Air Serbia has seen its passenger numbers decline 6.6% on its signature route between Belgrade and New York during the first quarter of the year, while the average cabin load factor and cargo uplift improved, data from the Bureau of Transportation Statistics of the United States shows. A range of factors influenced the figures, including less capacity being offered on the route when compared to last year, frequency reductions on connecting short haul flights, as well as the later start to Easter when compared to last year. The airline carried a total of 11.396 travellers between the two cities during the January - March period, down from 12.154. Its average cabin load factor stood at 74%, up 4.7 points.
Air Serbia’s capacity on the Belgrade - New York - Belgrade service decreased during Q1 2019 in part due to the usage of Etihad Airways’ Airbus A330-200 aircraft between January 12 and February 14, while its own jet of the same type underwent scheduled maintenance checks at Etihad Airways Engineering in Abu Dhabi. During the first quarter, the carrier offered 2.126 fewer seats than in 2018. Over the same period, Air Serbia’s European network was exposed to a number of frequency cuts, as the carrier consolidated its network in the lead-up to a significant expansion over the summer. Furthermore, the Easter holidays in the United States, when there is an increase in demand for travel, began in late March in 2018, while this year the holidays fell solely within April.
During the first three months of the year, Air Serbia uplifted 692.340 kilograms of freight on the Belgrade - New York service, up 8.7% on 2018, despite a decline in cargo capacity. “JFK Airport is important due to long haul capacity and the capability of covering cargo transportation across the Atlantic to the United States, Canada, and countries in South America”, Air Serbia previously said. In addition to its nonstop flights to New York, the airline provides road feeder services to 53 cities across the US and Canada. Overall, during Q1, there were more passengers originating from Belgrade, a total of 5.863, compared to the 5.533 travellers starting their journey at JFK Airport. For the whole of 2018, Air Serbia handled a total of 79.657 passengers to and from New York with an average annual cabin load factor of 80.8%.
Any info on the profitability of the route?
ReplyDeleteIs RASK approaching CASK?
If the route is still not profitable with 80.8% annual loadfactor I don't know when it will be.
DeleteLong haul must be over 95% i top season and 85% in low season to be profitable. That is average 90%. Of course with average price of 500 EUR (from 350 up to 650) out of season and average 900 EUR (from 800 up to 1000) in top season and double for business klas. Air Serbia is so far away from it.
DeleteCan you tell us how you calculated JU's average fare? Did you also include their business class passengers and if you did then you must have info on the loads.
DeleteI don't think any European airline has a 90% annual load factor on their long haul flights but they are profitable.
DeleteMore important than load factors are the prices an airline can ask and their cost.
ASL seems to be in a bind, the costs of operating only one aircraft are big and at the same time it cannot charge high enough ticket prices.
Re. Petar, I fully agree except for the last sentence: operating two aircraft instead of one doesn't reduce costs materially. Just the costs of spare parts and maintenance in BEG. Every new lh route will be worse, as you start with ones that have the biggest interest among pax and go down to those even more risky.
DeleteThere are a couple of markets where JU could see potential ie YYZ, PVG. A fleet of 2-3 A330's isnt too ambitious. This may in turn help the seasonality issues they have with their aircraft
DeleteNa koji nacin? Sve Internet menjadjeri.
DeleteJU has extra capacity until June 2020 to add an additional long haul route with its existing capacity.
DeleteStarting say YYZ or PVG twice a week, increasing as a second ac arrives in say mid June is the way to go, I would say.
In the mean time, the ac is operating bringing in some revenue, as well as allowing the slow months for promoting the route and establishing it for the summer.
Almost if not all TATL operators are announcing next years routes and frequencies now.
The 2nd ac would potentialy be operating in the peak season:
* Daily JFK
* 3-4 weekly YYZ/PVG
* Charter flight (AYT)
* A destination with high demand ie ZRH.
End of arm chair manager rant :)
Next 5-6 weeks should reveal if Air Serbia announces longhaul expansion and adds another A330 destination, as most airlines tend to announce it during summer or early fall season.
