Air Serbia prepares for fifth long-haul route

Air Serbia recently scheduled operations to Guangzhou with preparations now underway for the introduction of its fifth long-haul service, to Shanghai. As EX-YU Aviation News learns, two weekly flights to China’s largest city will launch as planned this year. By the end of 2024, the company will maintain services to three cities in China and two in the United States. “We launched JFK in 2016 and it took a pretty long time for it to become profitable. Being a small regional airline, it is not easy to make a decision over the second long-haul destination. Once you make that decision, you put yourself on the path of developing your long-haul network because you won’t be adding just one or two destinations if you don’t have a long-term strategy for meaningful long-haul growth. We were looking at Chicago as the second destinations, but due to its seasonality we were unsure whether it would be profitable or not and because it requires the lease of a second wide-body aircraft, it was not an easy decision to make”, Air Serbia’s CEO, Jiri Marek, said recently.

According to the CEO, the Chinese market provided a counterbalance to the seasonal nature of US operations. “Thanks to Covid, as a collateral benefit, the opportunity of the Chinese market opened, which is more flat in terms of demand and a nice addition is the rise in demand in January and February for the Chinese New Year. When we combined the Tianjin and Chicago business case together, it was an easy decision to make for the second aircraft. We launched Tianjin during Covid. There was no other option available to fly to China at the time due to the pandemic. Since those flights became profitable from day one, we don’t have the need to change to somewhere else at the moment. Chicago was opened in May due to the high seasonality. We kept it through the winter, which was much softer, as we expected, but we will work on improving it because we would like to keep it as a year-round destination”, Mr Marek said.

Commenting further on the development of Air Serbia’s long-haul network, Mr Marek noted, “The US market for us was key because it was based on diaspora traffic. Therefore, it was less risky for launch. On the other hand, diaspora routes come with high seasonality and high directionality, which you need to work on and manage. The codeshare agreement with JetBlue and the interline agreement with American Airlines will help us reverse directionality and seasonality. Despite all these measures, you will still continue to have seasonality, as everyone does on transatlantic flows, so the Chinese network counters that effect because Chinese seasonality is flat. You have the demand during New Year which comes at the slowest part of the year, and on top of that you have the Free Trade Agreement between Serbia and China which will unlock new cargo opportunities and even a segment of corporate travel. It is such a big market that there is an opportunity to grow more”.