Jat among the world’s safest ... again

The International Air Transport Association (IATA) has awarded the Serbian national carrier, Jat Airways, the IOSA (International Operational Safety Audit) certificate. The Serbian national carrier has thus for the third consecutive time officially received the top international grade certifying that it has attained security and quality as well as technical maintenance. The auditing was carried out last week, as Jat successfully passed the IOSA review by meeting every one of the 934 IATA-prescribed standards, nearly 140 standards more than in the previous audit. Jat Airways was IOSA registered for the first time in February 2005, as one of the 30 original IATA members. IATA rallies some 260 air companies. At the time of this first IOSA registration, Jat had passed the review without any negative points – a rarity in the aviation world. The certificate was renewed in 2006 and valid through February 25, 2008. Last week, the IATA-accredited London-based Wake Qa Ltd. auditing house performed a new audit of Jat Airways and issued IOSA registration validity to the Serbian air company until February 25, 2010.

Meanwhile, Jat has an uphill battle with finances although big changes may be ahead. More news about this will be published on the blog soon.

New flights to Pula

Croatia Airlines has announced that it will introduce flights to London and Paris from Pula, on the Croatian coast, in the second half of April 2009. Although the agreement with Pula Airport has not yet been signed it is almost certain that the deal will be successfully sealed. Croatia Airlines currently has some problems with financially supporting the London route although it is expected that this will overcome. Croatia Airlines’ main fear is that tourists will stay away from Croatia due to the global financial crisis while another cause of concern is the sliding value of the British Pound. If successful the lines will be operated during the winter 2009/2010 season as well which should help the sliding passenger numbers passing through Pula Airport. Flights to London will be operated to Gatwick Airport twice weekly although flights to both London and Paris will increase to 5 weekly flights during the peak tourist season. Croatia Airlines hopes that by linking Pula with Paris and London it will open passengers the opportunity to continue their journeys further on other partner Star Alliance member airlines. Meanwhile the low cost Germanwings will introduce flights from Berlin to Pula and Jat Airways will restart flights from Belgrade (currently meetings are being held between the Croatian and Serbian Aviation Directorate to completely liberate the airways between the two countries).

Pula AirportLarge potential as new flights announced

Pula is the largest city in Istria, Croatia and is considered to have high potential as a large tourist destination which it is developing into. Despite this, Pula Airport has struggled to sustain growth this year even though there is a high potential for European destinations. Croatia Airlines, the national airline, realising this potential yesterday announced new flights to London and Paris from Pula and is planning to open even more services in 2009. More about this can be read tomorrow at 07.00CET.

Recent flights to Belgrade proved to be very popular from Pula with load factors averaging around 75%, which is a good result for an ATR72 aircraft which operated on this line. Jat Airways and Pula Airport have signed an agreement for new flights to be operated to the coastal Croatian town and Serbia’s capital in the summer months, if Jat is financially able to operate at the time. Flights between Belgrade and Pula were the first scheduled flights between the two countries following the civil war. It showed that Croats had high interest in travelling to the once Yugoslav capital while Serbs had the desire to relax on the Croatian coast. German tourists head tourist arrivals to Istria. Berlin offers a high traffic potential which would be supported by strong local demand. Stockholm is currently served to Pula during the summer season. Scandinavian countries, especially Sweden, are regarded as the most promising markets to develop direct year-round connections. This line would also benefit from by strong local demand. There are currently no direct flights from Pula to Madrid. The number of visitors from Spain to Istria is rapidly growing and Madrid, as a destination with high traffic potential, would be a promising route. Substantial domestic traffic to Madrid can also be anticipated. The city of Dublin with its phenomenal economic growth is considered as one of the most popular destinations. It is an attractive destination tourist-wise for locals and for the broader catchment area as well. Croatia Airlines has announced that it will commence flights to Paris, London and Barcelona next year however details about this can be read tomorrow.

Pula Airport supports all airlines interested in taking up new routes with an incentive programme to reduce airline start-up costs such as landing and handling. The airport may also look to offer additional backing through Istrian Tourist Board marketing support (especially for low cost carriers). In addition the airport has a host of other marketing initiatives in terms of advertising, to strengthen the promotion of routes, to send out new route promotions, to promote flights and carriers at conventions, and to co-operate close with the local tourist board, Chamber of Commerce, and business development authorities.

In December you can read more airport analysis that will be published on the blog.

2 million passengers pass through Zagreb

On the 25th of November 2008 Zagreb Airport welcomed its 2 millionth passenger of the year. The lucky passenger, Gracia Horvatin (pictured above), received a 750 Euro voucher to be used at the airport’s duty free shop. She also received a dinner for two at Zagreb’s exclusive restaurant and a return ticket to Istanbul on behalf of Turkish Airlines. Croatia’s main airport is reporting an 11% increase in passengers this year and is coming in second position, in passenger terms, when compared to other airports in the EX-YU region. While other airports in Croatia have struggled to maintain growth and a high level of passenger numbers, largely due to the global financial crisis, Zagreb Airport is projecting that next year it should have approximately 2.4 million passengers pass its doors. It is also important to note that Zagreb Airport is operating with a profit along with only 2 other airports in Croatia – Dubrovnik and Split. Meanwhile the airport is preparing for the construction of the much publicised and criticised new terminal while minor reconstruction is ongoing at the current passenger terminal at Zagreb Pleso Airport.

