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Why Qatar Airways should strengthen the wings of Air Serbia

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For the double-digit growth of “Air Serbia” that it plans, additional investments are needed and this is probably one of the main reasons why Serbia is looking for a strategic partner for its national company.

And he is looking for him in “Qatar Airways” because Qatar and in general that part of the world at this moment is the one where he should be looked for first.

Slobodan Aćimović , Ph.D., a professor at the Faculty of Economics in Belgrade who teaches subjects dealing with logistics, traffic and infrastructure, told Sputnik.

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Proposal for consideration for Qatar Airways

The President of Serbia, Aleksandar Vučić, announced in Doha that he asked the Emir of Qatar, Sheikh Tamim bin Hamad al-Thani, to consider whether there is an interest in “Qatar Airways” becoming a strategic partner of “Air Serbia”.

He presented that the Serbian national airline today is completely in Serbian hands, that it belongs to the Serbian state, which, as he said, is looking to avoid some risks in the future.

Some materials and analyzes about “Air Serbia” and its operations have been handed over to Qatar, said Vučić, announcing that the teams from Doha will come to Belgrade to discuss it with ours.

“You can’t grow if you don’t open new lines, and you can’t open them if you don’t have enough investment.”I assume that this is one of the main reasons why Serbia decided to propose a strategic partnership to Qatar Airways.

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We were lucky as “Air Serbia” that with a smart decision we did not stop flights to Russia last year and that the profits on those flights were probably many times higher than in general. It will take some time and we need to think about the future, where to fly and with what investments,” says Aćimović.

There is no growth without investment

And “Air Serbia” has announced that it will grow. The general director of the company, Jirži Marek, said a month and a half ago that the goal is to reach double-digit traffic growth this year, to have more than 30 percent of passengersin transit, and a total of at least three million, which is a historic result.

He told Tanjug that “Air Serbia” recorded significant progress in business, that for the first time since the outbreak of the pandemic, a positive net and operational result was achieved, with a profit of 21 million euros , without a single euro of state subsidy.

Marek announced that “Air Serbia” is expanding its network of new destinations , and already in the spring, lines to Egypt and Chicago.

According to our interlocutor, the news that new lines are opening is good, but it is obvious that additional investments are needed for growth.

“One of the important reasons why a strategic partner is sought is when the basic company cannot grow so quickly, that is, it does not have enough investments, so it is necessary for someone to come as a strategic partner with a little more capital to support the investments.”

“I assume that , from a market point of view, Air Serbia could open some additional lines, but that it does not have enough planes, or it cannot lease enough of them because it is simply a smaller company,” the traffic expert points out.

Fleet renewal

Its general director pointed to the renewal of the fleet as one of the strategic goals of “Air Serbia”. Marek reminds that in 2012, the then “Jat Airways” had 11 planes, and that today, with the recent arrival of the last ATR 72-600, “Air Serbia” has a fleet of 24 planes , including three wide-body ones for long-haul traffic.

This is clearly not enough because “Air Serbia”, which flies on 87 routes in Europe, North America, Asia and Africa, announces 19 new ones.

However, it is not easy to look for a strategic partner in a situation where air traffic has not yet fully recovered. During the pandemic , that economic branch, along with tourism, was one of the most affected globally, and at one point planes were completely grounded. 

The national Italian airline “Al Italia” thus ceased to exist in October 2021. In order to survive, German Lufthansa received aid from the German state of nine billion euros, which it returned half a year ago, a year ahead of schedule, and is now again privately owned.

Recovery after the pandemic

At the end of last year, as reported by Reuters a month ago, “Lufthansa” recorded a turnaround in business, achieving an operating profit of 1.51 billion euros. That, however, is still 34 percent less compared to 2019, while passenger traffic reached 72 percent of that year’s traffic. At the same time, it reduced its net debt from nine to 6.9 billion euros.

When asked where to look for a strategic partner in air transport in the still difficult post-pandemic situation , Aćimović has no dilemma.

“Obviously in that part of the world where Serbia went to look for it.” I suppose that in that world, not only in terms of air transport, but also in terms of exporting fruits and vegetables – there is much to be won. It is not only the EU market that we should be oriented towards, but, on the contrary, we need to open new markets,” Aćimović points out.

Qatar can do it

“Qatar Airways” is the fourth best airline in the world , one of the five airlines in the world awarded with “five stars”. The national airline of Qatar, based in Doha, was founded in late 1993 and is owned by members of the Qatari royal family.

It operates flights to 91 destinations, and has 84 aircraft in its fleet, including freighters, and has ordered another 144 aircraft.

What are the chances that Air Serbia will get a strategic partner in such a company? I believe that we will soon have the opportunity to host Sheikh Al Thani in Belgrade, said Vučić, and then it would probably be certain whether the Qataris are even interested in that story.

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