Etihad Airways has said it will continue to work closely with Air Serbia after reducing its ownership stake in the airline. Commenting on the matter, an Etihad spokesperson told EX-YU Aviation News, “Following the Serbian government’s recapitalisation of Air Serbia, Etihad’s shareholding has diluted from 49% to 18%. We are pleased the Serbian government has reinvested in the future of the airline. Etihad continues to work closely with Air Serbia, while we respond to the ongoing impact of the Covid-19 crisis on our own business”. The Emirati airline did not respond as to whether its wide-ranging codeshare partnership with Air Serbia, which counts almost thirty routes, would continue. Current inventory listing shows it will not.
Etihad recently announced that it will be withdrawing from all commercial activities on the Serbian market. The airline has also terminated its Abu Dhabi - Belgrade service on which it handled 114.256 passengers in 2019 on 924 flights (both directions included). Its average annual cabin load factor stood at an extremely high 90.9%, with all services operated by the Airbus A320 aircraft throughout the year. This despite the carrier increasing capacity on the aircraft type after introducing new cabins and downgrading its overall hard product in economy class. The airline extended its dominance in its last full year of operations between the two cities compared to its Gulf competitors, handling 16.441 more passengers than its Doha-based rival, although it also added additional frequencies by operating a double daily service during the peak summer months.
The Serbian government has invested 100 million euros in recapitalising Air Serbia and increasing its ownership stake to 83%. Yesterday it once again defended the move, noting it was of “national interest”. The Serbian Minister for Construction, Transport and Infrastructure, Tomislav Momirović, said, “If it were not for Air Serbia, would Belgrade have become a regional hub and VINCI become the concessionaire of Belgrade Airport? No, they wouldn’t have. Air Serbia brings a lot of money to the state and is responsible for the influx of a large number of tourists to Serbia. The recapitalisation was a matter of national interest and dignity”.
Considering their loads, I wonder why they discontinued these flights
ReplyDeleteI'm also terminated BEG. Do they still fly to Minsk?
DeleteThey do, for now
DeleteBecause loads don't have to mean much. Etihad had a 870 million loss in 2019. If they are cutting the codeshare and reducing the share in JU, maybe they calculated there is no point in keeping flights to BEG. Also demand won't be near as close as it has been over the next few years and Australia will open in July 2021 while China, which was also big transfer market to BEG will open god knows when.
DeleteOnly difference is that AUH is really close to Dubai where FZ seems to be doing extremely well. They should focus on that market and not on transfers.
DeleteFZ is doing extremely well because it's about the only market Serbian citizens can enter at the moment with a negative test.
DeleteOf course they will also receive a boost from EY ending flights.
DeleteWell Serbs can also enter Russia, Jordan, Cyprus, Bulgaria, Tanzania, Maldives... actually I read somewhere that top three markets for FZ from BEG are Dubai, Zanzibar and then Maldives.
DeleteQuick reply to the question why EY closed the route despite 90% load factor.
DeleteSimple, AUH-BEG is a very long flight for an A320 and needs a lot of revenue to maintain profitability.
It isn't the case with EY on this route, too much connecting traffic to Australia results in poor yields, in addition to premium configuration on a route with poor business class demand.
If you wonder why FZ or Wizz can make the route work (maybe..):
EY A320 has 158 seats vs FZ 174 or 189, Wizz 180. Considering the costs of the operating aircraft are quite similar, EY would need to sell extremely high fares to make a profit
I don't think the Serbian market is the problem as EY is. They are a failing business and they have closed much higher profile destinations than Belgrade. FZ does well here because the market is lucrative enough for them and loads are good not to mention that they have a lot of local who pay a higher fare. EY failed on all fronts in Belgrade. Their prices have not gone down but the quality of their product and network have.
DeleteMaybe it's time for Air Serbia to start flying to the Middle East
ReplyDeleteThey already do.
DeleteWhere?
DeleteTLV, BEY, HRG, SSH and CAI if we speak of MENA.
DeleteExcept for TLV, they have terminated BEY and CAI. The rest are charters.
