Descent of Air Serbia

By Miša Brkić

“Never again! This is how a certain aviation analyst and the former fan of the Serbian national airline Air Serbia, who always assumed a servile attitude towards the airliner, figuratively “castrated” himself.

If an expert of such calibre and orientation has decided to stop flying with Air Serbia because he experienced frustrating mistreatment (read humiliation), what should we, ordinary passengers, do? Even worse, the former Air Serbia fan is not the only customer who has experienced a high level of frustration because of Air Serbia who left thousands of passengers stranded.  

Due to a series of cancelled flights, some of the passengers did not make it to an important business meeting, some lost their jobs, some missed a family celebration, some did not make it to the funeral of a loved one, some children did not see their parents, some patients had to cancel scheduled medical treatment… The list of defrauded travellers is impressive.

How long is the list of Air Serbia passengers who long ago booked and paid for their tickets, arranged meetings and accepted business and personal obligations in the cities and countries where they intended to travel? How anxiously do they look forward to the day of the trip? And, after all, can they trust Air Serbia and its promises?

Air Serbia is not a start-up so it can play a risk card (it might fly/it might not). It has to deliver a service that will meet the needs of the customer/passenger at a certain time, of a certain quality and at a certain price. The rules of air transport service have long been clearly defined and specified and imply reliability as a key determinant. Passengers are often willing to pay a more expensive ticket if the company is reliable (safety is implied) in adhering to the flight schedule (of course, when it is not faced with force majeure such as hurricanes, wars, volcanic eruptions, airport strikes and similar).

The customer/passenger’s doubt about the company’s ability to fulfil its obligations is disastrous for the image of any company, including Air Serbia. Winning a customer’s trust is long and hard process and it is very easy to lose it. New flights are in vain, cheaper tickets are in vain, bragging about being “the regional leader” is in vain, the Serbian President’s painstaking effort to boost the company’s reputation is in vain if the passenger finds out just before take-off that the airline will not fulfil its assumed and paid obligation. If the president were honest (and he wasn’t), he could use the same words for the management team of Air Serbia, as he did for those who demolished the Belgrade neighbourhood of Savamala. Such management’s behaviour destroys the brand, although, to be honest, Air Serbia has never had a really stellar reputation. It has never grown into a valuable brand, except in campaigns devised by media lobbyists (whose fees are much higher than their professional morals) and politicians (whose are steeped in corruption. After the business disaster in June with the cancellation of numerous flights there is no more politically inflated goodwill, with the company generating a 20-percent-loss in five years (in 2022 – 654,564,000 dinars and in 2018 – 783,376,000 dinars). How much will the cancellation of flights damage Air Serbia?

When trust is lost and the brand is destroyed, then there is no future for the company. Everything that follows is just a flight into nothingness. In order to cover the gap, the company will probably have to lower the ticket prices, especially on flights where it has stiff competition. That loss, as a direct consequence of the management’s mistake, will show up in the business balance sheet for this year, and the long-term losses will still be added up. The competition is rejoicing from the sidelines and is waiting for the opportunity to take over the market without much effort (not that it has even tried so far).

It is not the airline’s greatest sin if it cancels a flight. This happened to many, even the largest, air carriers after the end of the pandemic. All of them immediately informed the public and clients about the reasons for the cancellation. Business etiquette required them to do so – to inform passengers in advance, apologize for the omission and compensate for the damage. Air Serbia resorted to the biggest business sin – it tried to cover up the fraud. This was an absolutely gutsy move because the airliner had to reckon with angry passengers who would go public with just how messy this situation is. When all hell broke loose, there was a defensive announcement in the style of “everyone is to blame but us” (from the aircraft supplier, the aircraft maintenance staff, airports around the world, the weather and whatnot).

The scandalous flight cancellations in June revealed that Air Serbia is run by managers who are not up to the job. This is a consequence of the so-called improvised economy dictated by political commissars in management and characterized by a lack of planning and analytics.

When the management decided to embark on the (dubious, risky) adventure of launching 30 flights, it had to at least analyze beforehand the monetary justification of such a move and build solid foundations that would support such a business strategy. Instead, it started to expand like there is no tomorrow. It turned out that the company not only does not have enough leased planes but also has unsolvable problems with a lack of (at least) 35 percent of crew staff and 50 percent of aircraft maintenance staff. Air Serbia also did not consult Vinci, the Belgrade airport’s operator, about its plans considering that the airport seriously lacks check-in staff. Last but not least, it did not consult with passengers. Only total amateurs like Air Serbia’s management could decide on expanding its business from the airport which is under reconstruction and which is already known for congestions.

Since Air Serbia left thousands of people in the lurch, who had been sympathetic to the national airline until now, everybody started to doubt its business acumen and became its harsh critics. Air Serbia has lost trust, the most valuable value a company can create with consumers.

It is possible that passengers will not immediately stop using Air Serbia services. But, remembering their negative experiences, they will most likely pick a different air carrier next time because they don’t want to risk it with Air Serbia. The created distrust will slowly grow, as will the company’s reputational risk.

Of course, this will be a great opportunity for the competition to step in while it is waiting for the state to allow it to flourish at the Belgrade airport thanks to its anti-monopoly policy. This is also a topic for the country’s president to think about before he starts to triumphantly announce that Air Serbia will profit a lot from the (mini) EXPO 2027, which is Serbia going to host.”

(Danas, 26.06.2023)

This post is also available in: Italiano

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