Air Serbia does not plan to acquire brand new aircraft for the time being, with its CEO, Jiri Marek, noting that staying profitable is the company’s immediate goal. Speaking to “Bloomberg Adria”, Mr Marek said, “Our aim was to transform the company and secure profitability, which we did in 2022. Now the goal is to continue down the path of profitability and look for long-term sustainability”. He added, “Acquiring new aircraft might look interesting, but it is currently not on our radar because we can still take advantage of a volatile market with very good [leasing] deals”. Air Serbia added eight aircraft to its fleet last year through long-term dry-leases, and a further two so far this year, with more to come.
The carrier’s CEO has not ruled out the acquisition of new aircraft in the future. “We have to reach a fleet size of between thirty and 35 aircraft to consider such options. Currently, we are better off looking for middle-age aircraft”, Mr Marek said. The airline has noted it plans to dry-lease a further two ATR72-600 aircraft this year and is considering the possibility of leasing two Airbus A321 jets. Furthermore, the airline is sourcing a third and fourth wide-body aircraft. Since the retirement of its ATR72-200 and -500 turboprops earlier this year, Air Serbia no longer has any aircraft in its ownership in its fleet, with all aircraft being leased.
In early 2019, Etihad Airways cancelled its order for ten A320neo aircraft which were to be delivered to its Serbian equity partner. Deliveries were initially due to begin in November 2018. They were set to completely replace Air Serbia's fleet of A319s and A320s at the time. The Serbian carrier secured the narrow-bodies as part of a major fleet order by Etihad at the 2013 Dubai Air Show, for up to 117 Airbus aircraft. The delivery of the neos to Air Serbia was originally slated between late 2018 and 2020. However, they were due to arrive at a time when the Serbian carrier was undergoing significant cost cutting measures in the aftermath of its failed boutique business model and transition into a hybrid carrier. In 2019, Airbus returned a 23.5-million-dollar deposit to Air Serbia for eight A319 aircraft ordered by the carrier’s predecessor JAT Yugoslav Airlines in 1998 that were never delivered. It was later negotiated for the funds to be used towards Air Serbia’s A320neos.
Those neos that were ordered would have come in handy right about now.
ReplyDeleteThey were in no state to take delivery of or pay for new aircraft in 2018. And they would have had an issue during Covid as well.
Deletesome of them would be grounded if equiped with PW
DeleteWith oil so expensive NEOs would have been the best thing to have right now
DeleteThese planes would not have come FOC.
DeleteIt would be terrible financial burden for JU and therefore Air Serbia would not be able to open so many new destinations as they did it now.
What does FOC mean? Thanks
DeleteFree of charge I guess
DeleteYes, it means Free Of Charge.
DeleteAir Serbia fleet will soon start to age , with some birds approaching 20 years old .Maintenance cost will go up significantly . The best thing will be getting good deals on 6-7 yrs old 320neo’s leases With VIVA and Go First filed for bankruptcy, more of neos is becoming available on the market. They should definitely keep eye on it and be ready to jump in.
DeleteDo not take aircrafts with PW engines!
DeleteAnon 12:52 Not just Air Serbia, fleets at all airlines age all the time. As you should know by now, some of the older Air Serbia planes have been replaced with newer ones, reducing the average fleet age to 13.3 years according to planespotters site. For comparison, OU's fleet age is 18.1 years, much close to the 20 year number you mentioned.
DeleteMakes sense.
ReplyDeleteLogical conclusion. Fully agree with Marek.
ReplyDeleteHope they find those A321s. Would be cool to see an A321 in Air Serbia's livery.
ReplyDeleteSo the A321s will be dry leases?
DeleteIt seems to me that nobody knows that at the moment.
DeleteSo we might see Air Serbia order brand new planes in around 2-3 years? I expect then they might reach 35.
ReplyDeleteAt the rate they are going, yes.
DeleteAgree. Better use current profits to improve the company.
ReplyDeleteFuel efficient fleet in an era of high oil prices is a major improvement for a company.
DeleteNot to mention having aircraft that require a lot less maintenance when your relationship with your man maintenance provider is problematic.
I don't know about the relationship between the airline and the maintenance provider, but as a general rule of thumb, older aircraft that require more maintenance are more suitable in countries with low labour cost, which Serbia does have by European standards.
DeleteA320neos are popular and airlines in countries with higher labour and thereby maintenance costs are willing to pay to get their hands on them. It seems to me that it's best for Air Serbia not to join that bidding war at the moment.
Someone should send this to OU. They seem to think that with their terrible finances they will be more than prepared to finance A220s.
ReplyDeleteAlso to the majority of successful airlines around the world who opted for modern efficient aircraft fleets.
