Air Serbia ancillary revenue spikes 400%


Air Serbia saw its revenue from the sale of services beyond a basic flight ticket increase 402.7% last year, despite a general drop in the number of carried passengers. The airline has continued on a similar trajectory so far this year. The so-called "unbundling of fares" has been one of the main pillars of the carrier's transformation from a full-fare into a hybrid company. The airline pocketed 3.1 million euros from ancillary services in 2018, up from 619.000 euros the year before. Air Serbia said ancillary services achieved their best result to date this June, with the projected budget exceeded for the third time in 2019. Products contributing most to the improved result this year was "Plusgrade" - a newly introduced online bidding service for upgrading from economy to business class, then additional luggage, as well as seat selection.

The airline previously said it would put an even greater emphasis on merchandising in the future in order to drive up revenue. "Traditional commercial approaches are no longer sufficient in making an airline competitive enough to ensure its long term profitability. Passenger numbers are booming, competition has intensified, and low cost carriers have made the aviation industry even more dynamic and tougher than ever before. But most importantly, with flights more affordable than ever, travellers are paying more attention to factors outside of price that differentiate airlines", Air Serbia said. It added, "It’s all about unbundling the traditional airline product proposition, and allowing travellers to create or choose their own journey based on their travel styles and preferences. It’s all about making these packages simple and easy to understand for both the market and the sales network. And in short, it is all about offering the right service proposal to the right passenger at the right price at the right time in the right sales channel".

Air Serbia's ancillary services include: advance seat reservation, excess baggage, priority baggage tagging, Premium lounge passes, fast track, priority boarding, meet & assist, on board special moments celebration, priority check-in, children travelling alone, travelling with pets, sport equipment transport, on board wi-fi, pre-paid meals, extra seat reservation, gift vouchers, Plusgrade, Elevate Deli & Bar and inflight duty free. Despite increasing this revenue stream, customers have criticised the airline for charging extra for a number of services previously offered as part of a standard fare. Last year, the world's ten busiest carriers collectively took in 31.3 billion euros in ancillary revenue.



Comments

  1. How are they going to expand it next? Charge for toilet use?

    ReplyDelete
    Replies
    1. How about by adding more services passengers can pay for? Maybe expanding the onboard menu, offering more payable things in the lounge...

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    2. If they offered massages from the flight attendants I would gladly pay 5€.

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    3. Copy Ryanair.

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    4. Ja bi njoj platio da je izmasiram :D

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    5. They will simply increases the prices for the ancillary services.

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  2. Have they removed that ridiculous charge for lowest economy fare departing BEG that if you don't check in online you have to pay 30 EUR at the airport?

    ReplyDelete
    Replies
    1. No but they introduced self check in machines where you can checkin without any charges.

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    2. It's 10€ now officially if you do it at counter, but you can do it for free at self-checkin kiosks at Belgrade airport. There is always a personnel by the kiosk that will help anybody to check in.
      I don't understand why they don't clarify this on their web page.
      As far as I understand, for all other airports this fee is not applicable, ie. it is free of charge for all passengers.

      https://www.airserbia.com/en/information/pre_flight/check-in/check-in-at-the-airport

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    3. It only applies for BEG because that's the only place they can enforce this ludicrous measure. Other than some LCCs (not all) I don't know a single airline that does this.

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    4. Airport check-in is free for all fare types.

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    5. Not according to their website

      Economy LIGHT: Airport Check-in 10 EUR

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    6. But for two times I could not check in those self machines even with help of personal. They told me they have problems from time to time.

      In this scenario you proceed to baggage drop off like you made self check in with signature of that helping personal that machine is not working.

      Delete
  3. Congratulations.

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  4. For once I actually agree with them.

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  5. So basically like Wizz Air?

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    Replies
    1. With high fares.

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    2. Wizz Air does not fly to main airports like Air Serbia.

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    3. No matter, Wizz Air has lower prices.

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    4. Actually JU prices are not that expensive.

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    5. Wizz Air has low fares? Haven't noticed it.

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    6. Anonymous at 09:14
      LOL, sure!

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    7. Just checked average one-way far to BVA in September and it's €64 without any adds meaning cheapest return ticket is €128. That's not very cheap especially if you want to chose your seat, get priority or God forbid pay for luggage. Also, first two weeks fares are around €75 one-way.

