EX-YU flag carriers face historic losses


The remaining national carriers from the former Yugoslavia are set to post record losses this year as a result of the coronavirus pandemic with estimates ranging to up to 100 million euros. Most of the airlines were loss making in 2019 too, however, governments in each three states have committed themselves to providing aid.

Air Serbia has amassed over thirty million euros in losses up until its resumption of commercial flights in late May, with the Serbian Ministry for Construction, Transport and Infrastructure noting it hopes to mitigate losses in the country's aviation sector, which includes the national airline, airports and air navigation service provider, to 200 million euros by the end of the year. According to the Ministry, the country will provide direct fiscal support to Air Serbia 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. The Serbian carrier has commenced “intensive communication” with special purpose vehicles set-up by Etihad Airways in 2015 called Etihad Airways Partners I BV and Etihad Airways Partners II BV, over the restructuring of its multi million dollar debt.

2019 financial performance

AirlinesNet profit / loss (million €)
Air Serbia 9.5
Croatia Airlines 10.7
Montenegro Airlines 8.0

Croatia Airlines registered a net loss of 23.1 million euros during the first half of the year, almost double from its loss in H1 2019. During the first six months, revenue declined 52.4%. The airline said it was too early to estimate the financial consequences, as the pandemic was still ongoing, but said it would be considerable. The carrier’s CEO, Jasmin Bajić, recently noted, “We are adjusting to the current situation and are doing our job to the best of our ability. All our costs have been reduced as much as possible. We all agree recovery will be a long-lasting process during which we may again be exposed to another wave of the virus spread. Having said that, I also want to emphasise that, besides “U” shape and “V” shape scenarios, we need to be prepared for other scenarios too. This applies to many airlines around us as well. Many carriers will have to downsize for an unspecified time”. According to sone media reports, the company has requested just over ninety million euros from the state to navigate the crisis. The Croatian Minister for Sea, Transport and Infrastructure, Oleg Butković, said recently, “What is most important and what is giving us the biggest headache at this moment is Croatia Airlines and how to stabilise the company which was already struggling and is now worse off because of corona. We are preparing a wide-ranging and comprehensive process together with the Ministry of Finance. We must come up with a model that will be sustainable and in line with European Commission guidelines. I believe that in September or October we will propose concrete solutions which will aim to safeguard both Croatia Airlines and the entire aviation industry which has been hard hit. The state has to offer a final solution".

Montenegro Airlines is also feeling the effects of the pandemic. The company lost over fifteen million euros in revenue during the first half of the year, while it is yet to estimate overall losses generated by the Covid-19 pandemic. “Currently, it is impossible to assess the company’s losses as a result of the coronavirus since the pandemic is still ongoing. In any case, we are talking about a multi million euro loss. An indication is that during the first half of the year, Montenegro Airlines’ revenues declined by 15.110.063 euros”, the carrier said. The President of the company's Board of Directors, Nikola Vukićević, said, “Once it becomes clearer as to how the aviation sector will function in the aftermath of the pandemic, we will have to refine the company's commercial strategy and organisational structure. We might have to reduce our workforce”. Late last month, the Montenegrin government injected 10.4 million euros into its flag carrier to secure liquidity.

Comments

  1. Anonymous09:01

    I think this boost in charter traffic will help JU build some extra revenue and to compensate for the suspension of many scheduled flights.

    ReplyDelete
    Replies
    1. Anonymous09:03

      If you think a handful of charter flights can compensate for these massive losses...

      Delete
    2. Anonymous09:06

      Well they just added 70 rotations to Egypt and all flights will be packed so I think they'll do quite well there. Or do you think that no matter what JU does it has to be somehow doom and gloom?

      Delete
    3. Anonymous09:09

      I don't think everything is doom or gloom and there is no need to get upset. I just think you should be realistic and try and think if charter flights which are down almost 100% on last year will somehow help. Also have a think if JU is asking for the same price from tour agencies as it did last year. Sure it's better than nothing but suggesting it will somehow make up for the losses is a bit ludicrous.

