NEW YORK — Dane Kondić is the CEO of Belgrade-based Air Serbia. He has more than 25 years of experience in the travel industry, including stints at major international airlines and the agency, wholesale and content segments of the travel business.
Kondić began his career with Qantas Airways, then became regional director, South East Asia, for Sabre Airline Solutions, where he was responsible for strategic management. He served as vice president commercial at Abacus International, the Asian-based GDS now owned by Sabre Inc., and was vice president North Asia for GTA by Travelport, managing director Kuoni Travel China Ltd., and general manager of worldwide sales for Malaysia Airlines.
After Etihad Airways bought a 49 percent stake in Serbia’s national airline in 2013, Kondić was appointed by the Republic of Serbia as CEO of Air Serbia, and since then, the carrier has thrived. In 2014, it reported a net profit of €2.7 million ($3 million), which was a complete turnaround from its 2013 €73 million net loss. The airline resumed service between New York and Belgrade on June 23.
Kondić spoke to Airways about the benefits of being an Etihad strategic partner, and how the future of the airline looks like in terms of fleet and markets.
Airways: Air Serbia and its predecessor carrier, Jat Airways, haven’t flown to the United States in 25 years. First can you tell me why the service stopped? And the second can you tell me why you think now was the right time to restart service to the U.S.?
Dane Kondić: Much has changed from where we were 25 years ago to where we are today. The country doesn’t exist anymore. It was the Federation of Yugoslavia back then. During those days, Yugoslavia had regimes that implemented changes regularly, which had a devastating effect on the country and its economy.
In the past three or four years, Serbia has a new government and a new prime minister who has a very economic growth-oriented vision for the country. It is investing in the right sectors of the economy, one of which is aviation. It was his [Prime Minister’s Aleksandar Vučić’s] vision.
He began a relationship with the government of Abu Dhabi that led to Etihad’s investment into our new airline back in 2013. [Vučić] had a commercial mandate, one that was growth orientated, economic oriented and job oriented. One of Air Serbia’s great ambitions was to realize the goal of flying across the Atlantic. Our launch [on June 23] was able to happen because of record low-fuel prices, which allowed us to move forward with our growth plan.
But more importantly, we could do this because our airline is now part of the Etihad family under the Partner program. That probably saved us more than the cost of fuel, which is what enabled us to bring all the elements together to fly across the Atlantic. Alone, it would have been impossible for a small airline like Air Serbia to do this. But with help from Etihad Partners, Jet Airways, and Alitalia, we can use [the former’s] [Airbus A330] aircraft and the latter’s crew training facility, that’s infrastructure we didn’t have to pay to create by ourselves.
You became an Etihad strategic partner in 2013. How did Air Serbia get connected with Etihad and why did you feel it was a good idea to enter this partnership?
Next year we celebrate our 90th anniversary. There are few airlines that are still active today that can actually claim 90 years of continuous services. Look at the great glorious airlines of the past, like TWA and Pan Am, for example, that are no longer with us. The old government tried to privatize the airline twice and could never gain traction or interest. Prime Minister Vučić came in contact with the Crown Prince of Abu Dhabi, and a great friendship flourished between them. That led to a serious investment by Etihad into Air Serbia. And what we’ve been able to accomplish in three short years in the airline space has been nothing short of miraculous.
What benefits Air Serbia has seen under the Etihad partnership?
I think we all know how expensive aviation is as an industry. We have a lot to cultivate and margins are pretty thin. There’s only so much you can do. But when you’re part of a partnership with seven other airlines, then you can see how our combined resources can really make a difference. So as a small carrier, we are able to avail ourselves of the resources of our larger Etihad airline partners. Because we are part of that bigger family, we were able to realize our ambition of flying across the Atlantic. We simply don’t have enough money to invest in things like cabin crew training [in house]. So it helps us get the best for our crews and it helps our partners bring in more money for their services.
Our group Chief Executive James Hogan always talks about what the partnership is about — energy, innovation and scale. They’re all things that, irrespective of what part of airline you are, you can avail yourself on. But we still make our own decisions, and the partnership has enabled us to do the things that we need to do to be healthy and profitable.
What will Air Serbia’s fleet look like in the future?
We started the airline with a vision of exiting the broken and old fleet that we inherited. We are moving to a newer generation of Airbus A320neos. These will start entering our fleet in the second half of 2018. It will give us more flexibility for our network. Based on where we’re located, there are good opportunities for us, and having a new aircraft is a big part of that.
We serve 43 destinations in Europe and the Mediterranean, and that’s a good start for our network. We carried 2.6 million people last year, compared to 1.3 million before 2013. With many of the destinations that we fly today, we want to add frequencies. We don’t see a lot more opportunity for new destinations, because our network in Europe is set.
What do you see as the potential travel population for people flying from the U.S. to Serbia, especially because the U.S. does have cities around the country that have pockets of people of Serbian descent?
There’s a market there. But the competition across the Atlantic exists. We’re a boutique airline that doesn’t have 50 aircraft flying across the Atlantic. That’s not our goal. We’re here to provide an alternative. We know we’re punching above our weight against bigger carriers. We’re not afraid of competition because we genuinely believe that we have something good to offer.
We are known for our hospitality and service that is far and away better than anyone else. I know it’s a boast, but it’s fact. When you get the chance to experience it, you’ll know exactly what I’m talking about. In flying to the U.S., we will carve out our own niche with alternative routing outside of hubs like Frankfurt, London and Zurich. We know the U.S. market is competitive, but it still has space. A lot of people in the U.S. who have emigrated from or have roots in Serbia want to travel.
Part of the strategy is to develop Serbia as a tourist destination, and we want to bring more Americans here. I call our part of the world the new Europe, and there’s a lot of interest for travelers to visit. Because of its location, Belgrade is a natural hub and gateway to the Adriatic region. There’s a lot of interesting things for people to see and visit.
What do you hope Air Serbia will look like five years from now?
I hope that we can have eight continuous years of profit. We managed to do that in the first two years of our relaunch, which is an amazing achievement in this business. The most important thing is not to have an airline that isn’t making money. We need to keep our commercial mandate, because that’s important for our majority shareholder. But we’re also probably the best example, in terms of the economic agenda, for the economy in Serbia.
The country has a bunch of public companies, and we were the first one that went into this public-private partnership. And the fact that it’s been successful has given the government the space to look for similar deals as they divest from those companies. As long as I can ensure that we keep to our commercial mandate, keep growing, keep expanding, and keep employing Serbs, no one can really ask for any more than that.