Thursday, September 6, 2012

Confusion over AirAsia takeover claims

Conflicting claims over AirAsia’s “Jat takeover”
There have been contradictory statements over the potential takeover of the Serbian national carrier, Jat Airways, by the low cost Malaysian based AirAsia. Yesterday morning, AirAsia CEO, Tony Fernandes, said claims made that the airline was looking to buy Jat are “not true”. However, only an hour later, Serbia’s Minister for Transport, Milutin Mrkonjić, confirmed the government is in talks with AirAsia to buy Jat. Mrkonjić refused to reveal details, but said he expected positive results from the ongoing negotiations, adding that talks are to be held throughout the week.

Mrkonjić seemed surprised that the potential AirAsia takeover has been unearthed by the media, stating, “Some things should not be revealed, particularly when it comes to serious companies and serious businesses”. However, a senior AirAsia official was singing a different tune. He explained to the Reuters news agency, “There was an invitation by Belgrade, and we went just to explore market opportunities there. However, we have no plans to fly to Belgrade up to 2014. In short, AirAsia is not looking to buy any airline".

Late on Tuesday night the distinguished Serbian daily “Večernje novosti” broke the news that AirAsia was looking to establish an operational base in Belgrade with Jat to carry passengers from European destinations to the Serbian capital where they would transit onwards to Kula Lumpur with AirAsia X, the airline’s long haul subsidiary. AirAsia X recently suspended flights to several European destinations due to high costs. AirAsia itself is in the process of taking over the Indonesian no frills airline Batavia Air.


  1. I am not too familiar with the specifics related to Jat Airways (am from Croatia), but I'd like to ask our friends here some questions...

    Things do not add up well here. Would it be possible that Serbia's Minister for Transport is using the occasion of Air Asia's "exploratory visit" to portray these talks in a way that show how government is actively selling Jat ? If so, that's very manipulative. But what for ? To buy time ? For what ? Is there some kind of new loan that Jat is expecting ? Perhaps money needed to buy new aircraft which is an important part of Jat's restructuring policy... ? Yes OR No ?

    What is going on here and what are Jat's other options if it doesn't sell for another 1 year or 2 ?


    1. E....Pero...(the way we would say it in Vojvodina)

      Very good question!

      (Which most of the civilized people would consider, but Serbian politics are at their rudiments and anytihng, even for two weeks holiday in KL, could be put in press as a "real" news)

    2. Milutin Mrkonjic is a very unpopular minister. During the 90s he used to open imaginary bridges which didn’t exist and is known for constantly lying. Him and his gang were toppled in the October 5 revolution. He came back in 2008 and has since been shooting off his mouth. Of course he is an alcoholic and spends most of his time at the kafana and other than Jat his main topic of concern is his relationship with folk star Ana Bekuta who is 20 years younger than him. This exploratory visit was just that and the two people that went to Jat during the week are probably visiting other airlines as well. The problem is that the government has apsolutely no strategy for Jat. There biggest wish would probably be to close it down but they can’t because despite all of its problems it’s still one of the biggest companies in Serbia and has around 2000 employees.

    3. - There are worked out strategies for the Gov. for newco/privatization of Jat.

      - The main obstacle in Serbia (in my opinion) is the labor law that in the end protects "job positions" for completely redundant civil servants and public enterprise employees - namely, out of those 2000 working for Jat, Su-Port and Catering let's say that around 1500 should be fired and 200 new employed, but that is not possible because of the large lay off compensations would have to be paid to them, and that money does not exist in the budget.

      - If that kind of cost reduction would somehow be possible, Jat would be able to survive.

      - Alternative approach is to buy new aircraft and try to "find work" for those being redundant, but that is what politicians are prone to do - just patch problems a bit, for a short term.

      - New aircraft are also badly needed, but that doesn't eliminate a need for massive layoffs.

      - In my opinion, the Gov. should amend the labor law, perform a newco approach without strategic partner, and then potentially look for a partner, because airline in that state would be far more attractive.

  2. Seems like NO ONE wants to take any responsibility for JAT. They are just trying to find someone to inject some money into the airline and when things go wrong, the government and Jat staff and executives will be able to wash their hands and put the blame on someone else.

  3. invest money in a company that has a fleet thats older than most of the company's that are willing to buy it LOL. But to get it and dump the rubbish WWII planes and use the Balkan market is a good step, but with JAT & there fleet you dont have anything :)



    Australski gubitas Qantas je dogovorio 10-godišnju alijansu sa Emiratesom, u nadi da ce na taj nacin prekinuti gubitke. Cijela ideja je win-win za obije strane. Prica krece od ozujka 2013. i imat ce slijedece odlike:

    1. Qantas ce zamjeniti Singapore sa Dubaiem kao svojim hubom za Europske letove. Sto znaci da ce Qantas ne samo napraviti stop u Dubaiu umjesto Singaporea, nego na taj nacin povecati broj Australskih destinacija za Emirates (ovo je strateski vrlo vazno za dominaciju medju MEB3), ali i koristiti konekcije za europske destinacije od Emiratesa. Nemojmo se zavaravati, ovo je direktan odgovor kupovine 10% vlasnistva Etihada u Virgin Australija o cemu sam pisao prije neki dan. I Qatar je otvorio liniju za Perth i najavio suradnju sa partnerom iz Australije, pa ovaj potez jos manje cudi. Qantas ce se na ovaj nacin vise koncentrirati na profitabilne domace i internacionalne linije, a u koje linije prema Europi svakako ne spadaju.

    2. Obije kompanije ce imati jedinstvenu cjenovnu politiku, prodaju i kompatibilan red letenja.

    3. Qantas prekida sve veze sa British Airwaysom, naravno od ozujka 2013. tj. momenta ulaska u novu alijansu. Ovaj sporazum je mnogo vise od code-share ugovora.

    4. Qantas i Emirates ce dijeliti postojece i investirati u nove business class i first class loze, te imati jedinstven frequent flyer program.

    5. Qantas ukida liniju za Frankfurt kao dio ugovorne obveze.

    Ovo je u prvom redu velik udarac oneworldu, koji nakon problema sa JAL-om i Americanom (oba nastoji rjesiti investicijama u udjele tih kompanija), te bankrota Mexicane i Maleva, gubi partnera za ekstremno vazno trziste Oceanije. Kao da sam predvidio ovako nesto prije neki dan, kada sam pisao o novoj alijansi na CAF-u!

  5. I like the part about "serious companies and serious businesses". If only Serbia had a serious minister!

    The blame for the situation with JAT falls directly on the politicians that treat the airline like political game rather than a "serious company". JAT needs true professionals leading it and not political appointees.

  6. Suppliers take note - JAT: Goodbye and F*ck Off.

  7. But when zagreb gets done up dubai will colapse.

    1. Aha...mmm NOT. Zagreb will get "done up" sooner or later. And it's going to be great and will further help this

      And that's only a start. sorry ...


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