Saturday, July 27, 2013

Etihad confirms Jat takeover date

Etihad - Jat deal on August 1

The national carrier of the United Arab Emirates, Etihad Airways, has confirmed it will sign a strategic partnership agreement with the Serbian government for the takeover of Jat Airways on Thursday, August 1. The signing ceremony will be attended by Etihad Airways CEO, James Hogan, while on behalf of Serbia the agreement will be signed by the country’s Deputy Prime Minister Aleksandar Vučić. The signing will be proceeded by a press conference at the Hyatt Regency Hotel in the Serbian capital where Etihad is set to reveal all the details of the takeover agreement as well as its plans for Jat.

As the takeover date draws near, news has been leaking in relation to Etihad’s intentions for Jat. It includes plans to rebrand and rename the airline, the immediate lease of ten Airbus A319s and the launch of at least ten new destinations this winter. Furthermore, Danny Kondić, an Australian of Serbian origin, who has previously worked for Qantas, British Airways and Malaysia Airlines, has been tipped as Etihad’s choice for CEO. In addition, the Emirati carrier plans to invest fifty million dollars into Jat this year in an attempt to turn the company into a profitable business.

Etihad Airways has proposed for the Serbian 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. In addition, Etihad hopes it will resolve Jat’s 1998 order for Airbus aircraft by renegotiating the deal and providing financial backing for the delivery of the aircraft.

50 comments:

  1. Ex-Yu, just a small correction. Aleksandar Vucic is no longer the minister of defence. He resigned yesterday.

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    1. Yes, I corrected it just as you wrote your comment :) Thank you.

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    2. No problem, thanks for the updates!

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    3. He offered a resign, but he is still minister of defence.

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    4. Here is a source from Politika:

      'Александар Вучић више неће бити министар одбране, а Милутин Мркоњић неће остати на месту министра саобраћаја.'

      The name of the new minister was already made public. The first time he announced he would be leaving the ministerial place was announced to the army personnel in May. He is doing it because he wants to deal only with corruption.

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  2. 01aug we will party. Swiss nstional holiday and the etihad take over details....yeaaahh :-)

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  3. This comment has been removed by a blog administrator.

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  4. Serbia signed two business deals worth $240 million while the upcoming deals are estimated at around $1,5 billion. These are mostly in the construction sector.
    Construction material exports from Serbia to Iraq amounted to $300,000,000 last year.

    I wonder if all these business links might result in the eventual re-instatement of the Belgrade-Baghdad route?

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    1. I doubt it...

      You can fly via Istanbul, Doha and Dubai to Baghdad.

      Sarajevo´s Energoinvest signed a contract in Algier in worth of 150.000.000 € and there are still no direct flights.

      Also, Bosnian companies have contracts (1, 5 billion €) in Lybia - an there are still no direct flight to Tripolis (few years ago, till the Arab Spring, there was one weekly flight from Sarajevo to Tripolis).

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    2. Yes but Serbia also has a great deal of arms exports and other business links with Iraq. It's more than just one company doing business there.
      I am sure they could get some cargo contracts too.

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    3. People, there will certainly be no Belgrade-Bagdad direct flights, since those passangers can confortably fly via Abu Dhabi with Etihad. Not a think to regret - that way there is a daily comfortable connection and if JAT would fly to Bagdad, that would practically mean that they need to put one aircraft daily just for that connection. Times have changed: to travel with one stop today is something totally different than back 25 years ago. Back than it would have ment that passangers have to take and recheck their baggage at the transit point and so on..

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    4. Actually no one would fly via the Persian Gulf when there are valid connections via Istanbul with Turkish Airlines. So for Etihad it makes sense to establish this route if there are enough passengers.

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  5. Hopefully they will launch some INI flights

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  6. Na flightradaru sad video da se wizz airov avion vraca za Beg, trenutno prelece Osijek i spusta se prema Beg,zna li netko sta se desava?

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    1. Да, и ја сам управо видео. Лет је ишао за Меминген.
      Предпостављам да је квар на ваздухоплову или је неком позлило.

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    2. Ali zasto Blic nije vec digao uzbunu?! Stvarno su jadne te novine i mislim da ima istne u tome da hejtuju JAT i Etihad zbog Lufthanse (vlasnik Blica je nemacki Springer).

