Air Serbia to add more aircraft, looks to 2027 for new orders

Air Serbia is planning to expand its fleet, maintain selected wet-lease agreements, and explore potential new aircraft orders. Speaking to EX-YU Aviation News at the recent IATA Annual General Meeting & World Air Transport Summit in New Delhi, CEO Jiri Marek and General Manager Commercial and Strategy, Boško Rupić, outlined the airline’s short- and long-term fleet development strategy.

Fleet expansion

Mr Marek noted, “We’ve already signed a Letter of Intent for two Embraer aircraft, which we expect to arrive sometime in November or December. Timeline is still subject to change. As you know, even with commitments from lessors, there are dependencies on MRO slots, and delays are quite common.

That said, we’ve structured our winter schedule so that we’re not reliant on those aircraft during that period. Whenever they do arrive, they’ll be more than welcome additions to the fleet. In addition, we’ve signed another Airbus A320 that’s scheduled to join us this winter as well. It’s relatively young, with a manufacturer serial number starting with a six.

We're also actively evaluating two more A320s. Over the past three weeks, we’ve noticed the market becoming more dynamic. Several aircraft are returning from Wizz Air - previously under extended leases - and it seems that the engine issues affecting NEOs may now be easing. A few units from Volaris are also coming onto the market. We haven’t seen this level of aircraft availability since the Covid period. At this stage, we’re definitely planning to add two more A320s for next summer”.

Wet-leases

Air Serbia to extend wet-leases past October

Commenting on the airline’s wet-lease strategy, which this summer includes four A320s from GetJet Airlines and four Embraer E190s from Bulgaria Air, Air Serbia’s CEO noted, “Our wet-lease strategy is helping us bridge the gap by avoiding long-term commitments when aircraft prices are high. Once we find the right opportunities, we can gradually phase out wet-leased capacity.

One issue that’s often overlooked is the impact of our aging fleet. While the V2500 engines are generally excellent, over the past two years they’ve been increasingly affected by what are known as AD notes. This creates periods where several engines have been in the shop at same time which requires backups with utilisation of spare engines to support operations.

Ideally, we aim to concentrate our heavy maintenance during the winter season. That way, we can avoid major disruptions during peak months. Interestingly, because wet leases are usually in demand during summer, we’ve been able to negotiate favourable deals by also offering winter operations as part of the arrangement. This strategy allows us to maintain continuity at lower cost”.

Mr Rupić added, "In June, we will launch a Request for Proposal (RFP) to extend our wet-lease agreements with GetJet Airlines and Bulgaria Air beyond October. Both partners are finalising the recruitment of locally based crew, meaning that Serbian-speaking staff are now present on nearly every flight.

With the wet lease market cooling down, this is the ideal time to renegotiate terms, especially as we’re discussing operations for the winter season. In this context, the negotiating advantage is on our side. We fully expect to retain some level of wet-lease capacity during the winter period".

New aircraft

Air Serbia currently operates a fleet of mid-aged aircraft, a strategy the carrier says has proven successful for its operations. Mr Marek said, "Taking into account our wet-leased capacity this summer, we are already operating 37 aircraft. On some days, particularly during the morning peak, all gates up to A9 [at Belgrade Airport] are occupied by our aircraft, with additional ATRs parked on remote stands. There’s very limited space left, and it’s clear that the airport is starting to face congestion.

If we consider the core fleet of 32 aircraft, plus the two additional units we’re evaluating, we’ll be operating around 34-35 aircraft next summer. On top of that, we expect to continue using some level of wet-leased capacity.

We’re also actively exploring long-term fleet development. However, this is a complex process, not only due to limited availability in current order books, but also because many of the aircraft types we would logically consider still face ongoing engine reliability issues. We’re determined not to repeat mistakes made elsewhere in the industry.

At the same time, the secondary market is becoming more active, which aligns with our current fleet strategy. While we’re certainly examining future fleet renewal, I wouldn’t expect any firm decisions before 2027. And even then, deliveries will depend on availability.

We’re not in a rush. New aircraft only make financial sense when they’re flying regularly. Any prolonged ground time, anything over two weeks, can undermine the entire business case due to the high ownership costs".