Uproar against Belgrade Airport CEO

The work of Serbia’s parliament on Tuesday was blocked as members began discussion about Belgrade Nikola Tesla Airport CEO and his hefty monthly pay as well as large bonuses he secured for himself. Earlier on Tuesday, parliament members called for the dismissal of Nikola Tesla Airport CEO Bojan Krišto (pictured above) and said that they would block the work of the parliament until action is taken. Opposition party members enumerated a string of financial abuses, highlighting the six-figure salaries of the company’s directors and called on the government to hold a session to debate Krišto’s dismissal. They called for financial inspectors to be sent to the airport as well and urged the Interior Ministry to send the Anti-Organized Crime Administration to prevent “documents from being hidden”. Krišto, who became the airport’s CEO a few months ago, is one of the youngest CEO’s in a government owned company. In a country where the average wage stands at just over 530 Euros per month, Krišto’s pay was more than unacceptable for a government owned company whose wages are paid on behalf of the government and tax payers. After such a large uproar the Serbian president also demanded Krišto’s resignation. Late on Tuesday evening, Bojan Krišto handed in his resignation and returned his last wages. The issue became political as the CEO’s of the 28 government owned companies in Serbia are named by the government in power and they are usually a member of one of the parties in power. The party in question, G17+, as well as its coalition parties in power distanced themselves from Krišto and supported his resignation.

Adria Airways luring passengersEasyJet style

Mayer McCann, the advertising agency that designs ads for the low-cost airline EasyJet, recently accused studio 3S of copying their style. The 3S marketing agency, which developed an ad for the Slovenan national carrier Adria Airways that is displayed in washrooms (pictured left), denies the accusations and has stated that they hadn't seen EasyJet's advertisements (pictured right), which were published in newspapers and magazines last year in October and November. The EasyJet ad reads: "If you haven't been to London, get up!" Adria Airway's ad, which was put in women's toilets, reads: "If you've never been to Paris, stand up right now!" Marko Majer, director of Mayer McCann, said: "We aren't pleased because the ad uses the same wording". Majer said that they use each EasyJet ad for a short time and change them frequently, but emphasized they never copy them. He feels that now 3S has copied their idea in a "vulgar toilet context" and is deciding whether to take the issue to the court of arbitration. The head of the projects at 3S, Urša Detiček, explained that advertisers of competing products or services sometimes come up with similar ideas. Detiček, who says the two ads are graphically very different, and Adria Airways were surprised when they learned of Mayer McCann's accusations.

Despite EasyJet’s attempt to enter Slovenia’s aviation market it has failed as Adria Airways has managed to overcome the competition.

Flying dots

After exactly 10 years since the implementation of the “A flight more” frequent flyer programme, Jat Airways has decided to end it, instead replacing it with the new “Flying Dots”, appropriate due to the airline’s livery. With the full name being the Loyal Passenger’s Club – Flying Dots, neither the number of conducted flights, nor the mileage flown will no longer be the decisive factor towards receiving a free ticket. Under new regulations, Club members will earn points for each flight flown with the Serbian national carrier. The amount of earned points will depend on the ticket price, on board seat class and destination. Each new Club member will have a personal code enabling insight into their accumulated points. After a certain amount of points are accumulated passengers have the possibility to fly for free, reduce their ticket price or they may transfer points to a family member, colleague or friend. The new frequent flyer programme begins on December 3, 2008 and passengers may become a member by registering via the airline’s official website.

Adria Airways and Croatian Airlines use Lufthansa’s “Miles&More” frequent flyer programme while Montenegro Airlines has its own “Vision Team” programme. B&H Airlines and MAT do not have any frequent flyer programme available to passengers.

Wizz Air, FlyNikki and Malev to Serbia

Following a conference organised in order to stimulate airlines to begin low cost flights to Serbia’s capital Belgrade, 3 airlines have announced their interest to commence flights – Wizz Air FlyNikki and Malev Hungarian Airlines, a major threat the struggling national carrier Jat Airways. These airlines should join the current two low cost carriers, German Wings and Norwegian Air Shuttle, that currently operate flights to Belgrade. Wizz Air would make the largest commitment operating to 6 cities from and to Belgrade – one in Spain and one in Germany (the cities are yet undefined), Paris, Milan, London and Gothenburg in Sweden. Malev would commence flights from Budapest to Belgrade while Nikki would commence flights to Vienna. This could seriously harm Serbia’s national carrier that has recently announced that even more workers will lose their jobs (over 800). Furthermore the airline has struggled to maintain services after significantly downsizing its fleet. The 3 new airlines should commence flights to Belgrade from late March 2009 once the summer season starts although their arrival depends if Serbia’s parliament ratifies the Open Skies agreement by then.

