State to maintain support for Air Serbia


The Serbian government will continue providing support to the national carrier in the coming years, the country's Prime Minister, Ana Brnabić, has said, after the state gave some twenty million euros to the airline last year. She noted, "The government of Serbia will maintain its strong support for Air Serbia. This support will be in line with European Union regulations, as it has been so far, however, no one can prevent us or limit our support for Air Serbia". The PM added, "Air Serbia plays an important role in the development of tourism, improves our economic ties with numerous countries and strengthens our country's brand. It has been an important driver of economic growth and I am certain that we will see even better results ahead since there are good prospects for further growth".

Air Serbia has posted a profit for the past four years but has also received state funds. In 2014, the carrier's net profit stood at 2.7 million euros, which was followed by a 3.7 million euro profit in 2015. In 2016, upon launching its first long haul service, the airline's figures declined 77% with Air Serbia managing a 990.000 euro profit. However, in 2017 its profit soared to sixteen million euros. Last year's record results were achieved in part due to a significant reduction in expenditures and an increase in revenue. Furthermore, the state provided a twenty million euro subsidy, which is half of what the company used to receive from its majority shareholder, although the carrier was also granted twelve million euros for the "development of tourism". The Serbian Finance Minister, Siniša Mali, has said that the payment credited under tourism development is primarily for the support of the carrier's long haul service to New York. "As part of our tourism development strategy until 2025, the Serbian government has decided to extend its support to whatever contributes to tourism growth. In this case, it is flights to North America. Without that support there would be no service to the US. However, Air Serbia's financial performance would remain unchanged", Mr Mali said recently.

Air Serbia has justified the support by noting it gives back one billion dollars to the Serbian economy each year and that it plays an instrumental role in the country's economy. It provides some 13.230 people with employment (both directly and indirectly) and adds $210 million to the Serbian economy through its core operations including expenditures on fuel, maintenance costs and local Serbian suppliers. This includes over 1.600 direct jobs at Air Serbia in Serbia, 5.450 indirect jobs supported by the airline’s procurement of goods and services and 6.130 additional jobs supported by staff spending their wages in Serbia. Furthermore, the airline maintains it carries over half a million international visitors, predominantly from Europe and North America, to Serbia. In addition, Etihad Airways, which holds a 49% share in the company, supports some 3.900 jobs through its operations in Serbia, which equates to an economic contribution of $45 million. "The contribution that Air Serbia makes to the national economy and the job market in Serbia cannot be overstated. We support thousands of jobs directly, through our airline operations, and indirectly, through the powerful domino effect that Air Serbia has on stimulating economic activity throughout the country. Our flights benefit many jobs in Serbia, such as the local suppliers we use for inflight catering, to the many industries that rely on business from air travellers, including hotels, restaurants and other tourism and hospitality-related sectors", the airline said in previous years.

Comments

  1. I don't mind that they keep support. I mind that for that financial support service levels have gone down while ticket prices have stayed the same.

    ReplyDelete
    Replies
    1. And they do all of this while presenting 4 years of successive "profits" :)

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    2. Keeping costs in check, offering more aux services, modifying fare structures, improving efficiencies, focus on profitability.... that is what all airlines across europe are doing at the moment so I fail to see why Air Serbia wouldn't either.

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    3. Service went down and prices gone up. So sad.

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  2. Without state support, Air Serbia would go bust!

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    Replies
    1. It would. But it has state support to keep it afloat and that is good.

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    2. Yes, but who cares! It is for the fame, everyone should know Serbia. Like Turkish, Emirates etc. just for the fame.

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    3. The so called "prestige" like all third world countries...

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    4. If you care to read the text you would see it's for the economic benefit and not for fame/prestige.

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    5. @anon 12:27
      Ahahahaha

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  3. Well, without JU the Serbian community in Cyprus would be left without a direct link with the homeland during the winter season. Sometimes it's not all about the bottom line.

    Despite their shortfalls it's nice to see them keeping LCA during the slow months.

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    Replies
    1. Not just Cyprus. Without JU, many markets would be left unserved.

