Air Serbia is considering restoring its own catering, Maintenance, Repair and Overhaul (MRO), as well as ground handling divisions following difficulties with third-party providers throughout the past three years. “Before the pandemic, outsourcing was normal in the industry. It was part of the transformation. Airlines got out of dealing with catering, handling, or aircraft maintenance and repair services. During the pandemic, everyone started looking at expenses and reducing fixed costs. Since last year, when demand for air travel skyrocketed, it's mainly airports that are struggling”, Air Serbia’s CEO, Jiri Marek, told “Rynek Lotniczy” .
Commenting on the challenges faced by the airline in the three sectors, Mr Marek said, “Under a Joint Venture agreement with a partner specialising in aircraft repairs, we want to set up an MRO hangar at the airport [in Belgrade]. We are also looking at relaunching the catering business. We are dissatisfied with the product of a company with which we have a contract with for two years, and this is the only supplier. We are also thinking about our own cargo and handling services”.
Air Serbia began the process of outsourcing its catering and ground handling in 2019. Subsequently, Air Serbia’s catering division was absorbed by the privately-owned Airport Catering, which has been beset by a range of labour issues, including a strike last year, which, at the time, affected Air Serbia’s flights. Air Serbia Ground Handling Services, the in-house company serving Air Serbia aircraft at Belgrade Airport, transferred its employees to Belgrade Airport’s handling division several years ago after the airline outsourced its airport operations, including passenger services, supervision, station management, training, freight forwarding and customs clearance. This summer, the carrier reproached its hub airport for being underprepared for the busy travel period, which resulted in the delay and cancellation of some flights, as well as a notable amount of lost luggage affecting transfer passengers.
“Infrastructure at the airport is still being developed. We understand that eventually the renovation work will come to an end. Then we will be able to fully develop our business model. However, the expansion of our network was announced several months in advance. A lot of time passed from December to the beginning of July. Everyone had time to prepare properly … The airport operator was aware of our intentions. They should have prepared. If we do not develop, other airlines will take advantage of it”, Mr Marek noted.
Jat Tehnika, Air Serbia’s MRO provider, has also faced issues over the years. The airline has criticised a slow turnaround in aircraft maintenance and a lack of parts over the past year for the slow return of some aircraft into service. It has since begun sending a number of its jets to Turkish Technic, Turkish Airlines’ MRO provider in Istanbul. Turkish Airlines’ Chairman, Ahmet Bolat, said recently the carrier is considering opening an MRO subsidiary in Serbia, if an agreement is reached it is anticipated to be part of the potential Turkish Airlines – Air Serbia Joint Venture Agreement.
I think they should honestly.
ReplyDeleteThey need to convert those Atr-72 into freighters.
DeleteThey are beyond airworthy since they are used as donor aircraft for the 600 for some parts.
DeleteWe were calling for that for years.
ReplyDeleteAnd we were called haters.
I have been visiting this site for over a decade and I never saw anyone call someone a hater because they suggested inhouse catering...
DeleteYou must have been visiting some other blog because here anyone who questioned decisions by the GoS or JU's management was instantly labeled a hater.
DeleteIncluding the decisions to outsource maintenance, catering and handling.
I'm sorry but at the time it was the only right decision. There was no money to keep it all in place and the airline had to shrink in order to stabilize its finances. If nothing else, the development of the airline today shows it was the right decision at the time.
DeleteToday's JU growth happened because of investments, not because of cuts.
DeleteKeep in mind that everyone visiting this site is an aviation expert 😉 They know what aircraft type each exyu airline needs, the routes, number of routes, when to depart, how tall a pilot should be 😆
DeleteLol
DeleteYes, yes and yes!
ReplyDeleteWork conditions in ASGS were abysmal. A ramp supervisor was paid roughly 40.000 RSD per month. I don't see how having their own ground handling agency will solve their current problems. JU overall is struggling with retaining employees. They first need to fix existing issues before making their structure more complex.
ReplyDeleteFix their pay system you mean? 😉
DeleteNemjee +1
DeleteNemjee -100!
DeleteAnon 09.11
DeleteOf course. I suppose they are not matching what the private sector is paying so people are looking for alternatives. Belgrade is not really a cheap city to live in anymore. So maybe they should upgrade their pay grades before opening up new divisions which will have to be staffed by new hires.
Anon 09.17
Feel free to provide some argument as to why you disagree with me. Would love to hear your reasoning.
Ne moraju stanovati u Beogradu.
DeleteИ то што кажеш. Нека путују сваког дана из Петровца на Млави како би ЈУ могла да им исплаћује минималац док се хвале рекордним профилима.