New low cost flights from Croatia

Low cost carrier Belle Air recently launched a new service between Tirana and Zagreb. Albania's only low cost airline has already started the new service between Tirana and Zagreb, which operate three times a week on Monday, Wednesday and Friday. According to the airline’s website: "Belle Air commenced operating low cost flights two years ago with flights between Albania and Italy. The airline has shown steady growth since”. The airline currently boasts a network of 24 airports that connect Albania with Italy, Belgium, Israel, Egypt and Turkey - with Croatia being the latest nation to link up with Albania's capital city. Belle Air operates a mixed fleet, with 1 MD82, 2 BAE 146, 1 ATR42, 1 Fokker 100 and an Airbus A320. The low cost airline was launched in May 2005 and began operating flights between Albania and Italy in March 2006. As well as Tirana, Belle Air also operates flights from Priština.

Meanwhile the world’s leading low cost carrier EasyJet is expected to commence daily flights to Dubrovnik from the 2009 summer season. Final details will be made public in the upcoming month as talks between Dubrovnik Airport and EasyJet intensify.

Skopje AirportEuropean market underserved

Macedonia’s main aviation hub – Skopje Alexander the Great Airport is currently suffering to sustain the growth it had in 2007. There is a lack of interest on behalf of international carriers with only 12 scheduled airlines operating to the airport, most of which are from the former Yugoslav republics. As a result passengers are forced to transit through Vienna in order to reach other destinations. Current trends show a strong need for new flights from Skopje to European cities.

Trends show that direct flights to German cities could be very profitable from Skopje. There is a concentration of Macedonians in Berlin, Bavaria, Hamburg and the Ruhr. 62.295 Macedonian citizens were living in Germany in 2006, although Macedonian sources claim the true number of Macedonians to range from 75.000 to 85.000. As a result daily flights to Berlin, Frankfurt and Munich could be potentially profitable. Flights to Belgrade have managed to captivate many travellers from Skopje which are now choosing to transit through Belgrade onto further destinations. This has also been seen by the increase of flights on behalf of Jat Airways to the Macedonian capital. Most passengers continuing from Belgrade continue to London and Paris. There is such a large numbers of Macedonians continuing their flights to the capitals of the United Kingdom and France that 3 weekly flights from Skopje would be profitable to both. In France there is also a significant Macedonian diaspora totalling 15.000. Developing business cooperation and a large Macedonian population in Denmark (12.000) could make 3 weekly flights from Skopje to Copenhagen profitable. Also, it important to remember that all of these flights could be operated via Ohrid, Macedonia’s second hub, which could further increase passenger numbers on flights, although this would depend if the Macedonian Aviation Authority would allow foreign airlines such a practice, most probably not however there have been some cases where they have, for example Jat Airways operated from Skopje to Belgrade via Ohrid.

Due to the small size of the Macedonian aviation market there is currently no need for transatlantic flights. Most transatlantic passengers from Macedonia travel though Vienna.

Montenegro Airlines vs. Belgrade Airport

The feud between Montenegro Airlines and Belgrade Nikola Tesla Airport regarding landing fees continues. The Serbian Minister of Infrastructure, Milutin Mrkonjić, has said that he is negotiating with the Montenegrin Minister for Transportation in order for landing fees, for Montenegro Airlines in Belgrade and Jat Airways in Tivat and Podgorica, to be identical. Jat Airways currently pays the same landing fees at Montenegrin airports as do other international airlines while Montenegro Airlines pays lower fees in Belgrade due to the fact that it is still categorised as a domestic carrier. However when Belgrade Airport increased prices for Montenegro Airlines, a few days ago, in order to bring them in standard with fees payed by international carriers, Montenegro Airlines accused the Belgrade Airport management of a political move while the Montenegrin Minister for Transportation, Andrija Lompar, threatened that Montenegrin airports would increase Jat’s landing fees. Jat Airways CEO says that the airline has been put in the centre of this feud even though it has nothing to do with it. He also stated that Jat will not increase ticket prices to Tivat or Podgorica.

Montenegro is the most profitable market for Jat Airways while Serbia is most profitable for Montenegro Airlines. The national carrier of Montenegro was forced to end services from Belgrade to Zurich after the nation declared independence from the State Union of Serbia and Montenegro however operates many daily flights between Tivat, Podgorica and Belgrade. Montenegro Airlines currently pays fees at Belgrade Airport that are 90% lower than other international carriers and even Jat Airways.

Losses double for Croatia Airlines

In the third quarter of the year the Croatia Airlines Group reported a loss of 22.37 million Kuna (3.15 million Euros), which is twice as much when compared to the same quarter last year when the loss totalled 11.42 million Kuna (1.55 million Euros). In the first 9 months of 2008 the national carrier of Croatia had a total loss of 21.55 million Kuna (3.02 million Euros) due to the record prices of oil which increased expenditure which couldn’t be covered by the significant increase in operational profit which increased by 162 million Kuna (22.77 million Euros) compared to last year. The total income increased by 14.25% compared to last year, created by the increase in the number of transported passengers. Income from tickets sold inside Croatia increased by 37.12% compared last year while international sales increased by 3.4%.

However, these positive income figures could not cover the rising expenditures the airline had which are 17.97% higher than last year. Only operational costs are 19.33% higher than last year which is the reason why expenditure has increased significantly. Croatia Airlines hoped that ticket sales would significantly increase through the purchase of 2 new Bombardier Q400 aircraft and the sale of 2 ATR42s however this was not achieved. In 2008 Croatia Airlines shares decreased by 65% on the Zagreb Stock Exchange.

