Air Serbia eyes profitability on long haul service

Air Serbia will mark two years since the launch of its flagship route between Belgrade and New York this week with the airline increasingly looking at improving the route's profitability. The carrier has noted that the service is a long-term commitment which will take several years before it reaches its full potential. "It is a long-term game, especially for us since we are a non-aligned carrier flying across the Atlantic. We can't get as quick a traction as other carriers who are part of SkyTeam, Oneworld or Star Alliance because they are part of a club that works together. We have to make it work based largely on our own efforts but we are making great progress", the company said last year. Earlier this month, the Serbian President noted, "Can you make money on flights to New York? Of course you can't. We will be able to do that in about a year or two when three to five years have passed since the route's launch".

The carrier has also generated revenue on the service from alternative streams such as cargo. Its uplift capacity to JFK, which is fifteen tonnes per flight on the Airbus A330, is in high demand. It transports a wide variety of goods to the US and onwards to Canada and countries in South America, including textiles from Romania, Italy and Turkey, automotive parts and gaming industry machines from Bulgaria, and Serbian fruits and vegetables, to name a few. From the other direction, there are regular shipments of cargo from Ecuador and Argentina being sent to the region. On the passenger front, the airline recorded an average cabin load factor of 75.6% in both directions combined for the whole of last year, carrying 72.257 passengers on the route while offering 95.614 seats. The airline sees slightly more travellers heading from Belgrade to New York although passenger numbers in both directions are largely even.

Air Serbia Belgrade - New York - Belgrade performance 2017

Month	Passengers carried	Load factor (%) BEG - JFK - BEG
JAN	5.008	73.0
FEB	2.810	48.1
MAR	4.112	62.3
APR	5.501	83.3
MAY	5.475	82.9
JUN	8.431	85.1
JUL	8.638	81.0
AUG	9.365	83.8
SEP	8.515	79.8
OCT	3.748	73.8
NOV	4.694	71.1
DEC	5.960	66.2
TOTAL	72.257	75.6

Source: Bureau of Transportation Statistics of the United States

Ethnic travel agents in the United States have said the route has been largely a success. Travel agency Axioma Travel, which caters to the ethnic market and diaspora from the former Yugoslavia in the US, told EX-YU Aviation News, "It's hard to believe we are already in the third year of selling these flights. This year's schedule is the most ambitious yet with six flights planned during the busiest season. Air Serbia has done a remarkable job of maintaining an on-time schedule with just one airplane, and only a handful of delays over the two-year period, most caused by weather. The challenge this year will be even greater as just one major delay on Monday could create a domino effect all the way through Saturday". The agency's head, Fedja Stepanovich, added, "Obviously, for New York passengers, the non-stops flights are preferred almost always. But beyond NYC, it's been a tale of two types of cites (to paraphrase Charles Dickens), the ones with no one-stop flights to Europe such as Cleveland, Phoenix and Tampa, and the others with established flights to Europe such as Los Angeles, San Francisco and Chicago. Ethnic travellers living in the former cities are very excited about flying Air Serbia and love the fact that they can reach Belgrade with just one stop. They almost always insist on Air Serbia. However, the latter try to avoid having to connect in the US and having to have immigration in New York. They prefer non-stop flights to Europe from their city. For these customers the Air Serbia flights are a very hard sell. They prefer flying with Swiss or Lufthansa, even Air France and KLM. LOT has also been a strong competitor from Los Angeles and Chicago offering good connections and low fares. And of course, Turkish Airlines especially to Skopje, Podgorica and Sarajevo".

Despite Air Serbia's transformation into hybrid full fate - low cost carrier over the past year, services to New York have been largely unaffected by the change. "The transformation to a hybrid model has not really impacted the customers living in the United States. The JFK flights are exempt from the changes seen on the European routes. The only source of frustration we see is the thirty euro [airport] check-in fee, as its not common with transatlantic carriers", Mr Stepanovich said. He added, "Overall the flights have been a success from a customer satisfaction standpoint and are generally viewed very positively in most ethnic communities, especially outside of Chicago, LA, Boston, San Francisco etc".