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Friday, October 23, 2009

Jat in 2010
B737-700, Aeromak and new destinations

Jat’s year to recover in 2010?
Yesterday at the Belgrade Media Centre, Jat’s CEO Srdjan Radovanović announced big changes for the airline in 2010 and a new business plan.

2010 will, by all accounts, be a revolutionary year in Serbian aviation. Not only will the country liberate its sky but Serbian citizens ill be able to travel without visas to the European Union from January 1 and low cost airlines are announcing their arrival. All of this could hurt Jat, but the airline’s CEO is more than optimistic about the upcoming year.

Jat’s fleet plans are of most interest to readers. The airline will have all 16 of its aircraft in operation by the end of 2010. Jat will fix the current handful of grounded aircraft while those leased to Air Ivoire of the Ivory Coast will all be returned by the summer season. In March, Jat will finally lease a Boeing B737-700 which will be used on services to the Middle East and will cut the stop over on route to Abu Dhabi (which is operated via Larnaca). The aircraft will make its debut in Jat’s 2010 summer season timetable. The airline will also lease another Boeing B737-400 which will be used on services to London, Paris, Moscow and summer charter destinations. Jat currently has 4 Boeing B737-300s with the new look economy class seats and the economy class upgrades will continue throughout 2010. No new aircraft will be purchased in 2010 because Jat does not have the finances. The long term lease of the B737-700 will be financed thanks to the government’s 40 million Euro cash injection.

Jat has confirmed that it will launch its Macedonian subsidiary, Aeromak, by March 2010. All plans are in place for promotional flights to be conducted early next year. Jat is waiting for MAT to officially declare bankruptcy. Radovanović also said that in the latter half of 2010 the airline will focus on Banja Luka in Bosnia and Herzegovina, as it is a potential focus city for Jat as plans to launch a Banja Luka based airline, Sky Srpska, has been put on definite hold.

Passengers have also been given some good news. Starting January 1, 2010 all passengers flying with Jat from Belgrade in any cabin class will have the opportunity to use the airline’s complimentary taxi service, which will drive passengers to the airport. For all Serbian citizens travelling to any destination within the European Union, Jat will provide free travel insurance, granted they have a return ticket with Jat. The airline will also reduce its prices so that the average ticket price amounts to 100 Euros, starting from the 2010 summer season.

During 2010 Jat is expected to introduce new destinations. In return for Croatia Airlines’ new service from Zagreb to Belgrade (which you can read more about on Sunday), Jat will receive an all year round permit for flights to Pula and Dubrovnik. The airline plans to introduce a new destination in the Middle East and is holding talks with Portorož Airport management about a possible seasonal summer relaunch.

The airline will join one of the world’s 3 major alliances by the end of 2011. Skyteam is the front runner with recent negotiations held with its main member Air France. Lufthansa has been less than happy with Jat CEO’s recent announcements about joining Skyteam, so Star Alliance and One World are still on the table.

A new advertising campaign will be launched in late December this year within Serbia. Jat has no plans on changing its name or logo. On Wednesday, Radovanović named a new management team, replacing the old squad led by former CEO Saša Vlaisavljević who has lost his job at Jat after he was dumped from the airline’s board of directors. Most of the new positions have been filled by long time Jat employees.

Srdjan Radovanović suggests that all of these plans are already in preparation. He expects a major shift in the attitude towards Jat from April 2010. He also said that on board customer service will be greatly improved while Serbian citizens will be greatly disappointed when they realise that low cost airlines are not all that dreamy as the Serbian media has painted them.

In a bid for cash the airline will sell its agricultural aviation secotr and medicinal aviation secotor. Jat also hopes to create a new technical division although talks will be held with the government regarding this proposal.

Do you think 2010 will be Jat’s year of recovery? Send a comment with your thoughts.

28 comments:

  1. Ovaj plan za JAT je vise nego smesan.... :)))

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  2. Zasto mislis da je ovaj plan za JAT vise nego smesan? Daj ti neki konstruktivan predlog.

