Air Serbia - Etihad in talks over fleet options


Air Serbia has said it is in discussions with Etihad Airways over its fleet development after its part-owner cancelled an order for ten Airbus A320neo aircraft, which were destined for the Serbian carrier. In a statement, Air Serbia said, "Discussions on the long-term development of our fleet continue to be a part of strategic talks with our partner. The airline industry is experiencing significant competition, which is becoming stronger. With changes in demand and aggressive competition, as well as fluctuating fuel prices as the biggest fixed cost for any airline, all carriers are carefully examining the long-term development of their fleets. This is the primary reason Etihad decided to cancel the order for the ten aforementioned aircraft".

Following costly experiences with Alitalia and Air Berlin, Etihad will be reluctant to put in any more money into other airlines, although it is expected to transfer surplus aircraft to its equity partners if they need new equipment. Last Saturday, an Etihad Airways Airbus A330-200 aircraft, registered A6-EYQ, entered into service on behalf of Air Serbia. The aircraft will be used on flights between Belgrade and New York on a temporary basis until February 14, while Air Serbia's own jet of the same type undergoes scheduled maintenance checks at Etihad Airways Engineering in Abu Dhabi ahead of a busy summer season. In its flight permit application with the US Department of Transportation in 2016, Air Serbia foresaw and applied for the use of Etihad equipment on its US-bound flights.

Etihad A330 (A6-EYO) at Belgrade Airport

Air Serbia will soon require replacements for some members of its fleet. The airline has said it plans to phase out its remaining three Boeing 737-300 classic jets, used by its dedicated charter brand Aviolet, by 2020. All of them are owned by the airline and were delivered new to its predecessor over thirty years ago. The jets are also used as a replacement on mainline operations in case of technical issues or delays with other aircraft. The carrier has also previously said it plans to replace its ageing ATR72 turboprop fleet "over the coming years". "Our strategy is to start flying double daily to a number of cities and to get new regional planes. We will see whether they will be turboprops or jet-engine aircraft. With these, we can cover points in the region", the company previously said. It also noted that such a decision would depend on a range of factors such as pricing and other terms and conditions. However, it said that leasing equipment, rather than ordering them from the manufacturer, could be a simpler solution due to the longer time required to deliver newly ordered aircraft.

Russian plane manufacturer Sukhoi and the Japanese Mitsubishi have in the past both approached Air Serbia in regards to its future regional fleet operations. Previously, a delegation from the Sukhoi Civil Aircraft company, which manufactures the SSJ100 commercial jet, visited Serbia where they held talks with representatives from the country's aviation sector including Air Serbia, aircraft maintenance company Jat Tehnika and the Serbian Civil Aviation Directorate. Vladimir Lavrov, the Chief Designer at the Sukhoi Company, said at the time, "It is safe to say that talks with our Serbian colleagues were very successful. We found a few ideas that we will develop jointly and received a number of interesting proposals from our Serbian counterparts". The Mitsubishi Regional Jet (MRJ), which will be able to seat between seventy and ninety passengers, will begin deliveries in mid-2020 following a number of production delays. Last year, the company said it hoped to secure Air Serbia as its customer. "The last thing we need to achieve for the time being is to get an order from a European nation. Air Serbia is a core target for us. It has strong backing from Etihad and is looking to expand its network", the manufacturer's President for Europe said.

Comments

  1. I would not go for Sukhoi. Mitsubishi sounds interesting but we know little about them and it would probably take a few years to deliver them. So I think it is best sticking with the ATR which your crew knows. Just get newer ones.

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    1. Mitsubishi is a disaster, all of their planes are way too heavy. They can't get the weight right.

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    2. Agree that ATR is the most rational choice. For 28 years it's proven reliable with great economics and safety record.

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    3. Their ATRs are in relatively good shape after they refurbished them to match the Airbus cabins. I think they should just replace oldest ATRs with newer ones. It's the simplest option.

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    4. According to mechanics from Jat Tehnika, older Atrs have another three years in them.

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    5. Jeez they will never replace them :/

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    6. 70 seats is more than enough for regional routes.
      Turboprop ATR72-600 is the best option.

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    7. They should keep away from Sukhoi. JU needs a RELIABLE and economic aircraft.
      Better look for used E-Jets for regional flying and some used but much younger ATRs for the turboprop replacements.

