puppet marriage...tba
ReplyDeleteI don't see Etihad leaving. Why would they start this restructuring with their own man in charge if they plan to pick up and leave in a few months. It would make no sense.
ReplyDeleteI think a lot will be made clearer when we see who is selected as the new CEO (Naysmith is only interim). If it is someone from Etihad then I think JU is staying with them. Thankfully it doesn't seem as if it's going to be Sinisa Mali like everyone was saying a month or two ago.
ReplyDeleteWhen can we expect that new CEO to be named?
DeleteIt will probably take some time. Etihad Airways had an interim CEO for 7 months. Naysmith has been CEO only since January.
DeleteNaysmith has a European passport?
DeleteAm I correct in saying that they will present last year with a profit??? The way the PM is speaking, one would expect that.
ReplyDeleteThey will probably post small profit :D they are restructuring for fun :D
DeleteThey are cuting flights, abandoning destinations and retiring aircraft to increase the profitability! :D
DeleteWhat destination have they "abandoned" this year? Btw this is what most airline do when they are trying to improve turnover.
DeleteReply to Anon 10:05am:
Deletehttp://www.exyuaviation.com/2018/02/air-serbia-to-end-ohrid-operations.html
with 40mil of subsidies any money burner can show profit
DeleteAS actually posted profit for each year of its operation. The question is what is the profit minus subsidies (in various forms)
DeletePC Actually not, AB burned hundreds of millions and went out of business. If it is only 40M of euros, it is not big money.
DeleteIt would be embarrassing if they posted a profit for 2017. Audited by KPMG of course.
DeleteIs JU going to anounce how many passengers it carried last year?
ReplyDeleteHow many flights it operated and what was its loadfactor?
Every other airline in Europe has done so already.
If the results were good they would have anounced them by Christmass...
DeleteI think next year will be a year of significant growth for JU after 2 years of restructuring. Let's wait and see.
ReplyDeleteWhat are you basing this on? It does not look good and with every schedule it looks worse. Note, I am not happy at all about this.
DeleteShe is right in saying that JU is in a more and more competitive environment but they should have foresaw this in 2013 when they were relaunched. What did they think? That other airlines would stop flights and they would have a monopoly on all routes?
ReplyDeleteActually it started off that way. When JU launched and dumped prices on the market while offering a superior product even in economy many airlines reduced frequencies to BEG and some even suspended flights. Remember how quickly Adria retreated? Many of these foreign airlines benefited from Jat Airways being on its deathbed for so long.
DeleteThey thought that their Balkan customer base would choose them over the LCC competition bacause of metal cutlery, WiFly, new lounge and BS like that.
DeleteThey thought and acted as if the airline is based in SIN or LHR instead of BEG.
The result was milllons of Euros wasted...
JU simply needs a LCC division just like most major European airlines did to battle with the competition.
DeleteThey can operate the less competitive routes to with LCC to make it more attractive. Iberia - Iberia Express is a very good example. Or AF/KL - Transavia.
Company with 1.5 - 2.5 mil possible passengers to have a LCC subsidiary?
DeleteConsidering Etihad is moving closer to Star Alliance, I wonder if Air Serbia has the same plans? Etihad last week signed a codeshare agreement with Swiss, their arch nemesis during the time of Etihad Regional. They also have codeshares with Lufthansa now. So what should JU do? Cooperate more closely with these Lufthansa airlines which are their biggest competition in BEG?
ReplyDeleteJU must join an alliance!
DeleteBasically they have two options:
1. Join Star Alliance and shop for a deal similar to Adria (servicing all flights to Germany from Serbia, Montenegro, Banja LUka? Skopje?)
2. Join Sky Team, but with great financial injection from AF/KLM as to survive Eurowings battle which LH would then undertake
To me it would make more sense to join Sky Team. They would be swallowed by Lufthansa in Star, just like LH has done to OU and JP.
DeleteThey will servicing Skopje for Lufthansa Group and in same time Lufthansa already have own company there (Austrian) and old partners (Adria and Croatia)? They have almost 6 flights per day.
DeleteIn Podgorica Lufthansa has Austrian and Adria. Almost 4 flights per day.
In Star Alliance Air Serbia can benefit just from Tivat and Banja Luka. In all other markets Air Serbia is inferior to present LH partners.
But Sky Team destinations are very limited in terms of O&D (Paris/Amsterdam/Rome. Only Moscow.)
DeleteDeal with LH would need some serious political backing as to secure 150-200 weakly frequencies to Germany from Serbia (and beyond)
What about joining one world?
Delete@Alen
DeleteExactly as you said, but that could be subject of bigger political/business plan/negotiations.
RO is already serving the Balkan region for SkyTeam. I don't think they would like JU joining their alliance.
DeleteTo be honest, I miss the old JAT. At least the management was much more competent and things were quite logic. And at least it served you food and complimentory checked baggage. The 3 dot logo was unique and could be spotted even from the sky and represented Serbia in many ways.
ReplyDeleteHAHAHAHAHAHAHAHA. Good joke. You must have lived in a parallel universe.
Deletelet remind ourselves that in good old JAT they did crew planning with rulers & pens on a large pieces of paper held together by a duck tape.