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    3. They reported birdstrike, and returned back to BEG.

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    4. No way there was a birdstrike. They were well into Croatia which means that they were well over the level at which there are birds.

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  7. i hope this will work out better then the AirBerlin deal

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  8. Can't wait for Croatian comments to start...

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  9. No Croatian comments, I'm glad that JAT got out of it's problems... BUT... You have to realize one thing - the battle is just starting, you probably assume that ETIHAD will give you billions and billions of dolars, no they won't... Not to mention that you'll, in a few years, when JAT stands on it's feet will probably be close to EU membership, different rules apply...

    Other problem is that you have no world famous tourism, like Croatia does (Istra, Dubrovnik, islands) so I don't fear Croatia Airlines will have a lot less pax then JAT with a lot bigger fleet...

    I just hope that we'll manage to co-operate, and that everything will work out fine for whole region!

    Regards from Zagreb!

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    1. Instead of assuming this or that, it would be best just for wait for the 1st august. Then we can discuss the plans. Your remark on the tourism has a point, except for the fact that Croatia airlines never succed to make profit on that card. It was rather an important subject for foreign charter airliners, such as TUI, Condor and so on. Regarding the non-charters, I really hope that JAT will offer more flights to Split, Pula and Dubrovnik, bringing not only the rising number of Serbian tourists, but also transfer passangers from Russia, Ukraina, Middle east and so on. But as I said. There is no need for speculation, lets wait and see.

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    2. True about the tourism, that's why I think they are doing a really good job staying out of Croatia for now and, at the same time, avoiding seasonality of their demand. They are, actually, redefining what we consider our "region", which was basically always ex-YU countries, with possible addition of Albania.

      They are rather focusing on Bulgaria, Ukraine, Bosnia, Macedonia and Montenegro, which is a really smart thing to do. BEG is for these people more or less on the way to Western Europe and there is no fierce competition with local airlines, unlike in Croatia. Whatever one might think of OU, there is nothing close to that in any form in all these other countries (except Ukraine, but that's a huge country anyway).

      Unfortunately for both OU and JP, they missed their opportunity to become a sort of regional airline in the past. I would say JP never really had a chance, while OU will most certainly not go that way with their cost-saving measures now. Whether JU pulls that off, that's a million dollar question. They will have their chance. Good thing they're not fighting OU in Croatia (for now), they couldn't win anyway.

      In the future, however, different things are possible, and I would say going into battle over Croatian pax and inbound tourists would be the most stupid thing to do, both for JU and OU.

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    3. First of Serbia won;'t close to EU for a while, at least a decade, new EU enlargement rules are now in place, so for any new member will need to implement EU chapters and than only after positive 6 month progress report on chapter implementation does the chapter get closed and you can open a new one.

      So entire process can take a decade or even two, also each EU member will need to hold a referendum on new members before parliamentary ratification can proceed, only after this process can a country join the EU.

      Its a new rule put in place after Croatian EU accession, Iceland, Switzerland and Norway are exempt from this rule as they're already integrated in to the EU, in all but name.

      That being said, is there a Belgrade Airport live Cam? a link would be nice if there's one.

      much obliged.

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    4. @5:11

      Thanks on the insight on EU enlargement, but none of the comments above either addresses the issue or is in any way related to it. So, it's a bit redundant, I would say.

      Also, it's kind of wrong, as there is no referendum rule on new member accession - at least not on the EU level. Each country can choose its own process of ratification of multilateral international treaty (i.e. Ireland!), and as defining these rules at EU level would be considered by breach of sovereignty by many member states, I don't see it coming. Of course, each member state can decide on its own what kind of rules and procedures they want to implement, so referendums here and there are not out of the question.

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  10. Exactly like that, let's wait and see...and in one year time, we can analyze what this takeover has brought forward... I believe that by then results under Etihad management will surprise many. Solet's be patient a bit.

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  11. Želim puno sreće novoj kompaniji, bivšem Jat-u, i da napokon stane na noge kao što to zaslužuje! Puno pozdrava iz Hrvatske!

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    1. Meni bi nesto gust bio da se vrati ono jaje :)

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    2. Svima bi bio, ili ono sto je uradio onaj hrvatski dizajner pre par godina, sto je pobedilo na konkursu za rebranding JAT-a ali nikada nije sprovedeno u delo.

