Air Serbia looks to soften Covid blow
Air Serbia is undertaking a number of cost saving measures in order to alleviate the effects of the coronavirus Covid-19 pandemic. The airline said it has rationalised its fleet and renegotiated leasing terms for its aircraft, with power by the hour contracts concluded, where leasing costs are accounted based on the number of hours the aircraft has been utilised rather than a fixed rate. The carrier has returned one Airbus A320 and one ATR72 turboprop to their owners following the expiry of their leases, while planned new leases have not been taken on so far. The company reduced airport fees at a select number of destinations and managed to defer air navigation tax payments until 2021. “Up to this day, Air Serbia continues to meet its obligations towards all key and strategic suppliers”, the company noted. It added that it launched a program entitled “Deliver” back in March, aimed at reducing capital investments and services which are not of vital importance for the company. “This continues to significantly contribute to the company’s liquidity. Furthermore, the company has used the suspension of slot rules in Europe and the United States, as well as its primary markets, to secure the same slots for 2021”, Air Serbia said.
The Serbian carrier has secured credit lines from commercial banks up until December 31 and has deferred deposit requests from several airports. Based on its financial report, Air Serbia was the beneficiary of 19.7 million euros is donations last year. The government has said it will provide assistance to the carrier this year as well but noted the amount will depend on the final financial fallout from Covid-19. It added it was difficult to approximate an exact sum but said the assistance would be continuous and in line with the government’s priorities, needs and possibilities.
Air Serbia said the situation on the market remains unpredictable. “At this point, there is very little demand due to ongoing restrictions and constant changes to entry regulations state by state. These restrictions, as well as worries over Covid-19, have had a significant impact on demand. The company Is actively following the situation and will respond effectively as the impact of Covid-19 evolves. This will depend on a number of factors, including the further spread of the virus, measures and restrictions imposed by countries, as well as passenger behaviour. None of these can be predicted with a high degree of certainty”, the airline said. It added, “The management has discussed a number of potential scenarios keeping in mind the aviation sector has been faced with a significant decline in demand”.
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