      Delete
    4. Anonymous09:11

      The LF of charter flights doesn't usually matter because the tour organizers take on all the risk.

      Delete
    5. Anonymous09:13

      I know but these charters were negotiated last month. JU certainly didn't sell tour operators the seats at the same rate as last year.

      Delete
    6. Anonymous09:17

      Do you have a source for that or is it rekla kazala?

      Delete
    7. Anonymous09:20

      I don't. It's common sense. Tour operators are on the brink of bankruptcy. If you worked in the industry you would know.

      Delete
    8. Anonymous09:32

      Speaking of charters, JU tomorrow has 5 flights to Antalya all departing at the same time. Crazy. That's 700 seats.

      What's important about these flights is that they secure immediate liquidity/revenue.

      Delete
    9. Anonymous09:36

      Yes, a bunch of charters will definitely compensate the 30€ million loss...

      Delete
    10. Anonymous09:38

      Anon 09.20 so now your interpretation of facts should be adopted by everyone on here as common sense? Agencies are on the brink, people are still paying to travel. Plus, hotels have given massive discounts, not JU.

      Delete
    11. Anonymous09:39

      Anon 09.32

      Exactly that's what the government is saying, unlike OU and JP JU actually managed to find a fast source of additional revenue thus providing itself with an immediate lifeline.

      Delete
    12. Anonymous09:40

      @ Anonymous09:38

      I like how you know whether JU gave a discount or not.

      Delete
    13. Anonymous09:48

      Anon 09.40 how is that any different from what you are claiming?

      Delete
    14. Anonymous09:50

      Because it makes significantly more sense then what you are claiming. And further down in the comments you also claim how the situation is fantastic because they now have charters forgetting they cancelled half of their network.

      Delete
    15. Anonymous09:56

      So you think JU, which can rely on state aid any day if it needs it, is in a much worse position than hotels on the seaside that don't enjoy that luxury? I am sorry but it doesn't make more sense. Quite the contrary.

      - Turisti koji su ove godine planirali da odu u Grčku ili Španiju zbog situacije s korona virusom morali su da se odluče za druge destincije. Većina njih je odabrala Egipat, jer su neki od hotela odlučili da daju popust - pričaju zaposleni u turističkim agencijama.

      https://www.srbijadanas.com/biz/vesti/letovanje-458-evra-7-dana-ol-inkluziv-bez-pcr-testa-ove-dve-zemlje-su-hit-za-letovanje-ove-godine-2020-07-24

      Cmok

      Delete
    16. Anonymous09:59

      I don't know what hotels on the seaside have to do with anything since I didn't mention them anywhere nor were they part of the discussion. As someone that works closely with tour agencies I am well aware the mess they are in right now as well as Air Serbia. But there is no point in further discussing with you. Kao da ti je opran mozak. You are absolutely right. The situation at JU is dreamy. Charter flights are bringing so much cash, they don't have enough space to pile it up at their HQ. No, flight deck crew and cabin crew are not starting to get laid off as we speak because charters have completely wiped out all the losses from corona.

      Delete
    17. Anonymous10:04

      Thank you for finally admitting you were wrong and you especially proved us right by claiming JU keeps its profits in the HQ when in reality they keep it in the bank. Better luck next time son.

      Delete
    18. Anonymous10:08

      * You understand sarcasm just like you understand the aviation industry.

      Delete
    19. Anonymous10:36

      Anon 10:08
      +100000

      Delete
    20. Anonymous10:59

      I was mocking you of course because of all the arrogant nonsense you wrote. Btw unlike you I actually provided an actual source all you did is write some random things on here without backing a single one of them.

      Delete
    21. Anonymous11:00

      I was being arrogant for pointing out that charters can't make up for the losses made by the coronavirus as you ludicrously claim? Ok...