DeleteDobro, ne moraju, i sta hoćete da kažete? Da je ok plata? Ali samo ako ne živite u Bg?
Delete*профитима
DeleteA realno ne moraju ni jesti 3 obroka dnevno, 2 je sasvim dovoljno. Nego to sve razmazeno samo hoce pare a niko da pita kako je air serbiji😢
DeleteТако је а и шта ће им деца која само додатно коштају.
DeleteThis conversation is malign. Noting constructive. Espected
DeleteWhat are the salaries of the flight attendants?
Delete@10:55
DeleteWell yeah, you can be so much constructive dealing with someone arguing in favor of low salary with the most unreasonable point like 'just don't live in Belgrade'
Domaci geniji iz avijacije ne znaju da ljudi putuju na posao u NYC iz Pensilvanije. Svaki dan. Otprilike Subotica Surcin. Moj prijatelj iz Trentona NJ busom svaki dan na Menhetn. Stop being socialist. How many of BA flight attendants could afford to live in London?
Delete@anon 12:59
DeleteThere are already people that I know, driving daily to BG from NS and PA to go to work. Even from Mladenovac.
@ anon 12:59 - Porediti situaciju u US i Srbiji nije smisleno jer su dve zemlje na potpunim krajevima spektra - i ovde bi ljudi putovali za pristojnu platu, takav je zakon trzista, a ne za minimalac; da li neko putuje dva sata da bi radio u Mcdonaldsu u US? Iz prve ruke znam da imaju ogroman problem sa ground handling staff na aerodromu i da svako ko vredi ode posle par meseci. Ljudi sada radije rade u Lidlu ili slicno u gradu ili od kuce(call centri ili slicni poslovi) i da nece da putuju na aerodrom za 50.000...
DeletePare nisu glavi problemu JU. Evo opet povecavaju platu a ljudi im odlaze i pored toga. Nece niko da radi tamo, uslovi su uzasni i to neko ko je radio tamo zna (mislim na operacije ne na ljude u kancelarijama). Ja se nikad ne bi vratio, sto najcrnje ovo je misljene ne vecine nego svih kolega koji su otisli. Otislo je nas 15 i niko se nije javio na konkurs koji je otvoren sad vec godinama i niko se ni nece javiti jer znam vecino ljudi koji se bavi ovim poslom.
DeleteIt seams that retur of own catering is becoming reality for other airlines as well.
ReplyDeleteYesterday I read that British Airways is considering reinstating free drinks and snacks to their European Traveler passingers.
Two different things.
DeleteI feel like with the higher ticket prices nowadays airlines have a harder time getting away with giving you the bare minimum which was kinda the norm pre covid, so the return of free snacks is a natural step
Delete^ agree 100%
DeleteA tale as old as time itself. Seen it many times in various businesses.
ReplyDelete1. Company outsources core aspects of their business.
2. Increased profits. CEO is lauded as a business genius. Everyone is happy.
3. The quality of the product decreases. Customers notice. It starts affecting the bottom line. Vendors increase their prices. Various shortages and delays occur.
4. The business has no choice but to restructure and reinvest. They get a new CEO.
5. Several years later they begin again at step 1.
@09.37
Delete+1.000.000
I don't remember anyone giving such a brilliant concise description of corporate BS all around us, as one of the main "advantages" of "democracy" and "market economy". Just one small thing which in my opinion would fit into description, and not mentioned : fat bonuses CEO's are getting in points 2 and 4. Then, the picture is complete
+100
DeleteBravo@ Anonymous09:37
Delete@Pozdrav
DeleteDamned Democracy and freedoms.
Give us back socialist dictatorship and five year plans. 😆
Not!
@11.07
DeleteYou are obviously one of those who see everything black and white. Plus you don't have enough information on the matter you wish to discuss. For the beginning there was the diferrence between Yugoslavia and "Eastern block". People had much more individual rights in later stage of Yugoslavia, incomparably better living standard (one of the things this topic is about), and there were no "five year plans". Despite it was much better than "Eastern block", I am not idealizing Yugoslavia and its system. Of course there were many fields which needed changes, improvement, and even democratization (but in real meaning of the World, not cosmetics which we see today). Let's go on : Croatia with Franjo Tudjman, and Serbia with Slobodan Milosevic (I will refrain talking about present time) where much more dictatorships then Yugoslavia over its last years, despite the countries formally transited into "democracy". Consequencies of both dictatorships are felt even today. And for the end, if you really believe that today's World is going in the right direction, people live generally better than before, have more rights, better standards, equal access to education, healthcare, judiciary protection, and general equal represantation no matter of their social status, in that case, I apologize to you. Unfortunately, I believe you live in a fairytale written by multinational corporations, their banks and their lawyers. Cheers!
