Air Serbia has said it would be open to future airline consolidation if such a move would be beneficial for both sides. Europe’s airline industry has been gradually consolidating for the last twenty years but remains fragmented, with small national carriers struggling to compete with bigger rivals. Recently, the European Commission approved the partial acquisition of ITA Airways by Lufthansa, while Air France - KLM is investing $1.2 billion in SAS Scandinavian Airlines in return for a 19.9% share in the carrier, although it is pushing for a bigger stake in the company. Speaking at an IATA conference in Dubai recently, Air Serbia’s CEO, Jiri Marek noted, “Europe is still very fragmented. If you look at our region, we sill have a couple of national airlines. We are happy to cooperate with anyone. If there were to be some consolidation that would have benefits for both sides and was win-win scenario then why not”.
Mr Marek noted that Europe still hasn’t fully embraced consolidation in the airline industry. “In Europe, we always do things a bit by half. We are still keeping the airline brands because there is still a strong local affinity towards them. It is not like in the US where you merge airlines, and you repaint the aircraft of one of the carriers into the colours of the other. Here, in Europe, there is a lot of complexity attached because airlines keep an independent brand, independent management, and retain their independence in many other aspects. I am not sure that the true benefits of consolidation are still unlocked in Europe”.
Air Serbia is not actively seeking equity tie-ups with other carriers but has so far pursued expanding codeshare partnerships with nearby airlines. Bulgaria Air currently codeshares on 21 routes operated by Air Serbia, TAROM on seven, Turkish Airlines on five, and Aegean Airlines on four. Air Serbia and Turkish Airlines are also exploring closer cooperation in the form of a joint venture for aircraft maintenance. The Serbian carrier had also previously cooperated with the now defunct Adria Airways, B&H Airlines, and Montenegro Airlines. Both Air Serbia and Air Montenegro are currently seeking to conclude a codeshare partnership. This summer season, Air Serbia is the tenth largest carrier by available seat capacity based in Central and Eastern Europe. If carriers from Russia, which have a strong domestic network, are excluded, it places sixth, behind Ryanair, Wizz Air, LOT Polish Airlines, easyJet, and airBaltic.
In the past, the Serbian carrier has explored other opportunities to base operations in other markets. The airline presented plans to establish flights from Ljubljana to several European destinations in September 2020. The then CEO of the carrier, Duncan Naysmith, was accompanied to Ljubljana by Luka Tomić, the head of the Cabinet of the Serbian Minister for Finance, as well as the then-assistant in charge for aviation from the Serbian Ministry for Construction, Transport and Infrastructure, Zoran Ilić, where they held talks with the Slovenian Ministry for Infrastructure. “Air Serbia presented its proposal for linking Slovenia with nonstop flights to key markets, as well as flights via Belgrade. The airline outlined potential plans to open a base in Ljubljana, acquire a Slovenian Air Operator’s Certificate (AOC), presented its strategy and network, and potential routes from Slovenia”, documents from the Slovenian Ministry for Infrastructure show. The Serbian carrier has since given up on the idea, focusing instead on developing its Belgrade hub.
4O said how it is their priority to get JU codeshare, while JU said that they are waiting on 4O. So why no codeshare yet?
ReplyDelete4O is in the midsts of management change. Perhaps after things settle down solution will be reached. 4O still has no codeshares with any airline.
DeleteSeems like they have closest cooperation with Bulgaria Air considering the size of the codeshare and the wet-leasing.
ReplyDeleteYes that's a huge number of routes Bulgaria Air codeshares on. Interestingly JU has code on just 1 FB route.
DeleteWell FB has a modest network, not much to put their code on.
DeleteI believe there was an opportunity for some sort of consolidation back in the day when Etihad was buying up airlines and there was some sort plan with Montenegro Airlines back then but not anymore obviously.
ReplyDeleteI think there is still a possibility for JU to takeover Air Montenegro sone time in the future.
DeleteWhy would JU need them? For 2 ERJs? Don't think so.
DeleteIts not just about the planes. It's about greater market access, a market with growing tourism industry and workforce.
Deletethey can have all that without having to bother with Air Montenegro
DeleteHow would acquiring 4O increase JU's market access to Montenegro?
