Etihad Airways has indefinitely terminated flights between Abu Dhabi and Belgrade and will seemingly end its codeshare partnership with Air Serbia next year, indicating its part-ownership of the company will also come to a close. Etihad restored services between Abu Dhabi and Belgrade in July but suspended them on October 14 for a six-week period. It later postponed the service resumption until January 2021 but has now completely discontinued sales and no longer offers options to the Serbian capital via points in Europe from where it codeshares on Air Serbia flights. Etihad performed well on its service to Belgrade, which was launched in 2013, benefiting from an extensive codeshare partnership with the Serbian carrier. They were maintained on a daily basis up until the coronavirus pandemic, while it ran up to twelve weekly rotations between the two cities over the past two summers. In 2019, the airline operated 462 one-way flights between Abu Dhabi and Belgrade, offering 62.832 seats each way.
Currently, Etihad Airways has its designator code and flight numbers on Air Serbia’s services to and from Amsterdam, Barcelona, Berlin, Bucharest, Cairo, Copenhagen, Dusseldorf, Frankfurt, Helsinki, Kiev, Ljubljana, London, Madrid, Milan, New York, Podgorica, Prague, Rome, Moscow, Skopje, Sofia, Stockholm, Stuttgart, Tirana, Tivat, Venice and Vienna. Some of these routes are temporarily suspended due to Covid-19. Etihad declined to comment on the latest developments.
The Serbian government has indicated Etihad may exit from its part-ownership of Air Serbia. In June, the state launched talks with the Emirati national carrier over its future role in the airline. The Serbian government noted at the time it would request for Etihad to cover part of the losses incurred throughout the Covid crisis, otherwise it would look to take a greater share in the airline. Yesterday, the Serbian President, Aleksandar Vučić, noted, “As far as Air Serbia is concerned, not only will it continue operating, we will also have enough strength and knowledge if we have to recapitalise the company and take over a larger ownership stake. This is not a problem at all. Air Serbia will be a successful airline and the pride of Serbia everywhere in the world”. The Serbian government owns a 51% stake in the company, while Etihad holds 49%.
In October, the Serbian government adopted a decree which enables it to recapitalise Air Serbia. Through recapitalisation, the state can increase its share in the company, which it can later sell back to the said company at any time or another entity. Mr Vučić hinted over the summer that if Etihad were to fully or partially exit the airline, another strategic partner could be brought in. “We might introduce some other strategic partners, but we will continue to hold a majority stake. Air Serbia will be our flag carrier and it will be stronger than it is today”, he said.
The strategic partnership agreement between Etihad Airways and the Serbian government, unveiled in August 2013, saw the Emirati airline make available a forty million US dollar loan facility to Air Serbia which was converted into equity on January 1, 2014 for a period of five years. This was matched by an equal funding injection by the Serbian government. The two sides each provided further funding through shareholder loans and other funding mechanisms to meet working capital requirements and support network development. The five-year deal was later extended until further notice, however, Etihad’s involvement in Air Serbia has been significantly reduced, with the state providing subsidies and funds for the airline over the past few years. Etihad registered an 870 million US dollar loss in 2019 and its equity investments in carriers around the world have unravelled in recent years.
Under the transaction agreement between Etihad and the Serbian government, the Emirati carrier’s part ownership of Air Serbia can be terminated at any time. The agreement states Etihad can pull out of the deal in case of a material adverse event. It further notes, “This agreement shall cease to have any effect from the date of termination and no party shall have any claim against any other party”.
Unfortunate about the route. As for the partnership... the writing was on the wall years ago.
ReplyDeleteWill Wizz Air Abu Dhabi or Air Arabia launch this route?
ReplyDeleteI don't think there is enough P2P demand. Etihad was filled with transfer passengers. But in recent years many migrated over to Qatar because of better prices, service, product and bigger destination network.
DeleteI'd rather have W7 as Etihad's future remains uncertain and they plan on shrinking even more.
