Jat Airways At The End Of Runway?

Serbian government is planning to restructure and rebrand the national air-carrier Jat Airways by the end of the year.

Serbian Finance Minister, Mladjan Dinkic, says that the current situation in the company is unsustainable. He sees declaring bankruptcy of Jat Airways as a necessity.

Serbian Transport Minister, Milutin Mrkonjic, says the government has already decided to form a separate company that would carry Jat Airways debt load in order to allow a new national air carrier to start afresh.

Serbian Finance Minister is to present a comprehensive plan for Jat Airways at one of the forthcoming government sessions. The government has refused a request from Jat Airways for further 35 million euros worth of subsidies.

According to Minister Dinkic, there are two possible scenarios for resolving the issue. If Serbia decides to form a new air carrier alone, it will have to provide the state guarantees, worth 140 million dollars in order to fulfill the existing obligation to lease 12 Airbus planes.

However, minister Dinkic says the preferable option would be a partnership with the United Arab Emirates state-run airline Etihad. He says that the principle objective of the cooperation would be construction of a cargo terminal at “Nikola Tesla” Belgrade airport, which would serve as a springboard for Serbian food export.

In 2011, the estimated loses of Jat Airways were 27 million euros. In 2010, Serbian government failed to sell the company to both Turkish Airways and Baltic Aviation Systems, while two years prior an auction collapsed due to lack of interest.

Serbian media recently reported Belgrade was negotiating to sell the airline to Air Asia. However, the Malaysian company denied its interest in the purchase.