    What makes you think that this JAT (business-)plan is funny? Do you have any suggestions on how to improve it?

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  3. Što bi ovo bilo smiješno?

    I'm really looking forward to the advertising campaign! That's IF it happens :)

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  4. .....another news item for Jat:

    http://www.balkans.com/open-news.php?uniquenumber=41737

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  5. All this sounds great, even if half of it becomes reality will be great! I am especially pleased about BNX airport as that airport is so not used enough!

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  6. @ anonymous

    Ма бре, требамо да дамо овај нови шансу. За ове прве неколико месеци у ЈАТу, причао о бољих планова за авиокомпанију него ове друге у претходни 10 година! Мада ми се не свиђа то што је бивши директор Гранд кафа ГИО ЈАТа али је заиста предложио доста за једну половину године. Хајде да кажемо да је предложио Ербас А380 авионе и интерконтиненталне летове на далеки исток итд, али ово што има у плану је нешто што може да се оствара, свакако уз мало рад и труд. Само једино би волео да уместо Абу Даби да некако склопи нови споразум са Емиратима и да врати летове за Дубаи. Иначе ове планове може да се оствари и свака му част ако то достигне.

    I generally dont tend to believe the words which come out from JAT but these plans are ambitious and are acheivable, just some work and effort would need to be put into them for them to succeed. I wish JAT the best of luck in achieving them. The most intresting thing is the Aeromak news...

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  7. Jat will disapear . Stop dreaming

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  8. Jat will disapear . Stop dreaming.
    Ovo je jedini ispravan komantar na cijelu ovu pricu.JAT apsolutno nema sanse za opstanak sa sadasnjim rukovodstvom, flotom itd.. u okviru otvorenog evropskog neba.
    Drzava to fino sve financira iz proracuna, ma koja to jos kompanija nebi funkcionirala na taj nacin, treba zavrnuti drzavnu pomoc pa bi vidjeli koliko bi Jat bio u zivotu.Drago mi je da gradjani Srbije ce moci bez viza u EU od januara i imati puno vise opcija osim monopola Jat-a.

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  9. The first comment is spot-on. An airline to offer free taxi service from NT to home? Why? Are they in the flying or ground transportation business? Even some of the profitable or large or well established airlines with excellent reputations don't offer this, let alone Jat who had been in the red for years now. I don't need an airline to provide me with the taxi and then use that to justify its sky-high price. I need an airline with good service, on-time departure/arrival (as close to it as possible), and most of all, functioning aircraft. Then in the case of something going wrong, I WANT them to take care of me. It isn't much. That is how normal airlines function.

    For an airline that has so many large issues, to worry about such small details is absurd. Their CEO's plan is to HOPE that they will be able to fly 1.5 million people so that they could break even. Seriously? His business plan is pinned to hope?

    This plan to give a free ride is a classic example of grasping for straws. Jat is aware that it is done, and are now, just now, trying to do something they should've done a long time ago.

    But, perhaps one of the saddest comments was that, starting with 2010, the staff will be more pleasant...so you need a new year for that to start? Are you going to put up an official "countdown until we have to start being pleasant" clock?

    Pathetic! I hope they go bankrupt as soon as possible, and that other, better companies will be fly to-out of Belgrade.

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  10. if they do half of these plans it will be good. but, i'm afraid they won't

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  11. In my opinion Jat would be much better of purchasing Sukhoi sj 100(still remains possible) hope Banja Luka works out.Wat date are the aircraft expected to be leased on? Is it possible for Jat to purchase these aircraft after the long term lease?

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  12. JATBEGMEL that what you have written in serbian doesn't really make any sence! Is Serbian (Serbo-Croat) your first language??????

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  13. I am sure something will work out if they start with lower price plan, especially if they want to do something with BNX.