DeleteThey should consider Dubai or Abu Dhabi again.
DeleteI don't think they can compete with Flydubai.
DeleteBEY is in the system for next summer.
DeleteWhat about Amman which they were supposed to start this year?
DeleteSo Anon 09.03 statement was very wrong.
DeleteYou can't book Beirut on Air Serbia's website. It doesn't even exist as an option.
DeleteBEY market has far bigger problems than Covid-19.
DeleteThe economic and political situation in Lebanon is currently the worse it has been in decades.
Last year MEA was refusing to sell tickets priced in the local currency and only accepted Dollars and Euros!
Dollars are widely used in Lebanon. All shops accept them too.
DeleteOriginal post said that they should start flying to the Middle East which is a wrong and uneducated statement.
DeleteBut it is true that their only scheduled route remaining in the Middle East is Tel Aviv.
DeleteAnon 09:36
DeleteIt is completely different when the national airline, fully owned by the state is refusing to accept the official currency of the country and demands that locals get foreign currency in order to sell them tickets.
there was a great uproar about it and they finally caved after the government promised even more financial assistance.
Shame about Amman though
DeleteAnon 09.39 making the original statement wrong.
DeleteI heard BEG and W6 are talking about potential AUH flights. If those happen then there is nothing left for EY in Belgrade.
ReplyDeleteWith the blockade coming down, QR will return to these regional markets making EY's life even more difficult.
Fingers crossed.
DeleteI'm sure they will continue to reap some financial benefits.
ReplyDeleteI don't think so. I think their 18% share is purely just a formality on paper.
DeleteTheir 49% share was also purely for show over last few years. They were asked to give money, they said they didn't have any and the government then gave all the money and increased its share.
Delete"We are pleased the Serbian government has reinvested in the future of the airline."
ReplyDeleteI'm sure you are
So what next for Air Serbia now?
ReplyDeleteRestructuring.
DeleteRoutes will be cut and fleet reduced.
DeleteI don't think much will be cut, what they have now will be kept plus some destinations will be brought back.
DeleteMost of the 2019 expansion will be wiped out
DeleteEnding the codeshare will have a negative impact on JU. I hope it doesn't come to that. For example JU used to have quite a few passengers on their LJU flights transferring from/to Etihad's flights.
ReplyDeleteTrue dat. ZAG too.
DeleteWell JU has a codeshare with TK now and they can offer so much more than EY ever could.
DeleteBut TK flies everywhere so no one will have the need to transfer through BEG.
DeleteTK is not cheap for locals so airlines like Aegean, Air Serbia, LOT, Tarom... get extra business from Istanbul. Just because an airline has a wide network doesn't mean others don't have transfers.
DeleteJU gets quite a few transfers from Istanbul.
What I'm saying is that you won't see people transferring from Istanbul to Ljubljana on JU via BEG.
DeleteBut there were such passengers when EY was around and you have them today who fly on JU to BEG and then connect onto QR. So why would TK be any different? Before covid you had, on some days, 10-15 passengers connecting onto Qatar.
DeleteJU should try and do a codeshare with Qatar. There is nothing stopping them now. Bulgaria Air did one recently.
DeleteThey already have an interline, I am sure a code-share is in the works as well. QR website sells flights to BEG via VIE with JU.
DeleteAnon 9:47
DeleteIf JU offers a competitive price you will very much see passengers from Turkey flying from IST to LJU via BEG.
As Anon 9:45 rightfully noted, TK is not cheap for locals anymore. Their direct flights are quite costly and with the local economy struggling, any dollar matters for local customers. The fact TK flies to all capitals in the Balkans doesn't mean much to a local customer if s/he has to pay $200 for that flight. If JU offers a connecting flight for $150, trust me, they will have transfer passengers from IST.
Nobody is cheap for locals unless you don't have a local market and if so, better close your hub.
DeleteTypical airline-corporate, face-saving PR gibberish from Etihad.
ReplyDeleteWork closely on what exactly? Routes? Growth? Development?
I don't think they know either.