DeleteIf not, it could mean Air Serbia might be on a downward spiral for A330. Lease for YU-ARA was for 5 years from early 2016 to early 2021, meaning there is only one summer season left for JFK service if that scenario is correct.
Americans must be laughing at someone's loosing a lot of money every single month with an leased plane.If you got only one plane & paying huge price for it monthly then it's crazy you even try it w that experiment.Other Airlines got at least 5 to 7 available planes to make the route profitable
DeleteYes but think of all the prestige a certain politician (thinks he) gets!
DeleteIt's like a buying a jeep on credit or house just to make ur neighbour jealous .You can't talking about the prestige on loans. Air Serbia"s plain is on loan, paying huge price every single month not to mention money they were loosing nine months in a year.
DeleteThere is something called a long-term investment and this is it. First year when it was launched only two months were profitable, this year five months will be. So there is a positive trend and that's what matters. Within a few years the route should become profitable overall, especially as JU adds more regional flights.
DeleteAnd anyway, government subventions for JU have been going down every year, I guess they are doing something right.
They need to offer more connecting flights within the US. A codeshare agreement with a US carrier would be extremely beneficial.
ReplyDeleteJU needs to join an alliance. How many full service carriers are left who are not part of one?
DeleteAmericans especially are very much into mile programme. They will prefer to fly with LH or UA through FRA if that will give them miles to their account instead of flying direct on JU.
I agree that an alliance is crucial to be successful on TATL flights. It's just difficult for JU to compete.
DeleteWhy haven't they made a codeshare with US airlines?
DeleteThey tried but no US airline was interested.
DeleteAir Serbia has an interline agreement with B6 and AA so they get feed from the rest of the country. The only thing is that buying these tickets doesn't come out first during the booking process which can be a problem.
DeleteDidn't they have an interline agreement with some US company? At one point I remember them having a lot of smaller US cities in their destination menu on their website, but they seem to have all disappeared.
DeleteThey have interline with American Airlines and jetBlue.
Deleteinterline < code share < alliance
Deleteat least for this type of routes, not talking for overall impact on business.
Well at least they have something even if it's the lowest form of partnership.
DeleteTrue. Over 85% of transatlantic capacity is tied up in the 3 major airline alliances.
DeleteIt's not about being in an alliance, these days it's about being in a joint venture. Look at LO, they are in Star Alliance yet they barely cooperate with UA, they are not part of the LH-UA-OS-LX JV.
DeleteSo even alliance means little these days. JU needs to find a way to survive solo on the market.
AA is very thin with domestic services from JFK. Maybe if they offer a shuttle bus to LGA airport? And B6 - I heard of that agreement, but its quirky to connect from/to a legacy to low cost, especially regarding baggage allowances.
DeleteJU desperately needs to join SkyTeam or Oneworld. Hope Etihad would not oppose that. And beyond all that, 74% LF is good for the years weakest quarter.
They tried to get a codeshare but the US airlines were not interested. They prefer to send traffic through their partners with most of which have joint ventures for transatlantic flights.
DeleteUA with LH group. AA with BA-IBERIA. And DL with AF-KL.
I seriously doubt that EY will allow JU to join an alliance.
DeleteThey don't need an alliance. They need a JV and that won't happen in a million years. Interline is okay, codeshare would be nice someday.
Deletere. anon 9.36:
DeleteFully agree. Only jv means something. Alliance is surely attractive to often flying pax (points, lounges), but means more costs. LO transports to US more than 600k pax yearly and still nobody, including star alliance UA is interested in larger number of codeshares, because UA has JV with LH and prefers selling a TATL ticket via FRA or MUC to domestic one as an add-on to LOT's TATL.
I hope that none of you experts thinks that there is a slight possibility for JU to enter some JV :) If you do, you really need to get reality check.
DeleteOnly viable option would be alliance, and that will bring some benefits. Also, given the circumstances, not easy task at the moment.
A Joint Venture is a much stronger form of cooperation than being members of the shame alliance.
DeleteThere is zero chance of JU getting one with an American or Canadian airline.
Getting into one of the alliances should be their top priority.
Allicance without JV is a nonstarter. JV has 0 chance, therefore no need to get into any alliance outside of Etihad. Any other alliance will force them to be a feeder to their hubs and pay member fees, and Air Serbia does not need it.
