BEFORE THE

DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

)

Application of )

)

JAT AIRWAYS A.D. BELGRADE ) Docket DOT-OST-2013-0177

)

for an Exemption pursuant to )

49 U.S.C. § 40109 )

)

)

ANSWER OF THE AIR LINE PILOTS ASSOCIATION

Communications with respect to this document should be sent to:

Russell Bailey

David M. Semanchik

Air Line Pilots Association

1625 Massachusetts Avenue NW

Washington, DC 20036

Phone: 202-797-4086

Fax: 202-797-4014

Russell.Bailey@alpa.org

David.Semanchik@alpa.org

Attorneys for the

Air Line Pilots Association

Dated: October 4, 2013
BEFORE THE

DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

)

Application of )

)

JAT AIRWAYS A.D. BELGRADE ) Docket DOT-OST-2013-0177

)

for an Exemption pursuant to )

49 U.S.C. § 40109 )

)

)

ANSWER OF THE AIR LINE PILOTS ASSOCIATION

The Air Line Pilots Association (“ALPA”) hereby answers the Application of JAT 

Airways a.d. Belgrade (“JAT”)1 for an exemption from 49 U.S.C. § 41301 so that it may 

provide scheduled foreign air transportation of persons, property and mail between 

Serbia and the U.S. on a code-share basis with current or future partners. For the 

reasons set forth below, DOT should deny the Application or hold it in abeyance until 

there is a determination of whether JAT will remain under the control of Serbia or 

nationals of Serbia once Etihad Airways acquires a significant portion of JAT’s stock 

and obtains the right to manage the carrier.

 

1

 JAT is soon to be rebranded as Air Serbia and press and analyst reports use both 

names - JAT and Air Serbia – when referring to the carrier. ALPA will here use the 

name that appears in the Application – JAT.
2

DISCUSSION

There is no air transport agreement in place between Serbia and the U.S. If the 

U.S. and Serbia were to enter into an air transport agreement, that agreement would 

almost certainly include the “nationality clause” that is a standard component of such 

agreements. That clause would require that “substantial ownership and effective 

control” of JAT be vested in Serbia, its nationals or both. Air Transport Agreement, 

model text, January 12, 2012. 2

JAT asserts it is owned and controlled by Serbian citizens. (Application at ¶ 8). 

However, the Application states that JAT is in negotiations regarding the sale of a 49

percent stake of JAT to Etihad Airways, a carrier of the United Arab Emirates. 

(Application at ¶ 7). Press reports indicate that not only does Etihad plan to take this 

significant ownership interest in JAT, but plans to enter into an agreement to manage 

the Serbian carrier as well. Attachment A, Air Serbia debuts this fall, backed by Etihad 

Airways, USA Today, August 2, 2013, available at

http://www.usatoday.com/story/todayinthesky/2013/08/02/air-serbia-to-launch-withhelp-of-partner-etihad-airways/2611497. Etihad plans to invest $40 million in JAT, and 

Etihad’s chief executive officer, Mr. James Hogan, is reported to have said that the 

 

2 Section 3 of that model agreement states that each party shall grant appropriate 

authorizations to an airline of the other party provided, inter alia, that “substantial 

ownership and effective control of that airline are vested in the other Party, national of 

that Party, or both.” Available at http://www.state.gov/e/eb/rls/othr/ata/114866.htm.
3

airline plans “to integrate [JAT’s] network and trim its workforce while modernizing its 

fleet. . . .” CAPA Centre for Aviation, Air Serbia’s upcoming expansion under Etihad to seek 

creation of European hub (Sept. 9, 2013) Attachment B, available at 

http://centreforaviation.com/analysis/air-serbias-upcoming-expansion-under-etihad-tosee-creation-of-eastern-european-hub-127314. Moreover, the CAPA report indicates 

that Etihad “will take over [JAT’s] administration, revenue management and training 

(which will move to Abu Dhabi).” Id. In addition, while JAT’s Application shows what 

appears to be an all-Serbian Board and management team, Application Exhibits B and 

C, once Etihad takes over management of the airline this will almost certainly change. 

