Air Serbia plans to offer financial incentives to encourage employees to voluntarily resign, with the company seeking to reduce its headcount by some 300 staff members as a result of the coronavirus pandemic. Furthermore, employees have been told their wages will be reduced starting from December 2020 until March 2021. The amount will depend on the employee’s pay grade. The company informed its staff last week that it has been reducing its costs for the past eight months in order to mitigate the effects of the pandemic but that it is no longer able to take on such high expenses, resulting in voluntary redundancies and pay cuts. The airline introduced a hiring freeze in March.
Over the past few months, Air Serbia has rationalised its fleet and renegotiated leasing terms for its aircraft, with power by the hour contracts concluded, where leasing costs are accounted based on the number of hours the aircraft has been utilised rather than a fixed rate. The company has reduced airport fees at a select number of destinations and managed to defer air navigation tax payments until 2021. It launched a program entitled “Deliver” back in March, aimed at reducing capital investments and services which are not of vital importance for the company. Furthermore, it has used the suspension of slot rules in Europe and the United States, as well as its primary markets, to secure the same slots for 2021. The Serbian carrier has secured credit lines from commercial banks up until December 31 and has deferred deposit requests from several airports.
The situation on the market remains unstable as many countries go into a winter lockdown, while evolving travel restrictions continue to reduce demand. As a result, Air Serbia has halved its network of 63 destinations. However, the company has said it is satisfied with load factors on a number of routes, which have in some cases reached 80% during the third quarter. “Thanks to our flexible and swift response, during the third quarter, Air Serbia managed to improve its average cabin load factors compared to the competition. On selected routes, loads reached 80%, which can be considered a good result during the biggest crisis in the history of commercial aviation”, the airline said in a statement. The Serbian government is expected to grant Air Serbia aid of around 150 million euros this year, although the state is yet to announce an official figure.
Comments
Well, today's headline proves how grave the situation is with the aviation industry. Probably the hardest crisis ever.
2017: 1.466
2018: 1.370
2019: 1.439
As for state aid, I don't think JU was eligible for it as it was meant only for micro, small and medium sized companies. I think Air Serbia qualifies as a large one though I might be wrong.
BEG also started reducing its workforce, they have a scheme going on right now.
Next summer will be even worse as many won't have enough money to travel. What matters is for airlines to wait for the storm to pass and to get their house in order. After all, businesses like JU can use this opportunity to trim some fat which they couldn't do before.
Nowadays without state guarantees there would either be no credit for most of the airlines or the terms of that credit (in particular regarding interest rates) would be unsatisfactory. So you basically think that KLM or AF need state guarantees to be able to lend on the market at satisfactory terms, but ever loss making JU does need that?
If JU lent money without state guarantees, then the interest rate is much above the rates from the famous Etihad Partners loans. That is not a good solution.
Everyone knew that no airline can make positive results in these challenging times and honestly I have never heard that Government has ever said that.
I would be thankful to you if you could post a link proving it.
Earlier this month, Serbia’s Finance Minister said, “We are currently in discussions with the management [of Air Serbia] and drafting a business plan. We might use this opportunity to acquire another aircraft which could be used to fill the void on the market left by the number of airlines going into bankruptcy, which Air Serbia won’t. Therefore, we will examine how we can even better position the carrier following this crisis”.
https://www.exyuaviation.com/2020/05/right-time-to-acquire-aircraft-for-air.html
"Air Serbia plans to offer financial incentives to encourage employees to voluntarily resign, with the company seeking to reduce its headcount by some 300 staff members as a result of the coronavirus pandemic."
It is the opportunity to lease an airplane for a better price and it is a chance to have more flights with more planes AFTER the crisis but it is not now the big opportunity for Air Serbia.
As you quoted
"Therefore, we will examine how we can even better position the carrier FOLLOWING this crisis”."
Certainly during the crisis it can't be taken as a chance but a big problem as due to the less flights and income some employees need to be fired.
It seems that some people make just copy and paste of certain comments made related to other air carriers in the region.
There are approximately 10000 unemployed experienced pilots on the market in Europe. The probability of getting a job in the next couple of years is about the same as being struck by a lightning.
A few years go, with all the subsidiaries that you mention, they had around 2.500 employees.
https://www.exyuaviation.com/2020/11/air-serbia-tops-new-york-jfk-load-factor.html
I would say LCA had decent loads considering how quickly they increased frequencies, upgrading some flights to the A320.
Unlike JU.
As they should
all governments across the world are saving their airlines.
Airline is a big contributor to the tourism industry. This summer the season would have been even worse without them. They deserve for the losses to be covered. They could have easily parked planes to save costs but then many other industries would have struggled even more.
OU charter division if very, very minor especially comparing to Air Serbia. They could not even open base in LJu despite it was announced after Adria went belly up.
To which airlines did they provide maintenance?
In last 12 months they got more than 90 mil EUR cash just to survive!