Air Serbia posted its best financial result on record by generating 21 million euros in net profit last year, with the carrier claiming it received no subsidies from the state. In a statement, the airline said, “Based on preliminary results, Air Serbia posted a positive net and operating result in 2022, for the first time since the coronavirus pandemic broke out, achieving a profit of 21 million euros, without a single euro coming from government subsidies. The good preliminary financial result was achieved thanks to efficient operations and business consolidation measures that were carried out during the pandemic, as well as a big network expansion, traffic volume increase of around 60% year-over-year, general rise in demand since spring 2022 and the easing of travel restrictions which were in force up until then”.
Air Serbia has managed to bring its costs down by 25%, while its aggressive growth of over twenty new routes in 2022 performed exceptionally well. The carrier handled 2.75 million passengers during the year. Its detailed and audited financial results will be publicly available this summer. The Serbian government has not listed Air Serbia as a recipient of direct state subsidies in its 2023 budget for the first time in nine years. The government has maintained that previous funds destined for Air Serbia from the state budget were to pay off old debt owed by the carrier’s predecessor Jat Airways. During 2022, the state purchased 1.82 million newly issued shares by Air Serbia valued at a total of 15.5 million euros, increasing its ownership stake in the flag carrier by 1.6 points to 83.58%.
Commenting on the company’s financial results, Air Serbia’s CEO, Jiri Marek, said, “I am immensely happy with the good financial result achieved last year, which is already visible, because this is the real indicator of our company’s ability to react quickly and recognise opportunities for recovery and growth. This result comes after two extremely difficult years, not only for our company, but for the entire commercial aviation sector globally. I am especially pleased that we are entering our milestone tenth year since Air Serbia was established in the best way possible, and we have ambitious plans for this year, some of which have already been announced”. He added, “In the coming days, Air Serbia plans to publish its operating results for 2022, but we can already say that last year, the Serbian national airline came 2% away from the record-setting passenger numbers achieved in 2019, which is one of the best results in Europe, looking at this parameter”.
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wow congratulations!
ReplyDeleteImpressive
ReplyDeleteConsidering how expensive their fares are, and how much they charge for flights to Russia, I’m really not surprised.
ReplyDeleteAnd I'm not surprised that you were on standby to post your deflatory comment.
DeleteWell done Air Serbia!
@Anon 09:17
Delete+100!
Anonymous09:03 AS route to Moscow is one of 70+ routes they have, they fly about 9 times a week there and no matter how high the fares were, they simply cannot achieve 21m in profits just from one route. Knowing that that same route was sabotaged and as a result had the cost of maintaining it much higher it really isn't a surprise that the fares were that high.
DeleteThey had many good moves last year, huge investments, new routes, new planes....I really expect that AirSerbia can be a good model for all government companies that are struggling like GSP Beograd, EPS, Putevi Srbije etc.
They charge premium on many routes. In summer season round trip to almost any destination regularly cost as much as average salary in Serbia unless you.buy weeks in advance!
DeleteCreative Accounting! If the government didn't keep JU afloat they would of recorded record losses! Still I would rather the government keep funding their own Airline rather then giving money to the likes of Ryanair or Wizz!
ReplyDeleteAnd how on earth do you know that they would have "record losses". Most airline are posting big profits. Fares have gone up, Air Serbia has decreased its costs significantly, it charges a fortune on routes to Russia and China, it renegotiated its aircraft leases to reduce prices, the lease of two A330s is now has is the price of the single YU-ARA A330 they used to have.
DeleteNo government funding will take place this year. The company's ability to become profitable over the years is thanks to that same government which propped the company financially in a rational manner and helped it on its feet. And the results talk for themselves. Unlike some other leeches in the region that get to freeload to unheard of extents, yet are shrinking and got nothing to show for it, except to demand fresh handouts to touch up their crumbling facades.
DeleteIt would be really great if it’s real, but I don’t trust those guys at all. Those kradeze are very talented to make creative accountings, depending of the current needs.
Delete"Kradeze"... you don't even get the reference that another person uses here to describe your national carrier.
DeleteWhy is it so hard to believe that there is a profit? You can’t do creative accounting like in communist days. Serbia as a country, as well as Air Serbia have a duty to be transparent. They received no funding in the form of subsidies from the government, so what’s the issue?
