Etihad to partially withdraw from and retain a stake in Air Serbia?

Etihad Airways is expected to announce within days that it will retain its 49% minority stake in Air Serbia, however, it will not renew its Management Services Agreement with the airline, which expires on January 1, 2019, EX-YU Aviation News reported on Monday, June 11.

As the portal writes, the repercussions of the termination are still unknown, however, it is likely to include the departure of Etihad-appointed staff from key management roles, which will coincide with the transfer of the airline's revenue management and network planning departments from Abu Dhabi back to Belgrade next January.

A number of high-ranking positions at Air Serbia are currently held by Etihad employees, including the post of Chief Executive Officer, Chief Financial Officer and Chief Operations Officer.

The Transaction Framework Agreement between Etihad and the Serbian government states, "Before expiry of the term of the Management Services Agreement, Etihad will seek to identify competent Serbian nationals as candidates for the positions of Chief Executive Officer and Chief Financial Officer within Air Serbia".

The move, the portal writes, will mark the partial withdrawal of Etihad from Air Serbia, however, the latter is expected to remain part of the Etihad Airways Partners alliance, frequent flyer program and retain its codeshare partnerships.

Etihad signed a dozen agreements with the Serbian government upon its partial takeover of Jat Airways almost five years ago.

The Management Services Agreement, which is expected to be terminated, covers a number of areas, including that Air Serbia should receive discounts at its home base in Belgrade and that Etihad shall act as a training services provider.

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