Serbia and Etihad Airways sign strategic partnership to secure future of Jat Airways
Serbia's Government and Etihad Airways signed (01-Aug-2013) a strategic partnership to secure the future of Jat Airways which will be renamed and rebranded as Air Serbia. The partnership will see Etihad Airways acquire 49% of the airline and be awarded a five-year management contract for the new airline. Etihad Airways and Serbia will both inject USD40 million into the airline while both parties will each provide up to USD60 million in further funding. Etihad's EUR40 million loan facility will be converted into equity on 01-Jan-2014. The partnership, signed by Serbia's Deputy Prime Minister Aleksandar Vučić and Etihad president and CEO James Hogan comes following Etihad's launch of Abu Dhabi-Belgrade service in Jun-2013 and will significantly enhance trade and investment relations between the UAE and Serbia as well as boosting the tourism sector in both countries. The agreement will include the following developments:
- Enhanced flight network with Air Serbia to codeshare with Etihad Airways and airberlin, adding to Air Serbia's existing network of 33 destinations with 12 new destinations including Abu Dhabi, Banja Luka, Beirut, Bucharest, Budapest, Cairo, Kiev, Ljubljana, Prague, Sofia, Varna, and Warsaw;
- Jat Airways' existing fleet of 10 Boeing 737-300 aircraft will be retired from scheduled operations and replaced by leased A319 equipment. In the longer term Air Serbia will order 10 new narrowbody aircraft;
- Air Serbia will be able to access Etihad Airways’ training academy and facilities in Abu Dhabi for flight deck crew and flight attendants;
- Appointment of Dane Kondic as CEO.
Air Serbia will become Etihad Airways’ sixth equity partner following investments in airberlin (29.21 per cent), Air Seychelles (40 per cent), Virgin Australia (10.5 per cent), Aer Lingus (2.99 per cent) and most recently Jet Airways (24 per cent – subject to regulatory approval). [more - original PR] [more - original PR II] [more - original PR III]
Etihad Airways: “We are delighted to welcome Air Serbia to our equity alliance and look forward to working constructively with them and their stakeholders to build a sustainable, competitive, and profitable airline. In addition to creating scale, our renowned business model provides a unique common platform to drive synergies and cost savings which will be of considerable benefit to Air Serbia as the new airline evolves. We will have tough decisions to make but the financial investment by Etihad Airways and the Government of Serbia, together with the positive impact of our joint management expertise and experience, will help ensure this airline, with its proud history, now has an even brighter future," James Hogan, president and CEO. Source: Company statement, 01-Aug-2013.
Serbian Government: “Etihad Airways’ reputation, financial strength and stability will be of significant benefit to Air Serbia and we are delighted to launch this strategic partnership. Air travellers to and from Serbia will soon benefit from an incredible range of new products and services. The partnership will provide passengers with an extensive route network and smooth flight connections. It will also consolidate and enhance both airlines' market competitiveness as the relationship deepens over the coming months," Aleksandar Vučić, Deputy Prime Minister. Source: Government statement, 01-Aug-2013.