DeleteWhat does "the airline provides road feeder services to 53 cities across the US and Canada" mean exactly?
ReplyDeleteIs JU providing truck services too through its cargo operation?
Yes. It has an agreement with a local company that provides road transport to other cities.
DeleteConsidering there were 2,000 seats less and Easter was later, the result is ok.
ReplyDeleteAnd when that was "excuse" for Croatia Airlines haters said "again that stupid excuse"?
DeleteIt's a stupid excuse if you justify the slump of your entire network on that. Here we are talking about a single route.
DeleteIt has exactly the same effect on whole network as it has on a single route.
DeleteGood to see LF up.
ReplyDeleteOverall I think numbers will be up on an annual level.
ReplyDeleteShould be the case with 6th flight added this summer season.
DeleteWasn't there a sixth flight last summer too?
DeleteYes it was. But this year they won;t have any flights for 2 weeks at the end of this month.
DeleteThis summer they offer much more connections for the New York flight including transfer options to Kiev.
DeleteGetting pax from Kiev to JFK will be tough. Ukraine International Airlines (PS) offers really cheap fares on their intercontinental network.
DeleteLF is up, which is more important than the number of passengers, but I still think this route is not profitable and God knows will it ever be ... at least not directly. Indirectly, it is probably profitable (tourists, taxes, hotels, cargo ...)
ReplyDeleteIt's profitable in summer but not in winter.
DeleteIf you make $100 during summer and lose $30 during winter you are still overall profitable.
DeleteAnonymous at 10:07 they probably are making $30 during Summer and lose $100 during the rest of the year. That is why the route is still unprofitable.
DeleteWith more regional flights being added all the time this route will perform better and better. Tirana is key here because of a large Albanian diaspora around New York.
ReplyDeleteOfficially 172K says they Albanian origin in the US.142K Serbian, Slovenian 163K.Croatians 424K.Croatians are the largest ethnic group in the US comapred to other EXYU nations.
DeleteRead the comment, I wrote New York, not US.
DeleteI still think they should have introduced Chicago first.
ReplyDeleteNew York is the single biggest market from BEG.
DeleteCikago uopste nema mnogo Srba samo je veliki aerodrom u regionu Ohajo ima i dva manastira SPC. Danasnja generaciija se seli na Istocnu ili Zapadnu obalu.
DeleteЧикаго има реплику Грачанице док постоји и српска православна црква у Милвокију. Срби из Висконсина лете из Чикага. А не знам одакле вам то да нема Срба у Илиноју када је Чикаго други по броју путника из Београда одмах иза Њујорка.
DeleteWhat Air Serbia need to do is replace the A330 with the A321XLR
DeleteThey had maintenance between January 12 and February 14 and now again for two weeks in end of September. What kind of plane is that to have 6 weeks maintenance per year?
ReplyDeleteThey did a C check in January.
DeleteThe most critical parts here are Q1 and Q4. Q2 and Q3 are packed.
ReplyDeleteAir Serbia was offering fantastic fares for upcoming winter from New York to Tel Aviv and Beirut (not sure how good the connections are to these especially BEY) but prices were very low.
DeleteThose were actually error fares. They last for about 12 hours.
DeleteFew days ago I witnessed removal of around 10 passengers from an Air Serbia flight. Rumour aboard said they had invalid tickets. Under which circumstances does it happen? I was among the first to board so could not see anything wrong, just that flight was late although boarding started on time. LF was 95+%
DeleteNot sure. That's really odd.
DeleteIn case a person buys an error fare, the airline either informs them well in advance that the ticket is invalid and returns them the money or they accept that they, as the airline, made a mistake and allows them to fly. A year ago JU made a business class error fare from Prague to New York for something like 400 euros. Those tickets were on sale for a few hours but JU honoured those tickets.
I hope they keep working and improving this route.
ReplyDeleteGood luck to JU. Sometimes you need to take a risk and I think in the long term it will pay off. I also think it is important that you are first in the region to operate this route, not because of prestige but in a few yaers I am sure more airlines in the region will go long haul. TAROM has already announced plans to start US flights. So it helps to have your product out there for some time when the competition comes.
