Monday, November 23, 2015

PM: Air Serbia seeking regional acquisition

Air Serbia’s future investments may involve regional acquisitions

The Serbian Prime Minister, Aleksandar Vučić, has said the country's national carrier is eyeing investment opportunities in the region. "I believe that in the coming period Air Serbia will acquire an airline from the Balkans. This will be the next major piece of news", Mr Vućič said. However, the Prime Minister added, "Were there no political obstacles, Air Serbia would have already acquired two or three companies in the region". Plans to purchase a nearby carrier have been on the agenda since Etihad Airways' part-takeover of Air Serbia two years ago. In October 2013, Mr Vučić noted, "There is an idea to acquire some airlines in the region after we bring in new planes. All airlines in the region have many problems. They are facing great challenges and will face them in the future”.

The CEO of Air Serbia, Dane Kondić, has also touched on the issue in the past. In 2013, prior to Air Serbia leasing ten Airbus aircraft and developing its route network, Mr Kondić said, "I think any business is always going to look at opportunities for growth. At the moment we have our own goals, ambitions and plans, which is to bring into service ten of these new aircraft, build a route structure, get some sustainability and then we can look at other sorts of investments that may involve acquisitions around the region". Asked whether Etihad Airways will be making more acquisitions itself, President and CEO, James Hogan, said, “I think we have our plate full at the moment".

Among the strongest possible contenders for acquisition is Montenegro Airlines, which earlier this month signed a Memorandum of Understanding (MoU) for Strategic Commercial Cooperation with Etihad. The deal gives Montenegro Airlines access to Etihad’s global network of destinations and will allow the airline to use the Emirati carrier’s resources in order to improve fleet utilisation. Furthermore, Montenegro will forge closer ties with Etihad's partner airlines, while the Abu Dhabi-based carrier will also assist in overhauling Montenegro Airlines' organisational structure which will, in turn, lead to greater efficiency. The new partnership is also set to boost synergies between the two carriers. In 2011, the Montenegrin government offered a 30% stake in its national airline. At the time, Etihad purchased the tender documentation but never made a takeover bid. Earlier this year, the Serbian Minister for Labour, Employment, Veteran and Social Policy, Aleksandar Vulin, said Montenegro Airlines' operations could be run out of Belgrade following negotiations between the carrier and Etihad.

84 comments:

  1. Sounds like a similar propaganda to base OU in SJJ.

    Aftakana-ahahana

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  2. I can just imagine how smooth a take over of MA would (not) be.

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  3. What was quoted in the first paragraph is poles apart to what was quoted in the second paragraph.

    Paragraph 1 - We are going to buy an airline soon!

    Paragraph 2 - No we are not!

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    1. Exactly, more political propaganda by Vučić using ASL for election campaign purposes.

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    2. One is from 2015 the other from 2013.

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    3. Only TAROM and Blue air are left.
      Blue Air is private, doing just fine and probably does not want to be acquired by a state owned company.
      Besides it has different strategy (low cost) than JU.
      That lives TAROM.
      It would be a disaster and will ruin both companies.

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    4. @Q400November 23, 2015 at 9:23 AM


      Vucic being idiot, needs votes in coming elections, problem is, Air Serbia is loosing millions and millions, yet he like all old communist apparatchiks of old continue to ignore the reality. Cause of Air Serbia, Serbian tax payers had to fork out $650 million in 2013 , 2014 and 2015, wonder how much more they'll need to fork out before they people of Serbia start to question political idiocracy that exist in the country and rampant corruption that allows such nonsense.

      Serbian taxpayers can ill afford such expensive toys, question is, how long before they wake up to the reality .

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    5. Anonymous 8:39
      +1

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  4. Even if it happens it would be interesting to know where the money would come from.

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  5. This Vucic cracks me up..two or three airlines in the region...political obstacles is he referring to Croatia Airlines by any chance? lol

    Everybody knows that Air Serbia is basically Ethiad...Serbia wouldn't even have an airline today if Vucic didn't partner with some middle eastern politician.

    So he wants to acquire regional airlines with middle eastern money?

    JAT Airways was on it's last leg because the Serbian Government couldn't even buy or lease one new plane for JAT since Yugoslavia broke up and now they act as if they have the money all of the sudden for everything..but it is not Serbian money that created airserbia in the first place nor will it be serbian capital acquiring regional airlines.