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    2. ko da ih je milion

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    3. Аанон 09.14

      Прво то је крајње глуп коментар посебно када се узме у вид чињеница да је ЈУ непрекидно летео за Ларнаку од 1992. године.
      По тренутним проценама амбасаде Србије на Кипру, на острву живи између 2.000 и 3.000 Срба а тај број се повећава сваког месеца.
      Прошле зиме Визер је имао у просеку 110 путника на летовима за Ларнаку (изван сезоне) што и није тако лоше. Ер Србија са својим А319 и путницима који преседају у Београду може сасвим солидно да опстане на тржишту.

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    4. Nemjee, it is good you have same selected data from somewher. But your weekness is really interpreting those few facts you have and putting them in the right context. Thanks for proving that daily.

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    5. Thank you for your constructive criticism, it has been duly noted though I don't see a point in your comment and how it's related to today's comment.

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    6. Topic, not comment.

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    7. Ignore the trolls nemjee they always singe the same song

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    8. @Nemjee: you write Wizz had 110 Pax on average, so JU must doing well with transits? How do you reach such a conclusion because you know that on average 110 Pax where on Wizz flights and 3000 Serbs live in LCA?

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    9. ...esp especially since support for EU membership isn't that high anymore.

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    10. No, I wrote that W6 had on average 110 passengers last winter meaning that if those switch to JU then they should do well. On top of that we can add Air Serbia's transfer passengers which are not using Wizz Air's flights so loads shouldn't be that bad for the one weekly flight.
      Also, there are enough Serbs in Cyprus to sustain at least a one weekly flight. Jat used to operate two weekly BEG-LCA-TLV when there were around 1.500 Serbs living on the island.

      And btw I might be wrong but I think Wizz Air has further downgraded their BEG operations. On some days they have one or two departures.

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    11. Poor Serbian community in Cyprus. Without JU they would face a horror of transferring in ATH :)))

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    12. Yes, maybe only during the low season because during the other ones a return flight can cost as much as €800!

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    13. Ryan would be a good solution for Cyprus

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  4. The return on investment is worth it.

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  5. So what would be the alternative? Finance Wizz Air in Hungary or let foreign airlines come in who have no intention of registering in Serbia, no intention of paying taxes in Serbia and who only look after their own interests which are in no way related to Serbia.

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    Replies
    1. Exactly, protectionism, who needs Iphones or foreign cars. Lets produce in Serbia. Why would we be giving Money to "foreigners". Serbian government should give the 20 million to a start up to compete with Apple or to Zastava to compete with BMW and save Jobs here.

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    2. So true Anon 10:21.

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    3. Anon @10:21 I see you used hyperbole - exaggerated statements or claims not meant to be taken literally. No other country in EU competes with Apple, but every country makes bread. Air Serbia is in the middle of those extremes, the right fit for the country and the benefits are listed in the text.

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  6. It is interesting that they manages such big profit when subsidies were halved.

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    Replies
    1. They did so much cost cutting that it would be a disaster if their results hadn't improved.

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  7. Since they are receiving so much money from the state budget it would be nice if they became more transparent on their future plans. Their CEO hasn't given a single interview, they are playing dumb about the A320neo order, their PR department is non existent.

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  8. once you join EU this will be over

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    Replies
    1. Tell that to Adria Airways lol. They continued to receive state aid even after Slovenia became an EU member.

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    2. see the actual state of JP an think again what u said

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    3. All ex-Yu airlines are unfortunately more or less in the same state. OU also received a big government injection before Croatia entered the EU and even today the government is guaranteeing big loans that Croatia Airlines took out this year to fund engine repairs.

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  9. I do not mind state aid at all, on the contrary, I support it since when looking at the greater picture Air Serbia is indeed contributing a lot to Serbian economy. Those 20 millions are really nothing compared to what Serbia is getting in return.

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    Replies
    1. This is just not true. For that price (let's say 20mio) you would have much more seats on LCC (a kind of subsidy), and also cheaper tickets. It would lead to more visitors fo Belgrade. And the brand Serbia has anyway no worth at the moment.

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    2. It is not all about the seats, please read the article again and notice what are the benefits from the subsidy again. Why the hell would Serbia fund Wizz Air and give the money to Hungarians when most of it would go directly in their pocket when there is a National Airline that contributes to Serbian economy in so many ways?