DeleteHahah, you are really funny. Yes, there can be creative accountings and they are using it all the time, whenever is needed for their daily political purposes or to cover some dirty work in behind.
DeleteHahah your evidence is even funnier. Proof please.
DeleteI am really proud of JU. They’ve come a long way! And they are returning to my home airport OHD too 😍
ReplyDelete+1
DeleteMuch better than I expected. Well done!
ReplyDeletePart I'm most excited about
ReplyDelete"and we have ambitious plans for this year, some of which have already been announced”"
so there is more to come :D
+1
DeleteWhat could it mean? More new routes? New aircraft additions?
DeleteThere will definitely be more new routes. At least, the China flights will probably be shifted to Beijing and Shanghai.
DeleteWe have still been expecting to see CAI, TLV and BEY.
DeleteThey are lucky Serbia is not a member in the EU .
ReplyDeleteFrom what I've seen in the EU, airlines are getting hidden incentives from their governments, airports, tourist boards, regions etc. In the case of Croatia Airlines we see state support for PSO (for profitable routes like Zagreb-Dubrovnik), funds from airports for advertising, funds from tourist board, funds from constant government aid, deferral of loan repayments provided by the state etc.
DeleteWhich makes Air Serbia a true success story, when you consider how much they get on a silver plate and how hard Air Serbia has to work without all those perks to get where it is.
DeleteYou think they're lucky not being able to start flights from anywhere but Belgrade or Nis? Yes, being EU airline means somewhat more financial discipline but it provides enormous opportunities for business.
DeleteSerbia's aviation sector is pretty much in line with EU protocols. JU can't exactly be pumped with endless amounts of cash and not expect repercussions from the EU due to the agreements in place. Previous investigations on JU financing (and management structure) showed that Serbian funding into JU is within EU limits. Both Ryan Air and Adria made complaints to the EU and got nowhere as the ruling was in JU's favour.
DeleteIt would be interesting to see which route makes them the most money.
ReplyDeleteIt was already published here a month ago for 2021. I'm sure we will get it for 2022 too.
DeleteIn 2021 Montenegro was their highest yielding market. It will be interesting to see if Russia overtakes it. In 2021 US was its highest revenue generating market. I expect that will stay the same.
Delete"During 2022, the state purchased 1.82 million newly issued shares by Air Serbia valued at a total of 15.5 million euros"
ReplyDeleteSo, they did not give the cash to Air Serbia directly so the public would not say that Air Serbia receives state aid, but Air Serbia simply issued new shares which the state bought and via that, they gave Air Serbia 15,5 Million.
So, yes it is creative accounting.
Even if you removed that, they are still in profit.
DeleteRecapitalization is never taken into account in a company's balance sheet in terms of profitability. So no, these 21 million are not related to the recapitalization.
DeleteAh well, you can sugarcoat it as much as you like, but they still did receive the 15,5 milion on one side so they can show profit on the other.
DeleteCan you subtract 15.5 million from 21 million and tell me if that's still a profit?
DeleteIf there weren't 15.5 million there most probably wouldn't be 21 million. But that's basic business logic, nothing weird or shady. The owners do play with their capital through recapitalisation and when they make profit, we call that companies successful.
DeleteAnonymous09:18
DeleteThe government is the owner, so what's the issue if they recapitalize their own company?
Well, if Airserbia were a public company, this would dilute the shareholders/reduce the value of the shares they have bought previously. Since this is not the case, the country is just diluting itself.
DeleteAnd bottom line, even if the company posted, in best case a profit of 7 million, I merely pointed to the fact that the state pumped the 15 million into Airserbia.
Anonymous13:39
DeleteEven if all of that is true, 7 million in a year in which first 3 months were closed off for travelling for most of Serbian citizens, in which investments were high, network was growing and fleet was renewed, still impressive right?
I do not think 7 million is impresive for a country of that size,position on the map,fleet,state support.But it is something. A clean start at least...But will be interesting to see what Wizz have in mind. Competetion will definitely push them to improve everything or die.
