Dots vs Rings

As previously announced, on the same day Jat Airways will be adding frequencies to Athens, Olympic Air will be launching the same route.

 

After a little more than a year, competition is back on the Serbian-Greek market. Today we will take a closer look at what kind of competition we can expect to see on this route.

 

Let’s start by looking at their summer schedules.

Jat Airways

JU438: Belgrade – Athens
12—-7  07:05-09:40            JU439 10:30-11:05
–3—-   10:20-13:00                    14:45-15:20
—45–  17:35-20:05                     20:55-21:30

Olympic Air

OA 391: Athens – Belgrade
123–6- 08:30-09:25              OA392 10:20-12:40

OA 393: Athens – Belgrade
—45-7 16:20-17:15               OA394 17:50-20:30

As usual Jat Airway has shown their inability to provide a consistent schedule which will enable people to connect to Athens via Belgrade.

On the other hand Olympic Air has returned with more or less same schedule as the one before the forced withdrawal from the market.

By taking an even closer look at these flights we can see that both airlines are concentrating on the origin and destination market by providing a limited number of connections via their hubs.
Today we will concentrate on Olympic Air and their strategy in Belgrade. The route has been loaded into the system and a return ticket on the route stands at 247.95 Euros. The cheapest class in not offered on the route, just like there is no business class on board.

Their competitor, Jat Airways, charges 211 Euros for economy class, where as business class stands at 272 Euros. This makes Jat Airways extremly attractive on the route as their business class ticket is just 20 Euros more expensive than Olympic’s cheapest economy class ticket.

Not to mention that Olympic Air will be operating the route using their regional, turboprop, Dash-8 aircraft. This will give Jat Airways another advantage as they use a much bigger and more spacious aircraft, with the possibility of transporting cargo.
The only possible connections in Athens are for the domestic routes and Cyprus. Domestic routes start at 362 Euros, where as Larnaca starts at 492 Euros.

Jat’s route to Larnaca is notorious for being too expensive. If Olympic Air was really interested in stealing some of the passengers, then they are doing it really badly. For example a return ticket with Malév via Budapest costs 412 Euros where as Austrian Airlines charges 327 Euros for the same flight. So in this case, the fastest and shortest route is the most expensive.

So what future does Olympic Air have in Belgrade? In the past year competition became so fierce that even Jat Airways had to reconsider their business plan. To me it seems as if Olympic Air returned with exactly the same kind of strategy Olympic Airways had. However back in those days Belgrade was far from the competitive market it is today.

This is one of the rare times when we can see Jat Airways have more potential on a certain route when compared to their competition. Usually the airline lacks frequencies, adequate schedules, competitive prices… However with six weekly frequencies Jat can offer flexibility to its passengers, the ticket is affordable, it allows up to 30 kilos of baggage, above average business class product etc.

For some the ticket might seem as a bit too expensive for this 1h40 min flight, however we have to understand that this route sees a lot of business passengers who do not mind paying a bit more.

With Jat’s above average business class product and a very attractive prices, Olympic Air might struggle to keep up.

If Olympic Air wants to become more competitive on this particular market then it needs to take radical measures. Some of these include lowering their ticket price to below 200 and upgrade the route to A319 with a business class product.

Otherwise Olympic’s success in Belgrade might be over before it began.

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