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- 16 Bulevar umetnosti
11070 Novi Beograd
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- Belgrade Nikola Tesla Airport
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KLM Royal Dutch Airlines
Formerly known as Jat Airways, Serbia's national airline was rebranded as Air Serbia in Aug-2013 when Etihad Airways acquired a minority stake from Serbia's Government. Originally established in 1927, it is one of the world's oldest operating airlines. Air Serbia operates extensive services within Europe, the Middle East and Africa and provides charter services through subsidiary, Aviolet as well as wet lease services from its base at Belgrade Nikola Tesla Airport. Air Serbia also operates Air Serbia Technical, an MRO provider.
Location of Air Serbia main hub (Belgrade Nikola Tesla Airport)
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Once rejected by global alliances, Etihad Airways has turned around and established its own partnership platform, "Etihad Airways Partners". Partners has familiarity to existing alliances: commercial relations are emphasised, there are frequent flyer benefits and aircraft will have the Partners logo.
But Partners is not simply a de facto fourth global airline alliance. Etihad is starting small with six members. This view requires Etihad's standard disclaimer that it seeks not to be the biggest but to have the highest quality.
Partners in some ways is a branding of what Etihad has already done, and plans to continue to do, in the loyalty space. Consolidating loyalty programmes reduces costs while providing scale.
Plans by Emirates to introduce service from Dubai to Chicago O’Hare in Aug-2014 continue extensive expansion by the three large Gulf carriers into the United States in 2014. Chicago becomes the ninth US market for Emirates, and the fourth market in the country where Emirates, Qatar and Etihad will compete on services from the Middle East.
Chicago also is the second American Airlines hub where its partners Qatar and Etihad will operate alongside Emirates, who has been courting American, but has yet to persuade the carrier to launch a partnership. Qatar and Etihad are both adding service to American’s Dallas/Fort Worth hub in Jul-2014 and Dec-2014, respectively.
The partnership dynamics in both Dallas and Chicago among American, Etihad and Qatar create ample connecting opportunities and traffic flows for all those carriers. But on a pure scale basis Emirates is still larger than its Gulf competitors, transporting more than double the passengers of Etihad and Qatar during 2013.
airBaltic settles into Etihad partnership for Africa, Middle East & Asia – North America may be next
airBaltic is quietly pleased with initial performance from its partnership with Etihad Airways, under which airBaltic commenced Riga-Abu Dhabi service in Dec-2013. Less than three months on, airBaltic is still observing trends in the proportion of local versus connecting traffic, but Bangkok is an early popular onward destination. CEO Martin Gauss told CAPA that Latvia's growing portfolio of air service agreements can expand the number of codeshares it can place on Etihad flights, enabling airBaltic to sell flights from Riga to the Middle East, Africa and Asia – a potentially huge area it previously had no access to, with its local market base instead using competing airlines.
As Etihad rapidly digests its Darwin Airline and Jet Airways equity stakes and evaluates Alitalia, speculation has mounted on airBaltic being a potential equity partner. Mr Gauss says the first priority for the airline is growing the codeshare – which so far is more important to airBaltic than Etihad – but he does not rule out any possibilities. More concretely in the medium term is gaining better access to North America, with airBaltic considering if a North American carrier can serve Riga and partner with airBaltic, or if airBaltic should serve North America with its own metal. The trans-Atlantic market is appealing but also competitive with joint ventures, and Mr Gauss is not rushing to enter.
The US government has formally stepped in and arguably set a dangerous precedent concerning the new business models being adopted by some of the Gulf airlines in rejecting a request by Air Serbia (formerly JAT) and Etihad to codeshare on service to the US.
The troika of airline lobbying group Airlines For America (A4A), Delta Air Lines and the Air Line Pilots Association formally opposed the request on what is now familiar grounds – arguing the Belgrade-Abu Dhabi–US routings are unviable for the consumer, Air Serbia’s new ownership (Etihad formally took a 49% stake in Jan-2014) is suspect, and the absence of a bilateral agreement with Serbia.
While debate will continue on the merits of the arguments offered by both sides, perhaps another underlying element is Etihad’s and Air Serbia’s plans to bolster the hub at Belgrade. The build-up in Belgrade adds a new competitive dynamic in Europe, one unsavoury to established network carriers within Europe and US airlines serving the continent.
Air Serbia’s recent rebranding from Jat Airways is the beginning of a number of significant developments for the airline which will also lead to changes in the Serbian aviation market. Through its partnership with Etihad Airways, Air Serbia will be establishing a medium sized hub in Belgrade with a restructured network featuring 12 new destinations and a new fleet of A319 aircraft. Through this hub other airlines within the Etihad’s ‘equity alliance’ will be able to take advantage of an increased presence in the Eastern European region.
As previously reported by CAPA, Serbia's Government and Etihad Airways established on 1-Aug-2013 a strategic partnership to secure the future of Jat Airways which was subsequently renamed and rebranded as Air Serbia. The partnership included the acquisition of 49% of Air Serbia by Etihad on 01-Jan-2014 and Etihad being awarded a five-year management contract
Etihad and the Serbian Government agreed to both inject USD40 million into the airline while both parties will each provide up to USD60 million in further funding. Debt from Jat Airways was also written off by the Serbian Government which will allow Air Serbia to launch from a clean sheet.
The outlook for troubled Serbian national carrier Jat Airways has improved significantly following the recent signing of an agreement with Etihad Airways.
The partnership will allow the modernisation of Jat’s fleet and changes to its network, while also closely working with Etihad to improve its efficiencies, revenue management and cost reduction measures. Abu Dhabi-based Etihad is also negotiating to acquire an equity stake in the small Serbian carrier with a deal expected to be announced on 22-Jul-2013.
If consummated, this will be Etihad's sixth equity arrangement, following those with Aer Lingus, airberlin, Jet Airways (pending), Air Seychelles and Virgin Australia.