DeleteI will never understand why do people criticize Government for helping Air Serbia. I really think they did A LOT to improve aviation in Serbia. And it's not just Air Serbia. The entire aviation sector has developed. Airport got the concession at a huge price thanks to Air Serbia. Jat Tehnika has been privatized, it is now converting widebodies into cargo planes, a whole faculty at university has been set up in the last few years which works with the entire aviation sector to train aviation professionals, MTU is now producing engines in Serbia etc. Thanks to all this you have thriving aviation sector in the country in all fields.
ReplyDeleteGood point. The industry really has risen up.
DeleteBecause the local mentality dictates that the more you spit on the government, the more you generate an image of a mucho brainiac and the cool guy associated with cutting-edge political views that would save the country (from itself). When a local starts embarking on an ego trip by spitting on the government left, right and centre for everything that's wrong in his life, you could safely assume in 90% of the time that the problem doesn't lie in the corridors of the government buildings.
DeleteAt least the government cares about aviation. Here in Slovenia we have had governments past and present which have done everything to destroy the aviation industry. And they have been successful in it.
DeletePostovani Anon 9:34. Veoma retko sam imao priliku da procitam tako sazet tekst upucen mnogim neodgovornim na ovom blogu. Ovavi tekstovi verovatno ljute ljude koji su puni gorcine i pomucenog
Deleterazuma. To se prvenstveno odnosi na pojedince koji psuju i bezobrazno se izrazavaju. Vredjajuci pristojnost ljudske komunikacije.svako cini po svojoj pameti.
Rodney. 😀✈🌐🛫
JU is one of the rare things of this regime I don't have anything against. It's not super transparent but I get this industry is tough, regulated and really expensive. Furthermore, its benefits are not visible only in company's books. If they were, there wouldn't be state owned companies in liberal part of world.
DeleteAnon @9:34 I couldn't agree more. It's the same issue with highways, someone told me that the highway from BEG to INI is in terrible shape. I drive it 2 times a week and it's amazing - way better than what we have on the majority of highways in Canada. But I guess haters are gonna hate.
Deletenonymous12:10
DeleteThe issue with highways, railways and aviation in Serbia is that some of it is developing at the cost of all other infrastructure in Serbia failing and deteriorating more than ever. Try driving a car in Belgrade and see the streets, or use a local road to travel anywhere...Hell. Even the highways are not really in a good shape as people may think, I did travel Nis to Belgrade by using the highway, and it it really not even close to a good shape at all.
@Anon 09:34 absolutely right about it. That’s the state of the mentality here. If it was at least 15% more positive, it would be so much better here. They really like to feed themselves with the notions of our misery and how others are always so much better instead of trying to better things and be happy if something is done right here …
Delete@09,34
DeleteCriticism is good to ensure we get the best for our country. Keeping quiet on obvious problems in our country doesn't help improve our standards and living conditions. Keeping quiet on severe mismanagement of government institutions does not help improve our country. Keeping quiet on a failure to deliver much needed promised improvemens is not ok. Normalising vulgar, racist/xenophobic, sexist comments is not ok. Criticism should be given where it is needed. Our country doesn't belong to a political party, it belongs to ALL citizens of our country.
Our aviation sector has improved, and this is one of the rare occasions that something has changed for the positive. JU could of been transformed earlier and cheaper, however the most important thing is the financial improvement has finally come. More however needs to be done, procedures in particular.
@12,10
Overall, our infrastructure isn't great and needs a lot of investment, especially in railways. Alot of corruption, failure to stick to deadlines, overpriced projects and poorly planned projects. Sure, your going to get certain places where it is better, but in general it is terrible. Our infrastructure doesn't start and end with the Belgrade-Niš highway (which isn't the best example of amazing quality, not terrible, not amazing), try taking a train between the 2 cities. Unfortunately, our politicians don't see the urgency to bring up the quality of our infrastructure or just don't care. Financing is not necessarily a problem.
@anon 12.10 Exactly how is the infrastructure in Serbia deteriorating more than ever? To tell you the truth I use lots of local roads in Vojvodina as well as southern Serbia, and they are better than ever. Ok, I have been driving for only 25 years now, can't tell about earlier times...
