Monday, September 1, 2014

Air Serbia posts strong H1 results

Air Serbia anticipates 2014 profit after strong half yearly performance

Air Serbia has published its half yearly results showing growth in revenue, passenger numbers and handled cargo compared to the same period last year. The airline is now confident it will achieve profitability by the end of 2014. During the first six months, revenue at the carrier grew by 82% to 102 million euros, compared to 56 million in 2013, while passenger numbers soared by 70%. The airline also reported it handled 907 tonnes of freight, a 65% increase on 2013. In addition, cargo revenue grew by 32%. Air Serbia’s passenger carrying capacity, measured in Available Seat Kilometres (ASKs), was 1.588 million in the first six months, an increase of 85% compared to the same period last year.

Air Serbia’s CEO, Dane Kondić, said, “The results are very pleasing and demonstrate how effectively the Air Serbia team is working to deliver on the strategy of sustainable growth. We are on track to deliver a profitable, strong airline by the end of the current financial year, in line with the commitment of our shareholders, the government of Serbia and Etihad Airways”. He added, “We expect to maintain the momentum for the second half of 2014, as we continue to reconnect the Balkan region and new markets, through a combination of direct flights, as well as expanding our codeshare partnerships. There is no doubt that we are bringing choice, convenience and comfort to travellers”. The airline is set to launch flights from Belgrade to Tirana later this month, connecting the two cities for the first time in six years.

In its report, the airline says it has launched eleven new routes while its growth has also produced hundreds of new jobs, with a total of 300 new employees signing on since last October. “Investing in the future, Air Serbia is planning to relaunch its cadet pilot scheme. Elsewhere, ten young graduates are currently attending a management program in Abu Dhabi with Etihad Airways and will, upon successful completion, join operating divisions across Air Serbia. The maintenance department has employed 44 engineers and technicians to establish the line maintenance facility at Belgrade’s Nikola Tesla International Airport”, the carrier concludes. Later next month, the Serbian national airline will mark its first anniversary since relaunching under its new brand.

Sunday, August 31, 2014

Serbia to create state airport operator

Serbia to set up single company to manage all of its airports

The Serbian government has announced plans to set up a state-run company to manage up to 25 of its airports, including the country’s busiest - Belgrade. The public company running Belgrade Airport will be renamed to “Airports of Serbia” with more than twenty smaller airports to be added to its managing portfolio. The move is believed to be in relation to the upcoming concession or sale of Serbia’s busiest airport, through which the future operator will also gain control to the rest of the country’s airport infrastructure. The Serbian Minister for Construction, Transport and Infrastructure, Zorana Mihajlović, says the company will be set up within days. “Six airports are currently confirmed to be part of the company including those in Niš, Kraljevo and Užice. We are not setting up a stand-alone enterprise, rather, these airports will be added to the “Aerodrom Beograd” company which manages Belgrade Airport”, Ms. Mihajlović said.

With exception to Belgrade, other airports in Serbia have no scheduled flights. Niš Constantine the Great Airport, in the country’s south-east, is expected to see low cost services from next summer season with an agreement to be signed with a budget carrier next month. Meanwhile, Kraljevo’s Morava Airport, in central Serbia, which has a brand new passenger terminal, is yet to be utilised for commercial use with further work needed on lengthening the runway and taxiways. The potential new operator of Belgrade Airport, which the government hope to offload from state funding in the coming future, will also have access to a majority of the country’s airports, which could add to its value.

The Serbian government yesterday confirmed that more than ten companies have expressed interest to take part in the concession of Belgrade Airport, including Germany’s Fraport, which is in the final stages of acquiring a 75.5% stake in Ljubljana Airport. However, the government admits it still hasn’t decided which model it will use for the airport’s privatisation and future expansion. Earlier this week the Serbian Prime Minister said, “Soon we will see how and in which way we will expand Belgrade Airport and build a new runway, whether it will be through concessions or whether a different approach will be used”.

Saturday, August 30, 2014

Adria and Turkish lead Ljubljana growth

Ljubljana Airport sees passenger growth as Fraport delays takeover

Ljubljana Jože Pučnik Airport, which is to be taken over by German operator Fraport in the coming days, has handled 596.572 passengers during the first half of the year, a modest increase of 3.7% compared to the same period in 2013. The growth comes despite a decrease in the number of operated flights, from 15.972 in 2013 to 15.448 this year. According to the airport’s half yearly report, Adria Airways, Turkish Airlines and Air Serbia fuelled Ljubljana’s growth while Air France and Montenegro Airlines recorded a decline in passenger numbers. Adria was the busiest airline operating to and from the Slovenian capital, handling 394.690 travellers, an increase 1.7% on last year. On the other hand, Turkish Airlines recorded passenger growth of 17.9% on its Ljubljana flights, while Air Serbia, which launched services to the city in December last year, handled over 20.000 passengers on the route during the first six months of 2014.

