Air Serbia eyes profitability in 2022


Air Serbia anticipates breaking even or registering a small profit in 2022 following two years of Covid-induced financial losses. “Air Serbia has performed relatively well during the pandemic. In 2021 we significantly improved our operational performance and even reduced our loss. This year we are aiming for profitability, and we will continue on this path in the future. Air Serbia will continue to be the leading regional airline in the Balkans, and we aim to keep our market share in Belgrade between 50% and 55%”, the company’s CEO, Jiri Marek, told “Aero Telegraph”. He added, “The rise in fuel prices is taking its toll and we are not hedged. As an airline, you can pass about 60% of the increase onto customers. So of course, we suffer. But even at current fuel prices, we believe we can break even this year”.

Air Serbia reported a loss of 77 million euros during the pandemic-stricken 2020, ending six consecutive years of profit. The result did not take into account the 100-million-euro recapitalisation provided by the Serbian government late that year, which saw it increase its ownership stake in the company to 82%. In 2021, the net loss was reduced to 21.3 million euros. Over the course of last year, Air Serbia repaid in full its second and final loan to Etihad Airways Partners BV, a special purpose vehicle set up by Etihad Airways in September 2015 to raise funds for itself and its equity partners. The loan amounted to 63 million US dollars. Air Serbia is one of sixty companies which receives subsidies from the state since it is categorised as being of “special importance”. This year, the sixty business are sharing amongst them 170 million euros in subsidies, although the exact amount each receives has not been made public.


Operationally, the airline expects to be close to overtaking its pre-pandemic traffic levels by the end of the year. “In 2022 we will be slightly below the numbers from 2019, likely ending up at 91% of pre-pandemic levels. Of course, only if nothing negative happens. In 2023 Air Serbia will definitely surpass 2019 levels and from then on, we aim to grow between 10% and 15% every year”, Mr Marek concluded. The carrier recently scheduled a slew of frequency increases across its existing network for the upcoming winter season, with additional growth to be publicised in the coming weeks, ahead of the launch of its second long haul service, and its first in the Far East, this winter.



Comments

  1. Anonymous09:02

    91% of pre Covid traffic by the end of the year is a really good result considering Serbian citizens were unable to travel to most of the EU until March and that two major markets – Germany and Italy were closed off to Serbian citizens for even longer.

    ReplyDelete
    Replies
    1. Anonymous09:05

      Yes not bad at all. How many passengers did they have in 2019 in total?

      Delete
    2. Nemjee09:08

      Passenger numbers:

      2016: 2.62
      2017: 2.62
      2018: 2.48
      2019: 2.81

      Delete
    3. Anonymous09:08

      2.91 million in 2019

      Delete
    4. Anonymous09:08

      Sorry meant 2.81 million. Nemjee is right.

      Delete
    5. Anonymous09:11

      Thanks. So they should handle around 2.1/2.2 million this year. Good result in my opinion.

      Delete
    6. Anonymous09:13

      Better than I expected

      Delete
    7. Nemjee09:18

      Well, if they are going to be at 91% of 2019 then this year they should handle around 2.5 million passengers. I believe this year, compared to 2019, they are going to have more flights out of INI and KVO. Back then in KVO they had just VIE which hopefully they bring back.

      Delete
    8. Anonymous09:22

      And KVO-INI started in December 2019.

      Delete
    9. Anonymous09:28

      You mean KVO-VIE?

      Delete
    10. Anonymous09:30

      lol yes of course. Sorry it's early for me :D KVO-VIE. Wonder if this route will come back at some point.

      Delete
    11. Anonymous09:32

      Air Serbia revenue in Euros (approximation)

      2019: €354.054.683
      2020: €148.387.316
      2021: €245.241.611

      so this year they should be over €300.000.000. You see how bad 2020 was for them, without state subdies their actual revenue was less than €50.000.000.

      Delete
    12. Anonymous09:33

      I can imagine it wasn't much better for other regional airlines either.

      Delete
    13. Anonymous09:37

      Of course, that is why Wizz Air is suffering so much and canceling left and right. Same with LH with GErmany going into a recession. Air Serbia is lucky that Serbian economy is doing good these days

      Delete
    14. Anonymous10:51

      I forgot, how many pax did they have in 2021?

      Delete
    15. Anonymous10:56

      1,586,665 passengers

      Delete
    16. Anonymous11:59

      Thank you. So they will add almost a million passengers this year!

      Delete
    17. Anonymous12:09

      How many passengers are they handling on the PSO routes from Nis and Kraljevo?

