Air Serbia is today marking five years since it relaunched under its new name on October 26, 2013 as Etihad Airways' equity partner. The Emirati carrier, which holds a 49% stake in its Serbian counterpart, has extended its initial five year partnership, however, the dynamic between the two is set to change. Etihad has not renewed its Management Services Agreement with the airline, meaning the Chief Executive Officer and Chief Operations Officer it appointed, Duncan Naysmith and Declan Keller, will stay on in their current roles until December 31, 2018, after which a change in management is expected. Furthermore, a number of key departments are set to be transferred from Abu Dhabi back to Belgrade, including revenue management and network planning. The Transaction Framework Agreement between Etihad and the Serbian government signed five years ago states, "Before expiry of the term of the Management Services Agreement, Etihad will seek to identify competent Serbian nationals as candidates for the positions of Chief Executive Officer and Chief Financial Officer within Air Serbia".
Etihad Aviation Group’s Chief Executive Officer for Equity Partners, Robin Kamark, said, “Etihad is honoured to have been able to help build Air Serbia into what it is today. We are looking forward to the next phase of our equity partnership as an engaged and supportive shareholder and cooperation partner”. He added, "Air Serbia and Etihad Airways have agreed that the equity partnership between the two airlines will be continued. Etihad continues to own 49% of Air Serbia and remains a fully committed and supportive shareholder in the partnership with Air Serbia’s majority shareholder, the Government of Serbia".
Over the past five years, Air Serbia handled over twelve million passengers, grown its destination network, fleet, revenue, load factor, launched transatlantic flights and has officially been reporting a profit since 2014, albeit with government support. In 2017, the airline posted a record sixteen million euro net profit. However, the carrier has made significant changes to its business model, transitioning into a hybrid full fare - low cost airline, a notable departure from the high-end legacy carrier premise it was relaunched under in 2013. Over the past year, Air Serbia has taken steps towards restructuring its business by reducing its workforce in late 2017, consolidating its destination network and putting on sale non-airworthy general aviation aircraft and equipment. CEO, Duncan Naysmith, told employees in an internal memo in February that focus would be put on "net profit, the new fare structure, in-flight sales, additional services that bring in ancillary revenues, as well as other initiatives to boost efficiency". The airline's restructuring coincided with the collapse of Etihad's equity investment strategy across Europe, which resulted in two of the continent's key airlines, Alitalia and Air Berlin, filing for bankruptcy after Etihad pulled the plug on their funding. while the Emirati airline also withdrew from its stake in Switzerland's Darwin Airline, which later filed for bankruptcy as well.
Air Serbia's CEO recently noted, "2017 was a pivotal year for Air Serbia that saw the airline implement fundamental changes to strengthen the business, which have already positively impacted on many key operating metrics. This is a fantastic sign of things to come. Despite intensified competition and other unfavourable circumstances in the market, ever since 2013 we continue to improve our results. We started 2018 with the same goal - to push forward on all the fronts, which will hopefully lead us to even better years ahead". Despite delivering on several of its middle-term business goals set out in 2013, including the introduction of long haul flights among other things, the airline has not taken delivery of new A320neo aircraft as scheduled and did not launch an international tender for the modernisation of its regional fleet as initially indicated in 2013.
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back to JAT, I guess. nevertheless, it was good that the company was thoroughly refreshed during these 5 years. too bad it is losing money without any signs of breaking even
Just some partial replacement of leases for the A320s.
Etihad is in complete mess and they are de facto leaving JU. They are keeping 49% shares as it does not cost them anything but might bring some additional million through aircraft lease, etc.
Oh wait, but it did turn 90 last year if I remember their campaign and livery correctly?!
https://www.exyuaviation.com/2018/02/air-serbia-to-publish-anniversary-book.html
They should definitely go for the second option.
