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Wednesday, September 17, 2014

Hogan: Air Serbia is this year’s success story

Etihad CEO looks back at Air Serbia’s first year and reveals future plans

The President and CEO of Etihad Airways, as well as Vice-Chairman of Air Serbia, James Hogan, has summed up the carrier’s first year of operations as a "success story". Attending the airline’s Supervisory Board meeting in Belgrade, Mr. Hogan said that by repositioning Serbia’s national carrier and accepting change, Air Serbia will record a profit by the end of the year, labelling this as an “extraordinary” feat. “To compete globally, you have to figure out how to find partners. When it comes to Serbia, I know the region, I used to work with JAT in Australia. We looked at Belgrade’s geographical position as a crossroads in the Balkans and felt that we had the opportunity in Europe to connect Abu Dhabi with Serbia and beyond”, Mr. Hogan said. He added, “We employed a similar model as we did with Air Seychelles. We had to rebuild the business, which meant eliminating the past, bringing in a fleet of good planes and applying sound financial practice. However, I had to be certain we could return Air Serbia to profitability”.

Commenting on Air Serbia’s future outlook, Mr. Hogan said, “It is important for Serbia to continue building its brand in the aviation industry. We will open the airline’s new head office in Belgrade. Air Serbia has the opportunity to become the number one airline in the Balkans. We are working closely with our stakeholders, as well as Jat Tehnika, and we also plan to open new premises at Belgrade Airport. We are focused on investing in our people, services, improved aircraft utilisation, promoting our brand, cost savings and improving traffic flow through Belgrade Airport”. Etihad’s CEO also affirmed plans for Air Serbia to launch long haul flights to the United States. “We plan on reintroducing flights from Belgrade to the United States. It is important that everything we do is commercially viable, that every new destination we launch is profitable. For our flights to the United States it is necessary to reach an agreement with their respective authorities”, Mr. Hogan noted

Responding to public criticism over the potentially costly deal the government made with Etihad for the latter’s part-takeover of Jat Airways, Mr. Hogan said, “What was the alternative? For there to be no national carrier at all. That vacuum would have been filled by Ryanair, easyJet, Wizz Air or whoever. In my opinion, what we have now is a strong national airline whose aircraft fly across Europe and to Abu Dhabi. A successful carrier acts as an ambassador, something people in Serbia should be proud of. We have employed over 300 people and are moving towards profitability”, Mr. Hogan concluded.

Tuesday, September 16, 2014

CSEBA in final talks over Zagreb - China flights

CSEBA hopes to link Croatia with China

The Chinese Southeast Europe Business Association (CSEBA) has confirmed to EX-YU Aviation News it is entering final talks with its business partners for the initial launch of charter flights between Croatia and China. According to earlier plans outlined by the Business Association, charter flights should link Zagreb with Beijing, Shanghai and Chongqing before scheduled services are launched during the summer of 2015. Within the next few weeks talks will be finalised in Zagreb between CSEBA and its Chinese backers, the Association says, after which it will announce its plans, most likely by the end of the month. The charter flights would cater primarily for Chinese tourists. Far off markets hold huge potential for Croatia's tourism industry as the number of Chinese travellers visiting the country has seen double digit growth over the past few years.

Earlier this summer, the Business Association revealed that charter flights between Croatia and China will operate until June 2015 in cooperation with Chinese carriers, after which CSEBA plans to launch its own airline and run scheduled flights between Croatia, China and Serbia, as well as countries in Central Asia such as Kazakhstan. It added, “CSEBA and its partners plan to establish an airline with regular flights between China and countries in the region, as well as regional flights in South East Europe at low cost prices”. However, Xu Qiang, Director General of the Chongqing Foreign Trade and Economic Relations Commission has said, “Setting up an airline demands big finances. CSEBA and its partners should link up with other Chinese companies”.

Most passengers travelling from Zagreb to the Far East do so with Lufthansa, Turkish Airlines and Qatar Airways, transiting through their respective hubs. The last time a city in the former Yugoslavia offered scheduled services to China was in 2000 when JAT Yugoslav Airlines operated flights from Belgrade to Beijing. Furthermore, CSEBA recently held a series of meetings with key Kazakh state company representatives and also met with SCAT Airlines officials to discuss the potential launch of regular flights between Zagreb and Astana. This is despite the fact that SCAT Airlines is currently banned from operating in European airspace, as is the case with all other airlines certified by authorities with responsibility for regulatory oversight in Kazakhstan, with the exception to flag carrier Air Astana.