      To je bio nekakav "omaz" jajetu, doduse pomalo me podsecao na CSA logo.

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  12. Serbs seem the only people on the planet to hail this EU-nonsense...
    For people that are already in EU that behaviour seems very strange.
    You clearly see that most peole in Serbia have never been outside their country.
    The EU profits only some countries (esp.Germany) by ruining others completely.
    Ever heard of Greece and Cyprus?

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    1. They find it strange, you say - is that before or after they contemplate their own fate as EU members? Getting out of the EU is quite simple, but I don't see anybody doing it. That's weird, considering how strange they find behavior of the Serbian people.

      AFAIK, Greece and Cyprus (and some other countries) are in trouble because they took up loans they couldn't repay, but feel free to prove me wrong. Nobody forced them to do that (or to host the Olympics, for that matter). Like nobody forced the Greeks to lie in order to get into the Eurozone against the Maastricht criteria, which are there for a reason.

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    2. Well when most countries entered the EU?
      End of the Seventies,begin of the Eighties!
      I was not even born then. Nobody asked us.
      It was a decision made by the politicians!
      Begin of the nineties there was a real EU-Euphoria,
      because communism was dead and the whole East wanted to join.
      Now Romanians and Bulgarians work in Germany in slave-like conditions!
      Yesterday there was news that some of them died in a house fire.They worked in shipbuilding.Their employer let them live in ruined houses,
      under conditions that are regarded as a disaster.
      But it is legal...also they get paid 5 Euro per hour for hard work.
      A normal German worker gets 15 Euro,which is not much for Germany.
      Croatia and Serbia in EU means that a lot of people will end up as slave-workers in Western Europe!
      Work and employment does not come to Croatia and Serbia.
      People will leave but problems will stay in their countries.

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    3. Actually, no. No country acceded at the end of 70s, while Greece did join in the first half of 80s. That's the only country to join the EU in that timeframe.

      The "biggest" enlargement was for sure the one with 10 countries, mainly Easter European, joining in 2004.

      But, still, any country that has any grievances with the EU can freely decide not to be a member state anymore. Their citizens as well - if there were serious complaints in the electorate, you would for sure be able to find a major political party to put that on its agenda - like the Tories did in the UK just recently.

      I guess that the fact that nobody is leaving the EU means that pros are greater than cons. Re Romanians and Bulgarians, they are free to settle anywhere in the EU, including their own countries, and nobody is forcing them to work in any conditions anywhere. It's their choice to do so, and EU at least gives you that choice. Not having it at all doesn't make it any better in my book.

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  13. "...most peole in Serbia have never been outside their country."?

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    1. That´s a sad fact. But still it is a fact. Otherwise that would be convienced that Russians live better than people in Norway, Germany or France.

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    2. And today's topic was...? Etihad-Jat deal I believe... Some funny, frustrated people around ;-)

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    3. I really don´t think it is beside the topic. I´m from Serbia, and I really believe that there would be far less demagogy if the people would just travel more. People just don´t know how the Italy or Ukraina, Germany or Russia look like, and they really believe that choosing EU or Russia is not the question of choosing better or worse standard, but a question of choosing a better friend with a same standard. In that manner: people would be more happy to welcome Etihad if they had opportunity to have expirience with different airliners.

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    4. +1 !
      My family in Serbia when speaking about EU they speak if it would be the paradise on earth!
      When we visit them they say"you are so rich".
      I hate it. Life in EU is not easy and the money you earn you have to spend the next day because of the high prices.
      But tell it to people in Serbia they wont believe it!
      EU-membership will be a shocking experience i have to warn you .
      Croatia already will learn it the hard way...
      ther only profiters are the politicians.

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    5. Serbia has long way to go before it is in the EU, at least 12 years if not 15.

      I think most Serbians can take it easy and relax.

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  14. Serbs against Croats, is there any other games?

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    1. Yes, Croats against Serbs :D

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  15. Etihad can only make JU better. I flew JU last year and I didn't think it was as horrific as so many people seem to make it. Regional flights in the USA have become far worse than a flight on JU.