    Don't worry about Croatia Airlines, we will e acquired by Lufthansa soon.

    it;

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    1. Yeah, just like OU will be basically Lufthansa. Good luck with being Lufthansa's feeder. Jealous much?

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    2. Jealous of what? Looking forward to Lufthansa coming and buying, even shutting down OU, if they can't do their work properly, so be it! Not so good for Air Serbia, they will lose some passengers from Croatia once Lufthansa comes!

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    3. Anonymous 10:23 AM, Air Serbia should try to buy OU, with all the money they earn that shouldn't be a problem, or should it?

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    4. anonymous 1036....dumping fares does not yield big profits. Money would have to be borrowed from Etihad.

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    5. I think Anon 10:36 was being ironic about Air Serbia's "profits".

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    6. Yes, I was, thank you, Anoymous 11:20 AM!

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    7. Lol. No one even mentioned Croatia Airlines anywhere, but this envious troll had to have his 5c worth of comments.

      No, you don't worry about Air Serbia. It is miles ahead of your OU. And I do hope that Lufthansa acquires you so that you can officially be labelled as a feeder-only airline. That will be one less obstacle for JU to dominate the ex-YU market.

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    8. No one mentioned OU? Anonymous 9:32, 10:23? I also hope Lufthansa will buy OU, then Air Serbia will dominate Montenegro and... well, that's about it!

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    9. What would be in LH's interest to purchase OU ??? They could achieve much more for far less, by positioning 4 or 5 aircraft from within their group in ZAG and job done. Plus, they don't buy the headache that comes with OU - especially the people issues. Much cleaner if they simply base some aircraft in ZAG and they achieve the same result. This, they would be allowed to do as an EU airline ....

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  6. ..."Air Serbia issued US codeshare permit"...
    Admin, why Air Serbia hasn't announced this ? They usually confirm issued codeshare permits or agreements.

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    1. Air Berlin has to be issued the same permit in order for Air Serbia to place its codes on Air Berlin flights. Air Berlin applied for this permit last Wednesday when Air Serbia was granted DoT approval.

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    2. Another week passed that DoT did not gave permission for Air Serbia flights to US.
      Is there any info about when will that be?
      It was supposed to have come two weeks ago according to Vučić/Kondić.

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    3. And you will now remind us of this every single day? You are so unable to sit back, relax and see what happens to the damn permission at the end?

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    4. ^ He can't do that because until yesterday he was shouting how they will never announce the flights, now he has to hang on to the idea they will not get a permit. The guy writes 20 comments per day. It's easy to see from his style of writing - 10.29, 11.17, 11.37....

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    5. Add 9.35 and 11.22 to that too

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  7. I really hope ASL doesn't acquire any other airline.

    The reason why ASL is making good progress is because the government is fully supporting it. If ASL buys MGX and then the Montenegro government decides to start causing problems, it could be a disaster for ASL. It would probably be even worse if ASL got involved in CTN, although I don't think ASL is even close to strong enough to acquire CTN.

    Air Serbia should focus on their core business and not take huge risks while the company is still in a period of growth and relative immaturity.

    Plus such investment money is much more vital to the expansion of ASL.

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  8. PM just love avation. Would be nice as well that he bulids his own airport and airliner from Lego brics and play with them.

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  9. Why not buying 49,9% of Adria for 1 EUR?

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    1. The only ex-yu airline that ASL realistically can (or to be more precise is allowed to) buy is Montenegro Airlines.
      And not even that is easy.
      For political, not commercial reasons.
      I think ASL would have an easier time politically buying A3 than OIU or JP.

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    2. Who told you that ASL will purchase any of exYU companies? You can find much better companies in RO and BU.

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    3. You can find them, but you can't afford them!

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    4. Which Romanian and Bulgarian airline companies would like to be acquired by JU?
      And which ones do you think would become profitable for JU instead of ruining it?

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    5. BH Air i Air Bucharest leglo bi kao budali samar. Imaju i bolji metal od CTN i Adrie.

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    6. LOL, fantastic choices, fleets and networks!
      I think they are a great much for JU!

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    7. Imaju A332 kojim su letos putovali Hrvati. A drugi su charter sa Crnog Mora i po Mediteranu odlicni za prosirenje Avioleta i ulazak na rumunsko trziste LOL. ASL mora tamo da se siri

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  10. What interests me is whether in the case of a purchase of MGX, would they be able to acquire 49% of the company or 100% as a European airline?