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    3. because it's cheaper and more efficient

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    4. Da je samo 20M Jura mogli bi tako u nedogled to je sitnica za drzavni budzet koliki su drugi rashodi. Problem je sto je sve ovo uradjeno po Dinkicevom modelu i sto nas AS kosta zapravo 400M jura bez da poseduje ijedan mladji avion.

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    5. Nije bitno posedovati avione, danas mnoge kompanije ne poseduju niti jedan avion.

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  10. Air Serbia started with a completely clean sheet. Debts were written off, huge number of staff got redundancies packages and left. Yes, a lot of investment was required but weren't Etihad supposed to have the 'know how' so they would invest that money smartly? So it is completely disappointing that just 4 years in they had to do a massive restructuring and are now fighting to survive.

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    Replies
    1. They had an opportunity together with other shareholder (government) and just did not use it.I am disappointed as a Serbian tax payer.

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    2. Who is fighting to survive? Based on what did you make that assumption? Are they selling planes and slots? Are they firing employees? What, Who, Where?

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    3. Well they did let off workers at the end of last year, closed down some sale offices too. They also sold some unworthy light aircraft and sold old Boeing engines this year.

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    4. Those were all smart moves, you sell what you do not need ... that is definitely not fighting to survive.

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    5. No need to sell planes and slots as long as they recieve tax money. Once that stops we will see where that difference will be coming from...

      Maybe other airlines can also get Money from Serbia flying there, as they have the same effect on the Serbian Economy ..... distortion of the market..

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    6. That is not true, not even close. Air Serbia employs thousands of Serbian citizens who support their families. Air Serbia is also paying health and pension contributions to those people. Air Serbia is paying profit tax in Serbia, Air Serbia is purchasing oil from Serbian State Oil company, buying local food and so on and on and on. If State financed Wizz Air (Hungarian company) like Macedonians, that money would go in their pocket, while in this case at least Serbia has some benefit from it. Come on, you know all those, you are just trying to be negative.

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    7. lol and you are obv. too positive dude. You slash Wizz as if they are only receiving money. All what you said about JU is aplicable for Wizz in MK as well. They employ local crews, they helped increase the tourism a lot and everything that is associated with it and hey they sell Pelisterka ;) Its not all black and white

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    8. Wizz employs like 20 locals? Compare that to Air Serbia numbers. I guess the discussion ends here :)

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    9. no it doesnt. wait til you get in EU

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    10. I think we will be waiting for a while.

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    11. ... I guess under that rationale the Serbian government should give 1 billion to JU and employ all of the unemployed today... with this the discussion really ends here.

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    12. Anon at 10:50
      +1000

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    13. Anon @10:50 Again a hyperbole instead of a rational argument? Right size for JU, not the largest airline in the world.

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    14. right size is very relative and gives a loooot room for interpretation....

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    15. employ all of the unemployed today suggested by Anon @ 10:50 is not the right size, but he wanted to use that to really end the discussion.

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  11. I'd love to see the calculation behind the 1 billion claim

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    Replies
    1. Same. I love it when company PR just shoot off a numbers with no real evidence to back it up.

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    2. This is the funniest part

      "6.130 additional jobs supported by staff spending their wages in Serbia"

      So because staff spend their wages thr local shop clerk is also included in the number of jobs Air Serbia is supporting.

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    3. Also for example supporting staff like upper, middle and lower management are all hired in Belgrade and not in Budapest as is the case with Wizz.

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  12. When one reads something like this it's better to leave no comment. What a bunch of ....

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  13. Say someone starts a regional airline in Serbia, do you think it would get any help even though they hire local staff and procure everything locally?

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    Replies
    1. Most of this money probably ends up in connected peoples pockets so what would be the incentive of support another home grown airline? Just increases the chance of getting caught lol

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  14. Let's face it, Air Serbia needs to employ party cadre, be it employees or board of directors.

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    Replies
    1. Actually this not true and one of the rare positives to come out of the Etihad partnership.

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    2. Air Serbia has somewhat bloated work force for its size. Care to explain?

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    3. They need to fire anyone who is not necessary.

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    4. JU has about the same number of employees as Aegean despite being about 5 times smaller.
      So it is only natural that state subsidies are needed.

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    5. An. 10.55
      To need to do and to do are two differrent things. Unfortunatelly what is needed to be done has not been done for several years, because the whole deal is results of politics, and employing party people is just one of the results, the same as PM 's speech from today' s topic

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    6. If they cut the workforce to appropriate size relative to the passengers flown, they would be close to breaking even.

