Friday, February 19, 2010

Airbus ready to talk

A 12 year story
The vice president of Airbus’ Eastern European sales branch, Andreas Kramer, has said that the European aircraft manufacturer is ready to finally settle its agreement with Jat Airways which ordered 8 Airbus A319s in 1998. The aircraft, which never arrived, were supposed to be delivered to the airline between 2000 and 2005, with the final payment for the aircraft due in 2017. The order is worth 500 million Dollars while Jat has so far deposited 23.5 million. The airline says that the agreement was extremely damaging to the carrier and was more of a political stunt by the then Government, with the President of Yugoslavia signing the order in France in 1998.

Speaking to the media Kramer said, “It is our wish to meet with Jat’s management and discuss possible changes and modifications to the order so the aircraft could finally be delivered. Many parts of the purchasing agreement have to be changed, including the price which is no longer adequate to that of 12 years ago. We realise that Jat does not need this amount of aircraft and does not have the means to finance them. Thus, we have prepared a new solution to the problem”. Jat’s management met with Airbus last month. At that meting Airbus proposed 2 solutions to the problem. One was to slash the number of ordered aircraft from 8 to 2 or 4. However, they would immediately be sold to another airline and Jat would lease the aircraft from that airline, which is the only way Jat could afford to operate the aircraft. The other proposal Airbus brought to the table was for the airline to purchase 1 Airbus A319CJ (corporate jet), which Jat rejected due to its high costs. Jat’s proposal for the carrier to receive 1 ATR72 in exchange for the 23.5 million Dollar deposit was overruled by Airbus.

Jat said that having Airbus aircraft in its fleet would cproduce extra costs as the airline would have to train its pilots and cabin crew for the aircraft while Jat Tehnika does not possess the necessary certificates for the maintenance of Airbuses.


  1. You could at least get the spelling right:
    The name is:

    There is no new news here. Airbus' position hasn't changed. They're still dreaming of Airbus flying in Jat colours, which is unlikely to ever happen, and if they force it they will bankrupt Jat and will have to shoulder the responsibility for that. It will be a PR nightmare for them.

    Imagine the headlines:
    "Airbus force Jat bankruptcy due to old contract signed by politicians either dead or in the Hague"
    Not pretty.

  2. @Anonymous
    LOL good one

    I think the best solution is to give the orders to someone who really needs them...
    I am sure that after 12 years JU's order would be first on the list!

    Let's just hope that those 737-700's do arrive, but since there is no news on that I am starting to doubt it...

  3. Ofcourse Airbus should talk, its just intresting how could they have closed the deal with JAT at a time when the Federal Republic of Yugoslavia was under sanctions! Its surprising how its taken a decade to decide the fate of an order of 8 aircraft. Will be intresting to see what will happen with the orders.

    @ anonymous

    JAT is apparently selling their office in New Belgrade to be able to help finance for the leasing of newer aircraft. The intresting thing on the JAT website was they mentioned the leasing of 2 B733 aircraft and not B737. JAT will move its office from Bulevar Mihaila Pupina in New Belgrade to Nikola Tesla International Airport.

  4. @ Anonymous 1

    I doubt that any media outlet would pick-up a story about Jat bankruptcy other than media in Serbia and the region - I highly doubt that Reuters or BBC will be all over that story. I doubt even more that anybody would print such a headline because it isn't the contract that would have been the reason for the bankruptcy...they did that to themselves with years of poor management.


    Airbus saw this as the $$$ opportunity of a lifetime - the ability to rake in an enormous amount for a small amount of planes. The (then) FRY needed new planes and to buy some 'European' credibility after being shut out.

    The whole thing (luckily for JAT) just didn't pan out... but what are we left with? Airbus (with its lowest order year in some time) is looking to fill its books again, JAT is still operating on the edge of the abyss with one of the oldest fleets in the world.

    JAT would also love to get their hands on their money sitting in Airbus' account - it's not earning any interest, nor can they use it to recapitalise the airline.

    There will be no resolution to this one as neither has moved from its previous position.

  6. I find it amazing that the deal which would allow all involved to save some face didn't materialize: 23M$ for ATRs! This is a win-win scenario for everybody and I don't see shy Airbus is soooo against it. I mean, I can think of few things things, but nothing major...

  7. Sorry - let me rephrase the headline:


    While not entirely correct, this never stopped the media before. And in case you doubt that it would get published, I can assure for 100% certainty that it would. Certain well known media in the west are already aware of this and ready to pounce if Jat do disappear.

    But of course Jat going bankrupt will be due to many other reasons, with the Airbus contract being a small issue compared with the dozens of other huge errors made...but the media won't care! The headline at the top is sexy and will grab headlines. Trust me.

  8. ^
    Or even better:


    Which is basically the truth. That contract was signed with blood. Scary.

  9. What "blood money" are you talking about? Please explain....

  10. Not 'blood money' as such, but signed by people (the then gov't of YU) who had their hands covered in blood, for a variety of reasons.

  11. @ frequentflyer

    IR could bring airbus more money than what JAT can. Why dont they do a contract with them? after all theyre in need of a fleet renewal and would be in a possition to buy more aircraft than what JAT could. That, and they already have Airbus aircraft in their fleet.


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