In fact, JAT’s Chief Executive Officer, Dane Kondic (Application Exhibit C), was 

Etihad’s choice for that position. First Flight of Air Serbia in October, BLIC Online, 

August 2, 2013, available at http://english.blic.rs/Economy/9807/First-flight-of-Air-Serbiain-October/print.

Running an air carrier’s administration, determining its network, training and 

directing its workforce, and managing its revenue mean controlling it. These are not 

peripheral, but core elements, of JAT’s business. Accordingly, if the cited reports are 

accurate, there is a substantial likelihood that following completion of management 

agreement and the taking of the ownership stake, it will be Etihad, not Serbia or its 

nationals, that will have “effective control” of JAT.
4

CONCLUSION

For the foregoing reasons, DOT should deny JAT’s Application. In the 

alternative, DOT should defer processing the Application until DOT and interested 

persons have been able to review and consider whatever investment and management 

arrangements are entered into by JAT and Etihad.

Respectfully submitted,

_________________________________________

Russell Bailey

David M. Semanchik

Air Line Pilots Association

1625 Massachusetts Avenue, NW

Washington, DC 20036

Phone: 202-797-4086

Fax: 202-797-4014

Russell.Bailey@alpa.org

David.Semanchik@alpa.org

Attorneys for Air Line Pilots Association

October 4, 2013
5

CERTIFICATE OF SERVICE

I certify that I caused to have served, on this 4th day of October, 2013, the 

foregoing document on the persons identified below by causing a copy to be sent by 

electronic mail: 

anita.mosner@hklaw.com

jennifer.nowak@hklaw.com

robert.wirick@aa.com

francis.heil@aa.com

sascha.vanderbellen@delta.com

anbird@fedex.com

sllunsford@fedex.com

dan.weiss@united.com

howard.kass@usairways.com

rsilverberg@sgbdc.com

jjohnson@sgbdc.com

tom.fosko@airtransport.com

jcanny@amerijet.com

jrichardson@johnlrichardson.com

rpommer@atlasair.com

john.palo@evergreenairlines.com

charters@evergreenairlines.com

matwood@cozen.com

mlbenge@zsrlaw.com

kevin.montgomery@polaraircargo.com

peter.beckett@polaraircargo.com

john.allen@faa.gov

uskrs@state.gov

dberg@airlines.org

jcasey@airlines.org

Russell Bailey
ATTACHMENT A
TODAY IN THE SKY (/BLOG/TODAYINTHESKY/)

Air Serbia debuts this fall, backed by Etihad Airways

Jovana Gec, Associated Press 9:07 a.m. EDT August 2, 2013

BELGRADE, Serbia (AP) - Etihad Airways signed a wide-ranging strategic partnership deal Thursday with the

Serbian government that will lead to the launch of the Balkan country's new national carrier and spell the end

for the old loss-making JAT Airways.

The deal envisages that the United Arab Emirates company will acquire a 49% stake in the new carrier that

will be called Air Serbia, while the Serbian government will own 51%.

Air Serbia will start flying on Oct. 1, and JAT operations will cease.

TODAY IN THE SKY : Check back daily for the latest aviation news (http://www.usatoday.com/blog/todayinthesky/)

USATODAY: Gulf airlines lure fliers with new planes, top service (http://www.usatoday.com/story/travel/flights/2012/11/12/qatar-emiratesairlines/1700609/)

"We made something that will become a new face and a new start for our country, something we will be proud of," said Serbian Deputy Prime Minister

Aleksandar Vucic.

JAT Airways, once a major European airline, will cease to exist after 66 years in service. JAT has been crippled by international sanctions imposed on

Serbia during the wars of the 1990s when most of its fleet was grounded and is survived only on big government subsidies.

"The bottom line is that we wouldn't be here if we didn't believe Air Serbia has an exciting future," president and chief executive of Etihad Airways

James Hogan said during the signing ceremony. He said long-term goal is to turn Air Serbia into a "leading carrier in the region."

The pact is the latest partnership for fast-growing Etihad, which is locked in competition with other Gulf carriers, the Dubai-based Emirates and Qatar

Airways. Abu Dhabi-based Etihad already has investments in European carriers Airberlin and Ireland's Aer Lingus.

