Air Serbia takes off - Etihad promises exciting future for newly-formed company

With today’s signing of the contract between the Serbian Government and the Etihad company, Jugoslovenski aerotransport became a part of the history officially. Formerly a pride of Yugoslavia, founded in 1947, changed its name in Jat Airways and ten years later the company is starting its operations as Air Serbia.

Today, Etihad has signed a five-year contract on management of Serbian, national airline thus acquiring 49% stake while the state will remain a majority owner of national airline, Air Serbia.

At today’s press conference, journalists did not hear many details apart from the fact that Etihad, owing a 49%-stake in the new company will appoint its management, that it will pour EUR 40 mil, that there will be headcount downsizing in administration departments while new staff, pilots and cabin crew, will be hired.

Dane Kondic, an Australian with Serbian origin, with twenty years of experience in air industry, will head the company.

When it comes to fleet, the first man of Etihad, James Hogan, announced firstly procurement of 10 new airbus A319 planes but also the plan to replace them as well in the next 24-36 months with even more modern Boeing 737.

James Hogan has said today that Abu Dhabi-based airline decided Serbia should get a new national airline and that Belgrade should become the meeting point of the Balkans.

Apart from that he announced an exciting future fir the national Serbian airline.

(Photo: Aleksandar Parezanović)

The plan is to make Air Serbia profitable in 24 months and, as it was said at the conference, this will be achieved in the first year as well.

Aleksandar Vucic, the First Deputy Prime Minister of Serbian government, who, on behalf of Serbia signed the contract said that August 1, 2013 is an important date for Serbia because Serbian airplanes will be placed at the take off runway while the contract with Etihad will enable Serbia technological and business environment where 30 million passengers will get reliable airline to important destinations in Europe and worldwide.

At the press conference, it has been said that Etihad will invest EUR 40 mil while all financial construction details with respect to new airline are explained in the official announcement:

- The contract implies that Etihad Airways will provide a credit facility of USD 40 mil to Serbian national airline which will as of January 1, 2014, on the basis of appropriate official approvals, become the basic company`s capital. The Government of Serbia will follow this stake with its "injection" of capital in the same amount. Etihad and Government will also provide a "shareholder loans and other funding mechanisms, to the tune of USD 60 mil, thus covering needs for turn over capital and supporting traffic network development of newly-set up Air Serbia company."

The contract on strategic partnership will also enable options for Air Serbia fleet and cabin crew training who will have a prestigious aircraft academy, Etihad Airways, in Abu Dhabi at their disposal.

New destinations include Abu Dhabi as well as flights to BanjaLuka, Beirut, Budapest, Bucharest, Cairo, Kiev, Ljubljana, Prague, Sofia, Varna and Warsaw.

Among the first new destinations Air Serbia will introduce are four Belgrade- Abu Dhabi weekly flights and these flights, with the existing Etihad Airways flights at the same route will become daily flights as soon as new fleet comprising 10 airbus A319 planes could support forecast passengers and frequency increase.

The Jat Airways current fleet comprising 10 Boeing 737-300 planes will be withdrawn from the regular traffic and replaced with rented planes.

New wings of Serbia will take off in late 2013.

M.K.