      Delete
    18. Anonymous12:30

      You have their Kraljevo numbers here
      https://www.exyuaviation.com/2022/08/morava-airport-handles-over-7000.html

      Delete
  2. Anonymous09:03

    Wonder how much money was pumped into the company in 2017 in order for it to post such a profit.

    ReplyDelete
    Replies
    1. Anonymous09:04

      The most was pumped in 2014. The 2013 loss was generated in the last 3-4 months by Air Serbia, not Jat Airways. If you look at Jat's books, they were always hovering near the break even point or even a small profit. Their problem was debt.

      Delete
    2. Anonymous10:02

      No surprise for 2013. They were leasing new planes, cabin reconfiguration and huge expenses paid to Etihad.

      Delete
  3. Anonymous09:04

    Always forgeting Mr Marek always ! " The leading regional airline in the Balkans " , you mean in ex-yu !

    ReplyDelete
    Replies
    1. Nemjee09:06

      I think they should be fifth or sixth in the Balkans after Turkish Airlines, Aegean, Wizz Air and Ryanair. Don't know if they managed to overtake Tarom (honorary Balkan airline).

      Delete
    2. MR. Bajic is the leading C E.O in Europe!

      Delete
    3. Anonymous09:38

      Well, depends on the perspective... And actually they are the leading airline in Balkan in terms of regional connectivity. Aegean doesn't offer that many Balkan connectios, Wizz and Ryan offer almost nothing regionally, and Turkish, well they are everything but regional airline. So, Marek said nothing wrong. After all, ex-yu is not a league he wants to play in and I agree with him.

      Delete
    4. Anonymous09:42

      Aegean has a very respectable network and unlike JU they don't send their turboprops to almost every Balkan destination. A3 is much stronger in markets like IST, SOF, SKG and OTP and JU didn't manage to beat them in Belgrade. Heck they expanded quite a bit this summer over here, didn't they?

      Saying that Air Serbia is a more important than Aegean is the very definition of lacking any sensibility. In terms of fleet and passenger numbers they are all ahead of JU.

      Delete
    5. Anonymous10:07

      JU didnt manage to beat A6 in BEG? Congratulations. Just to inform you: JU has 10pw to ATH during winter and A6 doesnt have that much. Also, ATH flights are full of transfers.

      Of course A6 is ahead of JU in numbers. Greece is touristic meca and Serbia isnt.

      Delete
    6. Anonymous10:18

      Aegean's code is A3, not A6.
      This winter Aegean plans 4 weekly A320/A320neo flights to Belgrade. This is quite a respectable presence so JU did not manage to push them out of this market, just like they didn't manage to hurt Norwegian while they crushed weak Wizz Air to TRF.

      Delete
    7. Anonymous10:27

      Still JU has almost three times more flights.

      Delete
    8. Anonymous11:29

      Yes but in terms of capacity they are not that far ahead. Also don't forget that it was in June that JU replace the ATR at night with the A319 on flights to Athens. Aegean still commands a respectable presence in Belgrade with flights from Athens, Heraklion and Rhodes.

      Delete
    9. Anonymous11:38

      Why would JU and A3 hurt each other when they cooperate through wide code share?

      Delete
    10. Nemjee12:58

      Because at the end of the day they are still competitors, they are not owned by the same company nor do they have a JV on BEG-ATH. When it comes to the O&D market flying between Belgrade and Athens, they are fighting for customers.

      Delete
    11. Anonymous14:09

      I get that but they both have more important battles to fight. Furthermore I can't see JU winning the battle for Greece with strong national airline and numerous LCCs, two of them operating from Serbian market. JU can do more about Greece but I don't think fighting A3 is necessary.

      Delete
    12. Anonymous17:13

      JU can expand further in Greece in 2023 with seasonal scheduled destinations and have more greek destinations. A3 is gonna stay with flights to ATH maybe they will continue HER and RHO in 2023 but let's also not forget that the 4w flights in winter to ATH are operated with an A320/A321 while JU will send ATR and A319 to ATH. All in all JU shouldn't fight A3 but build a stronger greek network out of BEG.

      Delete
    13. Anonymous19:45

      >> JU shouldn't fight A3

      LOL are you some kind of airline consultant? Try selling that kind of expertise to OU and ZQ (former YM), they recently had a tendency to seek that kind of pointless advice.

      Delete
  4. Nemjee09:04

    If they can get their real loss to under €15 million then it should be manageable. It should not be a problem for the government to finance them. If their winter growth turns into a success then they have nothing to worry about, they are on the right track.

    Best of luck to Air Serbia's new destination, Kazan, which starts this afternoon.

    ReplyDelete
  5. Anonymous09:09

    Although it has never been revealed I think in the last few years the state subsidy has been around 20 million euros right?