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(Photo: Darko Vojinovic, AP)
Hogan said "JAT required a fresh start as a legacy carrier."

"This isn't new for Etihad Airways," he said, noting that his company has a similar deal with Air Seychelles.

Officials said Etihad and Serbia will immediately invest $40 million each into the new company. A further $60 million each will be provided in the future.

The new company will be managed by Etihad in the next five years.

Air Serbia's new fleet will include 10 Airbus A319 aircraft. JAT's current aging Boeing 737-300s will be phased out.

Air Serbia's new chief manager Dane Kondic, an Australian of Serbian origin, said the aim for the new airline is "driving toward profitability in the next

24 months."

"A new brand signals a new start," he said.

Air Serbia is expected to take over JAT's current 30 routes within Europe and to the Middle East, and add several new ones.

____

Associated Press writer Dusan Stojanovic contributed.

Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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ATTACHMENT B
10/4/13 Air Serbia’s upcoming expansion under Etihad to see creation of Eastern European hub | CAPA - Centre for Aviation

centreforaviation.com/analysis/air-serbias-upcoming-expansion-under-etihad-to-see-creation-of-eastern-european-hub-127314 1/8

Air Serbia’s upcoming expansion under Etihad to see creation of Eastern European hub

9th September, 2013

© CAPA

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 fiveyear 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.

[http://www.etouches.com/ehome/68117/home/]

See related report: Jat Airways-Etihad deal secures Jat and Serbia's future, making Etihad's 6th equity alliance member [http://centreforaviation.com/analysis/jat-airways-etihad-deal-secures-jat-and-serbias-futuremaking-etihads-6th-equity-alliance-member-119155]

Etihad's EUR40 million loan facility will be converted into equity on 01-Jan-2014. The agreement also included plans for Air Serbia to codeshare with Etihad and airberlin, which is one of five other carriers in Etihad’s

equity alliance.

Air Serbia is now Etihad Airways’ sixth equity arrangement

The agreement with Air Serbia is Etihad Airways' sixth equity arrangement, following those with Aer Lingus, airberlin, Jet Airways (pending), Air Seychelles and Virgin Australia. Etihad’s strategy of building its own

alliance began after 2007 when the global alliances told the airline they weren’t interested in having Etihad as a member.

At CAPA’s Australia Pacific Aviation Summit in Aug-2013 Etihad Airways CEO James Hogan said the carrier’s alliance strategy is about creating scale and network and is also about lowering costs by establishing

economy of scale and joint purchasing. Mr Hogan’s mandate from Abu Dhabi is to build up scale, efficiency and be best in class but not the biggest. "It's about working smarter," he said. The partnerships have also

helped Etihad become profitable.

Etihad reported a net profit of USD42 million for 2012, a 200% year-on-year increase, and is on track for another profit in 2013. Mr Hogan told the Summit that in 2Q2013 “we certainly hit all our numbers”.

Etihad reported 2Q2013 passenger revenue of USD921 million, up 8% year-on-year. 1H2013 passenger revenue growth was even stronger, up 13% year-on-year to USD1.8 billion. Overall, total revenue (including

cargo) grew to USD2.5 billion for the first six months of 2013, an increase of 14%. Of this, Etihad's partnership revenue comprised 20% of total passenger revenue in both periods.

See related report: Etihad reports another 6 months' record double-digit growth; 20%of revenues from partnerships [http://centreforaviation.com/analysis/etihad-reports-another-6-months-record-double-digitgrowth-20-of-revenues-from-partnerships-117863]

Etihad describes the alliance as the world’s first ‘airline equity alliance’ which offers benefits such as streamlining entry into new markets within foreign investment limits, enabling rapid expansion via established

brands and offering stronger customer proposition. The alliance also offers lower costs and higher productivity while also offering more choice to passengers. Etihad Airways says the alliance now cover over 410

unique destinations, carrying over 96 million passengers per annum on a fleet of over 500 aircraft.
10/4/13 Air Serbia’s upcoming expansion under Etihad to see creation of Eastern European hub | CAPA - Centre for Aviation

centreforaviation.com/analysis/air-serbias-upcoming-expansion-under-etihad-to-see-creation-of-eastern-european-hub-127314 2/8

