Wednesday, July 11, 2012

Winds of change

New government to deal with Jat’s old problems
The newly formed Serbian government is set to take office on July 23. Many are looking to see as to how the new government will deal with Jat Airways and its impending problems. So far, it is only certain that the Serbian carrier will get a new CEO. Vladimir Ognjenović’s Democratic Party is heading to the opposition benches and is unlikely to hold onto his post. The Serbian carrier has had a bad run of general managers recently as politics has taken centre stage over professionalism.

According to a coalition agreement between the parties that have formed the new government, all state owned companies will get a professional management without party affiliation and interference. However, it remains to be seen whether the government will deliver on its promise. Many old faces will be back in office. They include Milutin Mrkonjić as the Minister for Infrastructure. Mrkonjić has proposed for a new national carrier to be formed as a successor to Jat Airways with the help of local businessmen. Also returning to government will be Velimir Ilić, part of the 2004 - 2008 cabinet under whose order various Jat divisions such as Jat Tehnika and Jat Catering were divided from the carrier and set up as new companies, a move which has hurt the national airline.

The new coalition agreement outlines that Belgrade Nikola Tesla Airport will be one of several state owned companies which will not be privatised within the next four years. However, Jat is not on the list. The new management will have to deal with both a shortage of aircraft and an aged fleet, debt and a surplus of employees which counts over 1.200. The management will also have to deal with the 1998 order for eight Airbus A319s, which have never been delivered to the carrier. Ironically, many entering the new government were in power when the damaging Airbus order was made. Despite all the odds being stacked against it, Jat has had a relatively good year so far with record passenger numbers over the past few months and an increase in revenue, despite widespread competition.

9 comments:

  1. Does anyone have Jat's financial numbers? I'm curiuos to see if increased revenues translate to lower losses. As for Jat's prospects with the new government, I can bet all my frequent flier points with Jat that nothing is going to change (except maybe they switch in-flight tea brand from Lipton so something domestic like Macval). If only they somehow figure out a way to finance those Airbuses...

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  2. That setup of new companies in the way it was implemented was based on a study made by a consulting firm (PwC if I recall). Really makes sense to hold them accountable for some of those measures...

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  3. Condor has opened their office for Western Balkans in Belgrade.
    I guess they are getting ready to enter the charter market in the region.
    I guess this might have the greatest impact on Croatia Airlines since Croatia has the strongest tourist industry.

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  4. Yes, but Serbia has more pax out. Croatia is more a recipient.

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    1. Well if they base one or two aircraft in Belgrade they could easily operate flights such as BEG-AYT-SKP-AYT-BEG or any other combination.

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  5. I would like to remind everyone that this is an aviation blog. As a result, comments made here not relating to aviation have been removed.

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  6. 1st anonymous..... defintely curious what impact the improving loadfactors of JU has on their financial results

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  7. Dinkic is in charge of Economy and Finance ministries. I can't see him doing anything other than finding a way to kill of this ugly retarded beast of an airline...

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