Friday, January 31, 2014

Air Serbia - Etihad deal to be made public

Terms of Etihad’s takeover agreement of Jat to be published

Serbia is likely to reveal its secretive deal with Etihad Airways for its 49% stake in Air Serbia next month. One of the chief negotiators of the takeover, Siniša Mali, says the deal will be made public after the transition process is completed on February 20 when the airline’s new joint stock assembly is expected to hold its first session. The government has been under mounting pressure to publish the deal from both opposition parties and the media. The deal between the national carrier of the United Arab Emirates and the Serbian government has been classified as a state secret. Mr. Mali says the two sides will discuss lifting the ban to publish the classified document. “There is nothing to hide here. It is an excellent agreement for both Jat and the government”, Mr. Mali says.

Earlier this week Serbia’s former Economy Minister, Saša Radulović, who resigned from office on Saturday, said the takeover agreement with Etihad is damaging to Serbia, adding that the government continually blocked the restructuring of Jat Airways so it could hand the airline over to Etihad. He also criticised the addition of other companies in the deal such as Jat Catering, which Etihad is now the owner of as well. Mr. Mali has refuted those claims stating, “Planes were out of order, they were grounded, the company was falling apart and salaries were late so I don’t think this is a bad project, it will make Air Serbia a regional leader”. He recalled that Air Serbia recently hired new pilots, cabin crew, launched new routes and ordered ten new aircraft.

Etihad Airways officially took over its 49% stake in Air Serbia on January 1. Few of the terms and conditions of the takeover have been made public, however, it has been revealed that Etihad has invested forty million dollars into Air Serbia from August until December last year. An additional 200 million dollars will be invested from this January onwards. Yesterday, Serbia’s Deputy Prime Minister and most powerful politician, Aleksandar Vučić said, “Thanks to Etihad, Air Serbia has recorded passenger growth of 30%. The airline’s fleet is in the process of renewal and it is considering purchasing carriers in the region”.

49 comments:

  1. One correction - Saša Radulović was the minister of economy, not finance.

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  2. It will be nice to find out what are the T&C of this secretive deal however I am sure that they will not publish and make available the information that they do not want to go public. Nevertheless JU transformation is ongoing but everything is delayed compared to schedule ... flights themselves, new planes, funds from EY (still not a penny received), cockptit crew training, licensing of AC for new routes...etc It seems like the only people that are taking advantage of the situation are Kondic and highly paid advisors!!!.... so the bigger the mess the more profitable it is for them; why sould they act and sort it out since time works in their favor ...

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    1. In some cultures people try to make a successful company not for personal gain, but for the feeling of satisfaction. I know this is unheard of in our part of the world, but maybe Kondic actually wants to this project to succeed. Give him some time. There is a lot of obstacles in his way. Lazy workers, poor infrastructure, and things out of his control.

      Either way, the new JU is a whole different airline than the old JU. The difference is huge.

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    2. Aleksandar I wish JU becomes a true leading airline however unfortunately 3-4 months after the take over there is still poor planning across the board. I have flewn JU before and recently several times; other than inrpoved catering I have not seen any major difference. Flights were late, boarding last minute always, cabin staff not too interested, air miles not recognized, YU AOV and AOU charter versions selling business class while they don't have it (you should see the papaerwork required for the refund claim).....it is messy trust me!!

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    3. Oh I see now. JU isn't perfect after three months of new ownership. Time to shut down.

      JU has done more in three months than all the rest of the ExYu carriers have in the past three years.

      Yesterday, Pegasus, Swiss, Adria and Qatar were more than 30 minutes late on their flights to BEG. All airlines are late often. JU will continue to be late for some time. Perhaps if arabs takes over BEG, then JU will no longer be late, but for now it is what happens when airlines operate in Serbia.

      AOV and AOU were leased by the old management to hamper the efforts of the new management. Everyone knows that. They are terrible birds and the lease is terrible.

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    4. Excuse me, I meant those carriers were late on their flights from, not to, BEG.

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    5. I don't understand this claim that Etihad didn't invest a penny so far. While we don’t know the details, how do you think JU got these planes, livery, branding etc. etc. I highly doubt this could all happened without deep Etihad involvement (meaning money) in the form of either investment or loans that would otherwise not be possible. If it was Serbian money alone in this they could never get these birds. Or they could but the rates would be enormous. I hope they publish the complete contract and shut everyone up forever.