DeleteAnonymous18:55 Try sitting in a car and drive though the capital city, the roads are terrible! Public transportation is in its least reliable phase since the early 2000s, the city railways still use the same trains from the late 70s and early 80s, the railways stations are in terrible condition (outside of the BG-NS route), motorway to Pancevo now has a 60km per hour limit and the state of it is outrageous, even roads to Zrenjanin, Smederevo, Lazarevac, Mladenovac are equally as bad. Even the newer streets become terrible after a year or two and some major boulevards are terrible even after reconstruction or building like Ruzveltova or a Zemun-Borca road. Not to mention the state of urbanism and the fact that u sewage, water and electricity infrastructure is not made for this amount of people and outage or issues are very common as a result.
DeleteThat is the capital city where more than a third of the economy is, go to places like Kraljevo, Nis, Kragujevac, or god forbid Kursumlija, Pirot, Uzice, Valjevo etc. Some things are improving, but they come at a cost of other things not being well maintained.
Thinking that the state of Infrastructure in Serbia has never better is nothing but an illusion that is far from reality.
Congratulations to JU. Seems like things are looking up .
ReplyDeleteGood. At least this airline has something to show for last year. They renewed the turboprop fleet, introduced second wide body, launched second new long haul route, carried 98% of 2019 passenger levels and launched 20+ new routes.
ReplyDeleteWhen Aiŕ Serbia was losing money some people were angry. Now that Air Serbia is profitable some people are angry. Air Serbia is not the problem. Some people are the problem.
ReplyDeleteIts psychological - malicious comments from afar sugarcoated with a layer of concern (usually for the taxpayers), to disguise outright disdain for JU, but more so to offer a release vent to personal pent-up feelings of envy.
DeleteSeems like the consolidation measures worked. JU is growing again this year and we will probably get third long haul plane.
ReplyDeleteGood.
ReplyDeleteCongratulations Air Serbia.
ReplyDeleteSo JU is the only profitable national airline in ex-Yu.
ReplyDeleteBy far. And no longer a regional, but a continental player. And, hopefully, soon an intercontinental one too. Fingers crossed.
DeleteAnonymous09:45 It has regional dominance, and it is a strong brand in the region, but a continental player with 2.7 million passengers.... not really. It is a on a good way to be a great alternative for major airlines in Europe and it has a potential to be a continental and even a global player, but with the trends they have now.... let's give it a decade and see :D
DeleteSerbian economy must grow first, and its growing very slowly so we should be careful before saying that AS is a continental player.
They waste much less money than some other carriers and at least they have a decent network, frequent flyer program, crew etc
ReplyDeleteHow many employees does Air Serbia have now?
ReplyDeleteI'm interested to see their load factor.
ReplyDeleteIt will be published soon.
Delete"In the coming days, Air Serbia plans to publish its operating results for 2022"
They are on the right path. I expect more exciting things from them this year.
ReplyDeleteSurprising. Did not expect them to have such a big profit last year.
ReplyDeleteCongrats. I hope for further positive developments.
ReplyDeleteMany coming in 2023 :)
Delete1. They cut costs significantly and improved loads.
ReplyDelete2. They trimmed promotional prices substantially and increased prices.
3. They renegotiated airplane leasing terms and conditions
4. Their cargo loads have improved significantly which a big generator of revenue
And I would sey they did a lot in reducing seasonality.
DeleteAnonymous10:01 I only fly AS when paying promotional prices, they are available, a bit more expensive than before (10 do 30% maybe, I can't be so sure I didn't really analyze all the routes, but the ones I am using) but AS seems to offer prices for everyone's pocket (pocket of people that can afford air travel). However, they seem to be reducing the number of seats offered at those prices. Furthermore, for those whose main drive is a cheaper flight, flying from INI via BEG can me a much cheaper alternative and the connection times can be really short for some destinations, like SJJ, IST, VIE, ZHR, TIA etc.
DeleteAh long gone are the days of 2013 and 2014 when they dumped prices and you could score amazing fares. But still I am happy with how Air Serbia has developed over the past 10 years. If someone in 2013 showed me what Air Serbia would be like in 2023 and this was it, I would be very happy.
ReplyDeletePrice dumping was strategic. The idea was to get people flying with the newly branded airline which was unknown to people. If you ask me, Air Montenegro should have done this too but they would have to have a network of more than 5 routes to do that.