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    8. If the Frenchies have indeed solved the problems with the engines by december, as reported, Sukhois should become reliable. As for the operating costs, it is well known that the aircraft has shown well on longer legs. So, getting Sukhois should mean they should definitely keep ATR in fleet for regional routes.

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    9. The SSJ's problem is that all of its spare parts support is horrible.
      Just like all other Russian made civilian aircraft they just do not provide adequate parts in a timely manner.
      There is no reason for JU to get involved with an aircraft that all of its non-Russian customers are trying to get rid off.

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    10. Airbus A220-100?

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  2. They will probably get Etihad's planes they do not need, which will not be a bad decision ... if the financial construction is favourable.

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    1. Aren't the 2 A319s from Etihad being leased under quite unfavorable conditions?

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    2. Who cares about leasing conditions? Serbia is for the second consecutive year in the green and it is our moral duty to help our troubled Emirati brothers now when they are in the dark. They will know to respect that help from people of Serbia.

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    3. only interests in business, not brothers or sisters....

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    4. He was being sarcastic obviously.

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    5. Why does everyone keep claiming JU's current narrowbody fleet has expensive lease rates? Where have you all seen documents of their leasing arrangements and transactions? I doubt they put it up on their website.

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    6. I think they showed some evidence on that "Insajder" show that the current leasing arrangements are expensive.

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    7. It's all in their financial report actually.

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    8. 31 million EUR per year for 2 A320, 8 A319, 1 A330 and 3 ATR72.

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    9. The YU-ARA lease is particularly expensive for an aircraft of its age and also one that less than a year after we got it required a D check.

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    10. Lets all hope that the new management (when eventually is appointed) will be making fleet decisions based only on JU's financial interest instead of EY group's interests.

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    11. Gosh! That is a lot of money!

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    12. Anonymous 14 January 2019 at 09:58
      +1

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    13. C check ili D-check?

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  3. Etihad can't provide them a replacement for ATRs.

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    Replies
    1. Only if they get some planes from Alitalia.

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    2. Alitalia is no longer in EY group.

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    3. In 2017 JU was given the chance by Etihad to pick and choose any aircraft they wanted from Alitalia's grounded fleet at the time. JU declined.

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  4. Adria can lease them SSj100s :D

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    1. Actually it would be great if they wetleased them the CRJ900 like they did a couple of years ago. Good plane

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  5. Dudes, it's not "changes in demand", it's increase of demand! And you are failing to deliver.

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    1. Exactly, if anything, JU has shown us that they are incompetent in fighting off competition in key markets. easyJet launches BEG-TXL and what does JU do? They immediately reduce it from 9 to 7 weekly.

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    2. During the last 2-3 years when demand for flights both in our region and in the rest of Europe has skyrocketed JU management decided to curb growth.
      Foreign carriers gaining a lot of market share in BEG was the logical outcome.

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    3. This comment has been removed by the author.

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    4. This comment has been removed by the author.

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  6. What are they going to do without those B737? They have been a lifesaver for them covering every time some ATR or Airbus goes tech. Also without them they would be unable to operate summer charters.

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    1. Anon 09:09 the logical solution would be to lease used A320s or A319s in their place.
      Lease rates are coming down and especially for A319s by a lot now that NEOs are entering fleets in large numbers.
      Lets hope that for a change management does the logical thing.

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    2. This comment has been removed by the author.

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    3. yeah, but the lease rates will never go down to zero, which is precisely how much tho 737s cost them, since they were owning these planes.

      this thing with 737s was unique occasion in aviation business that made economic sense
      i would be surprised if this business model of charter/backup fleet can be prolonged after 737s retire

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    4. Has this comment been removed by the author?

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  7. Waiting on Etihad to do something for them has proven as a bad idea. Maybe they should do something themselves.

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    1. A bit difficult to go at it alone when your CEO is from Etihad.

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    2. Stvarno naivno. Ja smem da se kladim da je "vraceni" polog za avione dosao od Vlade Srbije preko Etihada, a ne od Airbusa.

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    3. ajde da se kladimo da nisi u pravu

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  8. The ERJ E2 would be a good option to replace both ATR72 and A319.

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    1. What is the capacity of that aircraft?