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    6. @AnonymousJanuary 31, 2014 at 9:38 AM
      In Serbia for a stupid shirt that cost 15$ they require you to write some paperwork if you want a full refund back. That country is just pathetic when it comes to a full refund. As for Airliner Air Serbia have got improved a lot but it still need a long way to go if they wanna be a serious player.

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    7. Serbia is absolutely appalling when it comes to refunds.

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  3. Actually I heard that Mr Kondic spends more time in London than in Belgrade shere he should be ... Apparently he is never available when he is needed. I heard that from a highly ranked source in Support...does anyone know more about this??

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    1. You should maybe ask your source.

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    2. This is not true ... if you ask the right people, you will find out that he spends most of his time in the Seychelles

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    3. I have it on good authority that he spends the majority of his time in Australia. He is regularly seen frequenting the same cafe's and restaurants in Sydney, instead of being here in BEG where he should be running the airline .. no wonder nobody can get to see him

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    4. He is actually in Dubai most of the time... working for Emirates part time.

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    5. anonymous @ 3.56pm - what do you mean no one can see him ? You just said that everyone can see him in SYD ! So what is it - people can or can't see him ?

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    6. Does Mr Kondic actually exist?
      There is rumour that he is a actor...

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    7. Mr Kondic changed sides, now he is in New York working for Delta.

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    8. That guy seems to have superhuman abilities...
      That would explain how he can be at different places in the same time!

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  4. I wish all the best to Air Serbia! Greetings from Croatia!

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  5. Where can we find takeover agreements for Lufhansa deals with Austrian and Swiss? It would be interesting to compare.

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  6. Looser out crying, election running, bla,bla story rolling fast. Who is who? Wot is wot? Typical blog story. Lot
    of bull.... (Psi laju karavani prolaze! Uvek bilo i bice.) My money and to vote go to AIR SERBIA. This time, every time. Finally AirSERBIA is Icon in aviation of this land and will be!. You can hatred, but have to respect. I have learn to love aviation in my native QANTAS and that passion carry with me to any place and people who respecting aviation, airports and people who work in it.
    Rodney Marinkovic, AME. Kraljevo / Sydney-Griffith.

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  7. ExYU, I normaly don't mingle in your selection of daily updates but for this once, please be aware that one unclear sentence taken from the statement of a shadowy and corrupt politician ('we will publish the contract soon') should not make a headline on this blog.

    That sentence is worth as much as the dignity and moral value of the guy who said it. And that means zero. And such are the chances the public will see that contract any time soon.

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  8. Adria launching Lodz -- Munich daily as of the summer....
    http://www.sloveniatimes.com/adria-to-service-lodz-munich-route

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  9. Publishing contract details will help with DOT decision for codeshare request with Air Berlin for US flights.

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    1. True. Does anyone know when that decision is due?

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    2. On the contrary - if the agreement includes the management contract (outsourcing), then it would be better DoT never sees it.

      It's not like they don't know what is going on, but big players prefer kicking each other under the table over going into open war.

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    3. We'll see the details once it's published. Based on published reports, CEO and some of the management team is employed by Air Serbia, not Etihad or outsourced company, so if that's the case - it is better if contract details are made public and presented to interested parties.

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    4. trust me, it is not better that the deal is published, if we are talking about DoT approval. Although, since DoT is not in Burundi, I guess they already know all details of the deal

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    5. Partial or full foreign ownership is not unusual in airline industry and alone is not likely to prevent DoT from allowing codeshare if everything else checks out. Takeovers are rarely done without controversies, perfect example was Lufthansa takeover of Austrian. It was full of scandals involving former CEO and even EU commission investigation for trade rules violation. That didn’t prevent Austrian from operating to the USA.

      For Air Serbia at this stage in the game, full transparency in the process can only be perceived as beneficial. Better change the contract than keep it in the shade, if you catch my drift.

      On the other hand, DoT is not likely to favor one US airline (Delta) over others (potential new partners of Air Serbia in the US) everything else being equal.

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  10. Soon YU-AOV will be completely white, as AND, without dots. I have heard, the first ATR in airserbia livery will be in February, probably ALU.

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    1. Why completely white? I find it beeter even to have old Jat livery than being totally white

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    2. Well, because they will be flying charter flights and there is no need for them to wear any sort of livery. Air Serbia barely accepted to have charter flights this summer season.

