Montenegro retained its position as Air Serbia’s highest-yielding market last year, despite the impact of the coronavirus pandemic. Passenger yield is the average amount of revenue the airline receives per paying passenger flown per kilometre. The short hop to Montenegro, bolstered by relatively high fares and low operational costs, ensured that it remained one of the carrier’s top performers, according to the company’s annual report. Air Serbia saw its yields improve across the board in 2021 when compared to the pre-pandemic 2019 by 1.2 points. The carrier noted it achieved these results due to its swift reaction to changing market conditions, as well as dynamic pricing.
Other high-yielding markets for Air Serbia last year, following Montenegro, included Greece, Italy, Russia, the United Kingdom, Switzerland and the Netherlands. Russia saw the biggest jump in yields compared to the pre-pandemic 2019 in response to the large volume of traffic between Serbia and Russia last year and rising fares. The Serbian carrier handled 121.860 passengers on flights between the two countries in 2021. “Air Serbia managed to maintain an optimal level of traffic in order to respond to the needs of the market at all times and therefore reduce the negative impact of the pandemic on the company’s operations. With this strategy, Air Serbia managed to create an optimal balance between required capacity and suitable fares”, the company said.
Air Serbia change in yield by market, 2021 vs 2019
This year, Air Serbia become the launch customer of Sabre’s Air Price IQ tool, which provides technology to the airline to generate relevant offers by analysing the carrier’s own shopping and revenue management data in real time along with relevant marketplace insights. The cloud-native solution utilises artificial intelligence (AI) to optimise price and help it drive higher conversion rates and improved yield by delivering more relevant offers across all channels. Created as a result of Sabre’s strategic partnership with Google, Air Price IQ moves away from traditional static pricing models and uses advanced machine learning models to personalise airfare offers in real-time, helping Air Serbia drive conversion.
Air Serbia's best performing markets based on passengers carried and generated revenue in 2021
Air Serbia is expected to post a profit this year, with key performance indicators improving. The carrier’s CEO, Jiri Marek, recently said, “We would like to be in the black already this year. Covid taught us to react very quickly, which we can see even in today's circumstances, when fuel prices have skyrocketed. The season was successful, but now we have the harder part of the year ahead of us and no one can predict how inflation will affect people's will to travel, for example. For now, however, we remain optimistic”. Mr Marek noted the airline has reduced its costs and views airBaltic’s pre-Covid business model as an example. “We look at airBaltic, which was very successful before the pandemic. We cannot become a low cost carrier, that is impossible for an airline of this type. We will never be able to buy a hundred aircraft at once, which is what low cost carriers do to reduce costs. However, we try to be efficient and have twenty to thirty percent lower costs than other legacy carriers”, Mr Marek said.
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Not surprised at all. Flights Podgorica and Tivat are short and prices are expensive. No wonder they are making money on it. The lack of serious competition in the last 2 years probably helps too.
ReplyDeleteWhat are the average fares to Podgorica and Tivat?
DeleteTickets to Tivat in mid summer cost 300 euros without luggage!
DeleteSo a return trip is more than a monthly wage?
DeleteHe was referring to a return ticket.
DeleteThat is the return ticket. Average monthly wage in central Belgrade had reached 1.000 EUR by the last summer.
DeleteThey are high if you book last minute. At the moment a return fare Belgrade-Tivat in the middle of July with baggage on the A319/A320 is 160 euros.
Delete^ Of which 30 euros are actually various taxes.
Delete@ 9:23
DeleteI don't know anyone who makes that kind of money.
Obviously enough for over 85000 people to travel to Montenegro in a year where there were a lot of Covid restrictions. I expect the number will be well over 100,000 this year.
DeleteAlso the myth of tickets being 300 euros is easily broken if you go onto their website and look at the fares yourself. Sure, there will be fares for 300 euros or even more if you book the ticket a week in advance in the high season when everyone is traveling to Montenegro.
