Thursday, 30 March 2017



Rivalry Blocks the Salvation of the Balkan Airlines



Text by Matteo Tacconi   
16 November 2012 | A full-scale revolution is taking place in the former Yugoslav skies. National airlines are constantly in the red and low cost flights are expanding. Twenty-seven million Euros. That is the amount that JAT, the Serbian national airliner, lost in 2011. The former Belgrade Government, led by Mirko Cvetković, had made an attempt at privatizing the carrier in 2008. No one came forward. Two years later, negotiations started with Turkish Airlines and the Latvian Baltic Aviation Systems. Black smoke.

Between 2010 and 2011, Montenegro Airlines also sought privatization by placing 30% of its shares on the market. The Israeli El Al and Arkia and Arab Emirates Etihad have asked for “information”, but without going into greater detail.

The recent auction of the Slovenian Adria with which the Government – a majority shareholder – tried to save it ended with no purchasers.

The Macedonian MAT ceased operating in 2009, Kosova Airlines does not operate its own flights and coordinates traffic over Priština and from Priština to European airports. BH Airlines, only two carriers and a handful of destinations, found a shot in the arm in 2008 with the acquisition of 49% of its shares by Turkish Airlines. The relationship was, though, soon over. The investment made no profit and the Turks pulled out of the company.

The only airliner that seems to hold is Croatia Airlines, even though it has its own tough nuts to crack.

A meeting with the top managers of JAT, Adria, Montenegro Airlines and Croatia Airlines was held last May. On the agenda: creating one sole regional airliner.

The idea is not fantasy-politics, per se. Incited by the perspective of entering the European Union and the conditions this entails, above all regional cooperation, in the past few years the Countries of Western Balkans have given life to common projects in different fields, including transportation.

The agreement signed in 2010 among Slovenia, Croatia and Serbia on the collaboration in rail freight-transportation, which has brought the Ljubljana-Istanbul running time from 57 down to 35, shows that not only is it possible to work together, but it is also profitable.

As explained by the Centre for Aviation website last April, however, rail agreements are one thing, airline mergers are another. Compared to the former, there is the thorny issue of choosing the main hub.

The most equipped one would be Zagreb, both in terms of infrastructure and in terms of traffic. The possibility of having a new airliner with a Croatian center, though, does not please Adria, JAT and Montenegro Airlines. Not to mention that, geographically speaking, Zagreb is not as central, in former Yugoslavia, as Belgrade could be. The talks got stuck.

The general impression is that neither of the two perspectives on the table – new regional airliner or investors – is strong enough. Indeed, the past few years have seen a full-scale revolution in the skies of former Yugoslavia. Many low-cost have added routes. In Belgrade, for instance, operate Niki (Austria), Aviogenex (Serbia), Fly Dubai (United Arab Emirates), Sky Work (Switzerland), Germanwings (Germany) and Wizzair (Hungary).

Statistics indicate that low-cost flights channel over half of the 11 million passengers transiting through former Yugoslavia every year.

For local airliners, re-conquering market slices is thus hard, also considering that in the past few months a giant such as Turkish Airlines (32 million passengers every year) has greatly increased the number of its routes, following – one is easily led to think – the politics of political-economic penetration started in the region by the government of Ankara. Apparently, Turkish Airlines also intends to add routes connecting the United States to the Balkans, with the objective of serving former Yugoslav emigration to America.

A longer version of this article was originally published on Osservatorio Balcani e Caucaso.

 

 

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