    ReplyDelete
    Replies
    1. Anonymous09:16

      Don't forget the money they get for Nis and Kraljevo PSO flights.

      Delete
    2. Anonymous09:24

      Less than other Exyu airlines

      Delete
    3. Anonymous14:33

      OU gets PSO in last 12 years for each domestic destination they fly to!

      Delete
    4. Anonymous15:20

      Don't forget the money that JU got for the Serbia Creates (mess) on the tail of the A330.
      circa €5mil.

      Delete
    5. Anonymous15:38

      There is absolutely no record of them getting any money for that. Where did you get that from?

      Delete
    6. Anonymous16:28

      It was talked about on this forum as well as others. Why else would Air Serbia do that? Because either the tourist board, or government could give them funds that way bypassing EU subsidy regulations.

      Delete
    7. Anonymous16:30

      Ok. Basically no proof whatsoever. People in comments write all sort of nonsense.

      Delete
    8. Anonymous17:03

      So Air Serbia did it out of the goodness of their heart?

      Delete
    9. Anonymous17:05

      They cooperate with the Tourism Board and I'm just saying you have no proof for your claims, let alone the amount.

      Delete
  6. Anonymous09:13

    That's actually great - if you take into account the number of aircraft, and that covid was there for half of the year.

    ReplyDelete
  7. Anonymous09:15

    Considering Covid, fleet expansion and network expansion it would be incredible if they posted a profit.

    ReplyDelete
  8. Anonymous09:16

    Nice

    ReplyDelete
  9. Anonymous09:17

    Why don't they hedge fuel?

    ReplyDelete
    Replies
    1. Anonymous09:21

      Probably has something to do with their deal with NIS.

      Delete
  10. Anonymous09:17

    Most interesting part for me

    "In 2023 Air Serbia will definitely surpass 2019 levels and from then on, we aim to grow between 10% and 15% every year”

    ReplyDelete
  11. Anonymous09:26

    What a funny title

    ReplyDelete
  12. Anonymous09:28

    Why don't they publish quarterly results?

    ReplyDelete
    Replies
    1. Anonymous09:29

      Because they are not listed on the stock exchange so they don't have to. BEG is and that is why they do it. Air Serbia has to publish its yearly reports and that's about it.

      Delete
    2. Anonymous09:29

      They are not required to.

      Delete
    3. Anonymous09:30

      Thanks. Still I wish we could see their results each quarter.

      Delete
  13. Anonymous09:34

    Without state support, Air Serbia would go bust

    ReplyDelete
    Replies
    1. Anonymous09:38

      National carrier is vital for the economy. It is contributing immensely.

      Delete
    2. Anonymous09:40

      Really?

      Delete
    3. Nemjee09:43

      Anon 09.40
      Absolutely, just ask Germany about it.

      Delete
    4. Anonymous09:44

      You only need to look at Slovenia to see why it is important.

      Delete
    5. Anonymous09:48

      At least some companies show profit or small loss no matter if it includes certain financial support. You have other companies that receive state support, huge PSOs, operate in a country that is EU and NATO member, operate in a country that is a tourist mecca and still post losses year after year.

      Delete
    6. Anonymous12:30

      Anonymous09:44 - Slovenian economy is not suffering ...

      Delete
    7. JATBEGMEL13:16

      @12,30

      No, but Slovenian aviation is. The latest ACI report ranks Slovenia the worst in Europe, between war torn Ukraine and sanctioned Belarus.

      https://www.exyuaviation.com/2022/06/ex-yu-markets-lagging-in-air.html?m=1

      @09,40

      Yes, really. You can check out this link for details.

      https://www.b92.net/eng/news/business.php?yyyy=2015&mm=08&dd=31&nav_id=95275

      Lets also not forget 2020 which showed exactly why it is useful having a national carrier. 15.000 Serbian nationals stranded abroad were repatriated to Serbia, free of charge, thanks to Air Serbia. Not to mention the amount of cargo flights to Asia bringing in much needed medical supplies for our hospitals, vaccines.

      Delete
    8. Anonymous13:36

      I'm sorry to say but the "sufferring" of the Slovenian aviation doesn't interest most Slovenians, as long as the economy is doing as well as it is. There is record employment (over 900k), record levels of unemployment (I think it's around 4%), record levels of real GDP (over 52 billion in 2021: 7% more than in the previous record year of 2019). Wages are falling behind inflation, surely, but they are nevertheless growing. And this is all people care about, unfortunately. Aviation will have to wait a bit longer as it's not a priority for most people, especially with the winter ahead.

      Delete
    9. Anonymous15:23

      Record levels of (low) unemployment. Better said this way... cheers

      Delete
  14. Anonymous09:35

    Getting better.

