November surge for Serbian Jat Airways

Despite management wrangling last week, Jat Airways has posted an impressive 23% passenger increase in November 2010, compared to the same month last year. The airline carried 70.108 passengers compared to 56.800 last year. Since September, the Serbian carrier has also seen an increase in revenue by 18%. Jat’s media centre has reported that the airline kept a 40% share of all departures out of Belgrade despite competition from 32 airlines. Until the end of November, Jat Airways has carried 988.639 passengers in 2010.

Meanwhile, Jat, which was supposed to commence flights between Portorož and Rome yesterday, has delayed the service until January 13, although it is believed that the route will be cancelled. Jat employees have said that the route is unprofitable and have called on the new management to cancel the planned flights. There has been some good news for employees as most are returning to the airline’s headquarters in central Belgrade, a week after they were moved to neglected buildings near the airport which have not been used in 20 years. This week, the airline withdrew the first 2 million Euros out of a 51.5 million Euro credit, Serbian media report. 

News source: EX-YU Aviation link: article

Jat Airways CEO, Srdjan Radovanović, resigned last night after mounting criticism from unions

Jat Airways CEO, Srdjan Radovanović, resigned last night after mounting criticism from unions, the management board and the media. Radovanović said that a media campaign had been orchestrated against him and Jat on behalf of Saša Vlaisavljević, former Jat CEO (now president of the airline’s management board), who fell from grace in a similar fashion as Radovanović. Serbian media state that Vladimir Ognjenović, deputy CEO will takeover. Ognjenović was part of two disastrous management teams, one led by Radovanović and the other by Vlaisavljević. The union “Nezavisnost”, which represents all employees at Jat Airways said that the airline’s CEOs have gone from bad to worse. The union criticised former CEOs Nebojša Starčević, Saša Vlaisavljević, Srdjan Radovanović and the CEO in waiting, Vladimir Ognjenović. The union says that the airline has been used as a political tool.

Srdjan Radovanović, a lawyer by profession, came to Jat in 2009 when he was appointed CEO. His grand plans for 2010 included the opening of new bases in Skopje and Banja Luka and the purchase of new aircraft. None of them materialised. During his management, Jat Tehnika and Jat Catering both went on strike. The airline has moved to derelict buildings near the airport, one of which is in such bad state that employees had to move back to the former headquarters this week until it is fixed. Radovanović’s plans to sell tickets in Serbian post offices and provide free taxi services to Jat passengers in Belgrade were strongly criticised by employees. However, during Radovanović’s management some grounded aircraft were returned to the sky and their interior refurbished. The airline launched its first media campaign in decades and employed new cabin crew. Passenger numbers have somewhat improved in 2010.

Vladimir Ognjenović, who is expected to take over the airline, worked as a Jat ground handler at Belgrade Airport since 1995 before being mysteriously propelled to the position of the airline’s representative in Copenhagen and then finally settling for the deputy CEO post. He is also a member of the ruling Democratic Party which named Vlaisavljević and Radovanović as CEOs. Most employees have little optimism he will lead the airline into better times.

News source: EX-YU Avitation link: article

Economics Override History for Belgrade and Ankara

After a long period of distant, often frosty relations, Turkey and Serbia appear to be finally warming to each other. But will the Serbian people put aside historic grievances dating back to the Ottoman Empire and welcome Ankara’s Balkan renaissance?  “We need jobs, so if the Turks are going to create new jobs, they are welcome. I believe that what was happening here more than 100 years ago won’t be an obstacle for Turkish investment in Serbia, because… we are living in a new age now,” says Aleksandra Mitic, a 20-year-old student in Belgrade. Her views are, by and large, typical of the younger generation of Serbs, who appear less concerned with Turkey’s historical baggage as one time Ottoman occupiers of Serbia. Most simply see Turkish investment as good for the Serbian economy and jobs market.

And the Serbian political leadership agrees. In fact, economic cooperation between the two former foes is now well under way. Srdjan Stevic, a civil servant in Serbia’s economy and regional development ministry, says the volume of trade between Serbia and Turkey reached 180m euro in the first eight months of 2010 alone. That figure represents a 110% increase on figures for all of 2009. Belgrade wants to bring the volume of trade between the two countries to about 365m euro in near future, according to a paper published recently by the Serbian parliamentary Joint Committee for Serb-Turk Economic Cooperation. By comparison, Serbia currently has the highest volume of trade with Germany, valued at 2.1bn euro in 2009.

Srdjan Janicijevic, director of the Economic Institute in Belgrade, says that economic cooperation with Turkey is vital because Serbia has been in trade deficit with Turkey to date and Turkish investment in Serbia is still very modest. “Strengthening of economic cooperation is in the interest of both Serbia and Turkey because, among other things, the agreements that two countries have signed will make it possible for jointly producing and selling goods to third markets," he says. Just this summer, Ankara and Belgrade signed an agreement that will allow three major Turkish construction companies – Kolin, Makwol and Juksel – to build part of the planned 445km highway that will link Belgrade to Bar, a city on the coast of neighbouring Montenegro. As part of the deal, the Turkish companies are obliged to ensure 45% of their subcontractors are Serbian construction firms. This contract marks the first large investment in Serbia.