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    2. There are several variants, but between 80 and 120.

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    3. I agree that this would be a good idea. Eding turboprop ops would be a positive step since a lot of stigma is attached to them. A lot of people do not like flying with them.

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    4. Embraer would be perfect for air serbia!!

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    5. Nista ne moze da nadmasi ATR po ceni. Niti AS ima novca za E2 generaciju osim ako se donacije Vlade Srbije ne usmere samo u tom pravcu.

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    6. @Anon 9:25 - What sort of stigma? Never heard anyone complaining + most people would know which aircraft they were on if it weren’t for the safety leaflet in the seat pocket.

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    7. Well a good example of that is Montenegro-Serbia market. Many people choose to fly Montenegro Airlines simply because they will fly either Embraer of Fokker and not on a propeller ATR.

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    8. Passenger perception of ATRs are that they are "ancient" technology, plus in some aspects they are inconvenient - you are forced to leave some of your cabin luggage in front of airplane, level of noise is higher, lower cruising speed - longer trips, cabin is really tight (I'm always hitting my head in some open door compartments :) ). I'm not sure what improvements are with ATR72-600...

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    9. People see propellers and assume it is older technology. I am not saying it is correct, just how the general public assumes. That is why on some flight search engines there is an option to not show turboprop flights.

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    10. @anon 10.29 Ista ti je priča sa CRJ. Veći komadi ručne prtljage su delivery at aircraft

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  9. This statement for me seems like Air Serbia might have actually requested for this order to be cancelled. In translation i says the aircraft would have been too costly for them.

    Leasing aircraft might be the way to go.

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    1. Its logical and would be sign of common sense in company. JU simply don't need 10 planes like that nor they have financial capabilities for such order. It was "overstatement" from beginning of JU-EY cooperation, driven by current EY expansion strategy.

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  10. They don't have money to buy any planes but sooner or later they will have to start leasing some to replace the ones they got, especially ATRs and B737s. They can't fly forever.

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  11. Instead of replacing current decent A319/320 JU fleet, I think they should give priority to the ATR.

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  12. Registration: A6-EYQ
    Delivered: Sep 2007
    Config: C22Y240

    12 year old aircraft.

    Why not 787? Why not something newer?
    EY, what a disappointment.

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    Replies
    1. Because Etihad is using all its B787s which started arriving for them just a couple of years ago. The plane is the same age as Air Serbia's A330 and it flies for less than a month for Air Serbia. Why would you need anything more?

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    2. Because this is Balkans - a market of poor margins and poor customers. And even if it was a rich market any strategic partner would prioritize Dreamliners to its own network and deploy something less attractive to help an airline in another part of the world. Your expectations are completely unrealistic and they also imply that flying transatlantic in a 12 yo A332 is some kind of shame, which is certainly not the case.

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  13. They can probably get Sukhois for free.

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    1. Vladimir Putin is coming to Belgrade on Thursday. Let's see what he offers :D

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    2. Nothing ever came for free from anywhere, including Russia.

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    3. Do you think JU can really get them Ruski jets similar to Adrija?

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    4. The SSJ is a plane that even if you get it for free you are paying too much.

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  14. A220 would be good for JU but probably too expensive.

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  15. Ер Србија моћиће да се здраво развија када буде ПРИВАТИЗОВАНА. Без пуне приватизације остаће привремена решења. "Крпљење и трпљење", као и свих прошлих деценија. Верујем да долази време када ће Ер Србија почети озбиљан успон, али у статусу приватног авио превозника. Срећна Нова 2019 Година по јулијанском календару.
    Радован. Краљево // Сиднеј. 🌏🌍🌎🌐

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    Replies
    1. Ali kako ce onda vlada da zaposli sve rodake i rodice?

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  16. I actually think they need a regional jet plane. Something with the capacity to seat 100 passengers. Jat and now Air Serbia never filled the void of getting rid of the DC9/B727s which were actually the backbone of their fleet. They retired all those planes over night and had no alternative planned. 100-seaters would be perfect for many routes.

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    Replies
    1. DC-9 yes, JAT DC-9 's carried 107-115 passengers. But B727 capacity was well well over, it' s similar to A320/B737-800, and in JAT version it carried 168 passengers so no 100 seater at all, and also it had much much longer range than usually regional 100-seaters

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  17. The issue with Air Serbia is that in 2-3 months when a new CEO comes he could completely change the fleet plans. God only knows how many different strategies have been tries in the past 5 years.