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    3. Why is that? Charters are easy money.

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    4. Well, they are easy money but they are not great money, especially not for a legacy carrier such as Air Serbia. Sure Thompson or Monarch can pull it off when their model is much different than that of classical carriers.

      I guess that next summer they will not do it, leaving the Serbian charter market to foreign charter airlines.

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  11. Yeah, right. Probably the date of publication will be something around March 17, after the elections.

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    1. Unless he wants to prevent Air Serbia being used negatively during the campaign. He can't really brag about Air Serbia if the opposition is slamming him for ignoring transparency, a massive must in the European Union.

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    2. Yes, a regional leader company that bought $1b worth of planes in the first few months of operations can sure be used negatively to smear SNS!

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    3. I suppose you do not live in Serbia. Here facts are rarely relevant, Serbs have a special ability of being ignorant and stupid.

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    4. Air Serbia, january, +62% passengers compared to JAT january 2013, not bad ?

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  12. Here it is, YU-APA or F-ORAH.

    http://avioni.net/uploads/vesti/2014/01/a319-132-f-orah-air-serbia-jat-ju-ostrava-osr-lkmt-620x330.jpg

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  13. Election time in Serbia...
    The opposition will call the Etihad -Air Serbia deal unjust and a failure and blame the government for it.
    Best is to ignore them!
    Do you remember what the Democratic party and G17
    did for Jat ?



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    1. I always find it funny how fast people tend to forget what kind of bad airline Jat Airways was.
      I can't understand how anyone can argue that selling it off to Etihad was a bad idea.

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    2. ex JU employees. 400 people left the airline. It's natural that they are bitter.

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  14. Off topic what about the terms of take over of the Kucko clan by Croatia Airlines hè is the Ceo and the new Hitler .

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  15. Off Topic: Dnevni Avaz is claiming that for the first time in history there will be flight from Sarajevo to Rio de Janeiro. Is there any news on this from a reliable source?

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  16. Delta erlajns dokazivala (i dokazala) pred USA regulatorom da ima netransparentno vlasništvo i da prima državne subvencije, a da njen strateški partner Etihad koristi direktne infuzije državnog kapitala kroz poreske olakšice, subvencije za gorivo i aerodromske takse i da ima značajne državne investicije u kompanijsku infrastrukturu. ”Ove subvencije imaju efekat narušavanja tržišta i u suprotnosti su sa međunarodnim i pravilima američke vazduhoplovne politike”, napisala je Delta u tužbi protiv Er Srbije, pozivajući se na bivšeg čelnika Udruženja evropskih aviokompanija, Ulriha Šulte Strathausa, koji je izjavio da su ”Etihad i drugi avioprevoznici iz Emirata u vlasništvu njihovih vlada i funkcionišu kao instrument nacionalne strategije… da vertikalno integrišu trgovinu, turizam i spoljnu politiku”.
    24. januara 2014. godine na sajtu Agencije za privredne registre (APR) ne piše ko su članovi-suvlasnici akcionarskog društva Er Srbija i iz koje bi zemlje mogli biti. Piše samo da je upisan i uplaćen novčani kapital od 16.864.350.000 dinara i da je 19. decembra 2013. upisan i unet nenovčani kapital od 606.805.000 dinara. Novčani kapital (16.864.350.000 dinara) je novac koji je Republika Srbiji unela u novu kompaniju Er Srbija.
    I na sajtu Centralnog registra hartija od vrednosti 27. januara 2014. godine kao jedini akcionar sa 100 odsto vlasništva upisana je Republika Srbija (vrednost akcija 17.471.155.000 dinara.
    A kad je prošlog leta potpisan sporazum Vlade Srbije i Etihada jasno je saopšteno i preneli su doslovce svi mediji da će ”Etihad nacionalnoj aviokompaniji Srbije obezbediti kreditnu liniju od 40 miliona dolara, koja će od 1. januara 2014. godine, a na osnovu odgovarajućih zvaničnih odobrenja, postati osnovni kapital kompanije”. To se, koliko se vidi iz APR-a, nije dogodilo a i nejasno je kako ”kreditna linija” može biti bilo čiji udeo u osnovnom kapitalu neke kompanije.

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    1. Vec vidjen tekst. Zasto kreditna linija nemože biti ulog. Naravno ako je neko drugi otplaćuje.

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