Low cost airlines easyJet and Wizz Air welcomed a combined total of 76.288 travellers on their flights to and from the Slovenian capital, same as last year. easyJet has maintained its position as the second busiest airline in Ljubljana, while Wizz Air took fourth position behind Turkish Airlines. Low cost airlines now account for 13.4% of all passengers using Ljubljana Airport. Air France recorded a 5.5% decrease in passenger numbers while Montenegro Airlines also saw its figures decline slightly, handling just under 10.000 passengers on its flights to and from Podgorica. Frankfurt was the most popular destination followed by London, Istanbul, Zurich and Paris. Flights to and from Belgrade saw the greatest passenger growth, while Tel Aviv recorded the biggest decline. Among destinations in the former Yugoslavia, flights to Pristina saw a slight increase in passengers, while numbers weakened on services to Skopje, Sarajevo and Podgorica. Antalya was the most popular charter destination, followed by Hurghada, Monstir, Rhodes and Tenerife.

Fraport is expected to take its 75.5% stake in Ljubljana Airport next week. Originally, it was planned for the takeover to occur yesterday, however, the process has been slightly delayed as it is believed Fraport is renegotiating to reduce its initial offer. Local media now speculate Fraport has offered 240 million euros for its majority share in Slovenia’s busiest airport. Since yesterday, the country’s centre left publications have run negative coverage of the takeover, speculating Ljubljana will become a peripheral airport in Fraport’s empire. Fraport has expressed interest to turn Ljubljana into a major cargo hub.

Friday, August 29, 2014

Government rethinks Belgrade concession

Serbia considering different options for Belgrade Airport development

The Serbian government is revaluating whether to put Belgrade Nikola Tesla Airport up for concession as earlier planned. The change in policy comes after the country’s Prime Minister, Aleksandar Vučić, said his government will make a decision on Belgrade Airport’s future in the coming period. “Soon we will see how and in which way we will expand Belgrade Airport and build a new runway, whether it will be through concessions or whether a different approach will be used. I am certain that by the end of 2016 - 2017 Belgrade Airport will become the biggest hub in the region”, the Prime Minister said. He added Nikola Tesla Airport is experiencing problems as a result of increased traffic, in particular with baggage sorting and aging technology.

Earlier this year, the PM revealed plans to put Belgrade Airport up for a twenty year concession, outlining strong interest from the Persian Gulf’s largest construction company Arabtec Holding. At the time the government unveiled plans to utilise a Private-Public Partnership (PPP) model to build a third terminal at Belgrade Airport to be used exclusively by Air Serbia, reconstruct Terminal 1 and build a second runway, a cargo center and a nearby hotel. The investment was estimated to be worth one billion dollars. Mr. Vučić says the investments are needed in order to accommodate growing passenger numbers which have been driven primarily by Air Serbia. “I am proud to say that from July 2013 to July this year Air Serbia has recorded a 83% passenger increase - a European record. In September, Etihad Airways CEO James Hogan will present us with results of the partnership. From this year onwards Air Serbia will become a profitable company and Serbia will earn money from it, compared to the massive losses recorded all these years”. Recently revealed documents, signed between the government and Etihad Airways for the latter’s minority takeover of Air Serbia, show the Serbian national carrier is to be given a dedicated terminal at its hub.

Plans to grant a concession of the airport to a company from the United Arab Emirates was met with fierce opposition by trade unions who warned such action would give Etihad a monopoly over the Serbian aviation industry and lead to the pullout of other airlines operating flights to Belgrade. In a statement, the unions said, “Belgrade Airport is of strategic interest to Serbia and of great importance to national security. We appeal for the government to take this into consideration when making its final decision”. Several companies have already expressed their interest to participate in the concession process including Greek-based Copelouzos Group as well as the European Bank for Reconstruction and Development (EBRD). Interest from Austria, France and Russia has also been shown. The Serbian government has an 83% share in Belgrade Airport with minority shareholders made up mostly of banks and investment funds.