ReplyDeleteThose figures are definitely interesting, especially the cargo part.
ReplyDeleteIf the route with this LF is not profitable that means one or more of the following:
ReplyDeletea) the costs are too high,
b) there are too few O&D passengers or they pay to little premium to fly O&D instead transfering themselves through some hub
c) there are too few business passengers or they pay to little premium to fly business instead of economy
d) the transfer and economy passengers are paying to little
If the problem is a), it is fully managable. If one of the others (especially b and c)), the route may be destined to be permanently in a loss on a yearly basis. The question is can YU maximise the fare without losing pax, ie. are these pax paying the full amount they can afford or would they be able to pay more to fly with YU.
+1
DeleteGood analysis. I am afraid the airline can not increase fares too much without losing passengers to FRA, MUC, CDG, ZRH, IST, VIE etc.
Not being part of an alliance and having your loyalty program cooperate with 20+ other big airlines drives away business passengers.
Its partially good, because "a" is not fully manageable, ie. you cant lower all costs just like that because you decided to. Also, this analyses focus on something that is not step 1 but comes along the way.
DeleteWhat is not manageable for sure (and related to "a" and essential thing) is long haul operation with only 1 route.
Either expand and thus lower operational costs per route because of higher plane utilization, market awareness, some other parameters, etc. or go out of that business. That is essentials decision that should be made. After that you adjust regional network, timetable, find a way to sell more premium fares, etc.
Are there any plans what they are going to do with the A330 this winter?
ReplyDeleteThey shall at least give a try with several charters to Thailand.
DeleteAnonymous at 10:12
Delete+1000
We have spoken soo much on this.
DeleteThailand is a relatively cheap destination to travel to, with soo much competition. Very low yield. Not too sure if JU could get tour agencies to get the demand needed to pull off a few flights.
Plus, visa is another issue.
As of now, 1-4 weekly JFK is in the system.
* until Nov 2 / 3 pw
*Nov 2-Dec 14 / 2 pw
*Dec 15-Dec 28 / 3pw
*Dec 29-Jan 4 / 4pw
*Jan 5-Jan 11 / 3pw
*Jan 12-Jan 18 / 1pw
*Jan 19-Mar 21 / 2 pw
*from March 23 / 3pw
Thank you for the loads!
ReplyDeleteWhat happened to Air Serbia long haul expansion and new intercontinental destinations for 2020?
ReplyDeleteThey probably put the breaks on it. It would be too expensive.
DeleteIt has been four years of nothing but brakes for expansion. If they are not ready now they never will be. As if someone installed new leadership with the stealth goal of suppressing long haul expansion.
DeleteIf they don't expand now, in 5 years BEG will have AC/TS from YYZ, AA from PHL or ORD, DL from JFK and one of China carriers from China. People will ask why Air Serbia didn't grab the opportunity 5 years ago?
DeleteJesus, let them develop European network, they added the most routes in Europe out of all airlines this year. I would much prefer to stay away from transatlantic flights in the next 2-3 years.
Delete@Anon at 13:06
DeleteThey did develop European network over the past five years only to cancel or reduce seasonality/frequencies on many of them. Just look at the summer of 2016 with Adria CRJ and then reduction it followed. So no, they don't need to be "let" to mess around with Euro network as an excuse for killing the longhaul expansion. Carsten Spohr would also prefer them to stay away from TATL, so that kind of thinking is exactly opposite of Air Serbia interests.
What was the point of all the effort like renewing Canada bilateral and heavy promotion of Serbia as a tourist destination in China if not to start YYZ and PEK/PVG? Since 2016 Air Serbia had a perfect storm of 1) already established JFK service experience, 2) stable/predictable global economy and oil prices, and 3) having market clear of competition as foreign long haul airlines were staying away from BEG (unlike ZAG, DBV, OTP, BUD all getting new lonhgaul services). No wonder Kondic was constantly attacked, he was pushing for longhaul expansion.
The only thing that matters is profitability.
ReplyDeleteAny idea on what percentage of pax are O&D, and transfer?
