Air Serbia to terminate unprofitable routes as part of restructuring

Air Serbia plans to discontinue unprofitable routes as part of its restructuring process which will be adopted by the end of the year. The carrier has been working on a plan for the past few months, which will enable it to receive state aid, in line with European Union regulations. Based on its preliminary schedule, Air Serbia will discontinue flights from Belgrade to Helsinki and Rijeka, while the majority of its routes from Niš, as well as Kraljevo, remain uncertain at this point. Although the carrier has discontinued sales to several other destinations out of Belgrade, such as Cairo and Beirut, it has filed a schedule for the two as part of inventory listing, indicating flights are planned but the airline is not necessarily certain they will go ahead at this point in time, thus ticket sales have not been launched yet. 

The Serbian Finance Minister, Siniša Mali, said that once the restructuring program is adopted, it will be reviewed by the Serbian Commission for State Aid Control, after which it will be sent for approval to the European Commission. Although Serbia is not a member of the European Union, as a candidate state it must adhere to European Union regulation in order to progress in its negotiations to join the block. “Once we send it to the European Commission for approval it will be clear to everyone exactly how much money will be given and for what. I think it is clear that we will support our national carrier”, Mr Mali noted. 

Restructuring entails reorganising the legal, ownership, operational, or other structures of a company for the purpose of making it more profitable, or better organised for its present needs. Air Serbia previously drafted a restructuring program in 2016, which saw the company transform from a full fare into a hybrid carrier. It included the termination of unprofitable routes, reorganising parts of the business to produce savings and increasing other revenue streams. The program was approved by the State Aid Commission in 2018. “Every country has provided support for their national airline. So, there is no difference between what the Serbian government plans to do and what other European countries have done so far. We will not allow for the national carrier to fail. Air Serbia is restructuring, the number of employees is being reduced, wages have been slashed and unprofitable routes will be terminated”, Mr Mali said.