I don’t know anyone around my age (born in the early 90s) making less.
DeleteAnon 09:23 your comment hurts me a lot since at BEG gate agents have 550 EUR salary :)
DeleteThese 300 eur tickets are almost a standard during the summer. Of course you can find it much cheaper at the end of November.
DeleteI wrote above I looked at a return flight in the middle of July from Belgrade to Tivat and with luggage it is 160 euros. So just check before writing.
DeleteIt takes a minute of your time to go onto airserbia.com and see that ticket prices are more than reasonable during the high summer period. If you decide to book 2 weeks in advance in high season then yes, it will be expensive. This is the case with any airline in the world, especially on destinations with high demand.
Delete160 eur return ticket, mid August, bought 2 weeks in advance. No one would fly with JU if the tickets were 300 eur since Air Montenegro flies too, for similar prices as JU (120-180 eur).
DeleteThey are really doing well on that Oslo route! Considering this is data from last year when it was restricted for Serbian citizens to enter Norway.
ReplyDeleteThat's why they had up to 5 weekly flights to OSL this summer.
DeleteWould not have guessed about Montenegro but makes sense actually.
ReplyDeleteVery interesting data
ReplyDeleteI am surprised by the high number of passengers from Russia in 2021, even before the war and when Aeroflot was doing so well in BEG.
ReplyDeleteI think there was a huge increase in travel since neither Russians nor Serbians could travel much anywhere else. But you are right, I remember that was the time SU was using A330s and even B777 on some occasions to BEG.
DeleteI wonder how many passengers they have this year.
DeleteVaccine tourism was popular at some point too. Also have in mind this doesn't mean all pax are from Russia, there had to be some transfers too.
DeleteVaccine tourism? God help us.
DeleteYes Serbia accepted anyone and inoculated everyone who wanted unlike "civilized" US and Australia.
DeleteActually you could get vaccinated in the US :) and many did (mostly from South America).
DeleteYes, same goes for Australia. Whoever was in the country when they closed borders was able to get vaccinated. No questions asked.
DeleteBut they didn't let anyone enter for 2 years and you couldn't even travel inter state.
DeleteRemember also Russians flew via Serbia to get to Montenegro as they stopped direct flights, thus an impact on both Montenegro and Russia numbers in 2021
Delete"This year, Air Serbia become the launch customer of Sabre’s Air Price IQ tool, which provides technology to the airline to generate relevant offers by analysing the carrier’s own shopping and revenue management data in real time along with relevant marketplace insights."
ReplyDeleteBasically if you are searching for a city on google and than look at the fares on airserbia.com the fares will explode with every search :D
It's true. That is how it works. The pricing tool uses your google search but also information about the city. For example it knows that if there is a big concert being held in a particular city on a certain date and you are interested in it based on your searches, it will increase the prices automatically.
DeleteEverybody is doing it. It's not such a novel concept.
DeleteDoesn't mean it's good even if everybody is doing it.
DeleteFor the company it obviously is good. Makes them extra money.
DeleteIt means you have to be hyper-vigilant and try to figure out what the computer wants in order to give you the actual lowest fare.
DeleteTo me it looks as if Air Serbia is becoming more and more seld sustainable.
ReplyDeleteI have a feeling Russia might be the highest yielding this year. We will see.
ReplyDeleteDepends. it is quite costly to operate that route at the moment.
DeleteConsidering the prices they are charging for it, I think it more than covers the costs.
DeleteI'm surprised there is no Turkey on the list.
ReplyDeleteLast year they were flying just 4 weekly to Istanbul. The route really transformed this year.
DeleteLeaders of the Balkans! LOL!
ReplyDelete?
DeleteI think he is trying to make fun of the fact that Montenegro is the top yielding market for them I guess. But it just shows he doesn't know what yields are or how it works.
DeleteIn the Balkana we are all leaders lol
DeleteYields growing on all main markets is pretty impressive.
ReplyDeleteThey manages to keep operating costs low while fares increased.
