Air Serbia (formerly Jat Airways) (Belgrade) is prospering under its new brand and growing relationship with partner Etihad Airways (Abu Dhabi). The flag carrier reported a 2014 net profit of €2.7 million ($3 million), a complete turnaround from its 2013 €73 million net loss.

The airline issued this statement:

Air Serbia, the national airline of the Republic of Serbia, reported a net profit of EUR 2.7 million for 2014. In its first full year of operation, the airline’s revenues rose by 87 per cent to EUR 262 million, marking the strongest results in the existence of the national carrier.

Audited by KPMG, these financial statements also reflect strong growth in passenger traffic and cargo volumes. A total of 2.3 million passengers travelled with the airline in 2014, 68 per cent more than in 2013.

Air Serbia’s passenger carrying capacity, measured in Available Seat Kilometres (ASKs), increased by 74 per cent to 3.3 billion by the end of 2014. Despite this increase the airline’s seat load factor rose by three percentage points from 64 per cent in 2013, the last year of operation as Jat Airways, to 67 per cent in 2014.

Air Serbia Cargo also performed significantly better in 2014, carrying 2,700 tonnes of freight, a 67 per cent increase on 2013. Cargo services continue to be a major area of growth for Air Serbia.

In a year of significant capacity increase, Air Serbia’s 2014 average on-time performance at its hub, Belgrade’s Nikola Tesla International Airport, was 78 per cent. This represents a four percentage point improvement over the performance of the former Jat Airways.

Dane Kondić, Chief Executive Officer of Air Serbia, said: “These results are a great achievement validating the effectiveness of our strategy. We are proud to have been able to deliver on our mandate which was to achieve strong growth, to become the region’s leading carrier and, most importantly, to do so as a commercially viable and profitable enterprise, while becoming a key driver of economic growth in Serbia. The profit we have delivered in 2014 is, above all, a great sign for the future, as it lays a solid foundation going forward and is proof positive, of what can be achieved when the right strategies and governance structures are put in place. We owe a debt of thanks to our two shareholders – the Government of the Republic of Serbia and Etihad Airways for their ongoing support. I would also like to thank our staff for their contribution and hard work, without which, none of this would have been possible.”

James Hogan, President and Chief Executive Officer, Etihad Airways, said: “We are delighted with the progress Air Serbia has made in delivering on its performance objectives in the very competitive European market. Its continued success amidst these challenges will depend not only on continued investment in its workforce and in innovative products and services, but also on the ongoing and strict financial discipline and focus on cost which have marked its first year of operation.”

Since Air Serbia’s launch on October 26, 2013, the airline has undertaken a number of initiatives outlined in its turnaround plan to rebuild the national carrier and transform it into a profitable, stable, reliable and strong airline to serve Serbia and the broader Balkan region

The airline was rebranded and ten new generation Airbus aircraft were introduced, with eight A319 and two A320 added to the fleet. As a result, the average age of the jet fleet has decreased from 25 to 10 years, delivering greater reliability and significantly lowering the costs of operation.

During 2014, Air Serbia’s network of direct routes grew to 40 destinations in 30 countries, the last of which was the highly symbolic launch of flights to Zagreb in December, re-establishing a link between Zagreb and Belgrade, last flown 23 years ago. The airline also expanded to 35, the number of destinations served with codeshare partners – airberlin, Aeroflot, Etihad Airways, Etihad Regional and Tarom. Coupled with the introduction of a modern and reliable fleet, the network expansion strategy has been a key driver of the significant growth in passenger numbers and cargo volumes.

Air Serbia also established a dedicated charter brand – Aviolet – which operates four rebranded and refurbished Boeing 737-300 aircraft. Aviolet operated over 520 return flights during the 2014 summer season and transported over 90,000 tourists to popular vacation destinations in Turkey, Greece, Egypt and Italy, among others.

Air Serbia’s growth has created a significant number of new jobs for Serbian nationals. During 2014, the airline grew its workforce by more than 400 new professionals. The technical department of Air Serbia has employed 44 engineers and technicians to establish the line maintenance facility at Belgrade’s Nikola Tesla International Airport. A number of new pilots were hired in the first half of 2014, including three of the airline’s first female pilots. The airline’s largest ever global drive for pilots was launched in September 2014, and resulted in the recruitment of over 40 new pilots by the end of the year. A nation-wide recruitment drive for cabin crew attracted nearly 1,700 candidates – the highest in the history of the airline, indicating that the national airline not only inspires confidence, but that it has become an employer of choice among young Serbian nationals.

Presently, over 1,900 employees work at Air Serbia, including its subsidiaries Air Serbia Catering and Air Serbia Ground Services.

Air Serbia launched a ground-breaking multi-channel advertising campaign in October, with the tag-line “Air Serbia. The New Wings of Europe”, to boost awareness of the airline and position Belgrade and Serbia as an attractive destination and a convenient European air transport hub. The success of the campaign was recognised by the Association of Advertising Professionals of Serbia (UEPS), receiving two golden awards.

The campaign has to date, received a record 800,000 YouTube views (below):

Top Copyright Photo: (all others by Air Serbia): SPA/AirlinersGallery.com. Airbus A320-232 YU-APH (msn 2645) approaches the runway at London (Heathrow).

Air Serbia aircraft slide show: