The Serbian Ministry for Construction, Transport and Infrastructure has drafted several strategies to financially assist the country’s national carrier which has been grounded by the coronavirus Covid-19 pandemic since March 20 and has so far incurred over thirty million euros in losses. According to the ministry, the country will provide direct fiscal support as its main mode of assistance. The amount will depend on the final financial fallout from Covid-19, as well as the sum required to strengthen Air Serbia’s role in the wider Balkans, which it notes “is currently very plausible”. It said it was difficult to approximate an exact sum the state would invest in the national carrier but noted the assistance would be continuous and in line with the government’s priorities, needs and possibilities.
Four different aid proposals have been made for Air Serbia. “One of them is providing assistance in overcoming existing losses the airline has incurred due to the ban on commercial flights during the duration of the recession in the air transport sector. Another is to cover the losses for the transport of passengers and cargo”, the Ministry for Construction, Transport and Infrastructure said. It added, “First and foremost we will discuss relief for taxes and utilities, especially those payable to the state. A decision on whether and when the state would increase its ownership stake in Air Serbia would depend on the conditions and our financial capabilities after the the state of emergency is lifted in the country” (expected later this week).
The ministry also noted it would cover damages caused to the interior of Air Serbia’s aircraft which have been transporting tons of medical supplies and equipment from China over the past month on almost thirty flights. “Air Serbia will report all the costs and damages associated with these flights”, the ministry said. According to the country’s Deputy Prime Minister, Zorana Mihajlović, the airline is estimated to record a sixty-million-euro loss from the ongoing Covid-19 pandemic. Air Serbia has tentatively scheduled its resumption of flights for May 18 when the country’s airports are expected to open. A Notice to Airmen (NOTAM) - an aviation document informing all carriers of important and urgent messages – issued by the Serbia and Montenegro Air Traffic Services Agency last week banning all commercial flights in and out of the country until May 30 has been revised and brought forward to May 18.
The International Air Transport Association (IATA) - the representative body for the global airline industry - and Airports Council International (ACI) - which represents the world’s airports - issued a joint appeal to governments last Thursday to rapidly provide financial support to airlines and airport operators due to the severe effects on both sectors of the travel restrictions and lockdowns imposed by many countries. “Governments will depend on aviation to be ready to lead an economic recovery when this pandemic is behind us”, IATA Director General and CEO, Alexandre de Juniac, said. He added, “Governments must act now with financial lifelines that only they can provide for airlines and airports to see them through these extraordinary times”. The head of ACI World, Angela Gittens, said, “The financial impact of the current crisis is unlike anything we have ever seen and requires urgent action by governments to assist the aviation industry to protect jobs, ensure essential operations, and plan for recovery. Urgent tax relief and direct financial assistance that is to the benefit of the entire aviation ecosystem is needed to help preserve millions of jobs, protect essential operations, and foster a balanced recovery”. IATA and ACI jointly called on governments to provide tax relief for airlines and airports. This would include reducing or waiving payroll taxes, corporate taxes and other levies on the sector. They also appealed for loans, loan guarantees or “direct support” to ensure the aviation ecosystem maintained financial liquidity.
Comments
https://www.exyuaviation.com/2020/05/state-mulls-air-serbia-nationalisation.html
What could this mean? Vucic mentioned something similar a few weeks ago.
I hope that it will be well investrd in the fleet renewal.
Also use the money to get rig of OLD 737 or retrofit them to cargo. Ideally just remove them as it unnecessary causes constrains in cres, maintenance operations as well network planning.
Work on Airbus fleet as well. May get a cheap 330 as well even if it has no use at the moment. It will in near future, but by then the prices will go up in leasing costs.. Etc
All in all, I would use the funds smartly and use the opportunity (a bad wording unfortunately) and come out better and stronger
https://www.exyuaviation.com/2020/05/state-mulls-air-serbia-nationalisation.html
Also please stop with your patronizing labels. They are not very amusing. Thank you.
Interesting. State of emergency is being lifted on Thursday so maybe next week we will know more.
EU will not sanction any of its members or non-members for helping out an airline in this situation. The exact form of state aid is irrelevant - Serbia can put the money in a gift box, put a bow on the top and give it to Air Serbia and there will be no sanctions whatsoever. It's a pity that Adria couldn't make it a couple of more months, Covid-19 would have saved it. What a paradox.
As for Ryanair, their CEO can take all the lawsuits from his wet dreams and clown statements and stick them where the sun doesn't shine.
Some good days ahead for Serbian aviation.
My full support as a citizen.
