The airport takeoff

As is for the healthy person the worst development option untapped talent, it is also the worst economic development policy the economic system that neglects key resources. In this post, I am not writing about banking, but I still remain in the service sector – Airports of Republika Srpska Joint-stock company Banja Luka (ARS) is an airline service provider.

We have three time series based on the data from the unaudited financial statements, and the last three years are the forecast  (2018-2020.). The chart is complex, but I will not burden you with the figures. I am going to identify the main trends and will share with you a few key ratios and interesting figures. The business plan developed by the ARS for the period 2018-2020 will be also analyzed.

The ARS business is unstable, as can be seen from the oscillation of the income growth rate – revenue stability is a precondition for the development of any business activity.  Six years in a row the ARS was running losses (2007-2012), and the loss was realized in 2017 also. The plan/forecast of the movement of key economic variables shows primarily that the indirect majority owner, the Government of Republika of Srpska (the largest shareholders of the ARS are government funds, the Share Fund, and the PREF), decided that “the airport has to takeoff”. The number of passengers with ARS in 2017 is almost six times higher (2017/2009), and in the three-year period (2018-2020), two-digit growth rates for the number of ARS transported passengers are expected. In 2017, the number of passengers carried was 20,189, and the forecast for 2020 is 180,648, which should deliver ROE (net profit/equity) of 2,7% (calculated by D.J.).

Although the number of ARS passengers is significantly below the Tuzla airport (approximately 600,000 passengers), the expected exponential growth in the number of passengers with ARS should reduce this difference. The achievement of a business goal will depend on the efficiency of the business model based on; the development of airport's infrastructure, the introduction of cheap lines (Low-Cost Carrier should begin with flights in 11/2018) while retaining the existing ones and developing new lines, especially to the centers where our diaspora live.

For people from north and north-west Bosnia cost of travel from  Banjaluka is far lower than travel costs from, for example, Tuzla, for the simple reason that ARS is closer to them (Banja Luka Airport is located in Laktasi, in north Bosnia ).

And the longest route begins with the first step, and every flight begins with takeoff.