Etihad Airways ‘airline equity alliance’

Sou r ce: Etihad Airw a y s pr esenta tion a t CAPA Au st r a lia Pa cific Av ia tion Su m m it

Etihad Airways ‘equity alliance’ compared to other airline groups

Sou r ce: Etihad Airw a y s pr esenta tion a t CAPA Au st r a lia Pa cific Av ia tion Su m m it

Mr Hogan also said all the equity carriers Etihad Airways had invested in were profitable in 2012 and Etihad Airways recouped its investment in airberlin in the first eight months of the relationship and its partnership

continues to enhance revenue and provide cost synergies.

Etihad Airways to follow Air Seychelles model in turning around Air Serbia

Mr Hogan said the airline plans to integrate Air Serbia’s network and trim its workforce while also modernising its fleet, replacing older aircraft with new A319s. The overall aim for Air Serbia is to transform its

operations and turn Belgrade into a European hub.

Under the partnership Etihad Airways will take over Air Serbia’s administration, revenue management and training (which will move to Abu Dhabi). There will be opportunities for both carriers through network

linkage and resource sharing.

Mr Hogan said the Air Serbia strategy is essentially the Air Seychelles strategy. Air Seychelles turned a profit of USD1 million in 2012 compared to a loss of USD25 million in 2011. As this formula worked for Air

Seychelles, Etihad is confident it can also work for Air Serbia.

Fleet modernisation from 737-300s to A319s

Under its partnership with Etihad Airways, Air Serbia will expand its network with 12 new destinations while also modernising its fleet with 10 A319 aircraft initially. The airline plans to take delivery of its first A319

aircraft on 27-Oct-2013.

Initially two A319s will be leased from Etihad and the airline also has eight new A319s on order for delivery between 2013 and 2016 (one scheduled for delivery in 2013, one in 2014, four in 2015 and two in 2016).

These aircraft will replace the airline’s ageing fleet of 10 Boeing 737-300 aircraft.

Air Serbia also currently operates six ATR 72-200 aircraft on its regional network. These have not yet been marked for replacement although reportedly could be replaced in 2014 with Bombardier turboprops.

As Air Serbia’s initial fleet plan does not provide for expansion, just replacement, the airline will likely review its existing network and could cut or reduce capacity on routes not performing well in order to be able to

operate its planned 12 new routes. The airline’s overall capacity is likely to increase slightly as its Boeing 737-300 aircraft are configured with 127 seats in a single-class configuration while A319 aircraft are able to

be configured with 138 to 156 seats.

12 new destinations from Belgrade planned from winter 2013/2014

Air Serbia currently serves 32 destinations, 31 of which are within Europe and one to North Africa (Monastir in Morocco). With Air Serbia’s planned network expansion with 12 new routes from winter 2013/2014, the

airline’s North Africa and Middle East networks will see considerable expansion along with new European routes.
10/4/13 Air Serbia’s upcoming expansion under Etihad to see creation of Eastern European hub | CAPA - Centre for Aviation

centreforaviation.com/analysis/air-serbias-upcoming-expansion-under-etihad-to-see-creation-of-eastern-european-hub-127314 3/8

Five of the new routes have planned launch dates while the launch of the remaining seven routes hinges on the delivery of additional A319s. The initial five new routes for Air Serbia are Abu Dhabi, Banja Luka in

Bosnia Herzegovina, Prague in the Czech Republic, Bucharest in Romania and Ljubljana in Slovenia. The seven subsequent routes that are planned but don’t yet have launch dates are Beirut in Lebanon, Cairo in

Egypt, Kiev in the Ukraine, Sofia and Varna in Bulgaria and Warsaw in Poland.