DeleteIn 2013 Petar?
Delete"while its fleet size has grown by 23%"
ReplyDeletei see that she is very much into industry KPIs
nincompoop puppet. also a person who gave her this kind of statistic is to be blamed.
+1000
DeleteNot sure how they got this calculated. JU has always operated the same aircraft ever since the very beginning. Maybe they meant will grow by 23%, when the A320 neos start arriving from Toulouse.
JU had 7 operational aircraft in August 2013.Now it has 19.
DeleteMaybe in terms of seat reconfiguration?
DeleteIf I remember correctly Jat used to own 13 aircrafts in 2013 (10 B737 and 3 ATR). Maybe they had only 7 operating in August 2013 but that could have been sorted out in a month time with the small capital injection.
DeleteIf what you are saying is true, then the increase is 171,5% and not 23%.
ReplyDeleteAlso JAT used to have 6 ATR and 11 B737 - total of 17. Which is most likely how they compare it as they replaced all B737 with A32S + A330 and recently 1 = 20.
So 17 + 23% is 20, true. But as 1 a/c left the fleet the number went down to 19. Makes sense now. They are correct.
My point is that industry standard would be to say capacity is increased by x% of seats available or ASKs
DeleteTo say we have 23% more planes is ridiculous
That demonstrates what expert the PM is! As a matter of fact that is unfortunately how the entire country functions ...ALL BASED ON BS, assumptions and refined information.
DeleteI actually think JU would be better without Etihad.
ReplyDeleteAgree. They have proved as ineffective leaders in every single airline they bought.
DeleteIt would have been a much better story for JU if Dinkic had accepted the offer made by SU. Like this we ended just paying astronomically high consulting fees from EY and the end result is close to zero for JU.
DeleteYour brain is close to zero if you think transformation from 2012 to where it is now is close to zero.
Delete@anon 3:12
DeleteI cannot remember all details of SU offer, but you are right on the point. Huge amount of money spent, company has almost no assets, prospects grim...
@anon 3:55
Behave! There is really no need for such an attitude.
Huge amount of money spent, company has almost no assets
Deletetalking about wizz here, right?
prospects grim...
only if you trust Danas and the likes.
There is really no need for such an attitude.
once you drop your attitude and accept reality. ju is world's away from where it was in 2012. airport received record concession fee that could not have been reached in 2012, and most of it is thanks to growth of Air Serbia. Head of Vinci talks about supporting new long haul routes of Air Serbia and millions of new passengers at BEG and you keep ingoring that. there is really no need to hear your opinion unless you start accepting reality.
Anon 7:00 who are you to give someone the right to express his/her views? You are rude and ignorant to say the leasr! Besides how can you talk about Vinci deal since the contract is even not signed yet? not to mention that no one will ever know what was done behind the scene and what contract amendments will be taking place.
DeleteContract was signed last Thursday in case you missed it.
Delete@anon 7:00
DeleteBehave no2 :)
This is a forum in which people exchange opinions, ideas and impressions. I really do not see why you are mentioning wizz air and what does it have to do with JU? It is a private owned and financed company based in Budapest and listed on London Stock Exchange.
This is a forum in which people exchange opinions, ideas and impressions
Deletesure it is, and admin decides comment guidelines. luckily for you and few others, adhering to facts, possesing aviation knowlegde and having balanced approach in discussing issues is not required. everyone is free to take sides, ignore realities and push their interests. just because you are free to do so, does not mean everyone else including myself have to treat your biased anti-ju comments as valuable opinion. when reality and facts are counted in, your opinion is mostly just trolling. no respect.
@anon 8:11
DeleteTrolling - behave no 3 :)
"Anon 7:00 who are you to give someone the right to express his/her views?"
Deleteand who are you to mom other people into behaving the way you see fit? use facts and arguments instead.
EY has given JU some know-how and definitely not the other way round. JU has matured and now knows what is right and what is wrong for them.
DeleteThey got rid of the freebies, changed their seats and adapted to the market necesseties.
The next step is to retrofit the entire fleet including YU-ARA which might see a service similar to Air Europa where you have to pay for the microphones used.
If you want luxury, you have to pay. C'est la vie, mon ami.
Is this in Etihad agenda, or just Serbian experts? BTW this is not the first time I saw this.
ReplyDeletehttps://i.imgur.com/w5ciBub.png
xD
DeleteOMG, this is illegal!
DeleteThe worst part is that I've seen this a few times already. When I posted it on their Facebook, guess what happened. :D
DeleteDon't tell me they deleted your comment?!? If so, this means their level of customer service has gone down too :(
DeleteThe had "the level of customer service"? Do not let me start...
DeleteI have had an experience of blue tariff being 40 EUR more expensive than white one way. And only for the day I searched/needed! All other dates were 20 EUR more
DeleteBut, why are they doing doing this??? This is not good at all. I have just sent them a message via Facebook asking for an explanation. Really not good :((
DeleteI did another check, it seems a system glitch!! They will be in trouble if they don't fix it soon!!
ReplyDeletehttps://imgur.com/a/lCeNk