The CEO of airBaltic, Martin Gauss, is credited with restructuring the Latvian national carrier from a near-bankrupt business into one of the strongest in Eastern Europe, registering an operating profit of 32 million euros last year with four hubs and a fleet of forty aircraft. In an interview for EX-YU Aviation News, which will be published in three parts, Mr Gauss touched upon the current air connectivity issues in Ljubljana, with the Slovenian government expected to decide this summer on whether to establish a new national airline. “I am very sad that Ljubljana doesn’t have an airline anymore. Looking at Latvia with 1.8 million people, being in the northern end of Europe and having connectivity with more than 100 routes from just one airline, Ljubljana should have its own carrier and have that connectivity”, Mr Gauss said.
Elaborating further on the matter, airBaltic’s CEO noted, “Adria Airways failed and nobody else stepped in. What we have done in the Baltics is take a bankrupt company to where we are now. The same development is possible in Slovenia. Why not do what we do and start out with five planes out of Ljubljana and just establish connectivity. Don’t try to compete with Ryanair and Wizz Air and carry 200 passengers for no money from A to B. Establish connectivity, with a proper plan. Important for these kinds of models is to have the right aircraft. For example, in Tampere [Finland] we put an aircraft and established flights from an airport from which nothing was happening, and we have now built up a network. We are not connecting Tampere only to leisure destinations, which of course works as well, but we connected it to the hubs of our key codeshare partners and then you have proper connectivity with proper timing”.
Mr Gauss emphasised that connectivity is key to any European capital city airport. “Ljubljana is maybe privileged because it is closer to Central Europe, and it perhaps has better road and rail connections than Riga but, still, nothing beats a plane if we talk about something that is beyond 500 kilometres. Therefore, the airBaltic success story is building connectivity - that’s why we are still here and we will further build on this as well. There was an airline, it was providing it, it didn’t make it but that doesn’t mean you do not need connectivity. You have to try and understand why they did not make it”, Mr Gauss said. Asked whether the airline itself could establish operations between one of its hubs and Ljubljana, the CEO noted, “For us, Ljubljana is still not on the list of destinations with high enough passenger potential. However, that doesn’t mean that Ljubljana shouldn’t have its own connectivity”.
How yes no. 😂
ReplyDeleteWell said
ReplyDeleteIf only the government had this idea in mind and instead of selling the company to 4k invest (for nothing) they selected a professional international management, things could have been different.
ReplyDeleteActually, government paid 4K to take Adria. And the same idiots (some different faces) are now in charge.
DeleteThey are aiming for space now! :D :D :D
DeleteThis will never happen as Slovenians can never run anything without corruption
DeleteGovernment didn't even try to consult with industry experts. Neither when they decided to sell Adria or when they decided it should go bankrupt.
DeleteOne private owner needed who takes responsibilty for any losses and gains..government avoids responsibilty..
DeleteTruth is government killed JP by pushing it into troubles with non cooperation and even creating some additional road blocks. All for some self interests of those who had influence. At that time they thought they will benefit from the aftermath but they could not.
DeleteTakeaway: selling cheap tickets is not the only way to attract passengers and make money.
ReplyDeleteThat's right. You have to find your niche and you have to have the right aircraft.
DeleteI was hoping we would see Air Baltic in LJU. Pity there are no plans to start flights.
ReplyDeleteOU need to employ Mr. Gauss! He could turn them into a very profitable company.
ReplyDeleteI had no idea they established s hub in Tampere!
ReplyDeleteAnd they have 5 year round and 4 seasonal routes and almost no competition.
DeleteNice!
DeleteMy advice: Check the departures overview for this airport. There is no hub.
DeleteAmsterdam, CPH, Munich?
DeleteWish they considered LJU as as a potential base.
ReplyDelete+1
ReplyDeleteWell, you can't compare the two. Slovenia is a much smaller market with next to no diaspora demand. Baltic countries have experienced massive population declines over the past 30 years. When it comes to market dynamics, Latvia is more similar to Moldova than it is to Slovenia.
ReplyDeleteEven though ZAG's numbers are overall modest, they are still a problem for LJU. Add to that other airports in the region and there you go.
There is a reason why so many Baltic airlines failed, from Estonian to Air Lituanica.
LJU needs to stop losing local demand to foreign airports. First step is to make sure there are enough cheap tickets out of LJU. Only once you get people used to flying from LJU you can think of what your next step can be.
BT is a well run carrier but I don't think their model can be copied almost anywhere.
+1
Delete„Don’t try to compete with Ryanair and Wizz Air and carry 200 passengers for no money from A to B.“ Either cheap tickets or the right plan.
DeleteRight, I almost stopped reading when he was comparing Slovenia and Latvia. Both may have the same population, but Air Baltic caters for 2 other countries, and he says that the carrier should be a Slovenian national carrier (basically catering for only 1,8 million people).
DeleteAnother reason, fairly mentioned by himself, the distance... you may just drive from Munich or Vienna to Ljubljana, whereas you would really need to think twice before you do that from Riga or Talinn.