Turkish’s plans for B&H Airlines

On October 29, 2008 the government of Bosnia and Herzegovina officially named Turkish Airlines as the new strategic partner of the national carrier B&H Airlines marking the end to a successful privatisation. Despite Turkish’s desires to gain 51% of the airline and therefore become a majority share holder, the airline has made a compromise and has given in to the wishes of the Bosnian government, therefore holding 49% of the airline. Turkish will, at first, invest 5 million Euros in the purchase of new aircraft and will inject a further 5 million for the airline’s development. A new 100 seat jet aircraft should enter the fleet in the spring of 2009, most probably in time for the summer schedule which begins on March 29. By spring 2010 Turkish will add another new aircraft to the national carrier of Bosnia and Herzegovina brining the airline’s fleet size to a total 4. With 2 ATRs operating, two jet engine aircraft would be ideal for the small carrier. Turkish Airlines has agreed to keep all current workers employed in the airline, keep the airline’s name and its headquarters in Sarajevo.

Turkish Airlines is one of the world’s fastest growing airlines, expanding its fleet and destination network in recent years significantly. With a network of 140 scheduled destinations and a fleet size of 117 aircraft, Turkish Airlines has recently commenced a tender process for the purchase of another 105 aircraft until the year 2023 with another 30 options.

Montenegro Airlines angrywith landing fees

Montenegro Airlines currently pays the lowest fees at their most important and profitable market – Belgrade. These fees have stayed the same since the breakup of the state union of Serbia and Montenegro however Belgrade Nikola Tesla Airport recently announced they will be increasing fees for Montenegro Airlines and will bring it in line with other international carriers. This caused an outcry from Montenegro Airlines and the Montenegrin government with both stating that the decision is politically motivated. Montenegro Airlines CEO, Zoran Đurišić, threatened that the carrier would cease flights to Belgrade although he ruled this out in a statement released yesterday. The Montenegrin government is also less than happy threatening they would increase landing fees for Serbia’s national carrier Jat Airways at airports in Tivat and Podgorica. Interestingly Jat pays full fees at both Montenegrin airports as do other international carriers.

Jat Airways also released a statement saying that the issue must be resolved and that the airline will support its partner Montenegro Airlines. The relationship between Jat and Belgrade Airport is less than sound since Jat Airways pays the highest landing fees in Europe to land at their own hub. Today officials from Montenegro Airlines and Belgrade Airport will meet to discuss the dispute. Montenegro Airlines will not be increasing ticket prices to Belgrade for now.

Royal Jordanian emergency at Belgrade

A Royal Jordanian Airlines Airbus A310-300 on route from Amman to London Heathrow made an emergency landing yesterday at 14.38 at Belgrade’s Nikola Tesla Airport following decompression in the cabin. There were 154 passengers and 14 crew members on board at the time of the landing. A new aircraft has been flown over for passengers to continue their journey. It departed at 21.00 on Saturday. It was the second emergency landing within a month in Belgrade following the emergency landing of German charter company XL on October 18 when instruments reported engine trouble. Belgrade Airport has been praised for the way it handled the situation.

Meanwhile the airport is reporting the first drop in passenger numbers since August 2005. In the month of October, 202.274 passengers passed through Belgrade Nikola Tesla Airport, a decrease of 3% compared to last year when the airport had 208.421 passengers. The global financial crisis is blamed for the drop in passenger numbers although the airport will have an overall increase in passenger numbers by the end of the year. Meanwhile a feud with Montenegro Airlines is not helping the airport’s image. More news about this within the next few days.

New drama at Jat Tehnika

Weeks after the failed privatisation of the region’s largest maintenance company, Jat Tehnika from Serbia, fingers are being pointed towards those who are to blame and accusations are increasing. The air mechanics union is unhappy with the management of Jat Tehnika blaming it for late wages, the failed privatisation and agreements that have costed the company millions.

Earlier this year it was almost certain that Jat Tehnika, which became independent from Jat Airways after strikes in 2005 which costed the airline millions, would become privatised with four companies interested in the purchase. However selling public companies during the world’s largest economic crisis since the depression turned out to be bad idea. Ironically workers at Jat Tehnika have said its former enemy Jat Airways is the most cooperative by paying for all services and therefore will not be affected by the current mutiny inside the maintenance company. Workers are requesting for the current CEO and his advisors to voluntarily resign as they are being blamed for falsifying documentation to the Serbian Privatisation Agency. Another more surprising element is that the company is currently operating with a loss despite having a profit last year (USD 35.5 million) and statements from the Jat Tehnika CEO that the company will also have a profit this year. On the official website of the air mechanics union a statement has been published saying: “Dear colleagues, we have had tougher situations than the one we have currently been pushed in by unreliable people in our company. Some actions have led to disbelief and some to laughter however it has also led to fear for those that live thanks to Jat Tehnika”.

Jat Tehnika currently performs maintenance services at Belgrade Nikola Tesla Airport for Jat Airways and another 7 airlines, most of which are from Europe.

Ljubljana AirportInter-European and transatlantic flights

The most lucrative destinations from Ljubljana’s Jože Pučnik Airport, Slovenia’s main air hub, are those found inside Europe however a few transatlantic services could also be found profitable according to current trends.