This is just the start. Turkish investors are eyeing a range of projects – including other infrastructure contracts and potential deals involving factories, supermarkets, leisure, energy and the rebuilding of airports. Turkish Airlines is also bidding for the Serbian national carrier, JAT Airways, which is saddled with almost 150m euro of debt and an ageing fleet of aircraft. Negotiations between the two airlines are expected to be finalised by early 2011. While JAT has become a costly liability for the Serb government, Turkish Airlines is keen to expand it routes across the Balkans. Ankara and Belgrade signed a free trade accord – which came into effect in September this year – opening Serb markets to Turkish investors. The two countries are in the process of allowing visa-free travel for their nationals.

Sulejman Ugljanin, the Serbian minister who is responsible for Serbia-Turkey bilateral relations, backed visa liberalisation during a parliamentary debate in October this year, saying it would enable greater investment in Serbia. “We should enable businessmen to invest here and employ young people. We have an obligation to enable our future strategic partners to come to Serbia without waiting at the airport.”

News source: BalkanInsight link: article

The losing ways of EX-YU carriers

The national carriers of Bosnia and Herzegovina, Croatia, Serbia, Slovenia and Montenegro will end 2010 with multi million Euro losses.

By the end of September Croatia Airlines has accumulated a loss of approximately 15 million Euros, an increase of 16.2% compared to the same period last year. “The aviation industry has just gone through one of the toughest periods in history and a further 3 years will be needed until the situation is stabilised”, a Croatia Airlines financial report for the Zagreb stock exchange states. The airline notes that the 2 day cabin crew strike and the Icelandic volcano ash cloud hit the airline’s finances even further. However, the Croatian national carrier did manage to decrease its expenditure by 6.2% this year.

Jat Airways recently reported that its financial result for 2010 will be “worse than expected”. The airline’s CEO said at a news conference in Bled, Slovenia that his optimistic plans for 2010 have been derailed by the failure to launch a base in Skopje, the delay in launching Sky Srpska in Banja Luka and the delayed technical overhaul of some of its aircraft. Furthermore, a series of managerial blunders have left the airline strapped for cash. However, the exact loss won’t be known until the 2010 financial report is published in January next year. Jat’s CEO, Srdjan Radovanović, became the airline’s number one man thanks to political ties (like most of his predecessors in the past few years) and has never worked in the field of aviation. Early in the year it was revealed that Jat’s head of finances, brought to the airline by Radovanović, has a high school diploma as his highest academic achievement.

Montenegro Airlines’ losses are also mounting. The airline owes “Airports of Montenegro”, the company that runs Podgorica and Tivat airports, 2.7 million Euros. The airline hasn’t paid its handling fees to the airports since August 31, 2009. The Montenegrin carrier is expected to end 2010 with a 5 million Euro loss, lower than most other EX-YU carriers. Montenegro Airlines’ CEO, Zoran Djurišić also has strong ties with the Government and has an ongoing corruption case against him, which involves the unlawful leasing of aircraft and the failed Master Airways project.

Increased passenger numbers have not financially materialised for B&H Airlines. The Bosnian carrier is projected to end the year with a loss of just over 6 million Euros. Additionally, the decision making process at the carrier has become extremely complicated as all decisions must be approved by Turkish Airlines in Istanbul. The airline still hasn’t named its new CEO, several months after Nudžeim Rečica (the former CEO) left the carrier. Rečica has been promoted by the Government from B&H CEO to the Ambassador of Bosnia and Herzegovina in Qatar.

Finally. Adria Airways’ losses have exceeded 13 million Euros in 2010. The Slovenian carrier received 2.5 million Euros from shareholders and partners last month in a move to aid the carrier.

News source: EX-YU Aviation link: article

Belgrade - Chicago feasibility underway

Jat Airways has ordered its operations department to carry out a study to determine the economic viability of operating direct flights between the Serbian capital Belgrade and Chicago in the United States. Serbia currently holds a category two rating, set by the Federal Aviation Authority in the US which forbids airlines from Serbia to operate flights to United States territory. However, both the airline’s management, the Civil Aviation Directorate, the Serbian Consulate in Chicago and the Minister for Infrastructure are certain the country’s rating will be upgraded Aater the Serbian Parliament passed a new aviation bill late on Tuesday.

On Monday, a meeting was held at the Serbian Civil Aviation Directorate to determine which steps must be taken in order for Jat to resume flights to the US after almost 2 decades. Jat Airways’ CEO, Srdjan Radovanović said, “Last year Jat Airways carried over 60.000 passengers who continued their journey to the United States via a European city”. Radovanović spent 10 days in the United States last month where he met with the Serbian Consul general in Chicago. The consulate has given strong backing for the new service to be introduced.

News source: EX-YU aviation link: article