      Delete
    22. Anonymous11:06

      Arrogant because you provided no sources to back ANYTHING you wrote and then by expecting us to take what you wrote as the universal truth. When you doubted hotels gave discounts I presented you with a source to prove you wrong but you kept on insisting on your anti-JU rant.

      Delete
    23. Anonymous11:10

      Can you tell me where I even mentioned the words hotels or where I even discussed them? I even wrote to you "I don't know what hotels on the seaside have to do with anything since I didn't mention them anywhere nor were they part of the discussion". You make things up as you go, realizing how stupid your claim is that somehow charters are saving Air Serbia despite just this week Air Serbia operating over 90 fewer flights compared to last year, despite Air Serbia starting to fire pilots and cabin crew this month, despite wages at Air Serbia being lowered 30%.

      Delete
    24. Anonymous11:17

      I understand, you still don't have any valid sources to back your claims. Interesting.

      Delete
    25. Anonymous11:17

      You understand very little. You have shown that from the start.

      Delete
    26. Anonymous11:30

      And what the point of this conversation If i can ask?

      Delete
    27. Mil Mi-815:38

      In short, nobody has any money for anything and we should wait this out by doing ashtanga yoga and listening to jazz music.

      Delete
  2. Anonymous09:02

    Very bleak times ahead. That's for sure.

    ReplyDelete
  3. Anonymous09:04

    The governments will have to provide much more cash in the future if they want these airlines to survive.

    ReplyDelete
    Replies
    1. Anonymous09:06

      The governments will have to provide a lot of cash to various industries due to this crisis. The question remains will they have enough the cover the losses for airlines.

      Delete
  4. Anonymous09:05

    I wonder if all the ex-Yu carriers will make it in the end

    ReplyDelete
    Replies
    1. Anonymous09:07

      The truth is that YM will be gone soon and I think OU unless privatized has about 2-3 years. They are going down the same path as JP.

      Delete
    2. Anonymous09:08

      I have no doubt about JU

      Delete
    3. Anonymous09:10

      They all will because they will be saved by the government.

      Delete
    4. Anonymous09:18

      Not all governments are in the same position, especially the MNE one

      Delete
    5. Anonymous09:22

      The government in Montenegro already said YM is a national asset and that they will save them. It also just gave 10 million to them.

      Delete
    6. Anonymous09:40

      They said that before corona struck, it was the same period when they assigned them €155 million. Things have changed since starting with the fact that there was no tourist season this year. Funny thing is that Naum in Bosnia is extremely popular with Serbs this year and hotels are packed. I guess Bosnia played their cards in the best way in ex-YU.

      Delete
    7. Anonymous09:50

      ^ No they said it during corona. Stop making things up as you go.

      Delete
    8. Anonymous09:56

      Last Anon, source or it didn't happen.

      Delete
    9. Anonymous10:04

      They just gave them over 10 million last week. Have you even read the article?

      Delete
    10. Anonymous11:07

      I am referring to when they assigned 155 million to YM, that was made under different circumstances. Also that 10 million came directly from a loan they just got, not from regular income.

      Delete
    11. Anonymous11:11

      Well you are making things up. No, 10 million did not come from a loan.

      "Vlada Crne Gore za obaveze MA dala nepunih 10,4 miliona, a isplata je realizovana 21. jula. Novac je povučen sa budžetske linije Pomorstvo i civilno vazduhoplovstvo - Ministarstva saobraćaja i pomorstva."

      https://www.vijesti.me/vijesti/ekonomija/456945/mrdovic-u-montenegro-airlines-i-brodske-kompanije-usuto-novih-143-miliona

      I really don't understand what is the point of making things up?

      Delete
    12. Anonymous11:18

      And where do you think they got the money for that budzetska linija? Do you even know how government finances work and where money comes from and how it's distributed around? That said, nice that you are finally trying to use sources to back your claims. Baby steps :)

      Delete
    13. Anonymous11:21

      You've fabricated pretty much everything you wrote today. And then you act dumb when you realize how stupid your comments are.