Berlin is considered one of the cities with the highest traffic potential for establishing services to Ljubljana. German tourists are listed second on the scale of tourist arrivals to Slovenia with 211.067 visitors in 2007. In the scope of tourism there is also high demand for travel to Berlin by Slovenians. Besides that the largest percentage of Slovenia’s diaspora is located in Germany with approximately 90.000 people. Furthermore German companies invest the most in the Slovenian market. Germany represents the most important trading partner to Slovenia with 13% growth in trade in 2008, which also results in 60.000 annual business trips. Scandinavian countries, especially Norway, are one of the most promising markets for the development of direct services from Ljubljana. In 2007 there were 6.990 arrivals by Norwegian tourists, and the number of tourists is still growing. There were 4 weekly flights during the summer from Ljubljana to Stockholm. This route proved to be very popular as seen in the very high load factor. Besides tourism, there is also potential for business between Sweden and Sweden’s financial centre Stockholm and Ljubljana. There was also one direct weekly flight in the summer timetable to Dublin, Ireland with an average load factor of 70%. Yearly, there are an increasing number of arrivals (10.813) and overnight stays (36.031) on behalf of Irish tourists in Slovenia. Dublin represents a chance for good business interaction between the two countries and could be especially attractive tourist wise for Slovenians and broader in nearby catchment areas. According to current trends Madrid, which will be served from Ljubljana from March 2009 on behalf of Adria Airways, should be very successful. Other European cities that could prove popular are Rome, Milan, Cologne and Dusseldorf.

There are no scheduled direct services between Ljubljana and New York although there is an increasing number of American tourists travelling to Slovenia (49.620 arrivals and 112.112 overnight stays in 2007). This transatlantic flight could be popular as a regular summer charter.

For newly introduced services or additional frequencies from Ljubljana, the airport managments offers special promotional prices with additional marketing support provided by the Slovenian Tourist Board and SPOT (Slovenian Power of Tourism) consortium in order to support introduction and development of incoming tourism.

Ljubljana is served by 8 scheduled airlines. Low cost airlines found it extremely difficult to make a profit flying to Ljubljana and ceased their operations to the Slovenian capital.

Adria Airways passenger numbers up 17%

In the first ten months of this year Adria Airways carried more than 1.149.450 passengers, which is 17% more than in the same period last year. The total number of flights was also up by 15% – scheduled flights by 16% and charter flights by 11%. In scheduled services, which is the airline’s most important sector, Adria operated 16% more flights in the first ten months of the year and carried 960.809 passengers, which is 20% up on the same period last year. In the month of October alone, Adria carried a total of 109.413 passengers, which is 4% more than in October 2007. Adria operated 2.187 scheduled flights, 12% more than in October last year and a total of 2.385 flights, 9% more than in the same period last year. The number of passengers on scheduled flights by the end of October stood at 97.932, which is 7% more than in the same period last year.

If the same trends continue it is certain that in terms of passenger numbers Adria will come as the third best national carrier inside the EX-YU, following Croatia Airlines and Jat Airways. This will be the third year in a row it will have such a rank.

Tomorrow a careful analysis of unserved destinations that could be profitable and successful from Ljubljana Jože Pučnik Airport will be published on the blog.

New airlines across EX-YU

Several new airlines have either started operations or are in the process of gaining necessary licenses in order to commence services. These airline originate from countries that once formed Yugoslavia.

Star Airlines

Star Airlines has just started operations as a cargo airline. Its fleet consists of 2 Boeing 747-200 freighters, one of which is pictured above in Hong Kong under the registration Z3-CAA, meaning its registration comes from Macedonia and as a result it is a Macedonian airline. However, cargo airlines inside EX-YU rarely operate from the country they are registered in. Instead they operate across the world where demands are needed. They register themselves in countries such as Macedonia and Serbia in order to bear the rewards such as low costs of registration and less frequent safety inspections allowing them to operate with fewer restrictions. For example the airline United International was previously operated under the name Air Sofia and was based in Sofia, Bulgaria. In March 2007, after Bulgaria joined European Union and strict new aviation regulations were introduced, the airline lost its license from the Bulgarian government along with 4 other airlines and it relocated to Serbia. This has similarly occurred to the now known Star Airlines. It used to operate as Orbit Express Airlines (Orex) in Turkey however it lost its license and relocated to Macedonia. It currently operates freight services between Europe and China.

Air Kosova

Air Kosova is the largest travel agency based in Serbia’s disputed region of Kosovo. After striking a deal with Slovenia’s Aurora Airlines, Air Kosova established their own charter carrier using Aurora’s fleet of 3 MD82s and 1 MD83. The airline’s operates flights between Priština and a handful of German cities as well as Maribor, Slovenia. The entire airline is managed by Aurora with the entire cabin crew and all pilots originating from Slovenia. Travel agents had unsuccessfully launched airlines in Kosovo all of which have gone bankrupt. These include Air Prishtina and Kosova Air.

Sky Srpska

The new airline based in Bosnia and Herzegovina is set to operate flights between Banja Luka and European destinations, which will commence sometime in 2009. The airline is being established by the government of Bosnia and Herzegovina’s entity of Republika Srpska in association with Jat Airways from Serbia. The government will take out a loan for two aircraft, each seating 50 passengers. Sky Srpska is allowed to spend up to USD 12.25 million per aircraft. Previously Air Srpska was based in Banja Luka until Jat Airways decided to withdraw 2 ATR72s from the airline which made up its entire fleet and as a result it ceased operations.

