AIR TRANSPORT MARKET CHALLENGES IN THE SOUTHEAST EUROPE Ružica Škurla Babić Ivan Mišetić Andrej Bajić Ph.D., Assistant Professor, University of Zagreb, Faculty of Transport and Traffic Sciences, Zagreb, Croatia, rskurla@fpz.hr Ph.D., Atlantic Grupa, Zagreb, Croatia, ivan.misetic@atlanticgrupa.com M.Sc., SCDM Germany GmbH, Frankfurt am Main, Germany, andrej.bajic@gmail.com Abstract: Air transport industry is one of the very important businesses worldwide. Te glo- bal recession in the years 2008/2009 and regional economic crisis in the countries of Southe- ast Europe have caused domestic demand weakening for air travel. At the same time, high increase of competition on the air transport market in the period 2008-2016 made positive infuence on fows of people, goods, capital, technology and ideas. State of the economy and air transport industry in the Southeast Europe countries has been analyzed in all-impor- tant segments including airlines, airports and air navigation services. Air transport regional market is still undeveloped with relatively weak connections within the region. Financial achievements for selected dominant airlines in the Southeast Europe region are showing ne- gative result and questionable sustainability of the business models in the future. Analysis of air transport infrastructure within the Southeast Europe region shows relatively low level of performance indicators compared to 136 countries worldwide in the year 2017. Implementa- tion of diferent restructuring measures and strategy improvements are necessary for the future surviving perspective of air transport Southeast Europe regional market. Keywords: Air transport, Southeast Europe, competition, restructuring, airlines, airports. JEL classifcation: F15. INTRODUCTION Airline industry,efciently and safely,is moving people and products on global level, thus connecting businesses and communities. Tanks to implementation of modern and efcient technologies, innovative changes in business models, air transport in the world is showing continuous growth and more signifcant trafc results. Liberalization, privatization and consolidation processes throu- ghout the commercial aviation world and especially in Europe, require strate- gic adjustment in response to market opportunities and challenges. Emerging economies in Southeast Europe with still undeveloped market and insufcient DOI: 10.7251/EMC1702330S Datum prijema rada: 29. septembar 2017. Datum prihvatanja rada: 1. decembar 2017. PREGLEDNI NAUČNI RAD / OVERVIEW SCIENTIFIC PAPER UDK: 656.7.027(4-12) Časopis za ekonomiju i tržišne komunikacije Godina VII  broj II str. 330-346