Air Serbia’s planned Belgrade network expansion

Route Frequency Launch date Current operators

BEG-AUH 4/week* 27 -Oct-2013 Etihad Airway s

BEG-BNX TBA 01 -Dec-2013 N/A

BEG-PRG TBA 01 -Dec-2013 N/A

BEG-OTP TBA 09-Dec-2013 TAROM

BEG-LJU TBA 09-Dec-2013 Adria Airway s

BEG-BUD TBA TBA N/A

BEG-BEY TBA TBA N/A

BEG-CAI TBA TBA N/A

BEG-KBP TBA TBA N/A

BEG-SOF TBA TBA N/A

BEG-VAR TBA TBA N/A

BEG-WAW TBA TBA LOT Polish Airlines

Sou r ce: CAPA – Cent r e for Av ia tion and Innov a ta

Notes: *plan is for Belg r ade-Abu Dhabi to incr ea se to da ily a s A3 1 9 fleet expands

BEG = Belg r ade Nikola Tesla Airpor t; AUH = Abu Dhabi Interna tiona l Airpor t; BNX = Banja Lu ka Interna tiona l Airpor t; PRG = Pr a gu e Vá cla v Ha v el Airpor t; OTP = Bu cha r est Otopeni Interna tiona l Airpor t; LJU =

Lju bljana Joze Pu cnik Airpor t; BUD = Bu dapest Fer enc Liszt Interna tiona l Airpor t; BEY = Beiru t Interna tiona l Airpor t; CAI = Ca ir o Interna tiona l Airpor t; KBP = Kiev Bor y spil Interna tiona l Airpor t; SOF = Sofia

Airpor t; VA R = Va rna Airpor t; WAW = Wa r saw Fr eder ic Chopin Airpor t.

Of Air Serbia’s 12 planned new routes, four are currently operated by other carriers, though Air Serbia codeshares on Etihad Airways’ daily Belgrade-Abu Dhabi service which is also operated with A319s.

The eight destinations not currently served with a direct link from Serbia will see Serbia’s international links grow, particularly to Eastern Europe and also to North Africa and the Middle East. Serbia’s existing

international capacity of about 100,000 seats per week also stands to increase as Air Serbia expands its network.

Serbia international capacity (seats per week) by region: 9-Sep-2013 to 15-Sep-2013
10/4/13 Air Serbia’s upcoming expansion under Etihad to see creation of Eastern European hub | CAPA - Centre for Aviation

centreforaviation.com/analysis/air-serbias-upcoming-expansion-under-etihad-to-see-creation-of-eastern-european-hub-127314 4/8

Sou r ce: CAPA – Cent r e for Av ia tion & Innov a ta

Aside from Belgrade-Abu Dhabi service, of the 12 new destinations for Air Serbia, Etihad Airways currently only operates to Beirut and Cairo. The remaining nine destinations are new to Etihad Airways and therefore

will represent a considerable extension of Etihad’s reach into Eastern Europe.

Air Serbia is already the largest of the flag carriers based in the EX-YU region and offers more capacity within the region than any other carrier. This will expand further with the announced network expansion.

Air Serbia network: as at 09-Sep-2013
10/4/13 Air Serbia’s upcoming expansion under Etihad to see creation of Eastern European hub | CAPA - Centre for Aviation

centreforaviation.com/analysis/air-serbias-upcoming-expansion-under-etihad-to-see-creation-of-eastern-european-hub-127314 5/8

Sou r ce: CAPA – Cent r e for Av ia tion & Innov a ta

Etihad will particularly be able to leverage the carrier’s strong network in the EX-YU region.

Podgorica and Tivat in Montenegro are Air Serbia’s largest routes and are currently served with three daily flights, according to Innovata data. Skopje in Macedonia is served with nine weekly flights and Sarajevo in

Bosnia and Herzegovina once daily.

A second destination in Macedonia, Ohrid, is served with four weekly flights. Air Serbia also flies to three Croatian cities – Dubrovnik, Pula and Split – with four to five weekly flights to each destination. Several of

these destinations could see capacity increases as they are not served by Etihad and traffic will likely increase as Belgrade evolves into a regional hub for Etihad.