      Delete
    14. Anonymous11:25

      Ah here come the insults just because you don't know how budget finances work and how money from loans are assigned.

      Delete
    15. Anonymous11:26

      I think the biggest insult for you is reading over your own comments and how bizarre they are.

      Delete
  5. Anonymous09:07

    Remember times when JP lost over 50m in a single year without coronavirus.

    ReplyDelete
  6. Anonymous09:11

    This is not going to end well.

    ReplyDelete
  7. Anonymous09:14

    Honestly, I don't think Montenegro Airlines will survive this. It took a lot of time for them to be persuaded to save MGX last year. With all of this, they might just give up and let LCCs take over the market.

    ReplyDelete
    Replies
    1. Anonymous09:18

      They just gave them 10 million. Seems like they don't need no persuading.

      Delete
    2. Anonymous09:22

      The government already said YM is a national asset and that they will save them.

      Delete
    3. Anonymous09:33

      The Montenegrin government also overpaid the repatriation flights which were operated by YM.

      Delete
    4. Anonymous09:56

      And how many were there? Two? Three? Hardly enough.

      Delete
    5. Anonymous11:15

      Well they got 79.060 euros for the four flights.

      Delete
    6. Anonymous13:08

      well, that is not enough for YM, they will loose much, much, much more than that

      Delete
    7. As long as YM has direct flights to BEG it will survive. They charge 100 Euros for a 30 minute flight with high load factors.

      Delete
    8. Anonymous15:43

      €100? :D Maybe in February. The most expensive ticket I bought with them was last August for €320!! If you book in advance it goes from €115 to €200.

      Delete
  8. Anonymous09:15

    All ex-yu flag carriers were loss making when the aviation industry was booming. What hope is there for them now...

    ReplyDelete
    Replies
    1. Anonymous09:24

      JU wasn't so please don't put them in the same group as with the others.

      Delete
    2. Anonymous09:41

      Of course, JU has a 115 million loan so its not in the same positions.

      Delete
    3. Anonymous09:49

      Exactly, it's not. Company is healthy enough to receive loans on the international market. They don't give it to just about anyone.

      Haters 0 - 1 common sense

      Delete
    4. Anonymous10:32

      Im a hater to you? Wow nice.
      And you call this a common sense? Taking loans which you cannot pay back is "heatlhy"? These loans are going to be paid by a taxpayers because airline is not successful to make any profits without the state help. And what is done with that money? Still I dont see any new orders from them.

      Delete
    5. Anonymous10:34

      "They don't give it to just about anyone." Say that to the every poor African country which got them to build motorways.

      Delete
    6. Anonymous11:08

      Anon 10.32 I am sorry but looking at the table in the text I see JU made profits. Are you implying this portal is lying? Also those loans are being renegotiated, they are not being written off. You need to research this a bit more before writing nonsense.

      Delete
    7. Anonymous11:12

      Before you reply you should try to understand what I wrote.

      Delete
    8. Anonymous11:18

      Oh I understood very well what you are trying to say and do.

      Delete
    9. Anonymous11:28

      You understand this?
      "to make any profits without the state help."

      Delete
    10. Anonymous12:34

      Operating profit ≠ Profit

      You can record a loss from operations and only to be pushed in black with some exceptional item (govn't help, FX effect, accounting standard change, etc).

      Looking at profit figure doesn't tell much, so yes, we can pretend that JU is profitable, but that would be lying to ourselves.
      If that makes you feel better, go ahead.

      Delete
  9. Anonymous09:23

    AS I ME su mogli mnogo bolje proći kroz krizu,ali zahvaljujući crnogorskoj vlasti tako je kako je. AS sutra ima 6 čarter letova što je jako bitno da bi se održala likvidnost kompanije,bitno je da ima priliva keša. Gubitke će pokriti vlada i nadam se da će AS izaći jača nego što je bila.