Tivat Airport expansion begins

Construction companies from Montenegro have begun work on the expansion of the country’s second international airport – Tivat. The project includes the construction of a new platform (apron) for aircraft handling and the project will also include the construction of supporting infrastructure. The project, which is being financed by Airports of Montenegro, is worth 2 million Euros with its aim being to increase handling capacity at the airport. The new platform will be primarily used by general aviation (as in private jets) which are seeing a large increase in operations to Tivat. The new platform will be able to handle six aircraft with a maximum wing span of 20 metres. Otherwise two scheduled commercial aviation aircraft, known as category C aircraft, can be handled. Category C aircraft include Boeing 737 jets and Airbus A320s. The project should be complete in 3 months after which a new lighting system will be implemented.

Tivat Airport is seeing an increase in passenger numbers this year despite charter flights being rerouted to Podgorica due to noise complaints from the citizens. Currently reconstruction of Podgorica’s terminal 1 is also under way. These projects take place under the new expansion strategy for Montenegro’s airports.

Terminal debate continues in Zagreb

A completely new terminal stretching on 70.000 hector of land with a capacity of handling 5 million passengers annually with 12 air bridges should become a reality in Zagreb with a new terminal building (pictured above) which should be complete by late 2011 or early 2012 (according to current time frames). Following a debate if the best architectural project for the airport was chosen, a new debate has begun. Is the new terminal building necessary and if it is, is it too late? According the CEO of Zagreb’s Pleso Airport, Boško Mataković , the new terminal will introduce Zagreb as the gateway for South Eastern Europe and will be a leader in the region. However the project will be complete in 4 years, by which time airports from neighbouring countries will already have expanded. In 2010 the airport in Budapest, Hungary will have a new, fourth, terminal with 16 air bridges. By 2010 Ljubljana’s Jože Pučnik Airport will also have a brand new terminal. Meanwhile Belgrade Airport, the regional leader, is already operating with a 5 million capacity terminal for the past 3 years and plans are being made for the construction of a third terminal. In 2012 Bratislava’s new terminal will also be complete having a capacity of 5 million as well. Therefore the CEO of Zagreb Airport believes a new terminal is necessary and that Zagreb is significantly behind due to the delays which have occurred with the project.

On the other hand critics say that Zagreb has lost its chance of being a regional leader years ago and that the new terminal, which will cost 200 million Euros to construct, is both unprofitable and unnecessary. The current terminal is able to accommodate 1.5 million passengers annually (this capacity is now insufficient as Zagreb will serve approximately 2 million passengers this year). Critics of the new terminal say that money would be invested more wisely if it would go towards the expansion of the current terminal which could than accommodate 3.5 million passengers. Croatia is the regional leader in the number of international airports it has – a total of 11. However, currently only 3 are profitable – Zagreb, Dubrovnik and Split.

Despite troubles passenger numbers rise

Despite financial difficulty Serbia’s national carrier Jat Airways has in the last 10 months of the year carried 1.216.420 passengers, a 6% increase compared to last year. Cabin occupancy stood at 65%, an increase of 2% compared to the same period last year. October 2008 will be remembered by a significant increase in cargo operations after a long period of time and continuing increase on charter travel. Jat increased its October 2008 charter flights by 50% compared to October 2007. 299 tonnes of cargo were transported, which is 2% more than expected while 47 tonnes of mail was also flown, which is an impressive 137% more than expected. Passengers transported to Montenegro increased by 4%, to inter European destinations by 3% and in charter travel by 23%.

The airline hopes the positive trend continues as it faces a difficult cost cutting period.

Bomb threat causes long delay

Earlier yesterday Belgrade Nikola Tesla Airport received a phone call stating that there was a bomb on Jat Airways’ flight which had just departed from Dubai to Belgrade via Larnaca and that it will explode at 8.000 metres above the ground. The Serbian police and the Serbian Civil Aviation Directorate were immediately informed. Jat’s aircraft was, at the time, starting its decent in to Larnaca, Cyprus when it received information that there could be a bomb on their flight. Once the aircraft landed in Larnaca the plane was met with police and fire services and all 67 passengers and 6 crew members immediately evacuated the Boeing B737-300 (YU-AND). None of the passengers on flight JU089 knew of the bomb threat until the captain informed them just before the plane came to a halt on the runway. Passengers later commented that it was better that the pilot had not told them as it would have cause widespread panic however all passengers seemed relaxed and even joked about the incident.

At Laranaca the plane was thoroughly checked and all baggage was screened with no explosive devices found. The 67 passenger, plus another 50 that were to board in Larnaca spent 4 hours waiting for their flight to Belgrade to resume. Jat Airways states it handled the situation professionally and that it would never compromise the safety of its passenger even though this was a false bomb threat.

The Dubai to Belgrade service is one of Jat’s most profitable. The flight is usually to full capacity carrying holiday makers, business people and a large portion of the Serbian diaspora travelling from Australia whose quickest way to Serbia is through Dubai. The plane landed safely just after 18.00 local time. The Serbian police are now investigating the call. According to Serbian law an individual who is found guilty of making a false bomb threat could face long jail time.

