Serbia’s Deputy Prime Minister and Minister for Construction, Transport and Infrastructure, Zorana Mihajlović, has said the country’s national carrier, Air Serbia, has registered over forty million euros in direct losses as a result of the coronavirus Covid-19 outbreak. Ms Mihajlović noted the figure will grow once indirect losses are added. However, the Minister said the ongoing health crisis has illustrated Air Serbia’s importance. “This entire situation has shown how vital it is for Serbia to have its own national carrier, which has been performing humanitarian and cargo flights over the past month. Air Serbia has carried both our nationals and foreigners to their countries of origin”, Ms Mihajlović noted.
The Deputy Prime Minister said Air Serbia faces a long road to recovery which will stretch into 2021. The country has previously said it will provide financial support for its national carrier either through recapitalisation or corporate bonds. “The European aviation industry has been hit with 160 billion euros in losses, so Serbia is not immune”, Ms Mihajlović said. Prior to the Covid-19 outbreak, Air Serbia was on course for a record year and estimated passenger growth of up to 30% only during the first quarter of 2020. The carrier registered a net profit of 12.2 million euros in 2018, with its 2019 results to be published in July or August of this year.
Air Serbia has scheduled May 1 as a tentative date for its resumption of operations, although this will depend on the country’s ongoing state of emergency and the lifting of its ban on commercial flights. The airline has been operating an average of two daily repatriation services since it was grounded on March 20. Since then, some 7.700 passengers have been carried to and from Serbia, while the Serbian carrier has also transported several thousand tons of aid. The company will today bring back stranded Serbian nationals from the United States on a flight from Washington, while a repatriation flight will also be operated to Kiev.
The good news is the state is willing to help.
ReplyDeleteGood news for who?
DeleteSerbia and its economy. It's quite obvious.
DeleteNot for the residents.
DeleteWhy not? Those who live in Serbia profit the most from having JU around. Their timetable is fantastic with almost all destinations having morning and afternoon departures allowing maximum flexibility. Take Milan as an example. JU has a split schedule while if we had to rely on easyJet we would be, most likely, stuck with some random hours and random days as is the case with Geneva and Berlin.
DeleteThanks Nemjee. This shows how market forces (easyJet) run against providing state help to have a good schedule (with less pax maybe) not really caring about demand.
DeleteI am sorry but that's an extremely stupid argument. So you are saying that JU is flying like that because the government wants it and not the market? What about night flights which depart between the afternoon and morning wave? Aren't we going to take that into consideration? Not to mention that JU's LF has been actually improving showing that demand is most definitely up.
DeleteAlso a split schedule allows far more flexibility. Take JU's BEG to TXL which allows you convenient weekend trips while easyJet doesn't.
This is pure common sense.
Arguments pro National Carrier so far:
DeleteJu sells sandwiches on board (and apparently earns big money with this)
Ju has very convenient time table
Ju employ local people
Arguments against:
JU has lost 40 million sofar (and will lose more) and will keep on losing money even without Covid
Ju already gets 20 million annually so it could have a convenient time table and sell the sandwiches.
This also applies to both MGX and OU.
Just to put things into perspective, losses so far
DeleteJU €40
BT €135
Millions
I'm not sure what gives people who constantly bring up the "wasted tax money" point the right to talk on behalf of all. If these taxes are a waste for you then so be it. I am more than happy to have a constructive contribution of my tax share towards a company that I see has some future perspective. And to come to the rescue of JU is a legitimate decision, which will be mirrored in many countries globally, when it comes to their national carriers. If all you ever see here is doom, gloom, conspiracy theories and type of sandwiches eaten, then you need not look at the economic situation in the country but rather at the overarching mentality.
DeleteSome people behave on here as if JU is the only one losing money.
DeleteHaving a strong national airline is a geopolitical tool above everything else. Serbia must fight to keep its own the same way Danes, Greeks, Italians... are.
DeleteAnon 12:23
DeleteI on the contrary am not happy at all to see my tax money being poured into bottomless pits. Why pay taxes then?
But to clarify, I am not against the state coming to the rescue in this particular situation, since not only with JU, but with all other carriers, it is a situation that is not the fault of JU (or any other carrier).
My problem is that JU has been losing money for years and has done very little to change this.
Exactly.
DeleteAre you seriously implying that they have done little to change that? Your comment is kind of disillusioned and malicious. I wonder if you are even a taxpayer in Serbia.
Delete@ anonymous 13,17
DeleteSince the EY management has left JU, the financial situation seems to be alot better. Losses have more than halved (after accounting for government funds). 2019 results, when published, will give us a good indication on the performance of the JU team. 2019 was as well the first major expansion to their network since rebranding, which could indicate better financial stability, compared to previous years. I wouldnt say there has been very little change, in fact, total opposite.
Serbia in general, not just JU sprecific, lacks adequate, educated people running the respective companies and ministries, draining tax payer money. The whole system is inefficient. JU has been different in that there has been foreign influence into its operations. JU isnt the first example, and im sure will not be the last. I believe that JU has overall been a postive factor to our economy, and think alot more can be done to further continue that trend.
I would also add that JU has finally found a business model that seems to be working just fine for them. They are no longer adding and removing services like a few years ago. Overall they seem to have landed on their feet, all that needs to happen now is to work on building that critical mass which will allow them to reach profitability on their own.
DeleteWhy is that every time someone mentions JU usual trolls show up with the same old arguments. Unlike some other airports in the region, JU isn't forcing BEG to limit competition. Serbian market is not at a loss AT ALL here. If anything we are winning by having a healthy mix.
DeleteThere is nothing that compares to the good old Jat Airways days. Things were quite different and the network coverage pretty decent. The new Air Serbia is still a 7 year old airline that still needs to mature for the market. Many new routes were announced but many were dropped too.
DeleteThe good old Jat Airways days saw:
Delete- constant cancellation of flights as not enough aircraft was able to fly for the schedules made.
- Many delays and 'return to field' situations because of technical issues.
- Destination after destination being reduced and/or terminated as less and less aircraft were in a state to fly.
- Scandal after scandal, with free taxi transportation, purchasing of 10.000€ telephones, screws falling from the wings inflight, constant changes of incompetant managers who only brought the airline into further debt.
- Rebranding issues, with aircraft flying white for years while they figured out what to paint, while interiors were mixed varied from aircraft to aircraft, not to mention the duct tape used everywhere to fix issues.
Air Serbia is far from perfect, but the 2 cannot be compared. And as nemjee has mentioned above, they seem to have found the model that works for them. It has reinstated many terminated destinations (SOF, TIA, KBP, OTP, VCE, BEY, PRG, CAI), increased frequencies to many destinations (AMS, ZRH, CPH, ARN) while reopening destinations not operated since the days of JAT (JFK, ZAG, ZAD). From BEG alone, termimating 5 out of 30 destinations isnt 'many routes being dropped', not to mention another 6 is/was expected to be launched this year, plus they opened a base in INI, and operate out of KVO. Not to mention operate almost 4 times more aircraft, carry almost 3 times more pax, cargo not to mention, while making less of a loss compared to those good old Jat Airways days.
Please stop comparing JU with BT. The levels are not really the same.
DeleteRIX is an EU capital well connected to a decent number of destinations. BT fleet has been long enjoying the A220 vs the ATR. I simply don´t get it. RIX is like in categories in a higher dimension.
JATBEGMEL thanks for the details.
Delete- When Jat Airways was alive the rest in the region where basically sleeping. Jat had the most extensive Regional network. Nobody is talking out Ne York or Pearson.
- Jat was one of the first airlines in Europe to introduce elektronic tickets
- Jat was one of the first airlines to offer real business class
-The Jat logo best represented the region
- Jat also provided pilots and cabin crew much more opportunites
No need to metion that it was one of the best in the region.