DeleteKeyword being successful which the former isn't.
DeleteSwiss has a third of its A220 fleet grounded - announced today.
DeleteThats not true, 25% is on ground because of PW engines!
DeleteOU is not buying a220 - they are leasing them.
DeleteHow many aircraft do they currently have in the fleet?
ReplyDelete20.
DeleteThanks. And how many are wet leased?
DeleteAnd because of that one of the atrs is stuck in Ljubljana for 24 hours now
ReplyDeleteAir Connect ATR.
DeleteThat they leased because their fleet organization is lacking (no one should wet lease in the winter)
DeleteThis wet leasing seems to be a bit out of control
DeleteAs long as they are financialy positive (and they were in last year and in Q1 of this year) wet lease is surely not out of control.
DeleteI'm not a fan of wet leasing, as costumers don't know what they are getting, and you pretty much don't know who pays if anything goes wrong (like being stuck in LJU for a day). ASL is profitable, but wet leasing 3 aircraft in the winter isn't helping them
DeleteI am also not fan of wet leasing, but that is way better than to cancel the flights if they do not have available planes. Just have a look what happened to OSI-ZAG because one plane was AOG few days ago...
DeleteAnd why the planes aren't available is mostly the question for technicians. Let's not forget how long YU-APB and after it YU-APA were on the ground due to technical checks.
With wet lease it is always certain that the company which leases the planes is responsible for technical condition of the plane and they are paying all the costs related to it.
If JU had not had these planes wet leased they would not have had any equipment to fly on. And if the benefit from flying is bigger than wet leased planes costs (which are anyhow less expensive in winter) then why not?
I can completely understand the short term wet leases (also tradeair is wet leasing from sprintair so it wasn't the best example from you). But what i have a problem with is wet leasing because your schedule is too big for your fleet (in summer it's quite common, but mot in winter times)
DeleteThe point is that Sprintair did not find replacing plane or they did not want to find it. Please tell it to the passengers who did not board on that flight how bad example it was.
DeleteThe schedule was made according to the fleet they had. It seems you missed the details about YU-APB and YU-APA mentioned here.
Let's agree to disagree - the winter schedule was made with the thought of 1x a319 and 1x atr wet lease - and they operated throught winter. I don't have a problem with Wamos a330
DeleteIs that 30-35 planes with wet leases on just dry leases.
ReplyDeleteProbably 30-35 dry leases
DeleteDefinitely dry leased.
DeleteI think this is short term thinking. Any thinking on a new fleet needs to be thought of sooner rather than later. Look at the waiting times for new aircraft and the problems Boeing continue to have with the 737 Max, thus demand is greater than supply. Also it is always better to negotiate from a position of strength. When Air Serbia get to negotiating air travel would have fully recovered or even be growing, alongside Boeing or airbus knowing they don’t own their own planes. On a side note I think if you have planes right now and leasing planes is where the money is at. You only need to look at any airport or airline across Europe right now and they are all doing it due to a lack of new planes being produced and not being able to handle demand. Also whilst its nice to see different planes with Air Serbia livery it doesn’t allow you to produce economies of scale.
ReplyDelete+1000
DeleteIs long term fleet planning even possible today? New plane should serve a company like JU for 20+ years, I think the regulation will change during that time (specially in EU) and new technology is likely to make break-through. I wouldn't buy new planes today.
DeleteAnon @11:29
Delete+1
JU-s model of dry+wet leasing of mid-age planes is far more flexible in today's aviation business where things changes almost daily. Imagine stick to the all-shiny-new A220's in say 5-10 years time, you have second to none chance to adopt your fleet to instant market changes.
Not a problem using middle age fleet but the same needs to be maintained so that the cabin looks decent and clean. Currently they don't care about the looks of the cabin and those are far from appealing and pretty. it looks they look after the AC components but no investment (even cleaning) of the cabins take place. Same are falling apart!
ReplyDeleteSwiss' A220 cabin looks good.
DeleteBut they don't fly. Engine problems.
Swiss also flies 27-year-old A320-100, but you couldn't tell their age. Neither from the outside nor from the inside.
DeleteTheir A320 cabin surely does not look better than A220 if we are talking about cabin condition.
DeleteThe point is that much more important is to have reliable airplane with proven engines than excellent cabin with probelmatic engines.
Constructive criticism of Anon 09:26 was to the point. Swiss cabins even in an old aircraft look brand new, are all the same and always clean. And this is one of the key issues in brand identity.
DeleteAnd also when it comes to reliability I would rather not compare JU to LX.
DeleteYou think that JU planes are not reliable?
DeleteIt seems your opinion is different than EU opinion.