Monday, September 15, 2014

State prepares for Croatia Airlines sale

Government outlines Croatia Airlines privatisation plans

The Croatian government is preparing to sell a minority stake in its national carrier this autumn, with the privatisation process likely to begin in November. The Minister for Sea, Transport and Infrastructure, Siniša Hajdaš Dončić, is convinced Croatia Airlines' sale will be successful this time around, following a failed attempt last year. “I’m confident we will get a couple of good offers. We can offer a majority stake if a buyer is from the European Union. We have received some queries”, Mr. Hajdaš Dončić explains. The minister adds that companies will have a 45-day timeframe in which to submit non-binding bids before the government selects candidates for the next round of negotiations.

The first attempt to sell Croatia Airline began over a year ago and failed after nobody responded to the tender call. Mr. Hajdaš Dončić recently outlined the government’s plan to conduct a thorough analysis of the aviation market in order to identify potential investors, adding that Croatia Airlines must consolidate its operations and expand in the region. Since the failed sales attempt late last year, Croatia Airlines has managed to post an annual profit, its first in years. However, its passenger numbers have been steadily declining throughout the year and its market share has been decreasing as it faces tougher competition, especially at its base in Zagreb.

Several airlines have been courted as Croatia Airlines’ potential investors. They include China Southern Airlines and Garuda Indonesia. While Garuda publicly expressed interest to purchase a minority stake in the Croatian airline last year, it failed to submit an offer during the tender process. Talks with China Southern Airlines were held behind closed doors, however, it did not put in an offer. Over the year, both Turkish Airlines and Etihad Airways have ruled out any interest in acquiring Croatia Airlines. On the other hand, Qatar Airways says it is again pursuing acquisitions in foreign carriers. CEO Akbar Al Baker notes that he is “actively discussing opportunities” with other airlines. “When we see that there are strong synergies between the two carriers we are open to investment”, Mr. Al Baker says. “We want airlines that we acquire to be complimentary to us, we don’t want to get involved in fixing other people’s problems”. Croatia Airlines could be of potential interest to the Gulf carrier, which maintains daily flights to Zagreb.

Sunday, September 14, 2014

New airline to set up Maribor base

FlyEth to inaugurate flights from Maribor in 2015

Start-up airline FlyEth plans to launch operations from Maribor Edvard Rusjan Airport, in Slovenia’s north-east, to Austria, Germany, the Netherlands, Belgium and Croatia. The airline intends to inaugurate flights on January 15, 2015 with a fleet of two Dornier 328 aircraft and two to three Bombardier CRJ200 jets. According to “Austrian Aviation”, the start-up will operate two daily flights from Maribor to both Amsterdam and Rome via Klagenfurt (with exception to Saturdays), as well as four weekly flights to Berlin via Linz. In addition, FlyEth will run six weekly flights from Maribor to Cologne and twice weekly to Split and Zadar. Finally, it plans to operate a one weekly service each to Brač and Linz.

FlyEth was set up by Fakete Shabani earlier this year with plans for the airline to be initially based in Klagenfurt in Austria. However, Mr. Shabani has now decided to move operations to Maribor. FlyEth will still offer one weekly flights from Vienna, Linz, Salzburg, Insburck and Munich to the Croatian island of Brač. Reportedly, the two Dornier aircraft will be acquired from the United States while the CRJ200s will be purchased from Lufthansa CityLine, which recently retired the type from its fleet. FlyEth currently operates in the lease and charter sector using a fleet of fifteen aircraft - seven A320s, four ATR 72-500s, two Dash 8-400s and two Do328-100s.

This is not the first time an airline has made plans to set up a base in Maribor. In 2011, the newly established Golden Air launched flights from the city to London Stansted Airport via Vienna. Headed by Harjinder Singh Sidhu, a British businessman of Indian decent, who had previously purchased Air Slovakia, Golden Air was grounded within a week of launching flights, citing problems with its aircraft leasing arrangement. Last year, German-operated Express Airways announced plans to resume services with a single Airbus A320, which was to be based in Maribor. However, the airline never took off. Maribor Airport has struggled to attract passengers over the years and relies predominantly on seasonal summer flights to the Greek islands and Turkey. The airport handled some 14.000 passengers last year.