DeleteInteresting stuff.
ReplyDeleteTo me it shows that the restructuring Air Serbia did in 2017 and 2018 was actually successful. It set them up to expand as they are doing now, improve their yields and financial performance.
ReplyDeleteAgree. And even through changing their business model from a boutique to a hybrid airline was painful for passengers, it shows it was the right decision for the business.
Delete^ True. To be honest, they should have relaunched in 2013 under this model and not as a boutique airline with dedicated business class cabin and selection of meals in economy an 1 hour flights. While it was nice while it lasted it was extremely expensive.
DeleteAnd I can imagine how much money they lost in that first year. Apart from operating this expensive model their fares were dirt cheap. They were dumping prices which was a smart strategy in my opinion (they were trying to attract passengers to fly with them in the first year) but I can only imagine how much money they lost by operating with this expensive model while selling cheap tickets.
DeleteThe consolidation was much needed.
DeleteIt would be very interesting now to see OU and Air Montenegro yields for comparison.
ReplyDeleteEspecially Air Montenegro's to compared to Air Serbia's Montenegro yields.
DeleteOh yes, it would be very useful :) I would love to see how much money OU is making on its FRA flights.
DeleteThey are not making money on FRA, it's loss making political service which has the only purpose of funnelling passengers, especially long haul passengers, to Lufthansa
Deletewho would have thought that duopoly (maybe soon monopoly) would lead to this :o
ReplyDelete+1
DeleteKonkurencija 2 firme takodje postoji na letovima izmedju BEG i FRA, AMS, CDG, VIE, ZRH, ATH, IST, OSL, BCN, OTP itd. Gde je dokaz o uzrocno posledicnoj vezi svakog "duopola" i velikih profita?
DeleteNot bad at all
ReplyDeleteNice analysis EX YU, not seen so far. Is this mean that there are no markets with negativ yealds in 2021 comparing 2019?
ReplyDeleteDoes anyone know why Dan Air is still operating certain YU flights and why they still have two aircraft based in BEG? Does JU have a lack of aircraft, or is this going to be some long-term partnership?
ReplyDeleteSeveral of Air Serbia's planes are undergoing maintenance and lots of crew have now been granted holiday leave after the summer. It is a short term wet lease.
DeleteI would add that JU were short of crew for the summer season, which has continued onto the winter season. Not to mention that most likely Jat Tehnika isn't able to complete maintenance in a timely manner (also possibly down to staff shortages).
DeleteSomething wrong with these figures or it is not revenue but maybe profit per passenger?
ReplyDeleteUS Rev per pax as per above numbers 241.26 USD. Switzerland 78.28 USD
Or one passenger with return ticket counted twice?
Why is that odd? When you subtract the taxes and charges the airline does not receive and when you count that many passengers are transfers so the amount the airline receives for each passenger varies by sector.
DeleteThe table is not revenue per passenger it says the total revenue generated on the route.
Delete@JU520 I don't see what the problem is. Those numbers are correct. They are per one way. Not return.
DeleteThanks anonym 09:54h, that makes sense.
Deleteanonym 10:02h - Thank you too, thats what I tought.
It is not surprising that yields are up. It happened at most airlines last year and this year because fares are higher than they should be. Also a lot more airlines are selling business class better which is a phenomenon left from the Covid era.
ReplyDeleteI think the bigger number of people traveling in business class is mainly on long haul flights.
DeleteEven on short sectors too.
DeleteAir Serbia really benefited from the collapse of Montenegro Airlines and the fact that Air Montenegro can't get its act together. Air Montenegro still can't even sell connecting flights.
ReplyDeleteDefinitely. A blessing for them. Especially since YM had more passengers. Although it is questionable who made more money at the time.