EU does not mean anything for safety. LX had more fatal accidents than loose African airlines.
DeleteThey ban airlines which do not follow safety procedures. JU is not among them.
DeleteAnd I agree that LX is not the best example for reliability.
ЈU is not reliable either when it comes to timetable execution. Let's not be fooled here by cheerleader fans when they are (JU) in fact amongst the second league in Europe.
DeleteWe are talking then about punctuality and not reliability. Hige difference.
DeleteTaking in consideration the country Air Serbia is coming from being in the second European aviation league in actually very good! It seems we have here totally unrealistic people who believe Air Serbia could be compared to Air France, Lufthansa, British or Iberia.
Nonsense.
I don't understand how such a constructive criticism as »Not a problem using middle age fleet but the same needs to be maintained so that the cabin looks decent and clean« can turn into totally uncritical comments about JU in general. Do you really don't care if you are flying aircraft that are not even cleaned properly? And this is exactly the case with JU.
DeleteThanks @anon 12:49!
Delete- they don't care about the looks of the cabin
Delete- those are far from appealing and pretty
- no investment (even cleaning) of the cabins take place. Same are falling apart!
- they are (JU) in fact amongst the second league in Europe
Not a single shred of evidence to support those defamatory statements.
If someone wants to publicly claim that, for example BMW X3 is a horrible vehicle, they should at least provide some proof for that.
Maintaining aircraft, and replacing interior and seats cost money for airline especially on aircraft they don’t own. Airlines are in business to make money and if they can get good deal on leases why not just replace the aircraft.
Delete"Airlines are in business to make money". I agree. Except Croatia Airlines.
DeleteCroatia Airlines doesn't measure profit in monetary terms.
DeleteFinally realistic comments from Purger and anon 20:19.
DeleteAnd in which terms can profit be measured? Potatoes? Or empty heads? Or Party booklets?
DeleteAnon 8:23. It says NOT purger. More like opposite of him.
DeleteGood luck. They will need it this summer.
ReplyDeleteThe best model. Ever. The only possible way, all others buying new aircraft are dumb AF. Long live the ASL!
ReplyDeleteName airlines of a similar size that are buying planes.
DeleteTAROM, hell even Croatia Airlines is going for new ones
DeleteTake a look at their finances. By the way, the average fleet age of both of those airlines is higher than that of Air Serbia.
DeleteThe fleet age means nothing in this context, a few years ago JU had an older fleet and opted for slightly less older one, while these are going for new generation of aircraft, getting themselves set for next at least 20 years.
DeleteRegarding finance, JU was in a similar spot not long ago when it started renewing the fleet. Looking long term throughout the lifespan of RO's 737 MAX JU will have cycled through a few middle aged A320s and just cause they're cheaper now, doesn't mean the market won't change in a few years.
All in all, it's good to see JU growing with what it can get, but let's not treat it as anything more then a short term quick fix solution. The age of building the fleet around older aircraft is over, even the US airlines bid farewell to their ancient MDs and Boeings for new and efficient aircraft that are the only viable long term strategy for a carrier that wishes to compete with the big boys. And unfortunately for both JU and Serbia, long term is an abstract and foreign concept, no one wants to bother with
Difference here is that JU is rebuilding operations and has a fair bit of catching up to do compared to 1990. US airlines didn't have that problem. JAT too once had its expansions built around brand new aircraft, being the first in Europe to operate the B737-300, new ATR72's, not to mention the MD11 order set to replace the DC10's (which some too were factory fresh).
DeleteJU's finances were not in the position to afford the luxury of owning brand new aircraft and still isn't. Brand new aircraft can cause further problems for the airline as we see with other carriers having issues with the 737Max groundings, engine issues with both the A220 and A320neo just to start the list. Money for a factory fresh fleet can certainly be spent elsewhere to enhance the product and services at JU. A start would be to at least uniform the cabins, serving business class pax with glass rather than plastic cups, offering business pax at least pillows and blankets on the night sectors amongst others.
I think there is logic behind the strategy that no new aircraft orders will come before JU have a fleet of 30-35 aircraft. It'll give them time to see how their expansions are paying off, what aircraft and how many will be needed, not to mention how much of their profits can realistically be thrown into brand new aircraft. They seem to be interested in the A321 which is new, they've talked about replacing A319's with A320's, regional jets to fill the gap between the ATR and A320, ATR fleet modernised and growing to 10 aircraft. I think they are waiting for an aircraft order to be built around their expansion strategy rather than their expansions being built around their aircraft order. Right now they have alot of flexibility which is a good thing.
+10000
DeleteAre the ex-Adria frames the youngest Airbuses in the fleet?