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  15. National carrier is vital for the economy. It is contributing immensely. Look what happened to Hungary after Malev went bust! Airport is closed, thousands of aviation professionals unemployed, no single tourist can be spotted on the streets of Budapest, people have to drive to Vienna to catch a flight. xD

    ReplyDelete
    Replies
    1. I've heard stories of Budapest as a ghost city.

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    2. after malev bankrupted i heard stories of hungarian women giving birth to children with two heads... wings even!

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    3. Yes ATH and LCA as well are ghost airports now that the state run carriers went kaput.
      SMFH!

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    4. Actually SKP is the most hurt here. After demise of MAT, Palair, Avioimpex, and now having no national airline and flag carrier, their numbers dropped drastically and dramatically, specially taking into account the size of the country and the power of the market.

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    5. Or look at UK, no government-owned airline, people are stuck on the island. Have to take boats to the continent.

      Every country needs a government-owned flag carrier!

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  16. Bez podrske vlade Srbije i subvencije od preko 25 milona godisnje za Air serbia i 3 milona za Aviolet aviokompaniju tesko da ce Air Serbia uopce opstati i JAT tehnika dobija masne subvencije drzave da i dalje uspjesno radi.

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    Replies
    1. air serbia i aviolet su jedna kompanija. samo da razjasnimo to. avioletovi avioni su samo drugačije ofarbani. sve fakture, obaveze, aoc... sve ide na airserbia. ne postoji pravno subjekt aviolet.

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  17. I find it interesting that in Serbia people get peeved about subsidies for Air Serbia but not to the dozen of other state owned dinosaurs who get the same assistance or even more,

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    Replies
    1. Probably because they were made to believe that after Etihad takes over there would be no more need for state assistance.

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    2. azotara went into bankruptcy just recently, as did several state owned companies.

      HIPP (profitable company btw) and MSK are in process of privatization.

      railways are getting torn apart into several companies with major investments in high speed railway (also note that railways, are not in the same basket as airlines, due to higher effect on the economy - freight transport).

      SrbijaGas & EPS both profitable, would be even more if the state would allow to price the product properly.

      Železara & RTB Bor sold to chinese...

      It seems to me that JU is left as the one of the most problematic state owned companies, losing €30-40 mil yearly

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    3. This is an aviation blog. Not Railways blog

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    4. @Petar You make it look like all Serbian state owned dinosaurs are making a profit, you would be surprised ...

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    5. my point all of them are being worked on, even resavica mines.
      all of them, except one

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    6. One thing is working on it and successfully solving the problem. They started working on AS 5 years ago when Etihad stepped in ... It obviously did not play out as they expected, mostly due to Etihad being completely incompetent. The Government is now doing what they have to do, fund the airline in order to stay competitive, until they find a different solution.

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    7. Agree. But do we really need 21 planes and so many money-losing routes until we wait to find another partner or some distruption that will benefit ju happens?

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    8. How many routes are money-losing according to you?

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    9. Speaking of which, does JAT has a fly+rail with Železnice Srbije?
      BEG can consider a train terminal to connect the entire country just like DE Bahn.

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    10. @Petar Air Serbia closed quite a few routes recently and every time they close a route, they are heavily criticized (on this website). I actually think their network is OK as it is now and should stay unchanged until they "stand on their feet".

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    11. @An:14:58
      Hahahahaha, have you ever travelled by train in Serbia? LOL LOL LOL

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    12. @14:33 by looking at the JU profit & loss statement, i would say a lot

      the problem is that they would need to scale back from hub model to p2p, but that would create a world of troubles for BEG and Vinci

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    13. No anon 15:12 but Air Serbia can try and promote this service too on their website.
      For example: New York to Novi Sad: fly direct and then hop into the train.
      Electronic ticketing.

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    14. @Petar Celik
      You are absolutely right!
      They must give up this redicilous wanna be hub system and stop flying half empty jets most of the year to most of destinstions. Any European flight during school holidays is full but that is too little to cover all the costs of running airline the whole year.

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    15. You do realize that Air Serbia has the highest avarage annual load factor of all the airlines in ex-Yu?