    ReplyDelete
    Replies
    1. Anonymous11:25

      Ah, kao uvijek.... Koga briga hoće li državna kompanija raditi profit ako imate porezne obveznike koji će platiti za sve.

      Delete
    2. Anonymous12:08

      To isto vazi i za OU

      Delete
    3. Anonymous13:04

      Ma vazi za hrpetinu drzavnih kompanija.

      Delete
  10. Anonymous09:23

    Historically, no ex-yu cat.ops flag airline made any financial profit on its on account. Ever. However, they all contributed huge non-financial benefits to the economy on the peninsula.

    ReplyDelete
    Replies
    1. Anonymous09:41

      The last time an airline from our region made money was the Serbian carrier AeroPut. But then again they were a private business which had to make a profit for its shareholders.

      Delete
    2. Anonymous10:57

      Wasnt Aeroput carrier of the Kingdom of Yugoslavia? Or there was a serbian one with the same name?

      Delete
    3. Anonymous11:02

      I would be very glad to see a profitabile and successful private owned carrier in the region.

      Delete
    4. Anonymous11:10

      Anon 10.57 it operated in the Kingdom of Yugoslavia but it was privately owned and based in Belgrade. It was mostly funded by Belgrade based banks. Tadija Sondermajer (Polish father, Serbian mother, he was born in Serbia) was a pilot himself and the founder of the airline. This private and highly successful business that didn't bankrupt during WW2 was nationalized by the communists in 1947 when it officially became the airline of Yugoslavia.

      Delete
    5. Anonymous11:13

      Anon 11.02

      I think Trade Air fits that profile.

      Delete
    6. Anonymous11:23

      Im sorry for misunderstanding but I was thinking about a carrier with the scheduled passanger flights like Aegean. I know there are a lot of successful private owned carriers in the region, but these (same as Trade Air) are not operating so much scheduled non-PSO pasanger flights because they mostly rely on the ACMI, charters, cargo, private flights and so on.

      Delete
    7. Aeroput had almost no competition as it operated in 1927-1948. Last year the market was over-flooded with airlines. Lets be real. AF and LH and many major carriers would not exist today without major backing by their respective States. To many countries, a national airline is part of the national interest.

      Delete
    8. Anonymous15:46

      Back then there was no such thing as competition in civil aviation as it was the very beginning of aviation. However AeroPut was the first to offer connections from Austria and Germany to the port city of Thessaloniki. It's really interesting to see how transfer passengers were part of Serbian aviation from the very start. In a way it's kind of poetic that nine decades later it's still there. I think that's something we should be proud of. :)

      Delete
  11. Anonymous09:24

    Some people don't seem to grasp how bad the situation is. And at the moment, it's not getting substantially better.

    ReplyDelete
    Replies
    1. Anonymous09:42

      How isn't it getting better? JU will have a bunch of charter flights it didn't have last month. Isn't that an improvement?

      Delete
    2. Anonymous09:46

      It also had to suspend over 10 scheduled routes because of flight bans and low demand. If you think charters are so important the airline wouldn't be flying any scheduled flights and would just be doing charters. Wake up.

      Delete
    3. Anonymous09:50

      Then how come we have so many successful charter airlines around the world if charters are not important? I am not the one that needs waking up.

      Delete
    4. Anonymous09:52

      You are absolutely delusional.

      Delete
    5. Anonymous09:57

      I am delusional because I know of successful charter businesses? That's odd.

      Remember Dubrovnik Airline? Well they were extremely successful until they went on and purchased those expensive A320s that killed them. They were thriving while they had those MDs.

      Delete
    6. Anonymous11:50

      Oil price increase plus MD engines burns 30% more fuel than A320 killed them. Plus Atlanska plovidba withdrew founds.

      Delete
  12. Anonymous09:28

    Good luck. Hope they will be able to pull through.

    ReplyDelete
  13. Anonymous09:28

    I'm surprised the losses aren't even greater.