ReplyDeleteYes, YU-APL and YU-APM are the youngest A319s in the fleet.
DeleteYU-APO is the youngest in the fleet at 8 y/o.
DeleteYU-APL and APM are both 13 y/o.
YU-APS is 12 y/o.
How much do brand new ATRs cost? The ATR72-600?
ReplyDeleteThese things change and vary based on numerous things but the -600 list price is $26.8M
DeleteSo pretty much they could own one with the money they paid in for NEOs
DeleteYes but few airlines order a single plane and I'm sure as part of a wider order they would get discounts.
DeleteDo many airlines have all their planes leased? Is this normal?
ReplyDeleteYes, it is normal in the aviation industry.
DeleteUnless its a stable Legacy carrier like British Airways, LH, Air France who's countries will never allow them to fail and have stable economic and political situations, leasing is the safest way to go. If something happens in your country crash economy or war then you can just stop paying for the plane, but if you bought it and own it then its your responsibility even when times are bad.
DeleteAlso leasing means you can always upgrade to a newer model sooner, if you buy a plane you have to keep it at least 15 years to make it financially successful.
You are not right @10.57. Jasmin for sure knows better. LOL!!! Jasmineeeeeee!!!! Dje si? Je l'se ispila kahva? Jel' citas kako se radi pos'o?
Delete@anon 10:57
DeleteLH actually owns most of its fleet.
@18:48 exactly, that's what I said. Only airlines from countries with stable political and economical situations can buy their planes.
DeleteSerbia is a long way away from being in a position where it would be safe for them to buy a plane.
well maybe if they bought it 2nd hand they could. maybe that can be an option for them. but definitely not brand new.
Anonymous 10.57 British Airways is a Spanish owned Airline, the British government wouldn't support it if it got into financial difficulty.
DeleteJU is making good progress with its fleet. Will be interesting to see what it looks like in a year's time.
ReplyDelete+1
DeleteThey just need better planning in terms of getting planes in time for when they need them.
DeleteI wouldn't call it good progress. Ok at best. It's moving forward but not at the pace of its expansions. 4 wet leases last summer have become 6 so far for this summer, with intentions to further expand operations not only this year but next year as well. Not to mention that a couple of their A319's are nearing 20 years old and are likely the first candidates to be replaced by A320's. They are very ambitious but it doesn't seem that all departments at JU are on the same page. It'll be interesting to see how far they come with their fleet expansion in December.
DeleteI wouldn't call your "analysis" reasonable. For example, what evidence you have their departments are not on the same page? Are you a comedian?
DeleteLets start with route planning and fleet planning. Last years wet lease capacity was not replaced 1 for 1 this summer despite another year of 20+ routes being introduced which could go as high as 30 this year. Last years 4 wet leases is 6 this year. Next year is expected to be another year where 20+ routes are being introduced. Fleet planning has a fair bit of catching up to do.
DeleteLooks like fleet planning is something you only saw in the movies. Perhaps Airplane and the sequel?
DeleteIsn't it dangerous not to have own planes??
ReplyDeleteIt isn't.
DeleteIt's only dangerous if the company is in poor financial state. Otherwise no.
DeleteThe biggest win out of that neo order was that Air Serbia somehow managed to get that JAT deposit back after over 20 years.
ReplyDeleteWhen you think about it, that was a lot of money to pay for a deposit back in 1998.
DeleteI am at ATH airport and I am going to travel to Belgrade with Air Serbia today . According to flightradar the airplane will be YR-JUL of DAN AIR. And I wonder all these last minute wet leases how much are going to cost ??? Is this financial right for the company ???
ReplyDeleteDan Air wet leases are not last minute. For months it was known that JU would have wet leases over summer 2023. Dan Air has been operating for JU the past several months. It's not ideal but not the worst.
DeleteActually Dan Air has been operating for Air Serbia for a year now. As for the finances it does not seem to be an issue considering their 2022 and Q1 2023 profit.
DeleteAnon 13:54 I wonder all these last minute wet leases how much are going to cost ??? Is this financial right for the company ???
DeleteDo you have same frightening visions when flying other airlines or just Air Serbia?
Anon 17:17 the other airline that I travel to BEG has no need to search for wet leases and a clear financial backround (Aegean) . Happy enough ???
Delete😂.
DeleteNemanja I am happy knowing it was you :D
DeleteA question re Trieste?
ReplyDeleteTwo month ago we were informed that JU would resume the flights to Trieste in June.
But the Amadeus-GDS doesn't show any BEG-TRS flights this summer.
What is the current status of JU's BEG-TRS service?
They were put on sale a month ago but pulled earlier this week.
DeleteOh! Thanks for your quick reply
Delete