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  14. U dugovima do grla,a oni planiraju Banjaluku i to od polovine 2010,pa ce umjesto 15 putnika za Beograd i obratno imati koliko putnika vise????Smijesno i bez ikakve biznis logike.Banjaluka ima mozda potencijala za nekoliko letova za Bec i to je to, sto ce u skoroj buducnosti sigurno biti pokriveno sa BH Airlinesom!

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  15. Slazem se sa poslednjim komentarom! Za Banjaluku trebaju letovi kao sto su Bec, eventualno neki njemacki veci grad i low cost kompanije ako ikad dodje do toga jer trenutna politika i smisao za biznis u B&H su blago receno katastrofalni!! Zasto se JAT ne skoncentrise na Nis, aerodrom zjapi prazan, treci grad po velicini u zemlji, nije moguce da uz dobar marketing i povoljnije cijene ljudi ne bi letjeli!

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  16. Zao mi je sto moram da kazem ovo, ali stvarno odavno nisam cuo toliko gluposti. Taksi od aerodroma do kuce i obratno. Da li direktor zna koja je tu infrastruktura potrebna, obracucni, citanje karata, diskusije sa putnicima itd? Druga glupost osiguranje: za to je potrebna ogromna birokratija za prijave, odjave, obracune, uplate, greske itd.
    Pa onda Banja Luka: Putnici iz BL vec masovno putuju preko Zagreba, jer imaju odlicne veze i low cost. Potencijal iz BL je 50-ak putnika maximum. Bolje je bilo da su stacionirali jedan avion u Nisu, pa da preotmu putnike koji iz juzne Srbije putuju preko Sofije. Pa flota: Sta ce JAT-u jedan jedini B737-700? Samo da bi leteo do Dubaja ili Abu Dabija? Pa jos jedan B737-400. Kakva je to papazjanija. Pa onda Makedonija: Adria, Malev, Austrian i drugi su vec uskocili i pokrivaju trziste Skopja, a tu ima i politicke komponente. Albanci koji cine veliki deo putnika iz Skopja iz principa ne ulaze u JAT-ove avione a nece ni u Aeromak, jer znaju da ce u njemu biti srpski kapital.
    Pa onda ime i logo: Domaci putnici i dijaspora jednostavno ne pristaju vise na ime JAT i taj bezlicni logo. O strancima da i ne govorimo za njih JAT ranzira negde u sferi gde je Aeroflot ili Air India. Bolje i postenije je bi bilo da promeni ime u Serbian Airlines, snizi cene i poboljsa uslugu i ulozi novac u iznajmljivanje nekoliko B737-700 i B737-800 ( carteri i letovi za LHR, CDG, SVO itd. ). Sve ovo drugo je bla bla koje ce krahirati.

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  17. "Pathetic! I hope they go bankrupt as soon as possible, and that other, better companies will be fly to-out of Belgrade."

    Ja sam rekao da je plan vise nego smesan, a sa ovim navedenim se POTPUNO slazem.

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  18. JAT has to do something otherwise it will be obliterated and won't exist in a few years. These steps (excluding the absurd taxi notion!) should get the airline back on its feet.

    The two big questions become:
    1) what impact will open skies and the likes of Niki, Malev, Wizz etc have on JAT's profitability?
    2) when are we going to see a proper plan on fleet replacement for the airline? One 737 and one 734 aren't going to solve the crisis overnight...

    Aeromak needs to be the big winner out of all of this. I assume a fleet of 2 733s would suffice, though ideally something around the 100-seat range is best for that market in the short/medium term.

    A focus of BNX is useless if the fares are still in the ~250 euros bracket, though positive to see year-round permits for PUY and DBV (the latter i'm not convinced yet will be profitable year-round).

    I wish them all the best, but just can't see the full plan being implimented even though it's desperately overdue

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  19. Hmm as many of you mentioned this plan is totaly unrealistic. Instead of focusing on their core business they are going to organize taxis to the airport.