    ReplyDelete
    Replies
    1. Anonymous09:29

      Primarily because expenses were low while the airlines were grounded.

      Delete
  14. Montenegro Airlines will be saved by tourists from Zimbabwe.

    ReplyDelete
    Replies
    1. Anonymous12:35

      Don't forget the Angolan tourists as well!

      Delete
  15. Anonymous09:29

    The situation is still very volatile and uncertain.

    ReplyDelete
  16. Anonymous09:38

    LH made a prediction that they will eventually recover the losses by 2024. So imagine how long it will take for the Yugo carriers...

    ReplyDelete
    Replies
    1. Anonymous09:54

      Yugo carriers were never making a profit, corona or no corona times, so nothing really changes :)

      Delete
    2. Anonymous09:59

      That's because they all kept the same fiscal responsibility introduced by JAT ;)

      Delete
  17. Anonymous09:59

    Are OU and YM operating any charter flights right now?

    ReplyDelete
    Replies
    1. Anonymous10:02

      Yes.

      Delete
    2. Anonymous10:04

      How many?

      Delete
    3. Anonymous10:20

      Croatia Airlines is flying numerous charters from Ljubljana to the Greek islands. Sorry, it's not just JU doing charters as you hoped.

      Delete
    4. Anonymous10:54

      YM has charters to Bari and Napoli but had to stop them because of the Italian flight ban.

      Delete
    5. Anonymous11:11

      OU almost operated charters to DBV from LJU but those failed due to really weak demand. How often are those Greek island charters? How often do they operate? Are they on the Q400?

      Delete
    6. Anonymous11:12

      Several flights each week. No, with A319. Sorry again.

      Delete
    7. Anonymous11:19

      Ok then that's not TOO bad. I guess Slovenia is helping them since they handed over their local market to foreigners.

      Delete
    8. Anonymous11:33

      @anon 11:12
      DO you have flight numbers of these charter flights from Slovenia?

      Delete
    9. Anonymous12:08

      "Croatia Airlines is flying numerous charters from Ljubljana to the Greek islands".not true, all charter flights are being operated by Aegean and Trade air.Perhaps there was a plan for OU but obvioussly it has not happend

      Delete
    10. Anonymous12:42

      OU has charter flights from Brac to Graz and Linz every week with A319.

      Delete
    11. Anonymous13:07

      But not from Slovenia

      Delete
  18. Anonymous10:53

    :(

    ReplyDelete
  19. Anonymous13:38

    So bad that we don't have Adria anymore. So, no loss for Slovenians :(

    ReplyDelete
    Replies
    1. Anonymous15:47

      No loss in terms of airline but the airport is about to go bankrupt. lol

      Delete
    2. Anonymous15:57

      Maribor and Ljubljana have a horrible air connectivity for an EU country. How is that no loss?

      Delete
    3. Anonymous16:13

      Yes, connectivity is bad. But is on that level that the market can sustain, without the support of public money. I travel quite a lot, 4-5 times a year, so much more than regular Slovenian. Of course it would be perfect to have connectivity like ZAG or even better, like VCE. But for me, it's not fair that all Slovenians must pay for that. More than 50% of them never fly. So from LJU we have basic connectivity. 2 flights per day to one big hub (FRA), including early morning flight and evening return. Few flights to biggest cities like Paris, Istanbul, Warsaw, Belgrade. And three low cost rutes (Berlin, Amsterdam and London). It's basic, but it is public money free. For more rutes you must drive 2-3 hours. But that target 10% of Slovenians few times per year.

      Delete
    4. Anonymous17:12

      I travel quite a lot, 4-5 times a year

      Delete
  20. Anonymous16:18

    I forget that we have 4 low cost routes: Berlin, Amsterdam, London and Brussels (Charleroi).

    ReplyDelete
  21. Anonymous00:02

    I feel sorry for those to whom a look through pink glasses gives the desired illusion. In a few months, they will have to come to terms with reality.

    ReplyDelete

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