DeleteTrue what last anon said. I have family in Australia. They used to all fly Etihad when visiting once per year but since 2018 all moved onto Qatar.
DeleteThere was little difference in the last year between W6 and EY. EY got rid of PTVs on their Belgrade flights and introduce buy on board.
DeleteEY served a tiny snack on a 16 hour flight from LAX.
DeleteIt's unfortunate, their service went so much downhill after Hogan left (when the Sheikh turned off the money tap).
DeleteQatar Airways likes this.
ReplyDeleteflydubai loves this.
Air Serbia has been on its own since the consulting contract ended. Luckily now they have a codeshare with TK through which they can cover all of Asia and Africa.
They need a codeshare with QR.
DeleteNow BEG has really good chanses to get EK flights, it would be much better.
ReplyDeleteThis should definitely help but I think for the Serbian market it's better to encourage FZ to keep on growing and expanding until they have double daily flights. It's just my opinion but I prefer frequency over capacity.
DeleteI think there is enough room for mix of LCC and legacy airline, where EK would be perfect. For sure FZ will boost frequency little bit now.
DeleteMaybe for the beginning FZ during winter and EK during summer
Delete+1
DeleteGood. Time to find someone more reliable.
ReplyDeleteWould it be realistic for JU to try AUH again or try DOH instead, and work out some code share agreement with Qatar airways?
ReplyDeleteI think Qatar especially should be interesting.
DeleteThey lose on AUH route one plane for too long time. Better to make 2 European routes
DeleteEnding the codeshare between EY and JU could really hurt JU.
ReplyDeleteIn what sense? AUH was mostly filled with Australian passengers going to Belgrade, JU profited little
DeleteActually it got a lot of feed from regional routes like Ljubljana. It has been decreasing in recent years as EY service has gone down hill. Australian passengers have long deserted Etihad because of poor service and prices and the fact they suspended two routes in Australia (Perth and Brisbane). They have all moved to Qatar. But Etihad in recent years was carrying a load of Chinese passengers. My last flight with them in January was more like a flight to Beijing. 98% of passengers were Chinese.
DeleteSpeaking of Australia, it has extended the ban on its citizens leaving the country (or any foreigner arriving) until March 2021.
DeleteJU also has an interline with QR now so they also provide feed on DOH-BEG-DOH flights.
DeleteLet's hope it results in a codeshare
DeleteAbsolutely, JU has a great opportunity to get access to QR's Australian network as well.
DeleteIt's the opportune time for Serbia (and indeed many state-owned airlines) to be free of any limiting agreements that kept them from going bankrupt in the past decade, using Covid as an excuse to pump millions and "have another go". Will be interesting to see what happens, hopefully they change tactic as the current formula has proven unsuccessful time and time again... The current Air Serbia was not a sustainable and profitable business. Neither is OU, YM... and we all know what happened to JP.
ReplyDeleteYou can see from Vucic's words that it's going to be more of the same.
Delete“As far as Air Serbia is concerned, not only will it continue operating, we will also have enough strength and knowledge if we have to recapitalise the company and take over a larger ownership stake. This is not a problem at all. Air Serbia will be a successful airline and the pride of Serbia everywhere in the world”.
Also, Vucic said yesterday that the New York flight is performing fantastically, that the route will keep operating and they have negotiated the best terms at JFK Airport (no one actually asked him about it, he just said it himself).
DeletePoliticians all over the world say only what they think will bring them popularity. Understandible. Wait patiently for the facts on state aid and we shall see. Things like this require time.
DeleteI personally think covid was a blessing for JU. Without it 2020 or even more 2021 would be a true check on their strategy, which I don't think works financially. Now they can blame all losses on covid and get more time and money. The same about politicians, who babysit the project.
"using Covid as an excuse to pump millions and "have another go"
DeleteAnd in couple years, pump some more millions, followed by some more millions...
:(
ReplyDeleteThis was to be expected.
ReplyDeleteEven if the partnership is ending, why suspend BEG? I have flown with them every year since 2013 and the planes were always packed to the last seat (and I flew in off peak periods).