DeleteAs a passenger that should really be the last thing you'd want an absolute monopoly on BEG-TGD/TIV
DeleteI think they would then be required to let a third airline in because it would be a complete monopoly.
DeleteNot sure it would apply in this case since neither country is an EU member,
DeleteTrue it would be up to the two countries to decide what to do. I think JU would end up enjoying a monopoly but then again they have it more or less now. People have chosen then en masse when traveling to MNE. I understand them since JU gives up 23 kg of luggage with the fare.
DeleteTo be honest I think JU would benefit most from an alliance membership. Either Skyteam or Oneworld.
ReplyDelete+1
DeleteJust a month ago Marek said again that they don't see the benefit of joining an alliance at this point because they would have to give more than they would get.
DeleteSkyteam would be best for them to join.
DeleteWouldn't Oneworld make more sense as they have no member in this area? TAROM is in Skyteam.
DeleteUltimately both would make sense, as neither airline has a strong central or eastern Europe presence now that Aeroflot and S7 are suspended, whereas Star Alliance has Aegean and Turkish
DeleteSome years ago, I would have said the same, but look at all the Eastern European airlines that so successfully joined alliances. Practically all are dead or on life support. CSA and Tarom were in SkyTeam. Malev was in OneWorld. Adria and Croatia in Star. Only LOT has managed to thrive as part of an alliance. Critical mass probably plays a role in a carrier's viability as part of an alliance. If they do join someone, OneWorld would make by far the most sense -- but the British government would have to finally relax the visa requirements or else (given the OneWorld configuration in Europe) this still wouldn't work.
Delete"This summer season, Air Serbia is the tenth largest carrier by available seat capacity based in Central and Eastern Europe. If carriers from Russia, which have a strong domestic network, are excluded, it places fifth, behind Ryanair, Wizz Air, LOT Polish Airlines, easyJet, and airBaltic."
ReplyDeletewow that's interesting. So JU is just behind Air Baltic.
Last year for a few months JU had more passengers than BT.
DeleteAir Serbia and Croatia Airlines makes the most sense. I wonder what they could call it?
DeleteJust don’t go there :)
DeleteReally who would consolidate with them at a business level when Air Serbia is not consolidated within itself!?. Past weekend was a disaster with regards to on time performance. They sell those multiple charter flights on top of regular operations to cash in but then regular operations suffer greatly and 2-3 hours delays are a norm from start- mid July until now.
ReplyDeletePast weekend was a disaster for most carriers across Europe. There are huge issues with air traffic control in Europe, airports, and weather related issues as well. Not to mention that many airports in Europe this weekend were still suffering from the Microsoft outage and many airlines, including Air Serbia still had a knock on affect from the delays on Friday caused by the outage, even though Air Serbia didn't cancel a single flight on Friday.
DeleteGetting rid of Aviolet was a mistake
Delete^ Not really as the planes were 35 years old and expensive to operate anymore.
DeleteI think it was a mistake for Croatia Airlines and Adria not to have merged. It would have been a strong airline.
ReplyDeleteWouldn't the hubs be too close?
DeleteThere is very little difference between JP and OU. What would be the point?
DeleteTwo loss-making airlines with unsustainable business models, with hubs located 90 mins between eachother by car. Yeah, what a great success story that would be.
DeleteWhat hubs? What are you talking about? What hubs?
DeleteWell hubs for the respective airlines.
DeletePay attention ZAG & LJU.
DeleteConsolidation would usually mean getting rid of one hub, and keeping the other. Perhaps that’s the main reason why consolidations don’t happen in this part of the world. There is no FRA in ex-YU.
DeleteIf any airport is the FRA of the region then it would be BEG.
DeleteSo ZAG is MUC?
DeleteHmm no, MUC doesn't have that many LCCs so ZAG can't be it. I guess ZAG is something like BGY or another similar airport with a huge presence of LCCs.
DeleteDon't forget that even ZAG has LCC long-haul (Air Transat, Tway).
Air Serbia said many things in the past. Not all of them came true. This might be another one.
ReplyDeleteAnother what? You think they are not being truthful when they say they are open to consolidation down the road if an opportunity present itself?
DeleteQuite the opposite. Air Serbia might be open to it but opportunity might never realize. You need two to tango.