In summary, he is comparing apples and oranges
OK, but from Talin, it is 2 hours by ferry to Helsinki. Not everyone is aiming for Vienna or Munich.
DeleteLet's not forget that this man failed as Malev CEO, an airline that was similar to JP in many ways. Same historic legacy (communism), proximity to Europe, many competing airports in the same catchment zone and so on.
DeleteOn the other hand, he inherited a fully setup airline in a country with a very different mentality and with a healthy O&D demand both to the east and to the west.
Latvia is home to many Georgians, Russians, Ukrainians... all O&D that helped them set up routes to the ex-USSR which were later used by transfers. Who does Slovenia have? Their minorities are small and this air service from LJU will have to compete for an extremely price sensitive group with cars, highways and bus companies. Besides TGD and BEG, LJU struggled to attract any other route to the region. INI was only introduced after the Serbian government set aside some Euros in order to improve connectivity between the two countries. It didn't even cross Slovenian government's mind to do it despite having more disposable income.
What Gauss is proposing is nothing new. JP tried to improve Slovenia's connectivity by not offering cheap tickets. Didn't work out well for them in the end.
The ugly truth is that Slovenia's passive attitude towards its aviation market will further erode its competitiveness. Larger airports in the region with more aggressive managements will make sure their sliding into irrelevance continues.
Anon 09.38
DeleteIt is two hours by ferry from Tallinn to Helsinki however this boat doesn't take you all the way to the airport. Once you reach the port you still have to reach HEL which is some 20 km away.
If you are traveling with luggage it can be quite an exhausting experience.
Latvian GDP per capita is more than 4 times higher than Moldovas. Not the best comparison.
DeleteI guess the purpose of your comment was to show that you know the distance between the two cities, otherwise I don't find any logic in it.
DeleteBtw, it may be 2 hrs by ferry from Talin to Helsinki, but it is certainly not 2 hrs from Riga or Vilnius, so again apples and oranges.
Anon 09.50
DeleteI spoke about market dynamics and the structure of air travel demand from these countries. Diaspora is massive from both Latvia and Moldova. Moldova has a massive diaspora in places like Italy, Spain... Latvia has it in Norway, the UK, Germany...
Who would JP 2.0 rely upon to buy its expensive tickets out of LJU?
Only a few routes required flying over Russia.
ReplyDelete^ they had a big network to Russia and Ukraine. Many people used them to transfer onto Russian flights.
ReplyDeleteMaybe it’s time for their fifth hub. This one in LJU.
ReplyDeleteThey announced a year ago or so that they plan to have several new hubs/bases. First came Tampere
DeleteJasmineeeeeee!!! Dje si?
ReplyDeleteI look forward to the rest of the interview. Until then: A lot of talking without a lot of saying.
Last Anonymous: You were right and I was not. Thanks for the correction.
ReplyDeleteAll their flights to Eastern Balkans, Greece, Turkey, Cyprus and the Middle East now have to take a large detour in order to avoid Russian, Belorussian and Ukranian air space.
ReplyDeleteThat ads a lot of flight time and expenses.
Basic: "For us, Ljubljana is still not on the list of destinations with high enough passenger potential."
ReplyDeleteWhy not own airline for Sarajevo and Skoplje too?
ReplyDeleteLatvia, Air Baltic :
ReplyDeleteunfavorable position on the european northern end
surrounded by SAS, Finnair, Norwegian, big players
less than 2 million people
no tourism
some diaspora, not that much home-oriented
average purchasing power
40 aircraft
over 100 services
Croatia, Croatia Airlines :
the most central position in Europe, with Balkans "behind"
no big players around except JU lately trying to join the club
4 million people
touristic super power
huge diaspora, extremely tied with homeland
average purchasing power
13 aircraft
40 services
Jasmineeeeeee!!! Dje si???? Dje smo ovaj vikend sa servis kartama?
Well I'd add OS to JU as competition to OU but now it's too late
Delete"touristic super power" - lol, maybe compared to Latvia and only for a few months in a year. CRO is visited in similar numbers than Balearic Islands in Spain. Austria has way more visitors and makes way more money with tourism and is definitely not considered touristic super power.
DeleteI agree with both comments above. OS is relatively close and big, and there are much bigger super powers in tourism than Croatia. I admit I wasn't perfectly precise but it still doesn't change the meaning and the message of my post, totally unused potential of air traffic in Croatia by OU, in this case compared to Latvia and BT
DeleteIn my opinion HR needs to do more to attract tourists who want to fly by plane. If Croatia has 14 million tourists then passenger numbers on the coast have to be higher in the future.
Delete
Delete"no tourism, some diaspora" = In 2019, estonia alone had 6.10 million tourists and 2.06 billion in revenue. Of course, tourism in the Baltics is an important factor. And it is well known that there is a very large diaspora
Out of those 6 million, 4 are Finns coming by ferry from Helsinki for one day visit. Statistics can make miracles 😃 Plus we are talking Latvia here, not Estonia. And Latvian diaspora is the largest in the Baltics, but not even half of Croatian, with much less ties to homeland. And as much as I agree with the first two replies, that much I disagree with this one
DeleteHow many one day visit have Zagreb?