ReplyDeleteThey could have been full but the question is were they making money.
DeleteAlso if they end codeshare with JU, it will have an impact on the route. JU was feeding it nicely.
DeleteI also don't get that. Why end the codeshare as well? I mean you don't have to own them but you can still codeshare.
DeleteI think it's a combination of ego and indifference. Don't forget that Belgrade was never really a priority for Etihad. Sure, they operated daily flights but remember how long it took them to increase capacity from A319 to A320. The switch also happened right before they retired the A319 from their fleet.
DeleteAUH-BEG was on idle for a long time, it was never a priority for them in any sense of the word. If they really wanted to seriously work with JU then they would have had at least 14 weekly flights with 7 operated with a widebody. The fact JU suspended AUH even when loads considerably improved only goes to show how both sides started to ignore each other. Etihad started to deal with its own issues while JU focused on BEG.
Like this they mostly had daily flights, so same as FZ and even less than QR at one moment. Even the additional EY flights were not year-round.
Business knows no feelings. The downfall started when EY reduced their operations from 2 daily BEG-AUH to 1 daily. JU also operated a daily service that was halted and did not last too long.
DeleteThe true winner here is clearly QR who will benefit from the Australian market via DOH.
EY operated two flights a day just for a few months in the seven years since they launched BEG in June 2013.
DeleteThis fairy tale was bound to end.
ReplyDeleteIt stopped being a fairytale a long time ago.
DeleteSto bi narod rekao "puce tikva"... Nista strasno neka |JU pocne da leti ponovo za DXB ili AUH i gotovo.
DeletePerfect moment for QR and JU to make partnership.
ReplyDeleteIt would be nice but there is no chance. QR had its adventure in Italy and failed. Our president is close to the Emirates Sheikh and has on occasion criticized Qatar (even though absolutely no one asked him anything about Qatar) but I guess he has to show loyalty to UAE. Also Al Baker, QR CEO said when Jet Airways from India collapsed that they have no interest in buying the mess from their "enemies".
DeleteAnon 9:27 If only GoS revokes citizenships given to Dahlan family and changes its political alliance completely towards Qatar.
DeleteThey don't want to postpone the restart of the route again and again, as for now they have no clue, when the route will be viable, so they ended it for now. They may reinstate it any time, if market conditions allow. Nothing special.
ReplyDeleteEnd of codeshares is not decided yet. It would however make sense if they do not reinstate the route to BEG. There is no point in offering your clients a route from BEG onwards if you dont offer them a route from UAE to BEG.
But they offered BEG via Frankfurt and Zurich for example, codeshare with Air Serbia. Now they don't offer anything with Air Serbia. But they offer BEG via Rome with Alitalia codeshare.
DeleteSorry, so are the codeshares already ended or it is just a speculation?
DeleteWe don't know. It says in the article Etihad didn't want to comment but EY is no longer offering any flight in codeshare partnership with JU on their website.
DeleteDo they continue flights from UAE to Frankfurt and Zurich? Maybe they want to discontinue those and here is the answer.
DeleteNo they haven't suspended FRA and ZRH.
DeleteOK. So they probably think about exiting JU venture.
DeletePersonally I don't see how they can profit from this venture in a reasonable future. There will be no profit to distribute, to what I understand they don't get any management fee or similar. They would not be interested to profit from interest on some new borrowings given to JU, because they are afraid that any borrowing given to JUI will not be repaid.
Sell for whatever the government wants to pay and that is it. They only incur some unnecessary costs managing their shareholding in JU.
What I don't get is that they restored this route after the lockdowns. Between June and October and they actually operated each and every flight. Didn't cancel anything.
ReplyDeleteVucic wouldn't be mentioning getting a bigger stake in the airline if he didn't already know that they will have to do it.
ReplyDeleteThe timeline fits. The policy they adopted for recapitalization in October, then the announcement of restructuring which will be done by the end of the year. Remember the EY agreement went into force on 1st January so that's when they will probably leave too.