      Delete
    8. Of course that it does matter very much where they fly and simply can't be so ignored. Wizzair flies from BEG to villages and Air Serbia to the main airports.
      Air Serbia provides possibility of 1 IATA measures hand lugagge and Wizzair would charge for it.
      Air Serbia has FF program, Wizzair does not know what it is.
      Air Serbia offers connecting flights, Wizzair is afraid of them
      Air Serbia at least offers free water and chips on their flights, in Wizzair you need to pay for it.
      And if it happens that Wizzair can't fly due to the technical reasons this is what happens
      https://www.kurir.rs/vesti/drustvo/3292589/viz-er-ostavio-srbe-na-cedilu-u-parizu-100-putnika-ukljucujuci-i-majke-s-malom-decom-let-cekali-17-sati-bez-hrane-i-smestaja-pa-za-srbiju-krenuli-autobusom-kurir-tv

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    9. "So basically like Wizz Air?"

      No, basically like British Airways.

      Delete
  6. They replaced boutique with merchandising.

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    Replies
    1. Ah the "boutique airline" concept.

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    2. If it what helps them reach profitability then so be it.

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    3. "profitability" LOL!

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  7. The worst one is charging for seat selection. I know some airlines do it but I really don't think they should charge extra to choose any other seat other than exit rows.

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  8. I'm not surprised it grew 400% when they started charging for everything extra.

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    Replies
    1. I do not mind paying as they offer a great service on board their flights . I was flying in canada with AirCanada and Westjet and they ate biggest in that country, they charge for every single thing and their flight attendants treat you like garbage or with a fake smile. AS is very good as such a competitive market . Glad to see they are making great money .

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    2. Oh come on, please don't. Flew several times Air Canada and West jet on ID tickets. Once SM sent extra personnel, very experienced, to sort out the mess which they had on my flight Calgary to Toronto. And lady did the magic, she managed to put me on the flight with 12 Id's who had priority over me, including sending some of them to West jet. And when I arrived to Pearson, afraid for my flight to Europe, which was also fully booked, my ticket was already waiting for me at the gate. West jet's whole philosophy is "next door people", simplicity and friendliness and I never saw more smiles, not fake, than in Air Canada. With both of these I have only very good experiences. And I don't mind you advocating Air Serbia, but please don't make up things about others which are not exactly true. Or maybe are true, if your attitude was such to provoke them not to be nice with you It takes two for the dance, you know

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  9. Well it all comes at a cost. Many people who flew JU last year won't come back this year after they had to pay extra for everything on top of an expensive fare.

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    Replies
    1. You will be surprised that there will be more people flying with Air Serbia than ever before

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    2. I won't be because there will be growth because they introduced 22 new routes. Last year we saw the actual results of this transformation and passenger numbers went down.

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    3. Last year we saw the result of cutting the routs and and not of transformation.

      If you cut the route you can't expect more passengers.

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    4. Which is why this year we will see the opposite effect.

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    5. Partially opposite,

      It looks like that new destinations like BCN, MAD, KRR etc have good results so we might see passengers number increasing. It will surely push BOB to be even more successful on JU flights

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    6. "people who flew JU last year won't come back this year"

      Are they going to take the bus instead? Numbers show they ARE coming back and they are getting used to paying for additional services, just like at many other airlines. It's a crushing defeat for those that criticized Air Serbia switch to this model. It is actually working.

      Delete
  10. Bravo Serbija!

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  11. I'm actually supportive of this. It's the way the wind is blowing in the aviation industry and it is what people (not avgeeks necessarily) but the general public wants.

    ReplyDelete
  12. Good luck with them competing against Wizz Air with this concept and trying to snatch passengers of them. I think it is a lost battle already.

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    Replies
    1. Most people said the same about Aer Lingus. And yet they transformed into a hybrid airline and have managed to survive next to Ryanair.

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    2. Same for airBaltic.

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    3. Between Air Serbia and Wizzair in BEG I would always choose Air Serbia.

      They have quite often promotions on their web site while Wizzair is ripping off especially to the airports like BVA that is soo far away ffrom Paris, but they charge like they arrive to CDG. And they are called ULCC? Funny!

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    4. Since Wizz Air isn't really growing in Belgrade, I think many think like you Anon 09.50

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    5. With exception of the Basel route, Wizz Air does not have serious LCC competition in Belgrade which explains their legacy prices !
      If Easyjet would open Paris-Orly of course Wizz would be forced to lower their price .

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  13. Flying is a privilege, not a right. If you can't afford a plane ticket take the bus. If you can't afford a bus then don't travel. I don't get the point of people who complain about JU's high fares (which are not that high anyway). Maybe if the airport was cheaper fares would be lower on all carriers that serve Belgrade? Compare Wizz Air's BVA fares to JU/AF to CDG, they literally charge the same while BVA is a shed in the middle of nowhere. So who is ripping off who here exactly?

