Air Serbia CEO Jiri Marek speaks with Routes about the carrier’s long-haul network plans.
Air Serbia was expecting a third widebody aircraft to join its fleet this summer. What happened?
Our third Airbus A330 was expected to come last July. However, the problems in the engine market escalated (supply chain, manpower shortage, etc.), and the lessor decided to sell the engines and scrap the airframe rather than proceed with the dry lease. During COVID, many aircraft were on the ground ... It is difficult to find the aircraft you need in the secondary aircraft market. Either you compromise on the customer experience and will need to invest in the cabin later, or you continue to search for the best value for your money. At the moment, we have some interesting leads for aircraft that we believe we will be able to finalize in November. After the finalization, the actual arrival of the aircraft will depend on maintenance, painting and shop visits, and we will try to be ready before the second quarter of 2024. For us, this is an important project. However, given the continuous volatility of the market, to insist on any definite deadline would be premature.
Four Airbus A330s are expected to be in operation in Air Serbia’s fleet by summer 2024. What are your plans for the widebody aircraft?
During this past summer, we secured traffic rights to Guangzhou and Shanghai in China and we will be getting the necessary airport slots soon. Regarding China, ideally we would start each destination with two weekly flights. However, this depends on many factors, and since we are committed to our Chinese development, we might start gradually. The remaining aircraft capacity most likely will be added to New York JFK, growing beyond daily flights. That would mean that for some days of the week, we will introduce a second daily rotation to JFK. It depends on many factors—for example, the availability of slots and terminal space, which is an issue that is becoming more and more serious, especially at JFK. Having the four A330s in the fleet will enable us to plan spare capacity to overcome any unscheduled maintenance or spare parts issues as the market will continue to be volatile for several years ahead.
Is a destination such as Toronto feasible?
As we have informed the public several times, our priority now is the expansion of the Chinese market. We see limited opportunities to start another North American expansion before 2025. Since Air Serbia has already reached the critical mass of its network in terms of destinations and connectivity, we will continue to develop the long-haul network as a natural step of our evolution. The post-COVID market is very different from what it used to be in many aspects. Typically, in the past, you would develop a long-haul route expecting full profitability within three to four years. However, in our case, [Belgrade flights to] Tianjin and Chicago were profitable from the start. The Chinese market fits in well with our strategy of addressing seasonality, as in the first quarter there is the high season during the Chinese Lunar New Year.
Could your widebody fleet eventually total 10 aircraft?
Internally, we try to live up to the statement that if you want to achieve high, you have to aim high. So, one day, most likely, yes. However, we initially assumed that the ideal widebody fleet size would be five, which could potentially grow to eight. Taking into consideration the recent development of the Serbian economy and also the granting of the EXPO 2027 to Belgrade—it is expected that between May and August there could be an additional three million passengers—we will continue to reevaluate. We proved during COVID that we are agile and quick to react to market changes, so we will not rule out that our fleet could grow beyond initial estimations. Since we have reached the critical mass of our network, further growth potential is in the transfer segment. It is very important for long-haul development, which will rely on that transfer segment. During this summer, we reached over 40% transfer passengers.
Air Serbia is one of the fastest-growing airlines in Europe. What is your opinion of your hub in Belgrade?
Despite the growth we are achieving, the airport is still going through infrastructure upgrades. Hence, at the moment, we are not strongly promoting the seamless hub option as a kind of niche in contrast to the congested hubs. However, once the infrastructure upgrade is finished, we believe that we can achieve a nice symbiosis with the airport where it can be a convenient alternative to the congested hubs, especially for north-south and west-east flows.
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