|Serbian carrier records 73 million euro loss in 2013|
Jat Airways, for the first ten months of 2013, and Air Serbia, for the last two months of the same year, has recorded a loss of 73 million euros, the airline has said. The Serbian carrier accumulated an operational loss of 45 million euros during the year, while the remaining 28 million came as a result of errors made in previous financial reports published by Jat Airways. For its 2013 financial report, which publicly owned companies in Serbia are required to publish in May the following year, the airline used International Financial Reporting Standards (IFRS) for the first time, which is designed as a common global language for business affairs so that company accounts are understandable and comparable across international boundaries.
Air Serbia’s CEO, Dane Kondić, says, “In line with international standards, we now have a clean balance sheet. The 73 million euro loss is related to the many years of bad business by Jat Airways. We now turn to the future and thanks to our partnership with Etihad Airways and the strong support from the Serbian government, Air Serbia now has a strategy for recovery as well as the foundations for creating a profitable and strong company”. Only recently, the CEO of Etihad Airways said he expects to see Air Serbia break even in 2014 or possibly record a small profit.
Despite the significant loss made last year, Mr. Kondić believes the airline is on the right path. “We have done a lot and we continue to work to set sound foundations for further business. We have commenced an ambition fleet renewal plan and an expansion of our destination network. Furthermore, we have invested in products and services in order to improve our customer service”. The airline’s CEO adds that Air Serbia has recorded significant passenger growth of 66% in the first quarter of 2014 and has increased the amount of cargo flown by 46%. “I am completely certain that the future will bring positive results. We will build up a regional leader in the field of aviation that will have long term value for its shareholders”, Mr. Kondić concludes.
The official takeover transaction between Etihad Airways and the Serbian government was completed in early 2014. Therefore, this year’s financial results will give a clearer understanding as to whether this ambitious project is actually sustainable. Under Serbian law, companies which are not floated on the Belgrade Stock Exchange (such as Air Serbia) are not required to publish quarterly financial reports. Ever since financial results for Serbian companies are required to be made publicly available (since 2004), Jat Airways has not recorded a single year in profit.