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    1. I have to agree with you. There is not a single flight I have been on in US that wasn't late.

      And... I am glad for Jat. I like to support economy of my country so I like flying with them. Flights are usually on time. Planes (and staff:) are kinda old, but I do not have a problem with their service. I cant wait to fly on one of the new A319 that will arrive soon and see the new Jat look after rebranding.

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    2. Yeah US flights have been flooded with flights on CRJ/ERJ and the product is ok but nothing special.

      As a former ground handler, the A319 is so much nicer. B737 aircraft are back-breakers as that cargo bay is like a bowling alley. The diaspora travelers pack the whole house and the kitchen sink with them making it oh so much more fun to load a B737 lol.

      JU has its flaws as do many, hopefully this takeover by people who actually have real aviation background and experience can bring it around.

      I just wish SkyTeam had a bigger presence in the former YU. Make my standby trips a lot easier :)

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  16. With this deal, JU is becoming feeder for Etihad and Air Berlin, the same as OU and JP already are for Lufthansa and Austrian.

    In order to feed decently, more modern fleet will be introduced, same as in OU during last 10-15 years, and BEG will serve as local half-regional mini-hub for Montenegro, Macedonia and Bulgaria to/from the Gulf and onwards, the same as ZAG serves as local half-regional mini-hub for Adriatic coast destinations amd Bosnia to/from Central Europe and onwards.

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    1. It´s a pure speculation. As far as I have understood, it was of the pillars of Etihad´s approach ro bring more fairness and sustainbility into partnerhsips than the star alliance. You cannot compare the ZAG-FRA and BEG-AUH relationship, because Lufthansa was taking ZAG and Croatian passenger to European destinations where Croatia arilines could fly by themselves (Moscow for isntance). On the other hand, Etihad is taking JAT passangers who fly to Australia, Japan, China - destinations that cannot be covered with JAT´s fleet. It is also a nonsence that 49% procent owned JAT will fill the 28% owned Air Berlin. That is a huge different: Etihad is to own JAT and it is their interest not just to take JAT passangers for long distances flight, but also to make profit with the company - wheress for Lufhtansa had no direct interest to see Croatia airlines growing (not to mention that the whole Croatia airlines was a part of the independence package that Germany secured for Croatia). And finally, to be a regional leader in Southeast Europe is not a small thing and task. JAT could bring up the passangers from whole Afraica for instance to Europe.

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  17. Yes.but what is the alternative?
    Without Lufthansa Croatia Airlines would not have survived for so long.
    Imagine OU and LH would compete against each other.
    LH and its daughter Germanwings would have destroyed OU!
    The tie-up with *alliance saved them.
    The same with Jat Airways and Etihad.
    Without this deal JU will be as dead as it can get!

    OU and JU are in the same situation but their customers are not.
    Zagreb and Belgrade could not be more different from a customers point of view.
    While when flying from ZAG to Germany you have to use OU/LH/GW
    ,those who fly from BEG still have the choice between JU/AB and LH/GW on the other side!
    Also nobody would have to use JU/EY when flying to Asia/Australia if Emirates or Qatar would begin nonstop flights to BEG !

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    1. Why wouldn't they fly with JU/EY if QR or EK had direct flights to Belgrade? They will primarily go for the price and convenience. With two daily flights between Belgrade and Abu Dhabi it is most likely this option would be the most convenient for a lot of people.

      Furthermore, when you mentioned flights to Germany from both Belgrade and Zagreb you forgot to mention another option from Belgrade, that is Wizz Air.

      Also, if Croatia Airlines would divorce Lufthansa, they would not only have to face tough competition from LH but also from its daughter companies such as Austrian Airlines, Swiss or SN Brussels. Though two of these do not fly to Zagreb I am sure they would if the situation would change.

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    2. There is to some extent a reason to compare OU with JU, but it makes no sense to compare the code-sharing and alliance partnership with Lufthansa with the selling of JAT to Etihad. Far more appropriate ist the comparation of JAT with Austrian that was bought by Lufthansa.

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  18. I hope the new Jat or whatever will be more profitabel and its won't pump money out it all the time as previously...Off topic: Hungary will also launch its new airlne: Solyom Hungarian Airways...Wht a coincidence and turbulance in av. industry in our region....

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