Air Serbia on track for third consecutive year of profit, passenger record

Air Serbia is on track to achieve its third consecutive year of profitability in 2024. It is expected to handle a record number of passengers since its 2013 relaunch and approach the 4.53 million travellers welcomed by its predecessor, JAT Yugoslav Airlines, in 1987. Speaking to EX-YU Aviation News, Air Serbia’s CEO, Jiri Marek, said, “We are continuing with passenger growth despite the more modest year in terms of expansion. Financially, our second quarter was very good, the third quarter is also very good, and the fourth quarter will be key. The year will definitely be profitable, so we will have a third year in profit without any government support, since the Covid-19 outbreak”.

Mr Marek noted that demand for air travel has been weaker across Europe this year, pointing out that, for the first time in recent years, there is available aircraft capacity on the market during the summer. He also mentioned that major sporting events like the Euro Football Championships in Germany and the Summer Olympic Games in Paris did not generate the expected spike in demand. “You see a lot of capacity reduction by a lot of airlines, even lowcost carriers. Everyone is using the engine issue as an excuse, but it is not only engines, it is demand. Another thing we are noticing is that after Covid-19, the season was extended through September, October and even November, which were very strong months. Last year it was already a bit softer. This year, for example, is the first year where we saw charter capacity reduce in the double digits, percentage wise. This is partly because of geopolitical issues, mostly driven by Egypt, but also partly because we now have a significant number of leisure destinations in our schedule, which is becoming more of a preference to the classic charter operations”, Mr Marek explained. He added, “Many aspects are influencing how the year will end. If Q4 goes well, we might even surpass the JAT record, but it will be tight”.

Air Serbia has seen its on-time performance improve this year, however, the carrier’s CEO noted there are still bottlenecks. “It is obvious that the year is performing much better operationally than last year. We learned lessons and most of our suppliers were unprepared for the growth. The supply chain took much longer to adjust. This year was one of stabilisation, so we were much more pragmatic in terms of growth, and we started to deal with suppliers. One of the main ones is ground handling [in Belgrade], which has been taken over from VINCI by Menzies Aviation. We didn’t expect quick miracles because it is the same business taken over, but the main thing that already changed is the equipment, management, and the processes”, Mr Marek said. He added, “It’s still not at the optimal level we would like it to be so we will use the winter season to work with Menzies on how to further improve. With this new set-up, it is now much more transparent where the real problems are since previously the same company ran both the ground handling and airport infrastructure and we will be addressing that”. Another major problem the airline, like others, has faced this summer is air traffic congestion. “We see an aircraft ready to depart on time and then a slot is given for two hours later than scheduled”, Mr Marek concluded.