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    1. It seems to me rather that no strategies have been tried.

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    2. I don't understand why you say - "when a new CEO comes" ....

      A new one won't be coming, they already have one and have had him for over 12 mths. He is an Etihad guy and he isn't going anywhere. So it will be more of the same ....

      if a new one was coming, he/she would have been in place as of 1 Jan, when Etihad exited its management contract. They also had over 6 mths to find one when they announced in June last year that they were not extending their management contract.

      So get over it ... this guy is here to stay

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  18. So Putin is coming to seal the deal for the Sukhojs. Nice touch.

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    1. That would be bad news for JU.

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    2. not sure what is worse ancient ATRs or Russian jets..?

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    3. Parts are available for the ATRs

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    4. Cause you've actually flown one?

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    5. I don't need to.
      Like I don't need to go to the north pole to know that it's cold or to the Sahara desert to know that is full of sand.

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  19. The interesting part is that 99% of those talking about a Sukhoi being a poor aircraft have never set their foot on a passenger jet as a traveller, let alone as a mechanician or pilot.

    They're so called armchair-experts whose only source of information is Western dismal disinformation and propaganda.

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    Replies
    1. Putin-bot alert!

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    2. Idiot with no knowledge in aviation or mechanics alert.

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    3. Oh, lets see what Russian media write about it:
      https://www.vedomosti.ru/business/articles/2018/11/21/787112-ssj100-malo-letaet

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    4. Well, then you should blame the French since they're the constructors of the turbine.

      Also, let's not forgot that Vedomosti is owned by FT from New York and that 'SSJ flies a little' is nothing short of an oxymoron.

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    5. Does it really matters for an airline who is constructor of defective part? What matters is fact that airplane because of that doesn't have sustainable operations. Fact that it was constructed by French company only matters for people who would overlook airplane faults just because its Russian.

      BTW, FT is not shareholder of Vedomosti for several years and there are other Russian sources talking about this and some other issues. You can google or yandex both facts :)

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    6. While i understand the national origin doesn't matter to the airlines i can't understand why it matters so much to you, unless it's some sort of bias.

      SSJ is totally new aircraft with no predecessor in series i.e it's not a continuation of any previous series. That means new engines and pretty much everything down to the last bolt. Having that in mind, it's difficulties are minimal and although you try to present it as grounded the SSJ's perform thousands flights a year in without a single incident.

      On another hand, i didn't hear you saying anything of the kind when the new Boeing 737-MAX crushed into the sea due to autopilot/stall warning error and killed ~200 people with it. Any other type would have been immediately grounded.

      So next time you might want to keep your uninformed bias to yourself.

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    7. For some reason you try to make this personal, while it's not. It's about current operational performance of airplane which is not good because of issues it has. Then need to deal with it, end of story.

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    8. Well, they're dealing with it so that Air Serbia or any other airline can order it.

      End of the story.

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    9. What they have done?

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  20. Little OT:
    Etihad Airways PJSC has agreed to lead a rescue of cash-strapped Jet Airways India Ltd. in a move that will see the Abu Dhabi-based carrier double its stake to 49 percent, according to television reports.

    https://www.bloomberg.com/news/articles/2019-01-14/jet-airways-jumps-on-report-founder-goyal-is-giving-up-control

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    1. That is bad news for Jet Airways! :D

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    2. The fact that Jet Airways has to be saved is bad. :D

      Delete
  21. Atr je svakako naj isplativiji ali su im mozda potrebni brzi regionalci da bi u jednom valu mogli da obave po dve rotacije(kao sto sada rade sa Zagrebom i Podgoricom nedeljom u trecem valu).

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  22. Meni osobno su EMB najdraži regionalni avioni. Visoka i široka kabina. Puno udobnije nego CRJ. Letio sam na EMB CAI-VIE i bilo kao skoro kao da sam u business classu. A u CRJ poludim LJU-MUC. Za mene osobno po pitanju komfora nema razlike između CRJ i Dash 8 odn. ATR. A letio sam već na svima spomenutima.

    ReplyDelete

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