real meaning of the word, not World, autocorrect
Deletewere much more dictatorships, not where, autocorrect again
DeleteW Pozdrav +1
DeleteWell said Anon 9:37 and Pozdrav. To all who think that the "western" system is going in the right direction, I would just advise to go out and look outside their windows for a change. I live in EU and while every country is different and I still think Europe is the best place to live, the direction we are taking is not correct. I will not even discuss US as they are so down the wrong path that I wouldn't go an live there any more than I would go to live in Russia. As one Anon noticed above - while it might be normal that people commute 2 hours to work and 2 hours back, this is everything but how it should be! Expecting people to waste 4 hours of their personal time is slavery, not democracy. I lose 2 hours every day to go and return from work and that is already too much. Maybe fine for young people with no family, not something that should be a norm. Same thing as tipping habits in US and expecting customers to pay your employees (and what about social contributions, pension...?).
DeleteAnd yes - outsourcing parts of the business under an assumption that someone can provide the same level of service and commitment and do it for much less (and be profitable) is laughable! Of course the quality will quickly deteriorate and you will have no control over it and you will run into issues in the (not so) long run. But, hey - as long as the management got fat bonuses, quit after a couple of years and went on with great references in their CVs, I guess all is just dandy!
@ Golub...I can witness that North America is on a wrong path and it is getting much worse each year especially after Corona and recently. This way of live (where everything is self regulated or market regulated) is not for people with kids, actually it is not for anybody. I would like for everyone who wants to try to live at lest 10 years in North America and than compare life elsewhere. I also want to say that they are using and abusing immigrants, refugees and their situation and "selling" them safe place to live and work. I am also disappointed that Europe is copying US and Canada but that is how it is for now. And to get back on topic ground handling and check in people are paid minimum wage here too.
DeleteOne of the most satisfying to read and correct analysis in a string of comments in a while. Cheers people!
DeleteThe question will be whether they purchase the units back, which they originally sold, or whether they will be starting from scratch? Starting from scratch will be massive capital investments.
ReplyDeleteThey won't have to buy back anything. They have an agreement with catering where the company is basically leasing all of Air Serbia's equipment and premises. They will just ens the lease and take it back.
DeleteFor ground handling they still have their own company.
Finally
ReplyDeleteAbout time
ReplyDeleteWhere will they find people for the maintenance unit? Not so eaay to find qualified staff
ReplyDeleteI guess many from Jat Tehnika would transfer.
DeleteWhy would they leave Tehnika which increased their salaries
DeleteJat Tehnika did not increased nothing. They are in a shameful condition. Everybody are just looking to leave.
DeletePossibly staff from Turkey. It is fairly easy today to obtain a stay permit and with the current inflation in Turkey this might be attractive.
DeleteHope so
DeleteAir Serbia never had its own maintenance right? Jat Tehnika was a separate company many years before Air Serbia was established under that name?
ReplyDeleteSince the beginning of ASL, they have their own line Maintenance. They should just
Deleteexpand their scope up to A-Checks!
Air Serbia has it own maintenance? Where are their hangars?
DeleteThere is a difference between line maintenance and base maintenance.
DeleteAirserbia is working on tasks way beyond A check from beginning. Problem now is that many maitenance engineers left the company so they struggle with regular daily and weekly checks..
DeleteWho made the decision for all of this to be outsourced?
ReplyDeleteNaysmith. It was a necessity at the time. The airline was in deep financial mess following a failed boutique strategy. They were looking to cut costs anyway they could.
DeleteYes, he was also appointed as Air Serbia's transformation officer or something like that. That's when they culled the network too.
DeleteNaysmith's decision proved wrong.
DeleteThis decision helped ASL through Covid to be fair...
DeleteSubsidies helped JU like every other airline during Covid.
DeleteSure, but ground handling and catering are paid per flight. So better, they didn't have all these employees on their payroll.
DeleteThis sounds like good news. especially if JU plans forfurther growth and to have solid control and connection in the region, but also remain independent from the alliances.
ReplyDeletethey need everything done independently in their own structure.
the only issue is how much is Marek and JU willing to spend and invest to create a solid organisation that produces good quality. The infrastructure for the maintenance hanger and equipment and training for staff alone will cost a lot. if they're going to try and be cheap in these there is no point in even doing any of it.
it will have to be something lose to the standard that turkish technik have or lufthansa technik.
"If we do not develop, other airlines will take advantage of it”
ReplyDeleteWell said
+100
DeleteAt least you can be sure Croatia Airlines will not be one of those taking advantage 😃
DeleteSounds like he was talking mostly about Wizz. Air Serbia has launched some routes to preempt Wizz. Some routes Wizz launched were then almost exactly matched by Air Serbia.