DeleteTrue. In 2018 and 2019 Qatar Airways dumped prices across the board to get people to know their brand better and start flying with them.
DeleteThat's a nice profit! Good job. Let's see if they increase salaries for their employees.
ReplyDeleteThey still have great fares. Last year I flew for 400 euros round trip to NYC because they had their anniversary promotion. Still, 600 euros round trip to JFK is a great price considering it includes two checked pieces of luggage.
ReplyDelete+1
DeleteThat was great deal. And if you got a relaxed Captain on the flight, flight attendant with a smile, decent meal then that is amazing value.
DeleteIn North America the airlines service deteriorated som much that is unrecognizable. No customer service, one free checked bag, no smiles, not even the fake ones, no trained staff, food that can hardly called food, cancelled flights,
Class action lawsuits are flying against airlines for Christmas fiasco….
Air Serbia is is very good compared to what is happening in other parts of the world
Bravo Er Srbijo. Bravo Srbijo koja si ulozila toliki novac i trud. Sada se svak ko prihvata dobro i istinu veseli na objavljenom rezultatu. Razvoj Nacionalne avio companije tek predstoji. Mada put u komercijalnom vazduhoplovstvu je izlozen preprekama i promenama. Takav je Krst koji nose ljudi koji rade i koji razumeju bavljenje plovidbe u podnebesju Gospodnjem.
ReplyDeleteRodney Marinkovic and Aviation Enthusiast Associate Group. 😀✈♥️🛫🌐🛫🇷🇸✈
+1
DeleteExceptional result
ReplyDeleteTheir best decision was abandoning the boutique model. Just can't work in Europe.
ReplyDeleteAgree, it just isn't sustainable on the European market. But we all had to pay a price for the experiment.
DeleteBut that was one of the most important differentiators for improving Air Serbia image compared to old Jat image.
Delete@19,46
DeleteIt was, however the average European passenger is not willing to pay extra for premium, which is why the boutique model didn't work. It's nice to have 2-3 hot meal choices in Y with branded metal cutlery, blankets and pillows on the 2-3 hour European sector but ticket price is an important factor for many (if not most) when booking a flight and the boutique model isn't competitive against the ULCC's, especially in a low yielding region such as the Balkans.
That's true, but years of dedicated business class weren't 100% waste. By the time JU switched to unified seats and BoB, Air Serbia's image and customer ratings were already improved. At least that part of experiement worked well.
Delete98% of pre Covid traffic in 2022 is an amazing result considering Serbian citizens were unable to travel to most of the EU until March and that two major markets – Germany and Italy were closed off to Serbian citizens for even longer.
ReplyDeleteWonder how much money was pumped into the company in 2017 in order for it to post such a profit.
ReplyDeleteI'm referring to the table provided in the article.
DeleteThe most was pumped in 2014. The 2013 loss was generated in the last 3-4 months by Air Serbia, not Jat Airways. If you look at Jat's books, they were always hovering near the break even point or even a small profit. Their problem was debt.
DeleteNo surprise for 2013. They were leasing new planes, cabin reconfiguration and huge expenses paid to Etihad.
DeleteYes, makes sense.
DeleteBravo Air Serbia 🇷🇸🇷🇸🇷🇸
ReplyDeleteBOOM!
ReplyDeleteThey should definitely work more on improving their image ,reliability and focus on building customer loyalty . Otherwise they are good airlines.
ReplyDeleteAbout 95% of airlines around the world should definitely work more on improving their image, reliability and focus on building customer loyalty
DeleteTo be honest I think JU is doing a good job. They are doing a lot of things right and you can actually see an airline developing.
ReplyDeleteAny predictions for 2023 finances? :D
ReplyDeleteDa best.
Delete"Air Serbia has managed to bring its costs down by 25%"
ReplyDeletehahaha and this is where the subsidies are hidden
Guys, recipe of their success is simple. You can guess it looking at dates of their increasing revenue. It all started in March 2022. Ring a bell? Just one of a few remaining airlines still flying from one big Russia. With nice connections.
ReplyDeleteNot lowering their efforts, of course. They got a chance and they used it fully, congrats.