Montenegro retained its position as Air Serbia’s highest-yielding market last year, despite the impact of the coronavirus pandemic. Passenger yield is the average amount of revenue the airline receives per paying passenger flown per kilometre. The short hop to Montenegro, bolstered by relatively high fares and low operational costs, ensured that it remained one of the carrier’s top performers, according to the company’s annual report. Air Serbia saw its yields improve across the board in 2021 when compared to the pre-pandemic 2019 by 1.2 points. The carrier noted it achieved these results due to its swift reaction to changing market conditions, as well as dynamic pricing.
Other high-yielding markets for Air Serbia last year, following Montenegro, included Greece, Italy, Russia, the United Kingdom, Switzerland and the Netherlands. Russia saw the biggest jump in yields compared to the pre-pandemic 2019 in response to the large volume of traffic between Serbia and Russia last year and rising fares. The Serbian carrier handled 121.860 passengers on flights between the two countries in 2021. “Air Serbia managed to maintain an optimal level of traffic in order to respond to the needs of the market at all times and therefore reduce the negative impact of the pandemic on the company’s operations. With this strategy, Air Serbia managed to create an optimal balance between required capacity and suitable fares”, the company said.
This year, Air Serbia become the launch customer of Sabre’s Air Price IQ tool, which provides technology to the airline to generate relevant offers by analysing the carrier’s own shopping and revenue management data in real time along with relevant marketplace insights. The cloud-native solution utilises artificial intelligence (AI) to optimise price and help it drive higher conversion rates and improved yield by delivering more relevant offers across all channels. Created as a result of Sabre’s strategic partnership with Google, Air Price IQ moves away from traditional static pricing models and uses advanced machine learning models to personalise airfare offers in real-time, helping Air Serbia drive conversion.
Air Serbia is expected to post a profit this year, with key performance indicators improving. The carrier’s CEO, Jiri Marek, recently said, “We would like to be in the black already this year. Covid taught us to react very quickly, which we can see even in today’s circumstances, when fuel prices have skyrocketed. The season was successful, but now we have the harder part of the year ahead of us and no one can predict how inflation will affect people’s will to travel, for example. For now, however, we remain optimistic”. Mr Marek noted the airline has reduced its costs and views airBaltic’s pre-Covid business model as an example. “We look at airBaltic, which was very successful before the pandemic. We cannot become a low cost carrier, that is impossible for an airline of this type. We will never be able to buy a hundred aircraft at once, which is what low cost carriers do to reduce costs. However, we try to be efficient and have twenty to thirty percent lower costs than other legacy carriers”, Mr Marek said, local media writes.