Another privatisation failure

Only weeks after the failed privatisation of Serbia’s national carrier Jat Airways, its maintenance company, Jat Tehnika, has also failed to be privatised. The tender for the purchase of documentation for the privatisation of Jat Tehnika began on June 16. Despite the tender documentation being purchased by two Israeli companies – El Al and the Bedek Aviation Group as well as Malev Hungarian Airlines and a fourth company which has remained unnamed, none sent in an offer for the company’s purchase. Offers had to be sent in by October 27, 2008 and this was already an extension on a previous deadline. Jat Tehnika gained its independence from Jat Airways in 2005 after major strikes which paralysed the national carrier. It is 100% owned by the Serbian government. However unlike its old partner, Jat Tehnika is operating with a profit which is expected to reach 45 million Euros by the end of the year. The company’s value had been placed between 100 and 200 million Euros.

Yesterday the Jat Tehnika union responded with an ad in the Serbian national newspaper “Politika” blaming the government for the privatisation’s failure. The Serbian Privatisation Agency will officially announce the privatisations failure within the next few days. Only yesterday did it officially announce that the privatisation of Jat Airways had failed.

Zagreb Airport potentialEurope and North America

Zagreb Airport is the second largest airport in terms of passenger numbers out of all the airports in the EX-YU. The most lucrative destinations that could be served from Croatia’s capital are those found inside the European Union while transatlantic flights could be profitable and sustainable through charter flights or seasonal summer flights. A total of 6 profitable destinations could be added to the current network from Zagreb.

Madrid is not served directly from Zagreb. In 2007, 10.785 passengers travelled from the Spanish capita; to Zagreb, which was an increase of 20% on the previous year. Madrid accounts for 38% of the total market to Spain from Zagreb. In 2007, 153.860 Spaniards visited Croatia, an increase of 35% compared to the previous year while 2008 data is even more promising. Warsaw in Poland is currently only indirectly served from Zagreb. In 2007, 7.965 passengers travelled from Warsaw to Zagreb, an increase of 15% from the previous year. Warsaw accounts for 67% of the total market from Zagreb to Poland. Polish visitors from Croatia increased 17% in 2007 to 323.000. In 2008 these numbers are even more impressive as by November this tear already 357.230 passengers from Poland have visited Croatia. Milan is also only indirectly served from Zagreb. In 2007, 11.524 passengers travelled from Milan to Zagreb, an increase of 20% compared to 2007. Milan accounts for 28 % of the total market from Zagreb to Italy. Italian visitors from Italy to Croatia exceeded 1 million in 2007 and a small increase is expected in 2008. Bucharest is another underserved destination from Zagreb. In 2007, 8.209 passengers travelled from Bucharest to Zagreb, an increase of 22% compared to the previous year. Bucharest accounts for 90% of the total market from Zagreb to Romania. Visitors to Croatia from Romania increased 40% in 2007 to 47.057.

As for transatlantic services New York and Toronto would, for now, be most profitable if operated on a charter or seasonal basis. Toronto has been served only during the summer period. In 2007 18.263 passengers travelled from Toronto to Zagreb. Passenger traffic to Canada grew by 7% in 2007 compared to 2006. In addition, Skyservice resumed their summer service to Zagreb from Toronto. Visitors from Canada totalled 36.474, an increase of 26% on the previous year. As for New York in 2007, 24.657 passengers travelled to Zagreb from the Big Apple, an increase of 7.7% on the previous year. New York accounts for 19.2% of the total market to the USA from Zagreb. Visitors from the USA totalled 181.381, an increase of 18% when compared with visitors in 2006. The total number of visitors from the USA and Canada to Croatia totalled 218.000 in 2007.

According to the airport’s management it would support any new route to the airport with a 5-year incentive scheme to reduce airline start-up costs. Based on the individual merits of the proposed route growth, the airport may look to offer additional backing through marketing support. In addition the airport has a host of other marketing initiatives - consumer magazine, e-mail database, website banners and other which would be used to promote any new service.

Zagreb Airport is currently served by 15 scheduled airlines and 2 low cost airlines. 1.992.455 passengers used the airport in 2007.

Low cost airlines arriving in 2009

Belgrade Nikola Tesla Airport is aiming to attract at least 2 low cost airlines by mid 2009 to compliment the current two operating to Serbia’s main hub – German Wings and Norwegian Air Shuttle. The airport management will lower its handling costs in order to attract more low cost companies. The airport is organising a summit in November where low cost airline representatives have been invited to discuss possible destinations to Belgrade. The airport will lower its handling costs by 10-20% and will allow low costers to choose handling services that they wish Belgrade Airport to conduct, an option unavailable for scheduled airlines. One of the main obstacles for low cost carriers is the visa regime currently in place on behalf of the European Union towards Serbia which does not allow Serbs to travel without visas to a large amount of European countries. These visas are costly and difficult to get. This visa regime however should come to an end during 2009.

The low cost airline most interested in operating to Belgrade is Fly Nikki from Vienna which requested to start operations during summer 2008 although this was made impossible due the agreement between Austria and Serbia which only allows 2 airlines to operate between the two countries (this right is exercised by Jat Airways and Austrian Airlines). Wizz Air is expected to be the other low cost airline anticipating to start operations to Serbia next year.