Anon 03:17 Good for BT and RIX, but they are not part of EX YU area discussed here.
DeleteWhy shouldn't we compare JU to BT? You obviously have no clue where airBaltic was about 15 years ago when they had a handful of European destinations and when the Fokker 50 was the backbone of their operations.
DeleteIt was only later on that they started transforming into what they are today. That said, given all that's happening and the massive cuts they are undertaking, one can assume that they over-expanded and that their model wasn't as successful as they hoped it to be.
So if JU keeps on growing the way they have been doing so far I don't see why they can't become more successful than airBaltic is today. Not to mention that JU's geographical location is much better. BEG is sitting on top of the Balkan peninsula, sandwiched between Italy and Turkey, two massive markets.
On the other hand, RIX is positioned all the way to the north in the Baltic region that has less people than Serbia. To the north it has the Nordics with a population smaller than ex-YU. The only real market they have in the region is Russia, mostly LED and MOW, two extremely competitive markets.
I think comparing the two makes a lot of sense. People always praise airlines like airBaltic, LOT or Aegean but they don't realize that about ten, fifteen years ago they were much different carriers. Air Serbia is faced with a simple choice. Either grow, build up a critical mass like the three above did OR stagnate into irrelevancy like CSA or Tarom did.
I think the choice is pretty obvious.
Anon 03.29
DeleteI think you are confusing Jat Airways with JAT Yugoslav Airlines.
Funny how no one minds billions that were poured into JAT but Air Serbia getting €20 million a year is somehow the end of the world.
@ anonymous 03,29
DeleteJAT (and not Jat) had a couple of hubs in a much larger country that no longer exists. Not to mention that aviation as a whole was completely different compared to today. LCC carriers did not exist, internet was in its infancy, triangle and multi stop flights the normal. 'Real business class' doesn't work anymore in Europe, neither does hot meals in Y, and other amenities which Air Serbia found to be an expensive mistake.
I havnt been able to find a timetable after winter 1985/86, so it would be great having info published later. Purger on a tango6 report compared JU frequencies between 1991, 2012 and 2017. These figures are out of date now, as JU expanded last year adding new destinations and upping the frequencies on more routes, while another round was expected this year.
https://tangosix.rs/2017/27/06/jesu-li-promjene-u-air-serbiji-napredak-ili-nazadovanje-1-dio/
However, considering the fact that JU today has roughly half the fleet count, 1/3 less pax, based in a country where the market is more than 2/3's smaller and now much poorer, I think JU today isnt that bad.
BEG today handles more pax than its best years in the Yugoslavia days, has slightly expanded and will further grow. What would of been had Yugoslavia not colapsed into the horrific events of the 1990's is a completely different topic. Yugoslavia no longer exists, neither does Jugoslovenski Aerotransport, JU is now a Serbian airline and represents just that - Serbia.
I remember for about two years JU was lost. I mean we all remember their business class meals and how downgraded they were. Now they seem to have a product that's quite ok and that passengers have more or less accepted.
Delete:(
ReplyDeleteI have to say that Air Serbia has really played a fantastic role in all this. A332 also helped in bringing medical supplies from places like China or Los Angeles. It's much cheaper to fully load a single A332 than to send 5 A321neo at the same time.
ReplyDeleteI agree. Look at Croatia for example. They had to pay for those flights operated by China Eastern to get medical supplies. Air serbia is for free. This prooves the need to have a long haul ops.
DeleteNot only that, the EU paid €450.000 to transport medical equipment on the Belorussian B747 to Serbia while when JU flew all they had to pay was fuel costs and dnevnice to their crew. Much cheaper.
Delete+1
Delete"air serbia is for free"
DeleteI guess that are lots of guys here who really believe in this balkan-style accounting methods;
so much about our education system ...