DeleteWell again I don't see what's wrong about them saying it. They didn't say it will happen, or that they plan for it to happen.
DeleteNo one said it was wrong for Air Serbia to say that, it might not happen because of the other side. For example Air Serbia announced third A330 would go to Lufthansa Technik on July 1 for landing gear repair. There is no doubt Air Serbia wanted it to happen and said it in a good faith. But you need both sides to tango.
DeleteIt is in Lufthansa facility in Lisbon since 1 July. Why make things up?
DeleteWhat's the tail number of this a330?
DeleteWhen did Lufthansa Technik open a facility at LIS?
DeleteIt didn't
DeleteI wonder if there is a future for some pan Balkan airine which are member of Open Balkans
ReplyDeleteOpen Balkans doesn't really involve air transport.
DeleteJU still has a legally registered subsidiary in Macedonia called Aeromak. i remember when Jat had plans to start this airline.
Delete@ 9.17
DeleteOpen Balkans doesn't involve air transport because all participating countries are also signatories to the ECAA (European Common Aviation Area) Agreement
Anonymous09:23
DeleteWhy didn't they launch it?
Aeromak’s application for an air operator’s certificate was refused by the Civil Aviation Directorate
DeleteWhy?
DeleteMacedonian CAA literally closed down MAT to completely make way for Wizz Air and then let the government fix 4 tenders to subsidize their flights. Later that same guy who was heading Macedonian CAA when he closed MAT got awarded with an EU job in Brussels.
DeleteThanks for the explanation @Anon 9.24
DeleteAlso before that, they closed Avioimpex which was the best in Macedonia out of all three airlines we had. They closed Avioimpex so that MAT can be the national carrier of Macedonia back then, because the ceo of Avioimpex didnt want to cooperate with the government and still money. They were enabled to operate from SKP anymore so they changed their operations from PRN for some months and at the end they collapsed. Avioimpex had 12 planes while MAT had around 4, and Avioimpex was a partner with Adria Airways.
DeleteSad that there is no flag carrier in MKD.
DeleteMAK is much too small to have it's own state airline.
DeleteWell we managed to have three carriers until 2002. For sure now we can have one.
DeleteAvioimpex failed because of the corrupted government not because they were flying empty planes.
DeleteDidn't Avioimpex crash at some point?
DeleteYes in 1993 in Ohrid, however they continued to fly until November 2002.
DeleteSAS model would be ideal for this region.
ReplyDeleteImpossible in this region
DeleteIt hasn't worked out that great in Scandinavia either.
DeleteTrue. Norway was never satisfied with the place they got in the SAS network and have actually divested from the airline.
DeleteThe SAS model wouldn't probably work well in the south east region due to distrust and stealing. But the option to have a joint venture like Lufthansa and turkish do with Sun Express could work. Like JU and FB could start a new airline with 50/50 ownership. The new airline would have access to operate routes from BEG and SOF to focus on the needed and profitable routes and high utlisarion. This way the airline cooperate but keep themselves safe by maintaining own identity and own company and own planes.
DeleteAir Serbia is now too big to be thinking about changing it's brand due to consolidation.
ReplyDeleteLol no. If Norwegian can do it so can JU
DeleteWhat did Norwegian change? From Norwegian Air Shuttle to Norwegian?
DeleteLet's be honest, when it comes to the Balkans, in a few years Air Bulgaria, Tarom, Air Albania, Croatia Airlines and Air Montenegro won't exist.
ReplyDelete+1
Deleteunsustainable business models in a very price sensitive region.
Tarom and Bulgaria Air will be fine.
DeleteBucharest management and organisation is at least 10 years ahead of the region in progress. As for bulgaria. The airline is growing and getting stronger. Also successful charter airlines in the country. They have skilled people that know what they're doing
What are you going on about? RO is a disaster worse than 4O
DeleteSlav.man we know that you are delusional but this is next level.
DeleteYet Bucharest is far further ahead all the other capitals and FB is growing. Even successfully introduced the A220 into its fleet. Seems like hate for some paranoid reason
DeleteWhat does Bucharest have to do with the state of RO? Brussles is a rich city and so is Vienna yet both SN and OS struggle to reach profitability.
