Air Serbia plans minimum of 28 aircraft in fleet this summer

Air Serbia plans to have a minimum of 28 aircraft in its fleet this year to serve its expanding network. Speaking at the New Air Gateway to Europe conference in Ljubljana last week, the carrier’s CEO, Jiri Marek, said, “At the moment, if you analyse our summer network, we need a minimum of 28 aircraft. We are constantly growing the fleet, but we will not grow it at any cost. We will not commit to the more expensive aircraft or to any kind of new aircraft and we will not start any financing on that. So, in the interim, before we get the right price for the aircraft, we will cover it by wet-leases. Currently, we are in the final stages of having an additional two ATRs but in the last two weeks there have been some new bankruptcies in Europe, which always have a positive effect on the market in terms of the lease rates. So, we might conclude our dry-lease fleet even earlier than we were planning. One A320 is already in painting so we will be announcing that. In the last two weeks, there were many interesting offers on the A319s being available on the market despite that we announced that we would prefer to go for the A320 and grow but seeing there is a very nice niche on the market for the A319s we might even consider that”. In addition, Mr Marek noted the carrier would take delivery of its third A330-200 jet this summer.

Commenting on the company’s decision not to order brand new aircraft, the CEO said, “Each crisis has its positive sides. Covid created many opportunities that many can capitalise on in terms of the lease market and aircraft availability. Doing the re-fleeting during Covid was one of the best decisions we could have made. In terms of the ATR, we got aircraft that are four to six years old but were not flying during Covid. So, we got almost a new aircraft at lease rates which were almost unimaginable before Covid. Same thing is happening now on the narrow-body market. At the moment, during winter, almost forty aircraft are being returned from one of the LCCs [low cost carriers] in Europe plus with all the bankruptcies that are happening, the offers that are coming in from the lessors are very tempting not to use. The same is the case with the wide-body market”. Mr Marek added, “Going forward, our main task is to be a profitable and sustainable airline. We cannot just keep relying on different subsidies as was the case in the past. We must stay on our own two feet. That being said, we are not at the stage that we can allow some heavy capital investment into the fleet. With up to thirty to 35 aircraft, you can basically cherry pick on the market with secondary matured used aircraft. Once you are at the size of thirty to 35 aircraft, that’s the moment when you need to do serious long-term fleet orders and investments”.

Wet-leases are being used as a temporary measure by Air Serbia

Addressing the wet-leases Air Serbia has been utilising over the past two years, Mr Marek said, “There are two issues with the wet-leases. First of all, you always have the summer peak, and the rule is that the wet-leases are always cheaper if you can’t have your aircraft fully employed for more than five months. So, in the short-term, the wet-lease might look more expensive but you just use it for the peak. What we see as a big change in 2022 is that the seasonality in our region, and especially in Belgrade, is much flatter compared to 2019. This is also thanks to our growing network. We now have an extensive network in winter and a lot of people, especially from the airport, are commenting that they have never seen such full planes and such heavy operations in winter. We had a very successful November, December, and January. Now we are coming to the most difficult month, which is February, but so far, we are not reducing operations, instead we are adding flights”. Mr Marek concluded, “We use wet-leases for two things. One is to cover the summer peak. It is also less risky for growth because if any kind of external worldwide effect happened, you can easily just end the wet-lease because the dry-lease is longer-term. We are also using the wet-leases to bridge before finding the right aircraft on the market. We want to capitalise on the market trends. So, if there is a good aircraft on the market at the right rate, we will be taking it any time it appears and we will cover the bridge period with the wet-lease”.