Delete+1000
DeleteLets hope they do not mean more expert advise like new wings of Europe project, WiFly, expensive business class offerings for intra European flights, etc. etc.
The Wifly service is great in my opinion. Use it every time.
DeleteSo was the business class and the hot food in economy with menus and choice of two meals :D
DeleteThose were the days...
DeleteI am sure the were great for those who were willing to pay for them. But they were very few and so the airline was just had increased expenses without the corresponding increase in revenues.
DeleteThe Abu Dhabi geniuses thought that our market was something like Singapore or Dubai.
Etihad is focusing on itself at the moment and could not care less about any partners.
ReplyDelete+1
DeleteImpressive thing about BEG is that even with all restrictions it still has a decent amount of flights every day and on some days it has close to 40!
ReplyDeleteBut today there are 12
DeleteTuesday is the slowest day since the pandemic began
DeleteAnon did you check yesterday?
DeleteMoramo biti pošteni. Od propalog JAT-a napravili su respektabilnu ErSrbiju i hvala im na tome. Da nisu uskočili pre 7 godina možda bi smo doživeli sudbinu Slovenije i Crne gore.
ReplyDelete+1
Delete@10:02 Apsolutno su glavnu ulogu odigrali politicari. Jedni su srozali JAT i skoro ga prizemljili da bi onda uskocili drugi i nasli pare da upumpaju u kompaniju koja im je trebala za samopromociju. Ni prva ni druga nisu profitabilne a dovodjenje EY i njihov know how je samo iskoriscen za neke mutne aranzmane koji nama do dan danas nisu poznati. Kad se sve sabere da, imamo kompaniju koja jos leti ali koja moze da stane u bilo koje vreme dana i noci ako to nekome ne bude vise odgovaralo. Zato prestanite da blatite vise JAT i da velicate ulogu EY.
DeleteJAT je u srećna vremena sa 10 interkontinentalnih letova imao 1800 zaposlenih. Pre 7 godina sa 4 aviona u floti imali su 10000 zaposlenih. Izgleda žalite za tim vremenima?Možda AS još nije profitabilna ali su subvencije iz godine u godinu sve manje i ide ka profitabilnosti.
DeletePre 7 godina Jat 4 aviona i 10000 zaposlenih?! Kakvo sramotno obmanjivanje ! - Krajem 2013. JAT je imao oko 800 zaposlenih i 8 aviona.
DeleteJos jednom : Prestanite pisati JAT kada govorite o Jat Airways - u. To su dva Univerzuma. JAT je bio div, Jat patuljak. JAT moderna i uspjesna kompanija, Jat smijurija i tuga ujedno. A sto se tice Air Serbie, bez obzira na sve politicke utjecaje i odluke, kapa dole i svaka cast na brzom razvoju i trenutnom izgledu, bez obzira na postojece mane i nedostatke. Koliko je para do sada upumpano u Croatiu, trebala je biti bar duplo bolja i veca od Air Serbie. A nije, i nema naznaka da bi mogla biti. Pozdrav!
DeleteCroatia koja je od 2012. do 2019. dobila cca. 140 mil. € bi nekim slucajem trebala imati 6 mil. putnika? Kojom logikom?
DeleteCroatia Airlines je pocela letjet 1991, ne 2012. Ako je za 7 godina 140, za 28 godina to je 560 mil. upumpanih eura Najmanje. Samo jos nesto : otprilike istovremeno sa Croatiom je poceo letit i Ryanair, sa dva stara BAC 1-11. Usporedite Croatiu i Ryanair danas. Koliko mil. putnika ima FR? 6? Toliko.
DeleteThat's a fantastic load factor for EY. Wow
ReplyDeleteIt is. But the question is how much money they made.
DeleteTrue over 90% with daily flights from/to Abu Dhabi which is a 5-6 hour flight. Good work.
DeleteThey stopped investing in JU when Hogan was chased out.
ReplyDeleteThey never invested anything in JU
DeleteThey did. They invested in rebranding, crew training (all of them used to be trained in Abu Dhabi), overhauling Jat Catering, purchasing equipment, buying plane seats and interiors, etc
DeleteAir Serbia passengers also use Etihad Guest program which is an investment within ifself. I've converted miles from Air Serbia flights onto Etihad flights and getting hotel discounts thorugh the Etihad program.
