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United in AIR “again”

Airlines in the former Yugoslavia have begun to react after the Association of European Airlines announced that the only solution for the aviation industry in the region is the formation of a single national carrier for the EX-YU countries. The news was followed by Adria Airways’ statement that it would take a leading role in the creation of the new airline if its privatisation process, which will take place this year, fails. Jat Airways has said it has learnt about the initiative via the media while B&H Airlines stated that it still hasn’t been contacted on the matter. Croatia Airlines claims that any such idea is unrealistic and unacceptable, although notes that a united front in the marketing division is possible only if the Croatian carrier takes a leading role.

However, the idea of a more united approach in the region was first suggested by Jat Airways in 2010 when it proposed an EX-YU alliance. The alliance was to function so airlines of the former Yugoslavia had lower handling fees at each other’s airports, would code share on each other’s flights and have an integrated booking system. Montenegro Airlines and Skywings International from Macedonia (which has since gone bankrupt) both agreed to the alliance, while Adria showed interest, although said it would have to take control over the alliance if it were to join. Croatia Airlines rejected its invitation. In the end the alliance never saw the light of day.

Today, the airlines of the former Yugoslavia handle some five million passengers annually, which is just a fraction above what JAT Yugoslav Airlines handled back in 1987. The central problem for all of the national carriers is that they are losing money at an alarming rate and all rely on government subsidies – some more, some less. With the exception of Croatia Airlines, all of the EX-YU carriers have at least one code share agreement with another airline in the former Yugoslavia. On the other hand, Croatia Airlines and Adria enjoy a common business plan model agreement. The two airlines agreed to strengthen ties and cooperate on jet leasing as a means of improving efficiency and streamlining fleet utilisation. The Association of European Airlines concludes, “The once single Yugoslav market is now fragmented and a regional solution is necessary. The region needs an airline that would cover local needs and connect with global hubs”.

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