You guys are delirious if you think that JU is doing anything for free. They have been milking Serbia for a long time and dont worry it will continue with more subsidies in the future.
Delete“This entire situation has shown how vital it is for Serbia to have its own national carrier, which has been performing humanitarian and cargo flights over the past month. Air Serbia has carried both our nationals and foreigners to their countries of origin”
DeleteTo argument that is why a national carrier is important is ridiculous.
You can charter planes to do that (and very probably get a good quote since lotsa available planes and pilots now) for a very small fraction of this price.
^ A) you don't know what the price is in order to know whether you can get it from someone else at the fraction of that price.
DeleteB) It takes time to find an airline to do it for you whereas a national airline is dispatched immediately.
If having a national airline was so dumb then most European countries wouldn't have one. But it is quite the contrary.
Well we know that the Belorussian charter cost €450.000 and it was paid by EU taxpayers. I'm sure JU flies around for much less. You must be delusional if you think it's more.
DeleteIt was already said by the Serbian government that the total cost of JU's repatriation.cargo flights is 2 million euros, which is being paid from EU fund. They also got jet fuel for free.
DeleteHaha so basically having JU didn't cost Serbian taxpayers anything, it was all paid by EU ones. <3
DeleteDid you even read this? It clearly says that JU made a loss of €40m.
DeleteThat loss has to be covered by someone and it's not going to be Etihad, that's for sure.
How can you call that 'for free'?
If you think about it then you'll know
DeleteI wonder if it would be more loss making for them to be flying a limited number of flights (like OU for example) or being grounded as they are.
ReplyDeleteIf they were flying there would be no need for repatriation flights.
DeleteDo remember the choices these two countries made. Croatia is in the European Union, so OU can perform intra-EU flights (should there be demand). Serbia is a non-EU country, so as long as EU's outside borders remain closed, JU cannot fly to the majority of it's destinations.
DeleteJU can fly (airlines are not banned) but no non-EU resident can enter any EU country.
DeleteAnon 09.28 and no one cant fly to serbia
DeleteIt's not as if they wouldn't have had losses if there was no crisis and they were flying normally.
ReplyDeleteTrue. even if they were flying in this environment they wouldn't be making any money. :(
DeleteNo one is.
Same goes for all other ex-Yu airlines.
DeleteOne good thing for JU is that they were actually having a fleet shortage before Corona. We all saw how tight their summer network was. Look at airBaltic, they got €135 million from the state and are grounding all B733 and Q400 and will be cutting most of their flights until winter. Such wasted capital on an airline that expanded way beyond its means.
ReplyDeleteYes but JU has already arranged leases of 4 aircraft. Some are even painted. So it's questionable if they can get out of them.
DeleteAnd also the leases for two planes are about to expire.
DeleteWhich means they will have a net increase of 2 planes which isn't that bad.
DeleteThere will be huge demand once all this ends.
DeleteNo one knows that. No one can predict how this will turn out. Why? because it never happened before. Unlike during world wars, industry itself has not been destroyed. Once this ends things will start picking up. Also many people simply deferred their travel from Q1 to Q4. China's economy is now showing a sharp U shape curve.
DeleteairBalitc announce some time ago, that they will not fly their dashs or boeings anymore - no matter how long the situation lasts
DeleteI am no aware of a single european airline that operated with positive cash flows during the last years, that is not planning with significantly reduced demand after the crisis
Those were supposed to leave the BT fleet in about two years. The plan was only now revised and they will not be coming back, at all, they are grounded, forever. We will have to see what impact that has on BT as they are not only replacing a turboprop with a jet aircraft but they are also increasing capacity from 78 to 145 seats.
DeleteIs the A330 pic in the news from Washington?
ReplyDeleteI think so. They would park at a remote stand.
DeleteThere were 236 passengers from Dulles.
DeleteWell at least we know the government will bail them out.
ReplyDeleteGovernments will bail out many airlines.