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    16. That tells a lot about airlines in the region. Four sad stories.

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  18. what could we expect?

    pets are nice to have but are not necessary, and they tend to cost a lot.

    the governments shouldn't have pets.


    ReplyDelete
    Replies
    1. JU is cattle, not a pet. Cattle also needs investment but overall makes sense. People tend to forget that, which is probably one of the reasons Air Serbia used to give interviews but not any more, at least not to aviation enthusiast media.

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    2. They don't give interviews to absolutely anyone.

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    3. Petar, are you the former employee of Jat Airways who was kicked out when Air Serbia was established?

      I see no other reason for so much hate towards JU from you

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    4. all of my experiences with regional players are good. even really like the people working there. my problem is money losing

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    5. Out of your personal/business taxes, how much exactly is going to JU? Hundred dinars maybe?
      On the other hand, is your life/work/business benefiting in any way (directly or indirectly) from growth of homegrown aviation industries and Air Serbia?

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    6. hundred dinars for JU,
      hundred dinars for oxygen wasters in municipalities
      thousand dinars for fixed tenders
      hundred dinars for that hill in grdelička klisura that keeps falling on highway
      hundred dinars for maintaining SNS lokalne odbore,
      hundred dinars for bankrupted banks (agrobanka, srpska banka, univerzal...)
      hundred dinars for beloved tycoons & party financiers
      ....


      all of those times 7 million population and you have completely bankrupt economy

      the purpose is to have efficient economy not lose money and then try to find excuses for it

      Delete
    7. You did manage to shift topic to economy at large but failed to answer my second question.

      Delete
  19. With this sort of money they should be up to Turkish Airlines standards. But the bottom line is, just as the state was incompetent of running an airline so was Etihad. In fact they are incompetent in all regards, they appeared to have best 'know-how' in the airline business, but it turns out it was all just for show. Not to mention that the level of corruption among the Etihad executives over the years has been on par with the government.

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    Replies
    1. What sort of money? 20 million EUR a year? You do realize that is nothing ... at least for Turkish.

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  20. The initial success of ASL was a result of a large investment from its shareholders. Unfortunately, this turns to be non sustainable.

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    Replies
    1. Shareholders being taxpayers of Republic of Serbia

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  21. Speaking of JU, they seem to have a new look website.

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    Replies
    1. It is simplified but kind of reminds of their new hybrid model - a bit on the cheap side.

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  22. PM: "there are good prospects for further growth".

    I really hope so. Enough with the consolidation and shrinking.

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    Replies
    1. At this price of oil? no way!

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    2. Flying A220 instead of 733 can offset the oil price difference.

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    3. Unfortunatelly PM AB cannot afford new A220 's, not even if desired as President' s birrthday present

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    4. Nije njihov liz veci od liza za A319 i A320. Imaju bolju ekonomicnost

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  23. Why doesn't the Serbian gov togeather with Etihad find a European partner for the 51% stake and that way fully privatize JU.

    ReplyDelete
    Replies
    1. 4k will eventually buy it. :D

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  24. Potrebno je vise finansija za veoma skupo odrzavanje Airbus aviona Air Serbia osobito za Airbus330

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    Replies
    1. Можебитно је А330 одржавање доступније. Упутно је знати да је особито А330 само 11 година стар, те је кужим ваша стријепња излишна.

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    2. Cijenjeni i dragi komsija ! Iskreno zahvaljujem na uporabi hrvatskoga knjizevnog jezika u cirilicnom pismu. Drzim iznimno zanimljivim ovakav pristup o kojemu bi zacijelo i eksperti jedne grane medicinskih znanosti imali sto kazati. Takodjer, nadam se da necete zamjeriti moju dobrohotnu primjedbu da se "kuzim" ne uklapa u kontekst u kojem pisete. Umjesto "kuzim", trebalo bi stajati "predmnijevam". Bok!

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    3. Sta zezas, bas je dobra fora :)

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    4. It's comforting to see how much neighbors care about the well being of Air Serbia.

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    5. Barem isto onoliko koliko i komsije za hrvatske aviokompanije i aerodrome. Zivelo bratstvo i jedinstvo jugoslovenskih naroda i narodnosti!

