Serbia's loss-making JAT Airways found a savior in Etihad Airways. The Abu Dhabi-based airline announced that it would be acquiring a 49% stake in JAT. The USD 40 million loan facility that it would provide to Serbia's official carrier would be turned into equity come January 1, 2014. The Serbian government would equally match the capital injection from Etihad. When the transaction is finalized, JAT will be called Air Serbia. Both Etihad and the Serbian governments would be providing an additional USD 60 million as working capital for the latter's airline.
In a joint press statement, Serbian Deputy Prime Minister Aleksandar Vucic said that the "partnership will provide passengers with an extensive route network and smooth flight connections." Serbia is currently in the process of containing its budget deficit, and offloading state enterprises that are not making money is one of its moves. It also intends to offload Galenika, a pharmaceutical company, and Zelezara Smederevo, a steel mill.
Join the Conversation