DeleteOr simply, that is where the demand is. When this site shared a list of top unserved European routes from Belgrade 2 years ago, you can exactly see that Air Serbia basically went down that list one by one and introduced these routes. They of course have data which destinations are most in demand from Belgrade which are not served by the airline and they launched them, which makes sense. Wizz Air has the same idea, except they can't rely on transfer passengers.
DeleteAnd they do not increase Madrid and Malaga, which gives Wizz the opportunity to open this route..
DeleteObviously they know what they are doing since Wizz opened neither.
DeleteThe catering really needs to be improved.
ReplyDeleteIf you read the text, it shows they are aware of it.
DeleteThis is the right decision
ReplyDeleteThis shows that financially they are probably doing very well
ReplyDeleteThe salaries they pay do not show that though.
DeleteHence the staffing issues both on air and on the ground.
Why was JAT Tehnika separated from the airline? AIR SERBIA is today in a position where WET LEASING is most profitable even though it is the most expensive, but they simply do not have the human resources for dry lease or ownership, when for every B+ check the plane has to fly to Turkey or wherever, awhile once upon a time D checks were performed at JAT Tehnika.
ReplyDeleteIt was separated when Jat Airways was struggling and the decision was made it would be easier to sell the company in bits and pieces. At the time, Jat Tehnika was considered the most profitable part of the business.
DeleteI remember when Jat Tehnika wanted to be separated from Jat Airways as they considered themselves as much better company as JU was at that time.
DeleteAnd now they need 5 months to complete check on A319.
Avia Prime, which owns Jat Tehnika, hasn't really done much.
DeleteAvia Prime destroyed Jat tehnika by purpose, not by chance.
Delete^ i agree especially since Adria Tehnika, which they also own is doing fine
DeleteWell..the things are improving at JU. At least.
ReplyDeleteIt is encouraging to have such a good young CEO at the right place to further develop this very old brand.
Ironically, when Etihad came they invested a lot of money in the catering unit. They renovated the catering facility, bought new equipment, new trucks, plates, etc. And then they just handed everything over to this murky Saudi-Egyptian company.
ReplyDeleteEspecially since in the first 2 years Air Serbia had outstanding catering, which could only be compared to Turkish Airlines. Do you guys remember that in October 2013 when Air Serbia started many flights from Belgrade were delayed because they couldn't load all the catering they had for each flight? Planes had to be reacatered for each flight because the majority had hot meals in both business and economy. Even in economy you had a menu for flights over 1 hour and could choose between two meals.
DeleteHow much extra will all of this cost the company?
ReplyDeleteProbably less than loosing money by having to wet lease planes because maintenance is taking forever.
DeleteTrue
DeleteIs there a timeline on when this might happen?
ReplyDeleteI'm just wondering what is going through the mind of the catering company?!? They have surely been warned by JU about quality and they are abiut to loose their biggest (and only) customer.
ReplyDeleteJust to cleared things out that each catering company can sell their product to anyone ie: LH,TK, W6 and others but also to hotels, rail company, fair, who knows who else. They are not strictly airline catering and they should diversify their market if they have capacity.
DeleteThey can't sell catering to anyone else at BEG. Only other airline that that takes on catering in Belgrade is Hainan Airlines and they are so dissatisfied with this catering company that they load bags full of snacks in Beijing and distribute them to passengers in business class. They would move to Air Serbia catering in an instant.
DeleteAnother question is what does Jat Tehnika do. Air Serbia is by far their biggest customer. Or does the B767 conversion program pay off more?
DeleteI remember around 2016 when Air Serbia branded sandwiches were being sold in Idea supermarkets.
DeleteInteresting one for you, did you know that Air Serbia is paying around 70 thousand EUROS monthly for line maintenance of their 3 aircraft to a new established company which is using Air Serbia tooling ?
ReplyDeleteJU actually had good food when they did it inhouse.
ReplyDeleteNice photo of the A330
ReplyDelete> Jat Tehnika, Air Serbia’s MRO provider, has also faced issues over the years. The airline has criticised a slow turnaround in aircraft maintenance and a lack of parts over the past year for the slow return of some aircraft into service
ReplyDeleteWhy Air Serbia doesn't develop its own maintenance company?
Well, as you can see in the article, they plan to
DeleteAt the moment they are slowly shutting down airserbia tehnika and on another hand they are talking about maintenance department development.. in few weeks they are going to stay without licensed mechanics for A330, 10 mech with license for 330 left in last couple of months
Delete