Air Serbia will no longer be babysitting Etihad’s Heathrow slots. The Belgrade based carrier had been operating ‘ghost flights’ on behalf of its parent airline since the demise of Jet Airways earlier this year. Now, it seems Etihad is taking its slots back, and yet Air Serbia still submitted a request for additional Heathrow capacity over the summer. What’s going on?
Etihad is getting its slots back
Etihad’s Heathrow slots were handed back to the airline in something of a rush, as failing Jet Airways could no longer operate internationally. With a strict policy of ‘use it or lose it’, Etihad needed to ensure the slots were being utilized or risk having them taken back by the allocation body.
As such, Etihad entered into a strange babysitting agreement with Air Serbia, where the Belgrade based airline would use the slots but with a wet-leased Etihad aircraft and crew. This has been going on since last summer, with the contract renewed in October for the IATA winter season.
Now, however, it seems the agreement is coming to an end, as CH-Aviation reports that the slots will be handed back to Etihad at the end of the winter season, on the 29th March 2020.
Air Serbia wants more Heathrow slots
Simultaneously with the announcement that Air Serbia will not use the Etihad slots for summer 2020 came the news that the Serbian carrier had been turned down for a request for more slots at the London airport. Air Serbia already owns nine slot pairs at Heathrow, and with the additional Etihad capacity has been running a total of 16 flights per week.
Air Serbia requested a 10th slot pair allocation for summer 2020 but apparently were rejected by Airport Coordination Limited. It seems that the carrier’s vision of increasing its Heathrow presence for the summer will have to wait.
Nevertheless, the Serbian carrier has been doing rather well as of late. It recently firmed up a codeshare agreement with transatlantic golden child Finnair, and has launched no less than 21 new routes in the past six months. Air Serbia’s CEO, Duncan Naysmith, told Ex-Yu Aviation about the great results the airline has been enjoying recently, saying,
“Even though we are satisfied, we will continue to improve our offer, because that is the only way we can respond to increased demand, which has in Q4 been exceeding all records since we started operations. I am convinced that everything we are preparing for the coming period will result in even better ratings from experts, but also greater satisfaction from our passengers.”
Why didn’t Air Serbia just keep the slots?
While Air Serbia operated these slots to Belgrade for some time, the flights were almost seen as ‘ghost flights’, with very low load factors and really very little commercial value to them. A recent trip report highlighted how bad the utilization of the route was, largely due to very poor timing with connections from North America and onwards from Belgrade.
The actual timings of the slots aren’t great for Air Serbia either, as they are timed for a widebody turnaround. This means that Air Serbia’s narrowbody would spend a long time on the stand for no reason, which is likely part of the decision to hand back the slots.
Of course, the other reason for Air Serbia to hand back the slots would be that Etihad no longer wants them to run it. It was a funny arrangement between the two carriers, with the slots operated by Etihad metal and Etihad crew but under Air Serbia flight numbers. While Air Serbia was largely babysitting the slots so Etihad didn’t lose them, perhaps the Gulf airline has plans of its own for the slots?
One option would be for Etihad to operate the slots themselves, but with four flights a day already, it’s potentially more capacity that it needs. More likely is that Etihad will look to lease them out to another airline; there’s certainly plenty of demand. Finally, the airline could look to sell the slots to raise capital.
Previously slots have sold for as much as $75m, and with Etihad’s balance sheet looking some years away from being in the black, a windfall like this could be tempting.