Good luck Air Serbia!
Within the EU, the commission still must approve aids even if currently some state aid rules are not being enforced. There will be thorough checks that only Corona incurred costs will be compensated for and most of aids must be in form of loans or equity share or similar.
Serbia will not just compensate JU for Corona losses but do a lot more for its airline and (most likely) does not even need to fear restrictions by other countries it flies to or by the EU (remember EU countries do have several protectionist measures for ex. against ME3 airines as they are receiving too much state aid, thus distorting the market).
One can only congratulate Serbia for being able to do so and JU for having such massively supportive majority owner.
" It said it was difficult to approximate an exact sum the state would invest in the national carrier"
Serious freight companies are taking deliveries of first B737-800 converted freighters and with the amount of aircraft available on the market, it will make less than zero sense to convert such old museum aircraft.
Not to mention UK government doesn't own any shares in easyJet.
Apart from it OU will get 34 mil EUR financial help + "uzdruzeno oglasavanje" fund money + corona crisis cash.
And now when JU should get financial help they remembered easyJet.
I doubt the current government would be willing to pump in 100m EUR just to cover debt and then whatever it takes on top to keep people on payroll for sitting at home.
"As for Ryanair, their CEO can take all the lawsuits from his wet dreams and clown statements and stick them where the sun doesn't shine."
I don't like the guy, but his wet dreams and clown statements brought Ryanair from a mediocre little regional no-name to second largest airline group in Europe. I bet he knows more about airline business than all of us here together :)
or 1 of the ones: "I took a flight with carrier x y 2 months ago and half seats were empty and I can now claim their LF is 50%"
Did YOU even read the article? There are at least 12 points which outline JU support beyond normal or European-average levels. Let's pick the article to pieces, shall we?
- several strategies to financially assist -> not one, but several, indicating the several levels of state aid JU will receive
- country will provide direct fiscal support as its main mode of assistance -> very clear, at least they don't even try to hide it now
- amount will depend on the final financial fallout from Covid-19 -> makes it clear there is no limit of support and deliveres an excuse to invest more at any later point if/whenever needed
- as well as the sum required to strengthen Air Serbia’s role in the wider Balkans -> makes it clear it is not about covering the Corona-loss, but it is about providing money as much as it needs in order to give ASL a strong competitive advantage within the Balkan region
- noted the assistance would be continuous -> long term financial support whereas most other airlines receive one-off aid!
- in line with the government’s priorities, needs -> so in Serbia a national airline is apparently a top priority of the country therefore country willing to invest "whatever it takes", not the case in many other countries in the region that have lost their national airlines
- Four different aid proposals -> four different ways of how to pump money into JU, not one, see point no. 1
- One of them is providing assistance in overcoming existing losses the airline has incurred due to the ban on commercial flights during the duration of the recession in the air transport sector. -> that is fine, it's what every country is doing right now
- Another is to cover the losses for the transport of passengers and cargo -> should of course be included in the previous point, not to give extra money for the same thing twice
- First and foremost we will discuss relief for taxes and utilities, especially those payable to the state -> not the case in other countries, so on top of all the beforementioned several levels and steps of state aid, JU will also have to pay less (or nothing, who knows) for taxes and fees in the future
- state would increase its ownership stake in Air Serbia -> is a precondition for state aid in most other countries
- ministry also noted it would cover damages caused to the interior of Air Serbia’s aircraft which have been transporting tons of medical supplies and equipment from China over the past month on almost thirty flights -> can be used as a blank excuse to invest into the cabins of JU aircraft using not own, but state money. Instead of fixing a scratch on three seats, JU may possibly report much more, it's not like the ministry can check if a cabin problem was caused by a transported relief package or existed since years!
- Notam banning all commercial flights in and out of the country until May 30 has been revised and brought forward to May 18 -> how convenient the state revised the date exactly to THAT date on which JU has pubicly announced it would be ready to restart flights. What a coincidence.
Got no words for you fanboys. Now go ahead and start the bashing, I'm gone for the day, anyways.
Nice try
BEG-JFK-BEG
2019-10 - 24 flights - 4,857 pax - 80%
2019-09 - 34 flights - 6,452 pax - 75%
2019-08 - 54 flights - 12,081 pax - 88%
2019-07 - 57 flights - 11,220 pax - 77%
year to year comparison:
2018-10 - 34 flights - 6,629 pax - 77%
2018-09 - 46 flights - 9,222 pax - 79%
2018-08 - 54 flights - 11,992 pax - 87%
2018-07 - 52 flights - 11,058 pax - 92%