Etihad to take 49% stake in Serbian airline

Etihad Airways has unveiled plans to acquire 49 per cent of JatAirways, the Serbian national airline. The Abu Dhabi-based carrier has also been given a five year management contract for the carrier.

These are two of the components of a partnership agreement signed by Etihad Airways and the Government of Serbia.

The agreement follows the launch of Etihad Airways flights between Abu Dhabi and Belgrade in June this year.

The partnership agreement was announced by James Hogan, President and Chief Executive Officer of Etihad Airways, and Aleksandar Vucic, Deputy Prime Minister of Serbia, at a media conference in Belgrade.

As per the agreement, Etihad Airways will make available a $40 million loan facility which will be converted into equity on  January 1, 2014, subject to regulatory approval. This will be matched by an equal funding injection by the government of Serbia.

Etihad Airways and the Government of Serbia will also each provide further funding through shareholder loans and other funding mechanisms of up to $60 million for the newly created Air Serbia.

The rebranding and renaming of JatAirways to Air Serbia is a significant moment in the history of the Serbian carrier which is more than 80 years old. Tail fins on Air Serbia aircraft will feature the Serbian coat of arms and the country's state colours on both sides.

Among other planned developments will be an enhanced flight network, codesharing with Etihad Airways and airberlin, adding another 12 destinations in Africa, Europe and the Middle East to Air Serbia’s current network of 33 cities.

The new destinations are Abu Dhabi (complementing Etihad Airways’ daily service), as well as Banja Luka, Beirut, Bucharest, Budapest, Cairo, Kiev, Ljubljana, Prague, Sofia, Varna, and Warsaw.

.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 – awaiting regulatory approval confirmation).

 

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