While direct services to Western Europe will probably be maintained (Paris, Zurich, London Heathrow, Frankfurt, Dusseldorf and Amsterdam are all among Air Serbia top 10 routes), Air Serbia’s growth under Etihad

management will more likely be focused on regional services. The feed from Etihad should allow Air Serbia to expand in the Eastern European markets, giving it an important competitive advantage over other

carriers from the region. Currently about one third of Air Serbia’s seat capacity is allocated to other EX-YU countries.

Etihad’s online network currently does not include any destinations in Montenegro, Macedonia, Bosnia and Herzegovina or Croatia. The UAE flag carrier will be able to use Air Serbia to increase its presence

significantly in the EX-YU region and offer connections via Abu Dhabi to destinations throughout the Middle East, Africa and Asia-Pacific.

Compared to other key European carriers, Air Serbia will operate a significant Eastern European network, particularly in the EX-YU region.

Air Serbia’s upcoming Eastern European network in comparison to other key European carriers

Airline

Number of

Eastern

Europe routes

Number of

Russia / CIS

routes

Total

Air Serbia ex. BEG

9 (18 following

expansion)

1

10 (19

following

expansion)

Air France-KLM (Air France

ex CDG and KLM ex AMS)

13 8 21

IAG (British Airway s ex LHR,

Iberia ex MAD and Vueling ex

BCN

15 1 1 26

Lufthansa/Germanwings

(Lufthansa ex FRA,

Germanwings ex CGN)

27 18 45

Sou r ce: CAPA – Cent r e for Av ia tion

Note: According to Innov a ta da ta for 02 -Sep-2 01 3 to 08-Sep-2 01 3

While the large European airline groups have bigger Eastern European and Russian/CIS networks than Air Serbia, for Air Serbia’s size it has a considerable Eastern market presence, which will significantly increase

following its upcoming route expansion. Air Serbia also has the advantage of operating a considerable Western European network which can feed passengers onto its Eastern European network, which features a

number of routes unique to Air Serbia compared to the above airline groups (such as to Podgorica in Montenegro).

The other European members of the Etihad equity alliance, Aer Lingus and airberlin, have extensive Western European networks but do not have such a large presence in the Eastern Europe region. Aer Lingus

currently has four Eastern European destinations while airberlin has 10. Air Serbia’s entry into the alliance will see their reach into the region greatly improve, through codeshare arrangements.

Through Air Serbia’s codeshare arrangements with Etihad Airways and other airlines in the equity alliance, passengers from these other carriers will also be able to be fed into Air Serbia’s Eastern network. Air

Serbia’s Eastern European network will likely continue to grow with support from Etihad Airways and other members of the Etihad equity alliance.

Air Serbia already the largest airline in Serbia
10/4/13 Air Serbia’s upcoming expansion under Etihad to see creation of Eastern European hub | CAPA - Centre for Aviation

centreforaviation.com/analysis/air-serbias-upcoming-expansion-under-etihad-to-see-creation-of-eastern-european-hub-127314 6/8

Air Serbia already the largest airline in Serbia

As Serbia’s national carrier and sole scheduled airline, Air Serbia plays an important role in providing international air transportation to Serbian citizens. Serbia’s scheduled air transport market is purely international

and operates mainly from the capital’s Belgrade Nikola Tesla Airport in northern Serbia and from Nis Konstantin Veliki Airport in southern Serbia.

Air Serbia is currently the largest airline with almost 45,000 seats offered, representing about 42% of Serbia’s overall available capacity for the week commencing 9-Sep-2013. Air Serbia is followed by Wizz Air with

around 13% of capacity and by Lufthansa and Montenegro Airlines, which each provide around 8% of capacity.

Serbia international capacity (seats per week): 9-Sep-2013 to 15-Sep-2013

Note: * indica tes a for eign ca r r ier

Sou r ce: CAPA - Cent r e for Av ia tion and Innov a ta

Air Serbia’s network currently focused on Europe

Air Serbia’s network is currently focused on Europe with only one route (Belgrade-Monastir) to North Africa. However following signing its partnership with Etihad Airways, three of its 12 planned new routes were

announced to be to Africa and the Middle East (Abu Dhabi, Beirut and Cairo).

