Etihad to invest in Jat’s fleet in 2013
Etihad Airways plans to invest fifty million dollars into the Serbian national carrier this year in an attempt to turn the company into a profitable business. As the “Večernje Novosti” daily writes, the biggest investment will be made in the renewal of Jat’s fleet. The airline’s line up of Boeing 737-300s, which are over 25 years old, will be retired from the start of the 2013/14 winter season which begins on October 27. Instead, Etihad plans for Jat to use ten Airbus A319s this winter. The Serbian national carrier will maintain its fleet of ATR turboprops for the time being, though these will likely be replaced with five Bombardier aircraft next year.
Etihad Airways has proposed for the government to take over all of Jat’s debt and provide redundancy packages for 250 to 300 employees which would leave the airline. Both the Serbian government and Etihad would share Jat’s profits and losses. Furthermore, the national carrier of the United Arab Emirates plans for Jat to operate with a small profit in 2014, while notable gains are projected for 2015. The national carrier of the United Arab Emirates has sent in its offer for a 49% stake in Jat last week and expects the Serbian government to respond within thirty days. Etihad is tipped to officially announce its plans for Jat next month. Speaking at a press conference last week, Serbia’s Minister for Finance and Trade, Mladjan Dinkić, said, “This will no longer be the same airline. It will be a new modern company, with a new fleet and a far superior product for passengers”.
The Serbian government will have the opportunity to decide on the fate of the retired Boeing jets. Previously, the government floated the idea to set up a low cost airline with Jat’s old aircraft. In addition, Etihad hopes it will resolve Jat’s 1998 order for eight Airbus aircraft by ordering new ones for the airline. Speaking to the “Večernje Novosti” newspaper, Etihad CEO James Hogan said the Emirati carrier will select Jat’s new management. “Serbia, as the majority share holder will name four members of the Supervisory Board while Etihad will name three”.