    Other interessting ideas is that you expand to Macedonia while you are still bleeding heavily in your own market. You can not solve problems in your own backyard so you expand to your neighbours to solve his problems eh. Makes no sense at all.

    And finally expanding to BNX is probably purely political decision which they will loose money heavily on. Government of lesser bosnian entity was offering heavy subsides to Austrian to connect BNX to VIE and Austrian backed out as it wouldn't be econmically viable despite getting subsidies. Now JAT expects to be able to do this.

    Generally bosnians, croats, serbs and i even guess other south slavic people tend to find some national pride in JA, JU, OU and so on instead of understanding that these are just a companies who tend to offer them shitty service and unrealiable service.

    It is indeed good thing to have company using your native airport as hub but if that company is going to offer you shitty service than what is the reason for flying with them?

    with that said I wish JAT good luck with this plan.

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  20. Anonymous said...

    Jat will disapear . Stop dreaming


    Let me guess.. You think Wizz Air will take over..

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  21. I can't but agree that this is the beginning of the end. For over 30 years all the management cared about are numbers, usually the wrong ones - number of passengers and number of employees. The success of the company is not measured simply by counting passengers or employees. First JAT have to do is to define their target markets and then adapt their timetable and fare structure accordingly. It's very simple - if someone from BNX wants to fly to MOW (once BEG-BNX-BEG flights are reinstated), one has to depart from BNX at 6am and spend 6 hours in BEG before continuing to MOW. Considering that it takes only 3 hours form BNX to BEG by car, that doesn't make any sense. ZAG is much closer to BNX (takes about 2 hours by car from BNX). The fare comparison is as follows: the lowest return fare incl. taxes from ZAG is EUR282 (SU direct flights) and via BEG on JU is EUR301. How does a 10-hour journey from BNX to MOW at EUR301 compare with a 2:55-hour journey from ZAG to MOW to EUR282?
    As for JAT employees, that is another sad story. Those voluntary redundancies they've had for the last few years depleted JAT of well trained and experienced staff and what's left is more or less unusable. Other airlines invest in automation thus making it possible to reduce the number of employees. In JAT people are paid to sit and wait to do the job manually no matter whether there is something to do or not.
    I rest my case. :-)

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  22. One point I would like to raise, Can Jat afford new planes? I assume that the current non leased fleet is completely paid off and if new aircraft are introduced, it would represent new cost Jat has to pay which they are currently not paying. So the question is, can Jat afford to pay for new aircraft.

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  23. Srdjan Radanovic is displaying the intelligence of a brick. Fleet renewal is needed more than anything in Jat, yet they decide to FINANCE PLANES FOR A NEW MACEDONIAN AIRLINE INSTEAD?

    I say let Macedonia do what it wants to get their own airline back, jat needs now to care about their main hub BEG more than anything else. An airline losing ground at home doesn't go off spontaneously to expand at other places, its financial suicide.

    and frequentflyer is absolutely right. Thinking that one 737-700 will solve problems is an appropriate analogy to thinking a band-aid will help cure someone from the flu. I DON'T say "Down with Jat." But I do say "Down with the excessively political-oriented management of Jat who keep the company from progressing because of their own interests." But if Jat sinks, so be it, hopefully these brickbrains like Radanovic will have learned a lesson.

    who agrees/

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  24. @ Q400,

    I've been reading somewhere (B92's biz section if I remember correctly), that Jat doesn't plan to buy any new aircraft until they have posted $10 million in profits. So, they themselves cannot. But he wants the Serbian government (I mean, taxpayers) to foot the bill for the first -700. Then, he said something about buying "other European aircraft" with the $24 mil that had been deposited with Airbus in 1998 (I'm assuming ATR).

    Whatever happens, if the comment about not buying new aircraft until they go to profits (yeah, those days are just around the corner), Jat may still be flying the old -300's.

    But what you said about them having additional overhead is correct. It had been mentioned in the past that those planes had been paid off. It is sad to think that even without that cost (which I would assume would be the biggest portion of the overhead), Jat is losing money.