DeleteThis route to Abu Dhabi had so many airlines codesharing. Air Serbia, Montenegro Airlines, Virgin Australia, Oman Air, SriLankan Airlines, Kuwait Airways and Saudi Arabian Airlines.
ReplyDeleteSriLankan has since moved to Qatar Airways and now codeshares on their flight to Belgrade.
DeleteEtihad CEO said recently they need to cut lots of routes, downsize airline and become a mid-size carrier. There will be a lot of changes at Etihad in the coming year. This is not so surprising.
ReplyDelete"In 2019, the airline operated 462 one-way flights between Abu Dhabi and Belgrade, offering 62.832 seats each way. "
ReplyDeleteThat is a lot. It means annual capacity was 125,664 seats. Hope BEG can find a replacement.
No surprise here. Serbia wanted to "retake control" of the new ASL after learning what EY provided them since 2013 anyway.
ReplyDeletePlus. there is nothing, absolutely nothing successful that EY did in Europe. They destroyed so many airlines, they never had a clear strategy. AB, AZ were a clear mess.
This also means that the sole A330 renewal in May remains questionable as well as the JFK service. Interesting times ahead....
Read what Vucic said about New York
DeletePoliticians are not aviation experts. Their job is to serve the nation. Has he menrioned anything about the aircraft renewal? Will Serbia be capable of sustaining this project by herself? JFK is not a cheap airport...
DeleteSerbia has been sustaining the JFK project since day one. What? You think Etihad is paying for the route? LOL. The only thing Etihad got from it is the inflated price for the subleasing of an A330. Please, no need for fake concern.
DeleteHere are a few sources to put things into perspective.
Deletehttps://simpleflying.com/air-serbia-new-york-load-factor/
...and then there is this.
https://nypost.com/2020/11/17/serbia-is-a-new-unlikely-oasis-for-nyc-residents-fleeing-the-city/
...and this.
https://www.insidehook.com/daily_brief/travel/new-yorkers-serbia-pandemic
This is great. Maybe if more of them come Delta or United might put BEG on their radar.
DeleteVERY interesting articles. Thanks for the link. I'm surprised that JU didn't increase prices for the JFK route - as most people travelling have less options or are less concerned over price right now.
DeleteIn summer they always made money so fares have remained stable. JU is not cheap to New York though. In winter they are because there is obviously less demand.
Deleteim pretty sure WizzAir Abu Dhabi will announce BEG in the next expansion round (together with SKP and maybe TZL)
ReplyDeleteyehhhh Etihad is tapdacing on thin ice Alitalia (g0ne), Airberlin(MIA) AerLingus (DOA) and now AirSERBIA
ReplyDeletethis two-stops strategy AUH-BEG was hardly working when you have one stop connections in the region via DOH, IST and DXB
ReplyDeleteDoes JU really need EY partnership?
ReplyDeleteJU maintaned a codeshare with TK via IST which is one of the best connected airport in the world (also the airport with the most carried passengers in 2020 in whole Europe so far), can't even compare to Abu Dhabi airport which is 4 hours away from IST.
Even in this pandemic time, IST is the busiest route from BEG. Imagine what can happen during the normal time without the COVID.
Also JU flies to IST while they no longer do so to AUH. It's also better for them to fly to a mega hub just an hour away where they have a lot of O&D demand.
DeleteWhat has TK to gain from JU? TK will never help JU for free...
DeleteWhat TK has to gain from JU? How about more transfer passengers from BEG. You might have missed it but before covid they requested 17 weekly flights with widebody options. They were turned down so JU compensates for that.
DeleteAlso TK has a morning flight and an evening flight, JU operates the one in the middle. This is especially good for businessmen who don't want to wait until 19.30 in the evening to fly back.
JU has codeshare with TK only for flights to other turkish cities
DeleteIt does not matter because TK has its code on the JU flight so when they sell flights they can fly passengers like that. JU is not the one who is pushing sales here, TK is.
