Thursday, May 3, 2012

AEA Suggests Greater Cooperation Necessary for Survival of Flag Carriers in Former Yugoslavia

The liberalization and consolidation of the global aviation sector that has occurred over the past decade, especially in Europe, has often come at the expense of the symbolic benefits flag carriers provide to a nation's sense of identity. EU Member States have begun making this sacrifice by privatizing, and in some cases shuttering, their national airlines in their pursuit of an EU single market. Though these measures may be most painful for nations that have only recently established an independent identity, such as the States comprising the former Yugoslavia, some form of market integration is financially necessary according to Ulrich Schulte-Strathaus, head of the Association of European Airlines (AEA). Schulte-Strathaus recommends that Slovenia's Adria Airways, Croatia Airways, Montenegro Airlines, and Serbia's JAT Airways look for ways to cooperate to reduce costs and fend off competition from low-cost carriers. See Struggling Airlines of Former Yugoslavia Urged to Boost Cooperation, Associated Press, May 2, 2012 (available here). Though Slovenia is the only one of the four States presently in the EU, no State in the region is immune from the market dynamics driving consolidation in the aviation sector. Representatives of the four carriers appear aware of this reality as they will meet later this month to discuss the potential for fleet sharing, exchanging aircraft, and joint maintenance facilities, among other ideas.

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