Deletejust like every year (and im talking for all exyu) ;)
DeleteEven outside Ex-yu.
DeleteCould recapitalisation also mean nationalisation?
ReplyDeleteI can imagine Etihad to pull out afert the crisis ends.
DeleteWhy? They are not spending anything on JU at all.
DeleteAnd they have a guaranteed lessee for their birds :)
DeleteSo the Serbian government will put money in without increasing their stake? That is crazy. So Serbia puts in millions over and over again and owns still the same? CRAZY!
DeleteI don't know. It's just my guess. But they have been doing it up until now and they don't seem to have had a problem.
DeleteWell, Serbia stands to lose much more than Etihad if JU goes belly up. And anyway, Serbia has the controlling majority of shares so it makes no difference if they have 51% or 91%.
DeleteAlso a repatriation flight to Bucharest today.
ReplyDeleteNije Bukurest vec Kiev,ATR je vec sleteo
DeleteI upravo krece nazad
DeleteKyiv via Bucharest
DeleteThe annual subsidy Air Serbia currently receives is really not a lot of money as far as national carriers go. And Air Serbia has proven that it can hold its own in the Balkan and European markets. It is a profitable airline after all.
ReplyDeleteASL have to pay lease even not flying,JAT will flee soon in bancrupcy during sanctions many years ago,but aircrafts were property,owned,not leased.
ReplyDeleteEven now, they do not deploy 737 on repatriation flights
ASL Airlines, the French company? My favorite bunch of folks here are the guys who refuse to use Air Serbia's IATA code and are trying to bash it by negating its history. The IATA code is not AS/ASL - it has always been and still is JU since the company has rebranded as Air Serbia, but it's still the same company.
DeleteI think it is safe to assume that on a ex-yu aviation forum AS means Air Serbia. Same for, CA = Croatian Airlines, MA = Montenegro Airlines. No harm done using these short forms.
DeleteAir Serbia is not an exception. I was looking at other national flag carriers in Europe during this crisis. So far I wasn't able to find one where government said they would let it fail. To be clear, I am not talking about countries that have 10 airlines where it's clear that couple of smaller airlines are headed for bankrupcy and government is refusing to help them. I am only talking about the leading, flag carrier airline in each country. If you found a different case during this crisis please name it here.
ReplyDeleteZero. Nil. Nula.
DeleteJust keep continuing to fly Americans for free to the US and soon the deficit will be even greater.
ReplyDeleteThey are not flying them for free.
DeleteAir Serbia does not have a loss of 40 millions . They only say so to get as much money from the state as possible .
ReplyDeleteAll airlines worldwide exagerate their losses in that way .
Governments are flooding the economy with free and cheap money and businesses will take as much they can get .
Even much more than they actually need - who doesnt want to take presents ?!
Why was the first China flight such a big propaganda and the cockpit crew celebrated as heroes? Now they fly every second day to China and nobody is heroe???!!!
ReplyDeleteMožda zato što ko prvi devojci, njemu devojka? Računa se samo ko je prvi osvojio planinski vrh. Probili su led, posle ide lakše.
DeleteOvolika rasprava medju ljudi razlicitih prilaza avio saobracaju. Ko ce ljudima ugoditi. Srbija nije izuzetak.
ReplyDeleteNjeni ljudi jesu. Oni koji dobro stvaraju pa govore.
Er Srbija, Aerodrom Nikola Tesla i Aerodromi Srbije
su opstanak Srbije. Zajedno sa novim auto putevima.
Dvadeset prvi vek jeste vek iformatike i vazdusnog saobracaja. Kome to ne izgleda, neka mu bude po volji.
✈😀🛫🌐🛫❤🇷🇸✈🇭🇲🛫. Rodney Marikovic
Bravo Roki
DeleteThe Governments investment in Air Serbia is the best money spent in decades.
ReplyDeleteI hope new routes remain after this. I recon its gonna take a year to recover financially and to breathe in profits again.
Go on JU!