Who dominates in Belgrade?


Since I started writing this blog I have spent a lot of time looking at the flaws of Serbia’s national carrier, Jat Airways. So today, my focus will be less on Jat and more on the general situation at Belgrade airport.


The summer season kicked off with two extremely strong weeks whereby Belgrade airport saw passenger numbers soar by 27%! At the end of the month the numbers were slightly more modest with a 17% rise. These numbers were more than impressive, but could we say that they are surprising? Belgrade, just like the rest of Serbia was cast into darkness and seclusion by much  of the world throughout the 90s. The decade was one of the darkest periods in the history of Serbian aviation. One could even argue that it was darker than the period of the Second World War when Aeroput just like other European airlines was grounded. On the other hand the 90s were a very successful period for numerous airlines around the world, but not for Jat.

The 90s have come and gone and now it’s time for both Jat Airways and the airport to enjoy a well-deserved period of prosperity. Unfortunately Jat has been unable to use this to its own advantage but on the other hand the airport has been doing very well indeed..

But what is happening with the other carriers? In 2011 Belgrade airport saw its passenger numbers rise by roughly 20%. No matter how impressive these results are we cannot say that all airlines present in Serbia managed to turn Belgrade into a success story.

Some traditional airlines in Belgrade such as Austrian Airlines or Swiss managed to reinforce their already strong presence in Belgrade. Others like CSA or Malév have been failing to cope with the growing competition in the market. Finally some underdogs like Tarom or airBaltic managed to do wonders and consolidate their position at the airport.

Both Tarom and Malév launched flights to Belgrade in December 2009. Tarom did this in a modest manner by using their regional turboprop aircraft operating the route three times per week. On the other hand Malév launched Belgrade with a massive ticket sale and by operating the inaugural flight with their B737-700 carrying airport officials and journalists onboard.

With the resumption of the normal fare structure Malév’s glory started to fade as passenger numbers began to shrink. The airline was forced to reduce both frequencies and capacity on the route. On the other hand Tarom has been adding frequencies, bringing the total to 5 during the 2011 summer season,and their load factor was more than impressive at 71%.

For the sake of simplicity I have divided the airlines into their alliances, whereas those that do not belong to any have been simply tagged ‘the non-aligned’.

As June is the introductory month of the summer rush I have taken the results of Belgrade airport and analyzed them in greater detail.

First stop is a simple insight into the market share of the four players at Belgrade:
70% of June traffic was carried by airlines which are not part of any alliance. A large percentage of the market is held by Jat Airways and Montenegro Airlines: naturally Jat as the national carrier of the republic, and Montenegro thanks to the large demand between the two countries.

Right behind the non-aligned bunch is Star Alliance with 22% of the market. Airlines that dominate within this alliance are Lufthansa, Swiss, Austrian and Spanair. Of these only Lufthansa saw a slight decrease in passenger numbers when compared to last year. However, their numbers are so impressive that even such a small decrease still puts them way ahead of their fellow Star members.

On the other hand Swiss almost doubled its passenger numbers which climbed from 8,728 in 2010 to 13,137 in 2011. This sharp increase was mostly the result of the additional frequencies from Zurich which were introduced in order to offer greater connecting possibilities to North America.

One of the true winners of this alliance has to be Austrian Airlines. They are the only airline from the Star Alliance family to see fierce competition on the route they operate out of Belgrade. In addition to good old Jat, the airline faces the Austrian no-frills airline, Niki. To make things even worse Niki announced the revision of their Belgrade operation which, among other things, includes an additional 5 frequencies during the winter season. With these new flights not only will Niki steal the O&D passengers from Austrian but will start competing for the transit passengers. Unlike Jat Airways, Niki uses their new Embraer E190 jet on the route; not to mention that soon they will become a member of the oneworld airline alliance. By becoming a member of oneworld they will assist Malév in filling the void left by British Airways’ withdrawal from Belgrade. No matter how fierce their competition is Austrian Airlines have managed to keep 51% of the market share between Belgrade and Vienna.

SkyTeam occupies the third position with 8% of the market. Top ranking airlines are Aeroflot, Alitalia, Air France and Czech Airlines. All SkyTeam members except CSA reported growth in June 2011. Most impressive growth came from Aeroflot whose numbers rose from 6,109 in June 2010 to 7,183 year on year. Another airline that managed to see healthy growth was Tarom whose numbers rose from 1,036 in June 2010 to 1,348 in 2011. CSA which had continuously failed to cope with the newly arrived competition suffered greatly and as a result was forced to cut Belgrade from 13 weekly flights to just 4!

Last, and unfortunately least, is the oneworld airline alliance with a pathetic 0,4% of the market! A major blow to oneworld passengers travelling to Belgrade was given last year when British Airways announced their withdrawal from the market prompted by the fact that Serbian citizens still require British visas in order to visit or transit the UK. This has proven to be the major disadvantage to British Airways which, unlike its competitors, could not attract mass transits to North America.

Today only Malév flies the oneworld flag to Belgrade. Unfortunately for them, their future in Belgrade seems uncertain. In June the airline managed to record an average load factor of only 47%, down from 50% same time last year. O&D market between Belgrade and Budapest is next to non-existent which means that Malév has to rely heavily on transit passengers. This puts Malév in a very difficult position and it’s a clear disadvantage when compared to the other carriers in Belgrade. Hopefully once Niki becomes a member of oneworld things will look up for the alliance’s situation in Belgrade.

If we take a closer look at the situation in the market between Belgrade and the Balkans things start to look interesting.

Below is the division of the Belgrade-Balkans market between Jat Airways and other carriers from the region.

In June 2010 the majority of the Belgrade-Balkans market was held by foreign carriers.

A year later this has changed with Jat Airways taking over the majority stake:

This change was probably due to the sharp rise in passenger numbers travelling between major areas of the peninsula. More specifically Jat saw a considerable rise in passenger numbers to destinations such as Istanbul, Athens, Tivat and Podgorica.

Athens remains as the only problematic destination since there isn’t enough demand for a daily B737-300 but it’s too far to be operated by an Atr.

In addition to the above mentioned destinations proving to be a success Jat has regained the monopoly on its Belgrade-Sarajevo route ever since Air B&H withdrew several months ago.

Routes to Croatia have been re-launched with Dubrovnik being the first city. During June Jat Airways managed to record a satisfactory load factor of 71%. Its competition on the route is Croatia Airlines which operates its brand new Dash-8 aircraft. Even if Croatia Airlines is a Star Alliance member and operates a more passenger friendly aircraft on the route, it has failed to attract more passengers. In June 2011 its load factor was only 40%. Both airlines operated equal number of flights between the two cities.

The overall situation in the Balkans is improving with every new season. Year on year passenger numbers between Belgrade and the Balkans have risen by 17%.

In June 2010 that figure stood at 60,559 whereas this year it is 70,678. More than half of these passengers travel between Belgrade and Montenegro. Year on year the number of passengers has risen by 15% (from 36,575 to 42,183).

So what conclusion can we draw from Jat’s positive passenger numbers? Since competition is very much present at the airport could we dare to assume that there is more faith and trust in the national airline of Serbia?

With these positive numbers the future doesn’t seem that grim for the 84 year old airline.



One Response to Who dominates in Belgrade?

  1. moz says:

    It’s nearly impossible to find educated people on this subject,
    but you seem like you know what you’re talking about! Thanks

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