Deleteyou all forget that TK flew double daily (pre Corona) to every single Yugo capital
DeleteBut that was my point, TK already performs well on BEG route, they don't need JU. 2x daily with TK which will come back in no time post-Covid feed their entire Asian and N.American network. JU or not JU doesn't shake TK at all to the Balkans.
DeleteTK has another bank of departures which is why they used to have a 15.15 departure from BEG before they lost the permits. JU compensates for this.
DeleteWhy would JU shake TK anywhere? You are missing the point, now they are partners, not enemies.
I see Qatar is already ready. They increased BEG from 7 to 11 starting from the beginning of the summer season. They brought back the night flight.
ReplyDeleteOh dear God, let JU enter some decent alliance...
ReplyDeleteWe get it, Nemjee, you love QR and hate EY. No need to reply to every comment here. :)
ReplyDeleteAnyway, I highly doubt their partnership, in sense of codeshares and EYG programme will end. It doesn't make sense, really
Also complete BEG suspension doesn't make sense, as it was always packed before Corona. I suppose they'll return once things start to get back in normal (whatever the new normal may be).
If it's all true, gotta spend my miles soon, as I couldn't use them for JU flights this year at all. lol
Why not join OneWorld?
ReplyDeleteQatar would take care of Asia and Africa.
In this corona time, JU flights to LHR have already switched from T4 to T2. It could very well switch to T5 and take advantage of AA's and BA's N America network.
With flights to Madrid, it could cover S America.
The whole world covered.
my2cents
If we are playing this game, probably more chances to join SkyTeam...
DeleteWhy is that?
DeleteIt would make more sense to join OW, simply because there are no OW carriers anywhere close to BEG and the alliance would actually open up some new markets and routes; again, not much opportunity for connectivity precisely because of that. LHR is served well, but other OW hubs in Europe, not so much. QR being the only OW carrier to serve BEG, they would benefit the most at this point.
DeleteSkyteam, while more beneficial to JU pax, is all around the place - Air France/KLM, Alitalia, Tarom, ČSA. What would they need another Eastern European carrier for?
JU has already good cooperation with many SkyTeam airlines (check the codeshares), French company is in charge of Belgrade airport (AirFrance/Delta are leading companies in SkyTeam), generally we will so more French companies here and our government loves to make business arrangement with political background.
DeleteOn minus side, as in previous post, there are already few SkyTeam members in region, although most of them without clear business case for the future - neither Alitalia, ČSA or Tarom.
I live in Canada. My concern is SkyTeam does not have presence here. It will be needed for connecting flights from when AS (JU) start flying to YYZ one day.
DeleteWell, AirCanada is in Star Alliance and that's not going to happen...
DeleteWhat's not going to happen?
DeleteJU in Star Alliance is not going to happen.
DeleteOK, but we were talking about whether SkyTeam or OneWorld is a better option for YU.
DeleteSince StarAlliance is so well represented in the region.
There is also the possibility Etihad will retain some symbolic stake in JU, like 10 or 20%
ReplyDeleteHope they come back eventually
ReplyDeleteI wonder what will happen with JU's frequent fly programme, Etihad Guest? As for the BEG-JFK route, it has been busier then normal in 2020 only due to the fact that many Europeans who aren't allowed to fly directly to the US come to Belgrade first, spend 2 weeks, then take that flight to the US. Americans in return are flying to Serbia as there aren't many other countries that they're allowed into due their own mismanagement of the Covid situation. Were it not for that, the flights would be empty - period. As for the A330, there are literally hundreds of parked aircraft sitting in storage around the world at prices significantly lower then whatever JU is paying for the current a/c.
ReplyDeleteFights to New York performed well before the pandemic too. You can find articles on annual performance with LF here. We don't know if Etihad is leaving JU. The article also says it is a conclusion but that it is not confirmed. We will see.
DeleteAnon 13:27
DeleteLet him believe in his words. Don't spoil the reality he lives in.
Puče AS kao i svaki prenaduvani balon...Emiraćani utekoše bez uloženog dolara, a mi platismo 300 miliona evra iz budžeta do sada...
