Etihad Agrees Belgrade Growth Ahead of Possible Jat Airways Investment

Etihad Airways, the national airline of the United Arab Emirates (UAE), will commence non-stop flights between its home base at Abu Dhabi International Airport and Nikola Tesla Airport in Belgrade, the capital of Serbia. The network growth and a comprehensive codeshare arrangement with European national carrier Jat Airways are expected to be just first step in a wider co-operation between the two operators that could lead to the Gulf carrier making a financial investment in the ailing airline and supporting its long-needed fleet renewal, according to sources.

The airline will introduce a daily flight between Abu Dhabi and Belgrade, from June 15, 2013 and will utilise an Airbus A319, configured to carry 106 passengers, with 16 seats in Pearl Business Class and 90 seats in Coral Economy Class on the route. Etihad will be the first network carrier to provide non-stop flights into the Gulf region from the Serbian capital, a destination also served by low-cost carrier flydubai from Dubai. Qatar Airways also serves Belgrade but via a technical stop in Ankara, Turkey.

The new flight will help provide better access to Belgrade for several hundred thousand Serbian nationals living around the world, especially in markets such as Australia where strong historical and cultural links exist. Currently there are more than 100,000 Australian citizens of Serbian ancestry, mostly residing in Melbourne and Sydney.

“The launch of Etihad Airways’ flights between Abu Dhabi and Belgrade, and the partnership development with Jat Airways, will cater for the significant and growing demand for air travel between the UAE and Serbia, as well as cities with large Serbian populations around the world, particularly in Australia and the US,” said James Hogan, President and Chief Executive Officer, Etihad Airways.

As part of enhancing connectivity, Jat Airways will place its ‘JU’ code on the new flights as well as to 21 destinations across the Etihad network, comprising: Bangkok, Beijing, Brisbane, Chengdu, Chicago, Colombo, Ho Chi Minh City, Islamabad, Johannesburg, Karachi, Kuala Lumpur, Kuwait, Lahore, New York, Melbourne, Seychelles, Shanghai, Singapore, Sydney, Toronto, and Washington, D.C.

A reciprocal arrangement will see Etihad place its own ‘EY’ code on Jat’s European flights to Amsterdam, Athens, Berlin, Brussels, Copenhagen, Düsseldorf, Rome, Frankfurt, Gothenburg, Istanbul, Heathrow, Larnaca, Milan, Moscow, Podgorica, Sarajevo, Skopje, Stockholm, Stuttgart, Thessaloniki, Tivat, Vienna and Zurich. Both arrangements remain subject to government and regulatory approval.

“We look forward to increasing the number of passengers travelling between Belgrade and Abu Dhabi and enhancing the relationship between Serbia and the UAE,” said Vladimir Ognjenović, Chief Executive Officer, Jat Airways. “The expanded codeshare will also provide Serbian nationals with great opportunities to travel beyond Abu Dhabi with Etihad Airways and to destinations in the Middle East, Far East, Africa and Australia. We are also excited to place the ‘EY’ code on JatAirways’ flights across the Balkan Region and Europe and build upon Belgrade’s great role as a hub.”

Alongside the direct relationship with Etihad, Jat Airways will also place its code on a number of the flights operated by equity partner, airberlin including the opportunity to offer a direct, one-stop link for passengers travelling between Belgrade and Chicago in the United States, via the German capital Berlin. The capital of Illinois has the second largest Serbian population of any city in the world, with an estimated 200,000 Serb nationals living in Chicago, and up to 500,000 residents of Serbian origin.

In the table below we highlight the largest markets between Serbia and North America and Asia and Australasia in 2012. An estimated 91,000 bi-directional O&D passengers flew between Serbia and destinations across Asia and Australasia in 2012. The largest carriers in this market were Aeroflot Russian Airlines (25.8 per cent share) and Turkish Airlines (19.4 per cent). Meanwhile, in the opposite direction an estimated 94,000 bi-directional O&D passengers flew between Serbia and destinations in North America in 2012. The largest carriers in this market were Lufthansa (26.7 per cent share), Austrian Airlines (14.5 per cent) and British Airways (11.4 per cent)

Scheduled Air Demand Between Serbia and International Markets (bi-directional O&D passengers; 2012)

Belgrade is one of five further destinations to be added to the Etihad before the end of the year following the recent addition of Washington Dulles to its network. Alongside the previously revealed links to Amsterdam in the Netherlands, Sao Paulo in Brazil and Ho Chi Minh City in Vietnam the carrier has announced the introduction of air services between Abu Dhabi and Sana’a, Yemen’s political and commercial capital. The destination will be Etihad’s eighth on the Arabian Peninsula following Bahrain, Dammam, Doha, Jeddah, Kuwait, Muscat and Riyadh and will be served on a four times weekly basis from September 1, 2013.

“The launch of direct services to Sana’a is consistent with our strategy of adding depth and scale to our network and targeting areas of growth in emerging markets,” said Hogan. “The ancestral, cultural and business ties between the two countries are significant, and we believe the new service will further facilitate Yemen’s economic development in the months and years ahead.”

More than 90,000 Yemini nationals live in the UAE, and the country is Yemen’s largest regional trading partner with annual trade valued at over US$2 billion, of which US$1.6 billion is made up of UAE exports, according to the Yemeni Ministry of Industry & Trade. Overall, the UAE accounts for almost 20 per cent of Yemen’s total imports.

Etihad plans to utilise a two-class Airbus A320 configured with 16 seats in Pearl Business Class and 120 seats in Coral Economy Class on the route. There are already numerous links between Sana’a and destinations across the GCC and MENA regions including existing flights into the UAE with Emirates Airline, flydubai and Yemenia flying to Dubai and Air Arabia to Sharjah, but this will be the only non-stop link to Abu Dhabi and first long-term schedule between the destinations since Gulf Air left the route in March 2006.

Alongside, point-to-point demand and regional connections, Etihad expects to secure notable traffic flows into Europe and Asia. There are currently only very limited regular direct scheduled flights from Sana’a into Asia and Europe with Yemenia flying to Mumbai and Turkish Airlines to Istanbul. In 2012 an estimated 105,000 O&D bi-directional O&D passengers flew between Sana’a and destinations across Asia and Australasia (with strong flows to India, Malaysia and China) while around 49,000 bi-directional O&D passengers flew between the Arabian capital and Europe (away from the direct link to Turkey, the main flows are to the UK and Germany).