Once JU starts to use its current fleet of leased Airbuses for charter flights or the Serbian CAA allows more foreign players into this segment, the previous "cash cow" will disappear
You had 5 challenging years of ups and downs but, the best is yet to come.
If EY gears up, by 2025 we should see new markets and horizons and fleet:
3 A330s
10 320 neo
10 new ATR-72
YYZ
BJS
ORD
DEL
Please don't use JAT. JAT was, especially in the 1980-1990 period, worldwide wellknown name, big, important and significant player, with fleet of 35 planes when Emirates had 8, with over 70 destinations in 40 countries on 5 continents bigger and better than Austrian and Turkish, and something all ex-yu airline peanut sellers can only dream about. Jat is completely differrent story, so please be so kind and don't even mention JAT name when talking about today. Thanks!
4 x B707
5 x B727
13 x DC-9
New York
Baghdad
Kuwait
Singapore
Sydney
Pametnom dosta!
However, JU could be much better performing at the moment.
It would greatly destroy itsi revenues.
Long-haul leisure destinations like Condor have demand.
Cancun, Sri Lanka, Mozambique, Bali, Canary Islands, Rio de Janeiro or Recife.
they dont necessarily need to double to make a hub system work. JU already has an ok system working. Their biggest issue is poor planning and poor implementation of their changing stratergies and not their size.
Not sure. They do not have enough passengers and that might be connected with limited frequences offered to those transfering. They fly half empty planes to many destinations most of the year outside holiday seasons (just my impression from numerous flights, I do not have statistical data for particular routes and dates).
Our market is rather small.
Young people are more pleasant to look at than old people. Deal with it.
A znam i nešto drugo. Nakon osamostaljenja dok su slovenske firme (ne govorim o aviokompanijama, ono općenito) vodili stari "partijski" kadrovi poput Turnšeka, Kosmine i ostalih te su firme rasle. Kad su "young boysi" preuzeli sve je otišlo do vraga. Evo, prije neki dan čitam: Ukrajinci kupili Perutninu Ptuj. Ja ne znam zašto uopće imamo "državu" kad ništa više nije naše
Oh come on, why are you being pessimist about it?
Those are CHEAP destinations and Serbs can afford to go there on holiday.
850€ all in for 1 week.
If 330 has 230 seat then this will be 103500€ per flight
The name of the country in which AeroPut was founded was Kraljevina Srba, Hrvata i Slovenaca, not Kingdom of Serbia. The countrie's teritorial division did not include today's states or ex-yu republics ;It was divided to 33 "okruga" and subvided to "srezove i opstine". Not one single teritorial division unit was Srbija. The names of the first directors and pilots :Tadija Sondermajer, Leonid Bajdak, Vladimir Strizevski - so not exactly Serbian names. The bigger shareholders were companies and banks from Belgrade, Zagreb, Sarajevo and Novi Sad, so not only from Serbia. The inaugural flight was not from Belgrade to Nis or Uzice but from Belgrade to Zagreb, so again outside of Serbia. The country which flag carrier Aeroput was became Kingdom of Yugoslavia, not Kingdom of Serbia after only 2 years after founding. So could you please tell us based on what you claim AeroPut was Serbian airline?
Can we all agree on these figures going forward as they come from annual reports ?
2013 prihodi od donacija EUR 3m
2014 prihodi od donacija RSD 8.4bn EURRSD 121.5 EUR 69 m
2014 Otpis duga aerodroma RSD 1.5bn EURRSD 121.5 EUR 12.3m
2015 prihodi od donacija RSD 5.96bn EURRSD 120.67 EUR 49 m
2015 Otpis duga aerodroma RSD 2.3bn EURRSD 120.67 EUR 19m
2016 prihodi od donacija RSD 4.95bn EURRSD 123 EUR 40 m
2017 prihodi od donacija RSD 2.46bn EURRSD 121.35 EUR 20.3m
2017 pomoc za razvoj saobracajne mreze RSD 1.43bn EURRSD 121.35 EUR 11.8m
2018 ???