Delete@ 10,47
DeleteEY didnt invest any of that in JU, they charged them for it at above market rates.
Initial interiors were changed on the Airbus fleet after a couple of years when they changed business models. Waste of money and resources.
They overhauled catering only to remove the offering almost completely. Hot meals in economy were replaced with a hand full of salted fish shaped crackers while business class downgraded to a cold meal in a box for a while.
Aircraft leases were also above market rates.
The rebranding JU did (livery and logo) was made locally by a Serbian student, Tamara Maksimovic.
Like anon said above, Serbia paid for all of that which is visible in Jat Airways' last financoal report in 2013.
DeleteSorry, it was JATBEGMEL not anonymous.
DeleteI guess these 18% are to keep the frequent flyer program.
ReplyDeleteThe minister makes a fair point.
ReplyDeleteWhat's happening with Etihad's investment in Air Seychelles?
ReplyDeleteIt still holds its stake there but it doesn't invest anything into it. Similar deal like with Air Serbia where the government pays for everything.
DeleteToday it was announced that the blockade against Qatar is coming down. I expect QR to go crazy in BEG especially with passengers to Dubai.
ReplyDeleteI think only the blockade from the UAE will stay, while Saudi, Bahrain and Egypt are ending it. Not sure though.
DeleteThe UAE does what Saudi Arabia does, I expect them to follow them especially since Qatar is also taking part in Expo 2020.
DeleteThe UAE has also joined the ending of the Qatar blockade. Just confirmed.
DeleteYep, all blockading countries lifting airspace restrictions to QR. Watch Flydubai's fares halve from Belgrade when Qatar returns to Dubai.
DeleteAlso Serbian citizens only need a negative test to enter Bahrain, plus online visa registration. Might be a destination to explore.
DeleteIt was already reported that FZ was planning more than daily flights to BEG in 2021. With QR coming back to DXB I am sure they will rush to schedule those, they need flexibility as a competitive advantage.
DeleteI hope Wizz Air Abu Dhabi will be encouraged to launch BEG flights.
ReplyDeleteOr Air Arabia Abu Dhabi.
DeleteOr Air Serbia
DeletePreferably with an evening departure from BEG.
DeleteAnyone remembers Air Serbia's Abu Dhabi schedule?
Delete23.15 and 23.40 departure from BEG.
DeleteWhy in gods name they stop flying to Belgrade and end the codeshare is surprising considering the success of their flights .
ReplyDeleteAnd that with strong competition .
A knee jerk reaction without reason, hope they reconsider their stupid decision ...
It wasn't stupid, EY lost money on the route despite the high load factor.
DeleteIt is no longer EY strategy to fly all over the world at a loss, the route cannot be profitable with their current fleet structure so better can it and let Air Arabia maybe try.
BEG to UAE (DXB/AUH) can only be profitable year-round with a LCC configured A321, 3x to 4x weekly max
The 90% load factor indicates that business class was selling well. I have flown with Flydubai 3 times in past five months from Belgrade and business class was sold out twice and had 10 out of 12 occupied on the third (same on return flights). Flydubai sells business for 1400-1800 euros return from/to DXB-BEG (much more than Etihad did)
DeleteHow do you know that the route was lossmaking ?
DeleteDont listen to the fairies too much ...
At least Air Arabia taking over is a good idea .
If the route was profitable they would not exit the market, simple.
DeleteThe 90% load only indicates they could sell more tickets, but there was no seats available due to their aircraft configuration. Actual business class loads are poor, most of the passengers flying in Business on that route are upgrades
Source?
DeleteMe looking at the loads data from the airport ;)
DeleteI am worried about the Etihad Guest program. As a JU frequent flyers and stuck now in COVID times, I do worry about my miles and maintaining Etihad Guest Status. No one has mentioned a thing.
ReplyDeleteThe Etihad Guest Call Center is in Serbia but that is about it.
Rgds, Eight.