ReplyDeleteНе видим како је ,,АС'' пукла. Ер Берлин је пукао. ,,АС'' се спасио на време.
DeleteI don't get people's logic and fascination with QR and that JU should now "buddy" up to them.
ReplyDeleteQR is a great airline with an awesome product and extensive network. There are many reasons why it might sense for JU to look to make a deal with them in a post-EY world.... except for one compelling reason ....
And that reason is that Qatar itself is a SHITHOLE of a place ! There is ZERO P2P traffic between BEG-DOH and it is not and will never be, a destination where Serbs (or other traffic from the surrounding region) wants to travel for a holiday.
The only place that is and that makes sense from a P2P perspective, is Dubai. Jat used to fly there (for good reason) and had a great relationship with EK. Now is the time to dust off that relationship and to look to restart it.
1. EK has an extensive Global network
2. It has a super network into Australia and the Far East
3. There is good history between the 2 carriers
4. Huge diaspora residing within Dubai itself
5. Dubai is THE pre-eminent tourist destination within the UAE and an existing popular destination for Serbs and others from the surrounding region (unlike Qatar). Points 4 and 5 alone, make a business case in its own right for P2P traffic without even considering the transfer traffic that we know exists, both from EY's experience and previously with EK
6. Good existing political relationship between GoS and UAE - striking a deal with EK would keep this intact.
7. Existing deep business ties between GoS and Dubai (developer of Belgrade Waterfront is from Dubai)
And these are just the things that come to mind .... I'm sure that there are more and that others could add to this list.
So forget the rubbish about Qatar and refocus the efforts on EK and Dubai ......
So would you like to see EK in BEG, or JU in DXB? or both?
DeleteI would like to see both working together again as they previously did ... how that happens and what it would look like really doesn't matter, as long as it is a "win-win" outcome for both
DeleteThere is only one flaw in your equation. Back when Jat flew to Dubai there was no FZ in the picture, EK had no other choice. Once MAX is back, FZ will offer a more than decent product to BEG, definitely a far superior one compared to JU which would be flying their 144 seat A319 to Dubai with no dedicated business class.
DeleteJU could and maybe even should return to Dubai however it should not solely rely on EK in order to make those flights work. JU has its own regional and European network and that should be its primary focus. Without a good enough product, among which is a lack of any IFE, they should focus on the price sensitive Europeans looking for a warm getaway. In a way carry similar passengers that Pegasus does.
They could have a 00.30 departure on Saturdays (basically Friday evening) which would be popular with locals going for holidays.
As for Qatar, I think they should get a code-share but don't know if they should launch Doha. QR is full, or was full, out of Belgrade before covid. Obviously they have enough passengers flying via Doha without going out there. I suppose QR would be more generous with fares towards JU than EK would be.
Overall, I don't think EY's exit would change much. Air Serbia still has some local talent that can lead the airline forward. After all, they were doing exactly that over the past few years.
Just to put things into perspective so that people understand that Doha and QR play an important role when it comes to Serbian aviation.
Delete2017:
IST 247.530
AUH 121.583
SAW 63.918
DXB 62.044
DOH 57.082
2018:
IST 261.766
AUH 88.220
DXB 86.281
DOH 81.397
2019
IST 203.856
AUH 114.256
DOH 97.815
So in just two years Qatar Aiways' numbers in BEG grew from 54.000 to almost 100.000.
I can see that the people commenting here have no clue on the level of corruption that goes on in Serbia. All losses from this partnership will be covered by Serbian people, through IMF loans that Serbia won't be able to pay back, instead loosing even more natural resources...
ReplyDeleteThat can be said about any ex YU or even Balkan country.
Deletelet's hope this is opening door to something new and more sustainable
ReplyDeleteJU had a bunch of cost cutting thanks to EY, it would be a shame if all of that disappears
Cost cutting measures had nothing to do with EY but rather with JU. JU was taking necessary steps while EY was still burning money left and right.
Delete