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    Replies
    1. People complain because you have to pay 220 euros to fly to Prague on a 30 year old ATR.

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    2. Prague is generally expensive as an airport so I don't think JU should operate it at a loss so that you can fly for €50. If you have an issue with high fares nag about airport fees at both BEG and PRG. Even Wizz Air closed Prague base.

      Delete
    3. There is no competition on BEG-PRG route so they are in the position to charge more money. And everyone would do it, I don't understand why you are so surprised about it.

      From the other side they need to lower the prices to Berlin because easyJet is flying there. Same logic, but in this case it looks like nobody complained :-)

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    4. If prices are high to Berlin despite easyJet being on the route then it means their loads are great. easyJet is reducing TXL-BEG to 3 weekly this winter while JU remains the same. Seems like they managed to defend their market quite well.

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    5. “ Flying is a privilege, not a right. If you can't afford a plane ticket take the bus.”

      Taking the bus is a privilege, not a right. If you can’t afford bus ticket, just walk there.

      Right?

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    6. Maybe some can't walk since they can't afford comfortable shoes. ;)

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    7. easyJet isnt reducing TXL-BEG this winter so JU surely didnt defeat them.

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    8. Yes they are Anon 12.36, they are reducing from 4 to 3 weekly. You can easily check their timetable. Number of overall frequencies by easyJet stays the same because GVA is increased from 3 to 4.

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  14. Service standards at JU have generally gone down. I understand you have to get new revenue streams and fine you can charge for extras but generally people are unhappy with the way it has all been done. Look at the comments and reviews online and compare them to 5 years ago. It's like two different airlines.

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    Replies
    1. Also they have changed their offering so many times and people are rightfully confused. First they didn't offer anything for free not even water on board. Then they reintroduced water, then some awfully packaged snack with some fish shaped crackers which everyone made fun of, now they have chips. In business they used to offer one of the best products, then served food out of cardboard boxes which opened up like a flower so you are literally eating off flat cardboard as if you are a pig on a farm. Now they have reintroduced a more decent product.

      It seems they don't know what they are doing.

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    2. Unfortunatly nothing in Serbia lasts too long! We are portrated best in everything but for a very short stretch of time!

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    3. Comparing "boutique" airline with hybrid airline is not realistic.

      Of course that better opinions will be given for boutique concept but in that case this company would be needed much more state support. And we know here all what kind of comments are coming anytime when some state support gets mentioned.

      So in order to be profitable or to be close to it this company must charge additional costs. SImple as that.

      Delete
  15. The main aim of this strategy was to bring in cash. And they have succeeded.

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  16. They have to find a way to effectively compete against LCCs. They are being challenged on more and more routes which is great for consumers. What I do question is whether they can efficiently compete against LCCs by adopting a hybrid model.

    ReplyDelete
  17. Be prepared for more and have one fare plus 20 surcharges. Be funny if we would hve to buy bread or milk like this.

    ReplyDelete
  18. Awesome! I wonder why they don´t cease operations as airline and they dedicated themselves to additional services, as this is apparently the only way they can be profitable.BTW, yesterday all flights from Nis were canceled cos the airplane was broken. If I am not mistaken on tender for subsidies, they had to fulfill all the conditions, one of which was that the company had a spare aircraft in Serbia. Anybody know where was this aircraft yesterday?

    ReplyDelete
    Replies
    1. You should find out since you seem to be a true detective!

      Delete
    2. Anon 9h26 asked a legitimate and fair question. No need to be offended and answer in such a negative way.

      If you have no answer, then simply don't reply!

      Delete
    3. But Anon 26 August, you don't have an answer either yet you wrote a comment! :O

      Delete
    4. One Air Serbia plane went tech for one day and all this drama? Let's check out today's news on how the rest of the world deals with it: Airline Swoop (low cost arm of WestJet in Canada) had to cancel the service because "The airline confirmed there was unscheduled maintenance to the aircraft". Passengers told to wait 11 days for next plane!!!!! Enjoy:

      https://globalnews.ca/news/5821441/passengers-told-to-wait-11-days-for-next-plane-after-swoop-cancels-kelowna-to-winnipeg-flight/

      Delete
  19. It;s nice it's working for them now but the reason they had to introduce "Plus Grade" is because no one in their right mind would book a business class ticket with JU anymore, following their 'fantastic' product review.

    ReplyDelete
    Replies
    1. Business class product is very good again.
      "Plus Grade" is not unique to Air Serbia (of course names are different for different airlines), its a way to offer business class to more potential customers.