And btw with 850 package holiday how much JU would make to Sri Lanka or whenever you are suggesting affordable holidays?
I think JU would benefit more from additional banks, which naturally means additional frequencies, but again its using existing capacities. For example, ZAG rotation should not keep an ATR 7 hours when the block time is just over 1.
JU has advantages it simply doesnt use and thats down to poor planning and poor, incomplete implementation of their product and services. Thats not something frequencies will change. The general mind set of its home market is that JU is an expensive airline to fly with and wont look at JU's prices expecting a better deal with any other airline.
Since JU rebranded as Air Serbia, the management has raped every bit of peoples hope that something better is becoming of it. Confusion over business models, constant changes to its services and offering, poor PR...JU simply needs more than just throwing in aircraft and frequencies to make a transfer hub happen.
Having said that, Air Serbia has been a big step forward from Jat.
JU was given 40 million euros in 2016 for a 'profit' of 900 thousand euros (a loss of 39,1 million euros).
JU was given 32,1 million euros in 2017 for a 'profit' of 16 million euros (a loss of 16,1 million euros).
2017 seems to be one of the cheaper if not the cheapest years in decades for Serbian tax payers. Dont forget at the same time that:
- airworthy fleet has quadrippled.
- pax figures more than doubled.
- average CLF is up by almost 10 points (63-67% with Jat and 73,4% in 2017).
- more frequencies.
- more destinations.
- more reliabilty.
Basically were paying less for more at least, and that amount of state subsidies in 2017 wasnt needed to keep the airline profitable. As the stratergy shift began later in 2017, I wouldnt be surprised to see JU pull of a small profit even when subsidies (which I'm sure they had) are deducted.
In 1913 (so before the creation of the new unfortunate state) the Kingdom of Serbia became the fifth country in the world to have regulated norms of air operations.
Once SHS was founded the first commercial flight wasn't to Zagreb but it was Novi Sad-Belgrade-Nis to Skoplje operated by the two seat Bregue.
Passenger flights you are referring to started after that- that is the ones from Belgrade to Zagreb and then onwards.
The founding of AeroPut came from the Belgrade based Aero-klub (Аеро-клуб) whose founders included Serbian aviation pilots from WW1 including Mr Sondermajer.
As for your comment about names, what was Tadija Sondermajer if not a Serb? His father was of Polish-German origin while his mother (Станиславa Ђурић) was from Belgrade. His father worked in Belgrade as is actually the founder of the first ever surgery department at the Belgrade hospital.
Sondermajer organized a special flight from Paris to Bombay (with a promotional stop in Belgrade) in order to prove the value of aviation for Serbia. After a successful trip he was welcomed by 30.000 Belgraders as a hero. After that shareholders bankrolled the whole project. These were the main ones:
- Vracarska Zadruga
- Privredna banka
- Postanska stedionica
- Gejert
- Srpska banka iz Zagreba
- Amerikansko-srpska banka iz Sarajeva
- Teleoptik
- Veleauto
- Ikarus from Novi Sad
- Tehnicko drustvo Vox
First promotional flight took place onboard an aircraft named Beograd and it flew to Zagreb. Pilots were a Serb, Sondermajer, and a Russian pilot, Strizevski.
AeroPut and KLM did not go under during the war, both companies survived. After the war Ribar who was a shareholder before the war basically killed AeroPut as a private company as there was no room for private ownership.
All in all, AeroPut was the pride of Serbian aviation and it was one of our greatest achievements but it was also the continuation of commercial flights that took place before WW1 (primarily mail flights). Serbia has one of the oldest aviation tradition in the world.
I know there is a tendency on this blog to belittle anything and everything that comes from Serbia but there was nothing 'Yugoslav' about AeroPut. Frankly, your comment that Tadija Sondermajer is not a Serb because of his name is borderline racist.
This sounds very optimistic :)
Isn't too much?