Air Serbia outlines route development strategy

Air Serbia is gearing up for its biggest expansion to date with the introduction of 22 routes in the coming months. However, the carrier sees more room for growth and notes that had it been able to forecast such strong winter season results, it may have expanded even more aggressively this summer. In an interview for EX-YU Aviation News, Air Serbia’s CEO, Jiri Marek, said, “A lot of our summer routes were formerly either charters or were leisure driven. Obviously, the booking profile for leisure routes is completely different from the rest. Routes like Naples, Catania and Greek islands are ones where tour operators book block capacity for groups, so we sell those flights very quickly. From that perspective, Izmir was very interesting because we haven’t had so many charter flights there before. However, we were surprised by how well it was working, and it was one of the first destinations that was booked out not only by groups but also by individuals, including the feed from the network. A lot of those leisure destinations are working very well. We are seeing strong demand even on our latest addition, Lisbon, where booked load factor in April was 25% within one week of tickets being on sale”.

Return to Budapest

Commenting on the carrier’s decision to return to Budapest after several years with a high number of frequencies, which will reach seventeen weekly flights during the summer, Mr Marek explained, “The airline was totally different when this route was last operated. Since we are now putting focus on regional connectivity, we believe that the network size we have already achieved has some kind of self-sustainable effect, that whenever we open a new regional destination, we have a variety of travel options to offer and that we will create some kind of base load demand. It is not natural that an airline with our ambition does not serve Budapest. Yes, it is heavily penetrated by LCCs, amassing over 100 destinations, however LCCs are typically operating few frequencies hence it is logical that our strategy on the Budapest route should target connecting traffic”. Mr Marek added, “Our biggest competitor will be the Lufthansa Group, namely Austrian Airlines, and we see a lot of similarities on this route with Zagreb. It is a destination which can also be easily reached by car, however, travelling to Budapest is much more challenging than to Zagreb due to border crossing queues and control in the summer which can take up to several hours. Our primary goal is not the point-to-point market because once the fast-speed train [between Belgrade and Budapest] is established it will become the most convenient travel option. However, at the moment, the heavy schedule is there to have perfect connectivity and point-to-point is pure increment. We decided to go heavy because there is no reason why Budapest should not work and develop as well as our Zagreb route”.

Middle East network

Commenting on the airline’s limited presence in the Middle East, with flights to Tel Aviv to resume this summer season following a three-year hiatus, Mr Marek said, “Looking at our ambitious growth plans and fleet plans you get to the point that you are placing your resources where you believe you will have the highest return. Beirut will most likely be the next to be considered but, at the moment, we have many other destinations on the priority list before we return to Beirut. That market is not what it used to be before we stopped flying there. Even before Covid, there were a lot of financial issues [in Lebanon] and we were relying very heavily on transfers from Scandinavia and Western Europe, like Paris, for example. However, if you see that we are flying year-round twice daily to Paris and we are looking at the option of increasing it to eighteen weekly or even triple daily flights in the summer, we lack capacity and if we introduced Beirut, we would not have enough seats. Due to high transfer share on the Beirut route, achieved yield would be lower and would jeopardise our point-to-point passengers on the Paris route. Beirut will be a nice addition, but we will first need to densify the European network which is performing well and currently achieving a high load factor. Beirut never had strong point-to-point traffic. Our growth prioritises routes with higher point-to-point demand”.

Future expansion

Air Serbia’s CEO noted that there is potential for more new routes in Europe on the horizon. “Our priority will now be switching towards more densification in Europe. We will densify our network in the whole of Europe and the region. There are still a couple of routes we are looking at in Europe, but I would not disclose them just yet. As a hint, the new routes might be outside of our current bank structures so we might start to create additional banks, for example like our flight to London, within this wave of departures. The routes we are looking into involve longer flying time. Maybe some of them will come as early as next year. However, I would not rule out even earlier introduction”, Mr Marek concluded.