Air Serbia confident in Miami as connecting traffic nears 50%

Air Serbia is confident its planned Miami service, launching next May, will draw on both local demand and connecting passengers from across Southeast Europe, as transfer traffic approaches half of the airline’s total. Speaking during the “Inside the Network Planner’s Mind” panel, the carrier’s Route Network Manager, Bojan Arandjelović, said its existing North American operations demonstrated the potential for further expansion, although fuel costs and operational constraints were making network planning increasingly complex.

Miami will become Air Serbia’s fourth North American destination, with the airline already carrying passengers to Florida through its existing US gateways. “We are not concerned about demand because we have been flying to the United States for more than ten years as Air Serbia. We have seen a lot of indirect flows from Belgrade, but also passengers on our flights using other American gateways to reach Florida”, Mr Arandjelović said. He pointed to the airline’s coverage of Southeast Europe and the former Yugoslav markets, their large overseas communities, and demand between Belgrade and Florida as supporting the new service.

The performance of Toronto, launched in May, has provided further encouragement. “We finished the first year of operations with an 88% load factor. We are really confident when it comes to further development in the North American market”, Mr Arandjelović noted. Asked about the length of the Miami route compared with its existing US services, he added, “It is still shorter than Shanghai and Guangzhou”.

The expansion comes as connecting passengers account for an increasingly significant part of Air Serbia’s business. “The share of connecting passengers Air Serbia transports keeps growing year by year. Almost 50% of the traffic we carry is connecting traffic”, Mr Arandjelović said. However, this growth is placing pressure on Belgrade Airport and the airline’s ability to organise its schedule around connecting banks. “Our home airport was not originally designed to sustain such high levels of traffic in the banks that are the main characteristic of a hub-and-spoke carrier”, he explained.

Although the airline continues to develop its transfer business, it has also adjusted its approach to protect operational reliability. “This year, for example, we have focused more on markets with stronger point-to-point demand rather than continuing to push the connecting side, as we saw that the pressure our network team was putting on operations was high”, Mr Arandjelović said. He added, “Our aim is that a customer who buys a ticket from Amsterdam to Athens can actually arrive in Athens on the same day, on the flight they booked. Sometimes that is not easy. This summer, we also had to take some painful decisions”.

These included removing certain connecting itineraries where recurring delays were creating more difficulties than commercial benefits. Mr Arandjelović singled out Spain as an example of a market where punctuality issues had affected onward connections. “We had to make the painful decision to say, for example, that we could no longer connect one city to another because it was creating more operational issues than benefits”, he said. “Unfortunately, as an airline, we cannot influence the entire ecosystem we operate in”.

The airline’s size also limits its options when passengers miss their connections, particularly during the summer peak. “If you do not have ten daily flights to Barcelona but only two, your options for rebooking passengers are reduced. During the summer peak, even your partners are completely full, and there are no options for rebooking passengers”, Mr Arandjelović explained. “We are very focused on that too: not pushing connections through Belgrade at all costs, because then it starts having a negative effect as well”.

Fuel costs are adding another layer of uncertainty, even as demand remains strong. “Reaching the point where you have to consider cancelling flights that are already over 80% booked, perhaps even for the winter season, just to save on fuel costs is not a great solution”, Mr Arandjelović said. “Air Serbia had another record summer compared with the previous year. This could have been, I think, the best year in our almost 100-year history. We do not see any problems on the demand side, but now it is all about managing costs and our exposure”.

Despite the challenges, Air Serbia intends to continue developing its network, while allowing greater room for operational buffers and changes in market conditions. “Now we are entering a more stable phase of growth, growing responsibly rather than aggressively. This gives us some room to balance the uncertainties we face”, Mr Arandjelović said. “They expect us to fly, but our shareholders also expect us to be responsible in how we manage the company and navigate the crisis”.