      Delete
    2. annon 9.29

      It seems you missed something
      https://www.kamatica.com/vest/unapredjena-usluga-u-biznis-klasi-air-serbia-e/57539

      Delete
    3. No I didn't. Compare it to what it used to be when the airline launched. Also for 8 months they served food from cartons in business class. So the "upgrade" kamatica was referring to was from that.

      Delete
    4. Compare the loss they had at the time company was launched and the loss they have now. Business class as it was on the beginning can't be found on any other European airline, but still people are booking business class with LH, OS, LX etc.

      So, do not worry business class will be booked with JU especially now after it has been improved

      Delete
  20. So many armchair experts on here (haters even?). JU is recording passenger number increases, more revenue and reduced losses. They are getting into shape bit by bit.

    ReplyDelete
    Replies
    1. Last year their passenger numbers fell notably. So did their profits.

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    2. Profits didn't because they got less in subsidies and I am talking about passenger growth this year. ;)

      Delete
  21. Will JU afford to renegotiate to buy the A320 neo ?
    Aviolet must be converted in their LCC división too...

    ReplyDelete
    Replies
    1. https://www.exyuaviation.com/2019/04/air-serbias-airbus-renewal-delayed.html

      Delete
  22. I don't understand why this is presented as success, when the money earned from these ancillary sales is still many millions below what is needed to make Air Serbia profitable.

    And it's not even put side by side with the other important figure - how much less money was earned from sales of basic flight tickets, now that they are supposedly cheaper.

    This kind of statistics taken out of context don't mean much in the bigger picture.

    ReplyDelete
    Replies
    1. Overall their revenue increased last year despite having fewer passengers.

      Delete
  23. 400%???

    boy, do they know how to paint the picture.

    ReplyDelete
    Replies
    1. Are you saying it wasn't 400%?

      Delete
    2. No, he does not look they way it looks like

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    3. let me start by saying it is very good that they got this plusgrade stuff,
      but, they start from a low base, or non-existing base
      (as far as i know only ancillary revenue was BoB on aviolet),
      then they introduced this, and of course that KPI will fly

      something on the lines of "satisfactory results on ancillary revenue" would be more proper than indicating 4x growth. it's ridiculous to play with the numbers like that

      Delete
    4. I don't agree, you have the numbers inside article so you can judge for yourself how big achievement this is (or not).
      Month ago, there was another statement regarding same stuff, fluffy, like "we are making huge improvements" but no any info to sustain it. And it was terrible, people didn't believed them, call them liars etc.
      This is how it should be done, and to be honest, every other company would do it in similar fashion. Thumbs up for Air Serbia PR department, big improvement in just one month ;)

      Delete
    5. Like when W6 claims they are making millions worth of investment when they add a plane to a certain base. lol

      Delete
    6. "as far as i know only ancillary revenue was BoB on aviolet"

      Petar you have been shown time and again you don't have understand commercial aviation. Have you heard of additional bag fees? Fees for pets, oversized bags, UM (kids) etc? Those are just some examples of ancillary revenue that existed for decades.

      Delete
  24. Why did JU cancel the ZED ID agreement with LX?
    Does somebody have thr same issue with different company?

    ReplyDelete
    Replies
    1. What do you mean by zed id?

      Delete
    2. As an employee of LX I can't fly anymore standby with JU.
      Even in JAT times i flew with them standby, e.g LCA-BEG when JU was flying TLV-LCA-BEG!

      Delete
    3. AS is one of the very frw airline not part of MyID travel. After Emailing their corporate office nobody can give you a straight answer why they are not able to transfer to My IdTravel.

      Delete
  25. Each airline goes through something like this especially from poorer markets.

    ReplyDelete
  26. Nowadays a passenger is no longer loyal to an airline and will always choose the lower price.
    Times have changed guys and so is JU. I personally don't find any problem of JU changing its business model so it can be more competitive.

    ReplyDelete
  27. Air Serbia would become profitable if they optimize staff

    ReplyDelete
  28. I think the best idea was to crate LCC (saling those old B733) and leasing 2x738. Instead of atcing as LCC and having FC prices.

    ReplyDelete
    Replies
    1. Agree. They should have converteed Aviolet into a LCC airline e.g. What IB did with VY or KL with HV.

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    2. The Aviolets have 134 seats and they can be EASILY filled if they turn it into an LCC. Alternatively, they can sell the 4 aircraft and buy 2 new 738 with 189 seats like Ryanair.

      Delete
    3. To whome can they sell the oldest flying B733 in Europe?

      Delete
    4. Uvek mogu otici u afrika a njima trebaju dva deceniju novija a320 sa 180 mesta za aviolet.

