ECONOMY

Yugoslav airline sees room for expansion in Balkans

BELGRADE (AFP) – Yugoslav carrier JAT Airways has plans to create a regional carrier for the Balkans by 2004 in the latest shift toward consolidation in the European aviation industry, executives say. The former Yugoslav Airlines, a minnow compared to its Western rivals, sees a niche opportunity for growth through greater cooperation between carriers in the Balkans, Director General Predrag Vujovic told AFP. He said the countries of the former Yugoslavia – Bosnia, Croatia, the Former Yugoslav Republic of Macedonia (FYROM), Serbia and Montenegro, and Slovenia – plus neighbors Albania, Bulgaria, Hungary and Romania, represent «the only and the best opportunity for growth» for the national carriers of Southeastern Europe. «We have a potential market of more than 50 million people, and their transport links today are catastrophic… Very few flight routes actually exist between the countries of the Balkans,» Vujovic said. Explaining what every traveler in Southeastern Europe already knows only too well, Vujovic described flight links between regional centers as «crazy.» Giving just one example, Vujovic said a trip from the Bosnian capital of Sarajevo to the Bulgarian coastal town of Varna, a direct flight of about one hour, currently requires two connections, in Belgrade and Sofia. «Nobody is moving toward the creation of a regional network… yet growth can only come from regional lines,» not by penetrating the Western European market, he said. JAT has recently opened several direct flights linking Belgrade with regional centers such as Tirana, Ljubljana and Sarajevo, and intends to add Zagreb and Dubrovnik to its schedules next year, he said. Vujovic said his next step was to create a regional airline by the first half of next year which initially would be 100 percent owned by JAT, but which would be open to partnerships with other carriers. Negotiations are already under way with national airlines in Bulgaria, FYROM, Albania and Bosnia-Herzegovina, he said. JAT has also organized a round-table discussion next month with European airline executives and representatives from the European Union. The new company would be able to piggyback on the long-term growth prospects for the region, where economies are generally expected to expand in line with ongoing legislative reform and European integration. «According to our forecasts for the next two years, political tensions will continue to diminish in the region, the visa system will be liberalized, and the conditions will be perfect for the creation of open skies in the Balkans,» Vujovic said. Belgrade was the «logical» base for such a project, but Vujovic insisted that the new company should have a cosmopolitan outlook. «The regional company will not have an ethnic identity – the language will be English. Our goal is to be able to employ people without problems, a pilot from Bulgaria, a Croat mechanic, a Serb flight stewardess.» For the past two years JAT has been restructuring in line with the government’s plans to privatize it in the near term. It now has 22 planes and employs 3,800 people.