ReplyDeleteI think in summer its around 50/50. In winter more than 50% are transfer for sure. At least that was the experience on all my flights so far.
DeleteIt will be hard to make a profit with limited potential for connections beyond the Balkans.
ReplyDeleteTo the contrary, it will be difficult to make profit with connections beyond the Balkans. Everebody outside Balkans that will connect via BEG to JFK will be after dirty cheap fares. Look at the map! The LF is apparently good, it is the fares that are too low!
DeleteThis route may be profitable only, if it has a) sufficient well-paying O&D pax from BEG and b) transfer pax from the Balkans that transfer in BEG because they have little more options and thus are paying decent transfer fares.
artflyer
Delete+1000
ASL is subsidizing the travels of Greeks, Bulgarians, Albanians and Lebanese to the New York.
That is not a business strategy that leads to profits.
Anon 11.08
DeleteSay that to all hub and spoke airlines that are making money. Just look at LO. Please inform yourself before writing nonsense.
re. anon 14.48
DeleteLO is making money because it can collect very good fares from people travelling O&D from Warsaw. More or less all other tickets on the plane are at their expense.
This is why despite having daily/more than daily direct connections from WAW on LO there are still many people travelling from WAW indirect (yearly >70k people from WAW indirect to JFK+EWR, >30k to ORD, >27k to PEK, >18k to LAX, >17k to NRT etc.).
When you sell many tickets on good fares, so you meet the costs of the route, you can sell the rest cheap and still make profit. Actually you make profit whatever is the fare for these transfer tickets, because you already covered all your costs from income on the O&D pax, so whatever the transfer pax pays is your profit.
So to put it more clear: if the BEG-JFK route is not in the black, this is most probably because BEG pax do not want to pay sufficient premium on their fares. And yes: it is them that should subsidise everbody else on that plane (Greeks, Bulgarians etc. you mentioned). A pax from LJU or ZAG doesn't care much if he transfers to JFK in BEG or in MUC, in WAW or in ZRH etc. He has to transfer anyway, which is more or less the same inconvenience, so he just looks at the price tag and, most often only secondly, the total travel time. The pax in BEG gets a premium thing which is a direct flight and if he is unwilling to pay sufficiently more for it (ie he doesn't value the direct flight enough) than probably he should be offered only a transfer flight. This is how it works.
DeleteYour argument is flawed because you assume ALL transfer passengers are loss-making which simply is not true. Also, I am sure LAX and NRT from WAW are primarily relying on transfers, same with ICN yet LO manages to boost frequencies and capacity.
DeleteIs there an idea at any point to introduce premium economy to improve offer and income from this route?
ReplyDeleteThey changed their concept so many times and even changed their A319/A320 cabins twice in just 5 years that I would not be surprised if they introduce premium economy sooner or later.
DeleteIf they introduced premium economy on top of standard business and economy, they would have one of the smallest capacity A330s in the industry. I mean their business class has 1-1-1 seating. That's almost unheard of on an A330.
DeleteAir Serbia A332 is unlikely to need another heavy maintenance after only 7 months in service. Perhaps they are using those two weeks of downtime to rip out existing business class seats and replace them with more modern, denser biz class and possibly some Premium Economy seats? That would work wonders for Plusgrade revenue. Current herringbone config is #1 complaint from biz class passengers.
DeleteBice to uspesna prica,ocekujemo nove LH letove u 2020-oj,srecno AS
ReplyDeleteImagine how successful this route would be if JU had morning flights to TIA, SKG, SKP...
ReplyDeleteOpet Internet menjadjer, LH moze da i njima obori cenu kao sto i radi za letove iz BG. Ne znam da li imas predstavu kako je na Frankfurtskom gde pune A380 preko bare.
DeleteThere is only soo much LH can compete. Look at how LX failed in their Balkan expansion a couple years back.
DeleteAt the end of the day, BEG has its own demand and its transfer that will boost the CLF, just as seen today.
I think JU just needs to work in more flights in the 1000-1030 time frame.
Ovde su ljudi osetljivi na placanje imaginarnog poreza i traze LCC kompanije. Pitaj me sto sam leteo sa Alitaliom i LH posle jednog leta sa AS preko atlantike. Cena. Najgora usluga je na LH. Ali povratna karta bila 420 jura pocetak jula. Toliko cemo da izdrzimo u avionu.
DeleteYou should be more mannered when you speak!
DeleteThe increased competition by our national airline is one reason why these fares are cheaper. Compare what is on offer from neighbouring airports with less competition.
The demand isnt necessarily LCC but cheaper tickets, and that is not specific to Serbia. LCC carriers are more than welcome to step in, Serbia cannot ban any EU airline from entering the market.
I still think this route came way too early and they should have strengthened the short haul network first before going into any long haul flights. That said I think they were forced into it politically or should I say by their 51% majority owner.
ReplyDeleteHad they not launched it in 2016, they would not have been able to do it later with all the stuff happening at Etihad.
DeleteI wonder if AA flights to DBV will have an impact on their passenger numbers in summer?
ReplyDeleteIts not their main market, nor does DBV connect well to JFK.
DeleteIt's odd they didn't name a connection to Dubrovnik.
DeleteIf they continue receiving such great passenger reviews like they do recently they will end up with less and less passengers.
ReplyDeleteWhy doesn't JU consider long haul charters?
ReplyDeleteCancun, Cuba, Mexico, Tanzania (safari tours). People want to try new places and not only Greece or Turkey or Egipat.
Because they have no creativity and knowledge to organize such trips. Remember that 75% of the head office are party loyal employees so with such knowledge what can one expect?
DeleteBecause they operate in a country where average salary amounts to 400 euros?
Delete@Anonymous 12:36
DeleteKo će da putuje tim čarterima za Kankun ili Tanzaniju?
Ne zanosite se ljudi, Srbija je jedna od najsiromašnijih evropskih zemalja, u celoj državi (od Horgoša do Preševa) ne može da se skupi 254 putnika koji mogu sebi da priušte safari u Tanzaniji ili sunčanje u Kankunu.
Prosečan Srbin jedva nakrpi 500 evra da ode u Sutomore 10 dana, a kamoli da ide u Kankun i slične egzotične destinacije koje koštaju par hiljada evra po osobi.
*Prethodni odgovor je za anona 12.41
DeleteLet me just point out that Serbia has biggest charter operation in balkan region and their revenue is huge. You indicating that we are poor and can not afford to travel does not reflect reality. We do have money for travelling and we do travel more then other Balkan countries .
DeleteCitizens with average sales will not fly to Cancun for sure. But there is lot of people traveling to different location in Asia &˛Africa.
DeleteCan some good soul tell me how will their winter ops to New York look like? I know frequencies change from month to month.
ReplyDeleteSee my post above :)
DeleteThank you! :)
Deletewhy not Beg-Las. only couple of airlines from europe fly directly to Las.
ReplyDeleteI have been saying for ages that a BEG-HAV or a BEG-CCS route would be highly successful and attract travelers from all over Europe and the Middle East who have no other convenient option!
DeleteViva la revolución!
Svašta, pa Turkiš leti za obe destinacije sa dobrim vezama za Bliski Istok i Evropu. Možda ti je rum malo udario u glavu?
DeleteТом логиком нису требали летети за Њујорк, Бејрут, Краснодар... пошто и ту Туркиш лети и нуди добре конекције?
DeleteWith the new connections they added this summer loads will improve significantly .
ReplyDeleteAlso even as this flight may not be profitable per se it adds value to the economy at a whole which can compensate for a loss.
I've traveled DTW-BEG three times in the last year and I'll be doing my fourth trip this Winter.
ReplyDeleteThe JU ticket isn't competitive. First, it almost never comes up during booking search. The DTW is dominated by Delta, but there is some competition by American & UA. But JU leg NEVER comes up. I flew CDG-BEG with JU and I'll be doing the same during Winter, but the TATL part is Delta.
If I was to by different tickets, the JU leg becomes too expensive when combining it with the DTW-JFK ride. It's just not competitive enough and I don't really save that much time when I have to travel to JFK already instead of doing TATL through DTW.
Air Serbia should replace their A330 and get two A321XLR's for long haul services to
ReplyDelete-New York
-Chicago
-Toronto
-Beijing