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    6. Sve koje znam nije ni malo briga za hrvatske aviokompanije i aerodrome, ovde traže info o avijaciji u Srbiji. Bilo bi najbolje da se svako drži komentara samo za svoje vesti, ali sa svake strane ima bolesnika koji provociraju gde ne treba, kao što je komentar koji je počeo ovaj niz o skupom održavanju "osobito A330".

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    7. Znači, znaš dvoje ljudi.

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  25. It just saddens and HURTS when politics get involved in airlines.
    Until when will this be tolerated? Are we going to witness new Serbian, political routes?
    When will ASL enjoy LOWER airport taxes to help it regain its legacy status?

    ReplyDelete
    Replies
    1. It does hurt when politics get involved, I felt the same way when Merkel went to UAE to talk about ending Air Berlin with a goal of eliminating competiton for LH.

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    2. Yes, Angela Merkel’s fault is that Air Berlin went bust. Not the hundreds of millions of EUR loss year after year after year.

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    3. If you do not pay taxes they are de facto lower :)

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    4. They actually do pay taxes in full. Have a look into Belgrade Airport's financial reports and stop spreading lies because you are unable to use google and see who paid what.

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    5. Report for 2014 or 2015?

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  26. personalna podrska u zivotu je jos bitnija za Air Serbia

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  27. 20m is nothing for a country such as Serbia, stop moaning

    ReplyDelete
    Replies
    1. That’s why the roads are so good and all the houses have proper thermal insulation and nobody drives Golf 1, Zastava or Yugo anymore.

      Because Serbia is a rich country full of rich people that should prioritise national airline.

      Delete
    2. Zastava and Yugo you say?

      Poor Englishmen

      http://www.reallyloud.co.uk/yugo/

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    3. Actually, all roads with the exception of highways are maintained by local municipalities, not the central government in Belgrade. It's up to administrative cities to use their funds to improve infrastructure, that's why there is such a stark difference in the quality throughout the country. For example Paracin-Zajecar is fantastic while you take a left turn towards Bor and it's 'Hello 19th century.'

      Also, almost no one drives a Yugo anymore, they are quite rare these days.

      Delete
  28. If the state will now help JU then they should do the same with aviolet.
    The livery is nice, but it should be related to Serbian heritage and not cheap blue and yellow like Nouvelair.
    Charters are becoming more and more popular and upgrading from current 737 to 737 Max 9 or 10 seems a wise decision.
    Aviolet is seriously underestimated and this should not be like this.

    ReplyDelete
    Replies
    1. JU and Aviolet are the same companies. Aviolet is just a brand operated by Air Serbia. It's not a legally separate company.

      Delete
    2. Well, Ryanair and Ryanair Sun are also the same company.
      My idea was to also be able to sell tickets freely on their website and not reply entirely on local travel agents and touroperaters. The need of Aviolet for bigger aeroplanes is just very important.

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    3. Treba da shvatis da oni nisu zeleli da razvijaju taj sektor samo da izduse Boinge koji su im inace spasavali saobracaj. Zamisli kakvo je odrzavanje ATRova kada im je Boing leteo cesto umesto njih. Primedba o velicini aviona je dobra.

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  29. Very nice photo of YU-ARA. The only wide body aircraft among ex-Yu carriers

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    Replies
    1. Wow! Thanks very much for telling us all it's the only widebody in ex-yu. You just forgot to write ONLY in capital letters. Just to add a bit to drama. But let me remind you of something you might have forgotten as well : About 30 years ago, when Turkish, Austrian and Emirates were small companies barely having widebodies, we in ex-yu had 5 plus 6 brand NEW on order. And now, 30 years later you seem to be so PROUD of ONLY one widebody here. Strange in my opinion, but differrent people, differrent habits, maybe you are just Green politically and happy we polute environment much less than 30 years ago ...

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    2. I don't get your point.

      YU-ARA best represents Serbia and proudly serves the nation. Or is that a crime?

      Delete
    3. Anon 21.49

      Yes, because you enjoyed those brand new DC-10 we are now forced to pay crazy amount of loans. You overburdened several generations to come. If it weren't for your megalomania JU would have a whole bunch of A330s.

      Delete
    4. YU-ARB and YU-ARC are likely to join by 2023.

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    5. Hopefully they will not burn additional money on extra planes.

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  30. Why? To fail like W6?

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