FINANCE | Air Serbia eyes profitability in 2022

Air Serbia anticipates breaking even or registering a small profit in 2022 following two years of Covid-induced financial losses. “Air Serbia has performed relatively well during the pandemic. In 2021 we significantly improved our operational performance and even reduced our loss. This year we are aiming for profitability, and we will continue on this path in the future. Air Serbia will continue to be the leading regional airline in the Balkans, and we aim to keep our market share in Belgrade between 50% and 55%”, the company’s CEO, Jiri Marek, told “Aero Telegraph”. He added, “The rise in fuel prices is taking its toll and we are not hedged. As an airline, you can pass about 60% of the increase onto customers. So of course, we suffer. But even at current fuel prices, we believe we can break even this year”.

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Air Serbia reported a loss of 77 million euros during the pandemic-stricken 2020, ending six consecutive years of profit. The result did not take into account the 100-million-euro recapitalisation provided by the Serbian government late that year, which saw it increase its ownership stake in the company to 82%. In 2021, the net loss was reduced to 21.3 million euros. Over the course of last year, Air Serbia repaid in full its second and final loan to Etihad Airways Partners BV, a special purpose vehicle set up by Etihad Airways in September 2015 to raise funds for itself and its equity partners. The loan amounted to 63 million US dollars. Air Serbia is one of sixty companies which receives subsidies from the state since it is categorised as being of “special importance”. This year, the sixty business are sharing amongst them 170 million euros in subsidies, although the exact amount each receives has not been made public.

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Operationally, the airline expects to be close to overtaking its pre-pandemic traffic levels by the end of the year. “In 2022 we will be slightly below the numbers from 2019, likely ending up at 91% of pre-pandemic levels. Of course, only if nothing negative happens. In 2023 Air Serbia will definitely surpass 2019 levels and from then on, we aim to grow between 10% and 15% every year”, Mr Marek concluded. The carrier recently scheduled a slew of frequency increases across its existing network for the upcoming winter season, with additional growth to be publicised in the coming weeks, ahead of the launch of its second long haul service, and its first in the Far East, this winter.

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