DeleteActually it would be interesting to know where Croatia's diaspora in Germany or Austria comes from, as in from which part of the country. If they are from the continental part then it will be more difficult to attract them to fly so you would need both competitive scheduling and pricing. However, if they are from the coast and especially from the south then flying would be much more appealing, especially if you add Bosnia's diaspora as well. That is why I think coastal airports should do more to motivate people to fly when visiting home especially in winter time.
DeleteI know this might sound stupid, but it kinda might work. In LJU they could establish a carrier/hub similar to those Canada or Island countries. Small 10-12pax planes that would fly about to every tiny airport around. There are plenty of them in Hungary, Croatia, Serbia, Bosnia, etc. Each morning those aircraft would return to LJU and fill larger planes/codeshare partners flying to large hubs further away. For many people in small towns it would be convenient not to travel to a larger city to take a flight. For example, someone from Osijek or Gyor would prefer that.
ReplyDeleteThe part of my family or friends who air travel in SLO, use mostly Venice or Bergamo or charter flights fm LJU. VCE has with the same airlines as in LJU, better prices, better schedule options or combinations, so no wonder they prefer Italian airports. We were checking LIM for example. Ex VCE 850-900 EUR. LJU 1250-1300 EUR. Two tickets 800 EUR difference, they def. prefer travelling to Venezia.
ReplyDeleteTrue. I use VCE often as well because it's usually significantly cheaper than ZAG, and the distance is almost the same. Even parking at Marco Polo for longer stays could be cheaper than Tudjman/Pleso
Delete+1
DeleteHow long does it take from Ljubljana and Zagreb to VCE? Are there buses or you have to take the car.
DeleteI don’t really know about Zagreb to Venice but from Ljubljana is about two haours or two hours and a half I believe if there is no bigger traffic jams. You can travel by car but of course there are buses directly from Ljubljana bus stations to marco polo (usually flixbus) and there are even train services to Trieste airport and maybe even to Venice airport. There are other options aswell like shuttle cars (GoOpti)
DeleteFrom Rijeka there is Flixbus, directly to Marco Polo airport, without changing bus in Venice or Mestre. Usually it is carrying more passengers than Croatia Airlines van going directly to Tudjman /Pleso
DeleteWith 500 million EUR on governments loans and aids I think any airline can make it. The problem is when you don't get them , then we see the miracles of great management working on.
ReplyDeleteFrom Ljubljana to Venice, Treviso or Zagreb exist shuttlebus with combivan. Also Flixbus company has bus line to Marco Polo. I don't know for Zagreb.
ReplyDeleteJā
ReplyDeleteThere are way too many airports in the region - all with manyfold overlapping catchment zones .
ReplyDeleteAll of them cannibalising on each other .
Its airport lottery for airlines ...
They are not too many in summer. Only in winter.
DeleteEven Rijeka is doing more or less ok during summer peak season, June to September
Delete150.000 godišnje ili kolko ima RIJ putnika je vama ok? A i Pula loše stoji. Look at Zadar! A blizu je splita
DeletePrvo Rijeka je prije pLandemije bila na blizu 200.000. Drugo, postoji razlika izmedju ok, i "more or less ok". I trece, skoro sav taj promet ostvaruje se unutar 4 ljetna mjeseca. To je dio godine kada RJK ima i 10-12 letova dnevno. Daleko od toga da sam zadovoljan ukupnim prometom i rezultatima Rijeke, koja ima ogranicavajuce faktore, ali je unatoc njima daleko od svog potencijala, ali dajte molim Vas bar i Vi probajte bar razumijet ono sto citate
DeleteAnd IATA 3 letter code for Rijeka is RJK, not RIJ
DeleteThanks!
DeleteI don't think you can run an airport economically even with 200,000 passengers. And why don't you go into the comparison with Zadar?
Well, they should motivate themselves to stimulate off season demand. Pula placed ads all over Belgrade throughout summer and autumn and in the end they got some New Year flights with JU. Sure loads weren't spectacular (around 50%) but it's a start.
DeleteAir Serbia is also boosting their BEG-PUY flights this summer from 3 to 4. This is best proof that smart marketing pays off.
Says a CEO of an airline which have more than 25% of its fleet grounded (10 out of 39 was not flying at all in the last three months). Hardly a visionary able to solve the problems of every airlines (as it was seen with Malev).
ReplyDeleteIt has little to do with the airline and more to do with Airbus which has engine issues with the A220.
DeleteNo, no. Tuzit ce vas Jasmin. Uuups, nece, zabole ga...... 😃
DeleteLJU should stick to its charter and cargo hub initial ambitions as Babett Stapel said:
ReplyDeletehttps://www.exyuaviation.com/2022/04/ljubljana-airport-mulls-becoming-hub.html
Hahahahaha
DeleteDoes anyone know did the sales team of LJU change in the last decade at all? How many are there? Will there be any new hiring?
ReplyDeleteCool
ReplyDelete