The reason these talks with low cost airlines have been delayed is in order to protect the struggling national carrier Jat. However with the new development strategy the Serbian Aviation Directorate expects that Jat will grow as low cost airlines arrive and will therefore not affect the national carrier. When analysed Wizz Air is potentially the most harmful to Jat’s existence especially if they commence flights from their hub in Budapest. Malev, the national airline of Hungary, had been rejected flying rights to Serbia for years as it would attract many Jat passengers and Jat has also been staying clear of Hungary due to the same reason.

Jat Airways has responded today by lowering prices to its entire European network.

Croatia Airlines farewells last ATR42s

The 2 remaining ATR42 aircraft within the Croatia Airlines fleet operating under the names of Dalmacija and Istra have completed their last flights for the airline. One of the ATR42s under registration 9A-CTT (pictured above) operating under the name Damacija carried out its last flight from Munich to Zagreb (flights number OU437) while the other ATR42, Istra, operated its last flights by taking off from Podgorica and heeding to Zagreb. The two aircraft became part of the Croatia Airlines fleet in June 1993, while the third ATR entered the fleet May 1995 and left in November last year. The ATR fleet has in total transported 2.195.500 passengers for Croatia Airlines.

The turboprop aircraft will now be replaced with the incoming Dash 8-Q400s. Croatia Airlines has 2 aircraft of this type already in the fleet with the latest entering service on August 1, 2008. Another two Dash 8s will be delivered during 2009 while additional 2 will be delivered the year after in 2010. The Croatia Airlines fleet now consists of 4 Airbus A320s, 4 Airbus A319s and 2 Dash 8-Q400s with the average fleet age amounting to 9 years.

Jat’s development strategy adoptedwith changes

The development strategy which outlines Jat’s expansion within the next 4 years and strategies on how to decrease costs has been adopted by the Government of Serbia although there have been some changes to the original plan. The government has given the green light for various Jat offices to be sold around the world including some of its main offices in Belgrade. Although the Serbian Prime Minister was initially against this he made a compromise causing anger amongst Jat’s management and workers who are against the major sell off. The government hopes that Belgrade Nikola Tesla Airport will buy up Jat’s property and will allow Jat to continue operating in them as it has done so far. However the sell off will not provide the finances for the creation of a payment plan for the 800 workers that will lose their jobs in the company as well as the purchase of new aircraft.

By November 15 the Serbian national carrier will have to provide a list of all properties that are not essential for the airline. The properties will be sold by December 15, 2008. The government has ordered Belgrade Airport, the Serbian Petroleum Industry and Serbian Air Control write off any debt that Jat owes to them.

Officials have warned that if the development strategy is not implemented soon Jat will be seriously hurt by a handful of airlines that will begin services to Belgrade in summer 2009, including 2 low cost airlines. More news about these airlines and plans will be published on the blog within the few days.

NOTE: Soon a careful analysis of unserved destinations that could be profitable and successful from major airports in the EX-YU republics, with statistics and potential passenger flow numbers included will be published on the blog starting with Zagreb Airport this week.

B&H Airlines privatisationStrategic partner officially named

On Wednesday October 29, the government of Bosnia and Herzegovina officially named Turkish Airlines as the new strategic partner of the national B&H Airlines marking the end to a successful privatisation. The media had reported earlier in the month that Turkish had won the bid, contested by another 2 companies. Transport and Communications Minister Nail Seckanović stated that "Turkish Airlines was ranked the best among those which submitted bids and we are starting negotiations on the contract details". Needing to be negotiated is the percentage of ownership Turkey’s national carrier will receive. The government of Bosnia is selling 49% however Turkish Airlines officials are pushing for a majority 51% stake in the airline. These details should be refined in the upcoming talks. Malaysia's Comintel Corporation and a Jordanian consortium that included Royal Jordanian Airlines were among companies that made binding bids. However the government gave the Jordanian consortium a mark of 32.20 (out of a possible 100) for the bid while Comintel was out ruled due to the fact that it did not deliver all necessary documentation. The Turkish carrier received a mark of 82.50. B&H Airlines has 2 passenger aircraft and controls a very small portion of the Bosnian aviation market. Turkish Airlines is obliged to provide at least one 100 seat aircraft to the Bosnian national carrier within the next few months.

New flights to Rijeka

After months of negotiations Ryan Air has confirmed that it will commence services to the sea side town of Rijeka (pictured above), located in North-Western Croatia. The world’s largest low cost airline will commence seasonal services to Rijeka’s Airport, located on the island of Krk, from April 1, 2009 and will operate there until the winter season which begins in late October. The flights will operate from London and Birmingham twice a week. This will bring the total number of flights to the UK from Rijeka to 4 times a week as two flights are operated by Croatia Airlines to London-Heathrow. More specific details about Ryan Air’s plans to Rijeka will be known when Rijeka Airport authorities sign an agreement with Ryan Air. The airport authorities are hoping that the low cost airline will introduce more flights in the near future. The German airline TUIfly has also announced it will be increasing flights to Rijeka next year.

Rijeka Airport has seen a major decrease in passenger numbers this year. In the month of September alone the airport saw a drop of 35% while October figures, which should be released within the next few days, are also expected to see decreasing numbers.