    ReplyDelete
  15. Anonymous09:35

    Will Etihad sell remaining 18% stake in JU?

    ReplyDelete
    Replies
    1. Anonymous09:38

      Doubt it. They have nothing to loose now.

      Delete
    2. Anonymous09:40

      My guess is Etihad will leave if Serbian government finds another investor to replace them. Let's see how the new found love with Turkish Airlines develops.

      Delete
    3. Anonymous10:09

      Who would have thought this would be Etihad's last remaining investment.

      Delete
    4. Anonymous10:10

      EY will keep its 18% on paper for time to come.

      Delete
  16. Anonymous09:41

    Air Serbia will be fine and is doing fine all things considered.

    ReplyDelete
  17. Anonymous09:44

    Hopefully things keep improving.

    ReplyDelete
  18. Anonymous10:01

    Liking the new CEO.

    ReplyDelete
    Replies
    1. Anonymous10:19

      He certainly does like the spotlight.

      Delete
    2. Anonymous10:21

      So? We are getting interesting information from him. We get to know more about their plans and where they are headed. Or would you prefer Neysmith who didn't give a single announcement or interview during his entire time as CEO?

      Delete
    3. Anonymous11:34

      Why are you triggered Anon 10.21? The CEO likes the spotlight and he likes to be in the media a lot.

      Delete
    4. Anonymous11:36

      Triggered? I just said that I prefer it this way as we have some clear information on what's going on and what's planned. Much rather that than read predictions by some experts in the comments here looking at their magic globe.

      Delete
  19. Anonymous10:07

    Seems like their consolidation measures worked during Covid. JU is growing again this year and we will get second long haul route in winter.

    ReplyDelete
  20. Anonymous10:08

    No wonder they will do well this year considering their astronomically high ticket prices.

    ReplyDelete
    Replies
    1. Anonymous10:21

      Their prices are generally ok and not that expensive. Except the ones to Russia.

      Delete
    2. Anonymous10:22

      And to Montenegro in peak summer.

      Delete
    3. Nemjee11:35

      LCA was very expensive as well. They charged €190 one way and there were 110 passengers onboard.

      Delete
    4. Anonymous11:35

      And on any of their codeshares

      Delete
    5. Anonymous11:39

      @ Nemjee. One was is usually more expensive than round trip. And it also depends when you actually made the booking.

      Delete
    6. Nemjee13:02

      When it comes to JU, I did not notice a major price difference if you are buying one way or return. I bought the flight maybe a few days before the flight. What I am referring to is that there were 113 passengers onboard in the end and no business class passengers. Why charge 190 Euros if you still have 31 seats which are unsold.
      Personally, I don't mind paying more as I know €5 fares are unrealistic. But maybe they would have sold more tickets if the price was lower.

      Delete
    7. JATBEGMEL13:30

      I definitely agree with @nemjee. They really need to have better pricing.

      This summer has been fairly ok in regards to pricing. I took advantage of their deal to Croatia this year, getting BEG-SPU for 5.800 din (49€), which was great considering the bus would of been 6.500 din (55€) one way and 11 hours on the road. It would be nice to see these types of fares as common practice in JU, especially on regional routes. I would love to see economy light fares to Montenegro, that would encourage more business and city break travel between the 2 countries.

      Delete
    8. Anonymous14:12

      They've just launched similar promotion for wide range of destinations during winter (BCN from 39eur one way, i.e.). They do have similar promos from time to time, the question is do people have information that they offer promo prices...

      Delete
    9. Anonymous15:26

      Other than being on the Air Serbia mailing list, how else is one likely to hear about promos? I guess social media, but how many potential clients do they reach overall?

      Delete
    10. Anonymous16:20

      I saw web banner through google display network so they do spend some money on advertising finally.

      Delete
  21. Anonymous10:50

    Sounds promising

    ReplyDelete
  22. Anonymous10:51

    This would be ideal. New routes, new aircraft and profitability.

    ReplyDelete
    Replies
    1. Anonymous10:56

      And new long haul :)

      Delete
    2. Anonymous10:57

      It is encouraging that they have had a stronger than expected year

      Delete
  23. Anonymous15:29

    I'm hopeful that in five years time we will be reading of profits between 50€ to 100€ millions.

    ReplyDelete
  24. Anonymous16:48

    I love it, number 6 so far. Can't wait for more.

    ReplyDelete
  25. Anonymous18:12

    Profit with or without government money pumping?

    ReplyDelete
    Replies
    1. Anonymous19:34

      Where, in Croatia Airlines or Air Montenegro?

      Delete

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