Air Serbia employs profit-driven approach to long-haul expansion

Air Serbia has said it has adopted a measured and strategic approach to long-haul expansion with profitability at the forefront of its decision-making process. The airline noted its step-by-step strategy ensures sustainable growth while mitigating risks associated with new markets. Speaking at the CAPA Airline Leader Summit World & Awards for Excellence, which is being held in Belgrade, Air Serbia’s CEO, Jiri Marek, said, “We need to understand who we are. We are a regional airline, so we don’t want to make any kind of decision that can potentially jeopardise our profitability. We start with low frequencies, test the market and if the market is working and we are satisfied, we will grow and densify. For us, this strategy has been working very well”.

Mr Marek reiterated that the carrier’s main focus is now on further growth on the Chinese market. “We started Guangzhou two weekly, Shanghai will begin with two weekly in January and if this works we will continue to densify those routes and potentially we are looking into a third destination in China, which will logically be Beijing but the application process for permits and landing permissions in China takes a lot of time so, at the moment, we will concentrate on the densification of Guangzhou and Shanghai and in parallel we will work on another destination”, Mr Marek said. He added, “When we were operating Tianjin, all the bookings came eight days before departure. Just imagine you are running a long-haul service where you see it’s empty and then eight days before departure it gets full. It is very stressful. We suspended it recently because when we launched Guangzhou, we realised that those people that were coming in the last eight days are using Guangzhou or other points because there is already sufficient capacity for the demand that is currently available in China”.

CAPA Airline Leader Summit, Belgrade

Commenting on future long-haul expansion, the CEO noted, “I would like to highlight the word consider because usually when we say we are considering or looking into some destination the media publishes that we are launching a new long-haul route the next day. There is no secrete because the numbers speak for themselves. If you look at the numbers, the logical choices for future expansion after we densify China, will be in North America, either Miami or Toronto or both and after that Seoul or Tokyo in the Far East. We said that many times already and it is a logical step in our development”.