DeleteThink you've changed the point now. Original post was about the airlines existing. Not changing to talk about profitability. Probably meant they'd exist like you mentiikned OS and SN
DeleteAlways thought Adria Airways would be the perfect name for a pan-regional airline :)
ReplyDeleteNo thanks. I am happy we have Air Serbia whose main focus is Serbia. Other countries are more than welcome to arrange their aviation without us getting involved. JU is string enough now that they are a must have carrier for all regional airports
DeleteOnly for charters division in summer.
DeleteNo need, JU tried with Aviolet and they saw a separate brand is not needed. In the end JU would have to subsidize Adria when winter comes.
DeleteMake it Pan Balkan Airlines :D
Delete@09:42 Nicely said. I would have disagreed with you 15 years ago, but see that any attempt to work with them will only lead to ruin.
DeleteWhat's happening with TAROM's sale? I'm not insinuating that JU will or could ever buy TAROM, I'm just wondering what's going on with them since they were supposed to be privatized many times.
ReplyDeleteNothing. TAROM is just changing CEOs, each of them have a different strategy, it is still loss making and the EU just approved a huge amount of state aid for them.
DeleteHow much did they get?
Delete95.3 million €
DeleteI thought state aid to state airlines was not permitted.
DeleteHehe, ask Croatia Airlines 🤣
DeleteSince we are talking about TAROM , does anybody know who will buy their slots in LHR ??
DeleteHow much is difference between Air Serbia and Baltic Air?
ReplyDeleteStrategically it makes sense. Realistically, knowing this region, it's not going to happen any time soon.
ReplyDeleteI would love to see a regional LCC.
ReplyDelete+10000
DeleteToo late. None could compete against Wizz and Ryanair.
DeleteRemember Centavia?
DeleteCentavia was purposely sabotaged by the directorate and Jat Airways
DeleteCould have been been big today.
DeleteActually, Centavia wasn't killed by the Serbian government. They successfully operated charter flights to Greece in summer and in autumn they were planning on flying to Montenegro and Croatia (ZAG). It was Montenegro (their lobby) and the Croatian Directorate that refused to issue them the permits. That's when they went bankrupt.
DeleteThat ship had sailed three decades ago. We had that on the table: independent countries with single market. We didn't pick that up and the rest is history.
ReplyDeleteWhen was single market with independent countries?
DeleteHe’s referencing to what was offered during The Hague conference in 1991.
DeleteIt would never work out.
ReplyDeleteThey should rename themselves as Pan Adriatic, open a few bases with ATRs and go from there
ReplyDelete(not gonna happen, but one can dream)
DeleteWe don't have access to the Adriatic in Serbia, remember? So we do not care about pan Adriatic stuff. We might open Pan Šumadian Airways, though.
DeleteNo need to change the name, Air Serbia is more than fine.
DeleteFully agree.
DeletePan Ad :)
DeleteSSA , Southern Slavic Airlines each with its own distinct livery representing its own country/region.
ReplyDeleteConfederation of national airlines from the southern slavic states
ReplyDeleteYes and the first thing each country would do is to obsess about the airline flying long-haul from their airport like JAT did in Yugo times. Do you honestly think they would be ok with BEG being the only airport with long-haul flights? I think not.
DeleteWith, of course, a smoking section to be re introduced and introductory šlivovitsa or grappa on boarding
ReplyDeleteOf kors.
Deleteof course ( kors )
Delete(since I don't read other comments)
Deleteof kourse.
Is ČSA considered within Air Serbia region of interest for airline consolidation?
ReplyDeleteNo because they were bought by Travel Service or whatever they are called. OK has like one or two planes and a handful of desynchronizations.
Delete*destinations
DeleteHaha
ReplyDeleteAir Serbia and Tarom before Aegean gets Sky Express lol
ReplyDeleteWhat you mean?
DeleteThe state needs to divest ASAP - either by finding someone interesting in buying the whole company or by floating shares on belex. The state has no business running airlines.
ReplyDeletefloating shares on belex? do we have Warren Buffett wannabe here?
DeleteGde staje voz...
ReplyDeleteHow about enhancing lavatories on mini-buses and possibly providing functional in-flight entertainment on 332s (on current and future 8+hrs flights)?
ReplyDelete