    --------------

    On the side note, I've been reading the comments here, and it seems to be clear that people don't care about the free taxi ride. I wonder, were Jat people summoned to a 5-min meeting (in between coffee break times), where they blurted out a bunch of ideas without analyzing them, and that is how we ended up with free taxi idea?

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  25. @ anonymous

    no, Yugoslavian isnt my first language and to add to that i typed it up in a rush.

    as much as it doesnt make sense, the free taxi is valid ONLY in Belgrade and ONLY if one has bought a RETURN ticket with JAT. Taxi from the airport to the city is not even 1.000 RSD! alot of the flying public is picked up at the airport anyway or have their cars parked at the airport. I think the taxi service could encourage passengers to fly with JAT, especially business people coming to Belgrade on business, and with an organised taxi they avoid the unpleasant experience on being ripped of as a welcome to Serbia! Im 50-50 about the taxi service thingy.

    @ frequentflyer

    JAT already has 10 B733, 5 ATR72, 1 B732Adv and 1 B734 but a couple B733's are either on lease or grounded and the rest dont always fill. Suddenly brining in say 5 aircraft isnt going to help either. Radovanovic intends to have all 10 B733's flying, which is something. Although the B733's are amongst the oldest in Europe, we have to remember that the aircraft didnt fly during the sanctions and that during the 1990's they didnt make a whole lot of mileage.

    The BNX idea is set to fail.

    As for Aeromak, i think its a better option at sending 2 of the older B733's to Skopje where they could probably better fill rather than have them in Belgrade. If im not mistaken 4 B733's are going to be brought into flying condition and an extra B734 and a B737 is entering the fleet, giving a total of around 780 extra seats. JAT's current usable fleet has around 1200 seats! JAT in Skopje would have minimal competition. SKP to VIE, DUS, HAM, CDG, LHR, AMS, ZRH, FCO, IST...

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  26. ^ @ JATBEGMEL

    You're 110% right that an extra 780 seats is far too many for the airline.

    However, if you take out two 733s for Aeromak (252 seats) it's only 528, and if another one is given to Aeromak or even FlySrpska (or whatever its supposed to be called), that number reduces to only 402, which is actually quite reasonable.

    On the topic of FlySrpska, if all the political bumblings were solved in BiH (yes, i'm dreaming!) then understanding only ONE national airline operating from TWO hubs (SJJ, BNX) and smaller aircraft would be far better than trying to set up another airline doomed to fail. Likewise a single postal system and railways would be a good start in that country...

    A sudden abundance of early-1990s 734s could have been the short-term saviour for JAT to replace ageing 733s that should already be out of the fleet, though I still believe they need to be looking at more ATRs in the short term, and to replace the inefficient 733s with NG aircraft (mostly 737s) or Sukhois for that ~90-pax range.

    JAT's identical yet a very different setup to Aerolineas Argentinas (who i've just had the unfortunate experience of travelling with), but they have now got government support to update their fleet, and cashflow once again. And they're replacing clapped-out 732s and 735s (some nearly 40 years old) with fewer, reliable 737s and 738s... just goes to show it can be done! But will it happen for JAT?

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  27. So many foreign aviation professionals have avoided Jat Airways for the last few years. This is coming from a direct source and it should give you an idea of what that "airline" is...

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  28. @ frequentflyer

    I think 2 B733's would be more than enough for SKP at the moment, considering that there isnt anything based there in months and that itll be more months untill something will finally be based there. A third B733 atm i think is too much. As for SkySrpska, i more than agree with your comment. As for the ATR's, i have heard theyre not all that efficient aircraft to keep. To add to that, the aircraft are even used on flights to Berlin! Maybe a better addition could be ERJ's or even SSJ's and to just leave the current fleet of ATR's for Balkan/Yugoslav destinations. Definately something should replace the DC9.

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