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    5. Nece ni Afrika to vise

      Delete
  29. I recon JU will become profitable in 2 years max.
    They really know what they doing and they have turned tables around when it comes to strategy.
    The new network is just what was missing, so they should be milking it in not more than 2 years.
    Compared to all of these loss makers across Europe, to have an airline that is so close to be in plus is astonishing.
    Well done Ju!

    ReplyDelete
    Replies
    1. Not to mention that MAD and BCN were smashing successes this year which probably made a lot of money for them. Other routes performed well as well whcih helped fill seats out of Belgrade.

      Delete
    2. I think that RJK is the worst perforimg route, but they anyhow get the money for flying there.

      Delete
    3. Actually from what I heard MAD performed the best, followed by BCN and then ZAD.

      Delete
    4. @ Anon 10:49: How can you predict that JU, or any other airline for that matter, will turn a profit in 2 years?! I understand that it's your wish, but JU is FAR from starting to turn a profit. We all agree that JU is trying, but to predict that in 2 years they will be profitable, in an industry that is plagued by cycles is quite astonishing.... JU exposed themselves and made themselves vulnerable with all their new routes knowing there's a looming EU recession on the horizon... so we can safely conclude that such a prediction is purely emotional.

      Delete
    5. Kao sto sam vec pisao ovde pokazuje se preveliki trud oko svega toga za samo jedan evro zarade po putniku dok su mnogi putnici zbunjeni sa komplikovanom shemom svega. Moze se vise ustedeti i imati lepsa ponuda za putnike nego sto ce ovako da zarade.

      Delete
    6. Well, I believe it is a mix of hopes and some facts.

      If fuel costs remains more less the same amd there is no huge economic crisis some profit could be achieved in appprox 2 years time as

      - JFK is close to turn to be profitable
      - JU is opening new routes and big majority of them are profitable (some of them even increased few weeks after launching like BCN)
      - loss has been decreasing year after year in previous 5 years and it is expected to follow the same trend
      - huge number of highly profitable charter flights (increase in 2019 was around 40% and expected to grow in next years). They bring nothing but pure cash
      - BOB revenue significantly increased
      - service in business as well as in economy is improved (no more cost cutting measures)

      All these signs show to me that JU is on the good way of recovery and I wish them all the best!

      Delete
    7. All the above statements can be debated, but lets just say they are positive. JU is aggressively trying to grow, and this in my opinion is forward thinking. All the Balkan airlines are heavily dependent on vacation and leisure travelers, as well as diaspora travel. When the economy is good, all is good. However, being heavily subsidized by the Serbian government, I am afraid if there's a hick up in the EU economy, JU management won't know how to cope when those travelers stop flying due to uncertainty in the market, and JU won't know how to properly consolidate the gains they made in the past few years ......we'll just have to wait and see.

      Delete
    8. How much did JU get last year from the government?

      Delete
    9. @Anon at 12:36

      Potential recession will only affect JU but not any other carriers? Nice story, bro.

      Delete
    10. They have made 16mil profit last year and they have a debt to pay of 20mil.
      Once the debt is payed off, which will be in a few years, they will run a pure profit.
      Even this “loss” they are making right now because of the debt they are paying off, are nothing compared to the losses of many European flagcarriers that taxpayers are cashing out every year.
      I am actually very pleased with JUs economy.

      Delete
  30. over 20 million....

    ReplyDelete
  31. Would really love to see them connect Belgrade with the remaining few countries in Europe where we're missing direct flights to. Lisbon, Riga and Dublin would be such good additions for next summer and Chisinau somewhere down the line would be great. I'm sure one of the LCCs will get around to Bratislava soon enough, which would only leave Iceland, Luxembourg, Lithuania and Estonia which I understand wouldn't really be feasible.

    ReplyDelete
    Replies
    1. There is Bratislava from INI, Belgrade isn't the only city in Serbia you know :D

      Delete
  32. My biggest issues with AS services:
    - unreasonable baggage fee if you have a light fare
    - not enough options for buy on board food
    - they can have more local Serbian and creative products for buy on board food
    - no options for vegans/fasting meals or sandwiches
    - they don't allow for a complimentary special meal selection on business class flights in Europe over 1.5hrs! (every airline that I have flow with in business class allowed me to request a special meal if there was a meal offered)
    - Air Serbia lounge in Belgrade closes too early in the evenings
    - Because of the above two points, I will never take a business class flight with them

    ReplyDelete
    Replies
    1. - unreasonable baggage fee if you have a light fare
      - not enough options for buy on board food
      I will never take a business class flight with them

      Business class passengers get food and baggage fee included, so why complain about them? If you are such a big business class traveller, why do you care about light fare? Pathetic.

      Delete

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