DeleteEven with its 7 weekly flights, it seems that Serbia is reached from Bulgaria by car. On the news today it says that Beograd hotels are fully booked for New Year with many Bulgarian tourists:
ReplyDeletehttps://www.euronews.rs/putovanja/novosti/66456/srbija-sve-popularnija-za-turiste-iz-bugarske-beograd-na-listi-vise-od-30-agencija-iz-sofije/vest
It's a pity that JU is not actively working with more tour operators especially in Varna or Plovdiv which started witnessing a strong boom in charter flights. This way it can also advertise Montenegro.
The yields to Greece are quite good probably as a result of charters. They sell the plane full to tour operators in the summer on their Greek charters regardless if the tour operator fills the plane or not. Obviously passenger numbers to Greece were not that high last year because of Covid and restrictions in entering Greece.
ReplyDeleteI wonder if they take charters into account in these yield results.
DeleteThey do
DeleteHope the yields keep growing in 2022 :)
ReplyDelete* kept
DeleteWe will see. Costs have risen by a lot due to fuel.
DeleteAre they having problems with ATR fleet or is there a genuine demand for morning lju flights? They are sending a319 almost every morning this week
ReplyDeleteI can't speak for other days but today there were 36 passengers from BEG to LJU and 67 on the way back. So it's probably due to lack of ATRs.
DeleteThat was one expensive flight for air serbia :D
DeleteWould have made good money on the ATR.
DeleteYU-ALY and YU-ALO haven't flown for a couple of days. YU-ALZ still hasn't arrived. YU-ALP was in INI and only arrived in the late morning.
DeleteReally fascinating to see these numbers and get a glimpse of which markets are performing well for Air Serbia. Thanks ex-Yu!
ReplyDeleteAnd then they say JU is not transaprent :D
DeleteNo wonder they kept flying to Russia. It's generating a lot of money for them.
ReplyDeleteFrance seems to be a good performing market and this was back in 2021 when they only flew to Paris.
ReplyDeleteCDG has always been a solid performer. Even during the Jat Airways era.
DeleteOne of the most profitable individual routes.
DeleteWill be interesting to eventually see the numbers for this year.
ReplyDeleteI'm surprised there is no "Montenegro keeps winning" comment :D
ReplyDeleteDoes TGD or TIV make them more money?
ReplyDeleteAir Serbia is not an expensive airline. Not even close. And if you can't afford 160 euros to fly to Crna Gora in the middle of the summer - peak season for travel, then you really should not be flying.
ReplyDeleteStill under the inflation rate. Yields should go up with same % as inflation in order to have same profit as last year, no?
ReplyDeleteIf you have trouble reading, results are for 2021.
DeleteWow, if you have problem reading, really? Avg inflation rate was 4% in 2021.
DeleteWonder what would happen with yields if an LCC was allowed to launch this route.
ReplyDeleteI think the biggest change would be that JU finally offers Economy Light fares to Montenegro. You can get a glimpse of what a LCC would do by looking at ZAG-TGD. Similar prices to what JU offers (when luggage is included) on their BEG-Montenegro sectors, JU at least has frequencies and better flexibility with their aircraft to adjust capacity according to demand, not to mention that JU isn't solely focused on the O&D demand. LCC's would have a hard time with the routes between BEG and Montenegro without heavily dumping fares, which for them isn't good long term. Yields would be affected short term as 3 carriers fight for their market share but in the long run I don't think 3 would survive the battle and then it's back to the same/similar fares and yields.
DeleteWe also had a similar scenario just over 10 years ago when Niki launched VIE-BEG flights. Both Jat and OS lowered fares which eventually kicked Niki out from the route. Without decent frequencies, a LCC would simply not be able to compete. Adding 1 daily flight (roughly 400 seats per day or 145.600 for the year) is a massive increase in capacity.
Would be interesting to see what happens with prices when Ryan enters Croatia domestic routes like ZAG-SPU and ZAG-DBV.
Deleteair montenegro tanked
ReplyDeleteI plan a trip to Russia, but cant afford AirSerbia expensive ticket. So probably i go via Istanbul. Prices went crazy.
ReplyDelete