Abu Dhabi will become a key route for the airline due to its close links with Etihad Airways though overall the airline’s own focus will continue to be on Europe, particularly Eastern Europe. Air Serbia will offer most

destinations in Africa, the Middle East and Asia virtually through a codeshare with Etihad. Beirut and Cairo will be exceptions as there is sufficient local point-to-point demand for these destinations to sustain a direct

service.

Through Etihad Airways and the other airlines in which Etihad has equity stakes in, Air Serbia will be able to greatly expand its global network through codeshare agreements, including to Australia. Air Serbia also

stands to benefit from receiving traffic onto its own network from codeshare partners.

Air Serbia international capacity by region (seats per week): 9-Sep-2013 to 15-Sep-2013
10/4/13 Air Serbia’s upcoming expansion under Etihad to see creation of Eastern European hub | CAPA - Centre for Aviation

centreforaviation.com/analysis/air-serbias-upcoming-expansion-under-etihad-to-see-creation-of-eastern-european-hub-127314 7/8

Sou r ce: CAPA - Cent r e for Av ia tion and Innov a ta Note: This g r aph does not inclu de the a ir line’s tw ice w eekly Belg r ade-Mona stir ser v ice.

Air Serbia top 10 international routes (seats per week): 9-Sep-2013 to 15-Sep-2013

Sou r ce: CAPA - Cent r e for Av ia tion and Innov a ta

Note: BEG = Belg r ade Nikola Tesla Airpor t; TIV = Tiv a t Airpor t; CDG = Pa r is Cha r les de Gau lle Airpor t; SV O = Moscow Sher em ety ev o Airpor t; TGD = Podgor ica Golu bov ci Airpor t; ZRH = Zu r ich Airpor t; SKP = Skopje

Airpor t; LHR = London Hea thr ow Airpor t; DUS = Du sseldor f Airpor t; VIE = Vienna Airpor t; AMS = A m sterdam Airpor t Schiphol.

Six of Air Serbia’s top 10 routes (based on weekly seat capacity) are to Western European destinations with the remaining four to Eastern European destinations, reflecting the airline’s overall network capacity
10/4/13 Air Serbia’s upcoming expansion under Etihad to see creation of Eastern European hub | CAPA - Centre for Aviation

centreforaviation.com/analysis/air-serbias-upcoming-expansion-under-etihad-to-see-creation-of-eastern-european-hub-127314 8/8

Six of Air Serbia’s top 10 routes (based on weekly seat capacity) are to Western European destinations with the remaining four to Eastern European destinations, reflecting the airline’s overall network capacity

allocations with over 50% allocated to Western Europe. This could change, however, as Air Serbia starts to feed Etihad and other members of the Etihad equity alliance with a focus on providing connections to

Eastern Europe.

Of the airline’s top 10 routes, Air Serbia currently directly competes with other airlines on five routes and indirectly on two routes. Air Serbia is currently the sole operator of services from Belgrade to Skopje,

Dusseldorf and Amsterdam.

Air Serbia has a greatly improved chance of having a long-term future

With a modernised fleet and a revised network including increased codeshare operations, Air Serbia stands a much improved chance of surviving and being able to create a sustainable operation. Despite being a

small carrier, Air Serbia will have the opportunity to enjoy an economy of scale that it or other carriers in the region would never be able to achieve on their own. The resource sharing and joint purchasing

opportunities and benefits Air Serbia will gain through its partnership with Etihad Airways will also greatly assist the carrier to return to profitability.

See related report: Etihad partnership strategy evolves further as joint purchasing with airberlin and Jet is pursued [https://centreforaviation.com/analysis/etihad-partnership-strategy-evolves-further-as-jointpurchasing-with-airberlin-and-jet-is-pursued-115978]

Meanwhile Etihad Airways and the other members of the Etihad airline equity alliance will see their global reach expand even further with the addition of Air Serbia as the sixth member to the alliance. Overall, if Jat

Airways’ transformation into Air Serbia is successful, its long term survival will be more secure and it will be in a stronger position to fend off further expansion by carriers such as low-cost operator Wizz Air, which

are continuing to expand their presence in the Eastern European region.

[http://www.etouches.com/ehome/68117/home/]

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