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    1. Montenegro is not an EU member, so I'd say more than 49%!

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    2. Yes, but Montenegro just like Serbia wants to become eventually part of EU.
      So it wont be selling more than 49% to a non EU entity.
      Unless of course by the time it sells YM Serbia has become an EU member.

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    3. Few things should be taken into account.
      Vucic and Milo are cousins (real cousins through his new wife), Milo introduced Vucic to the Arabs.

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    4. It's not EU, it's ECAA. Both Serbia and Montenegro are signatories to the agreement.

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    5. Evropska kompanija koliko ja znam moze da uzme drugu Evropsku kompaniju kompletno .
      INN-NS

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    6. Guys, again, read up on the ECAA agreement. The 51% rule relates to the signatories of the ECAA agreement, not EU member states. Both Serbia and Montenegro are parties to this agreement (also all EU MS and Norway, Iceland, Bosnia, Macedonia, Kosovo, Albania and in a way Switzerland).

      So, in theory, a Serbian company might own 100% of Lufthansa - today, not once Serbia becomes an EU member.

      That said, of course JU could purchase a 100% stake in YM.

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    7. Samo ludak bi kupovao YM. Imaju samo dugove.

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    8. Koji je iskljucivo prema drzavnim firmama, koji ce najverovatnije biti otpisan (kao sto je slucaj sa Jatom/Air Serbia)

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    9. Ne lupetaj gluposti, ovde danima se raspravlja o novcu koji je vlada Srbije uplatila na ime tog duga. Toliko o otpisu.

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  11. No better way to improve a business that is hemorrhaging money than by taking over another business that is hemorrhaging money.

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    1. Yes, it is kind a like the blind leading the blind situation.

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  12. Good God, the airline can barely retire its B733 fleet and yet our supreme leader believes that JU is competent enough to acquire a regional airline. Even Etihad has yet to successfully turnaround an airline... unless we count on Air Seychelles. lol

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  13. This whole thing with EY starts to remind me of the 'Hunter Strategy' of a world class airline that no longer exists.

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    1. It's not just airlines which have traditionally had a hard time with the aggressive acquisition strategy by all businesses in general.

      What tends to happen is that the capital outlay increases drastically the more business you require and the money needed to invest into them too to the point that revenues just can't keep up. Then you add in more competition or another major company which thinks its a good idea to do the same and the situation just gets financially that bad that it becomes impossible to recoup you initial investment let alone make money.

      The worlds stock markets have a long history of companies (not just airlines but all different types of industries) which are no longer with us or are about to go bust following this strategy.

      But Etihad seems to have a supporter with very deep pockets. (12 billion US dollars gifted to Etihad by the Abu Dhabi government just last year) and as long as they keep using that money to buy Airbus and Boeing aircraft than they have a good chance in bucking this trend.

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  14. Сваку пицоустову изјаву треба схватити само као чин самопромоције и промоције назадних идеја политичке странке коју води, тако је и ова изјава о преузимању авиокомпанија из региона јефтин политички маркетинг прилагођен схватању његових нискообразованих присталица којима је чак и 1 + 1 недокучива математика. Нема та изјава никаквог упоришта у реалности.

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    1. Anon @12:46

      +1000

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    2. 12.06 upravo tako!

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    3. Ouu, recnik dozvoljenih termina se izmenio?! Prijatelju, zar je sve pametno sto imas da kazes taj ne umesni pridev?

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  15. Jedina pozitivna stvar od bilo kojih solucija je preuzeti YM samo radi Embraer-a jedan ostaviti u TGD i sve ostale prebaciti u BEG radi ekspanzije.
    Ni jednu drugu EX YU aviokompaniju ne treba preuzeti posto je prevelik rizik i nebi bilo od koristi samo bi usporilo rast BEG.
    INN-NS

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    1. Ti avioni nisu u vlasnistvu YM, glupo bi bilo kupovati kompaniju sa brdom dugovanja, kada te avione mogu iznajmiti i to cak po povoljnijim uslovima nego sto ih YM ima.

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    2. Slazem se, Embraeri se vracaju lizoru.. samo @2:43, samo, akvizicija nije kupovina ;)

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  16. Regardless of who says what, at least one round of consolidation in this market is bound to happen in this market. Same has happend in Europe, US just on a much bigger scale. I think in 2-3 years time we'll have only two companies in exYu, combination of JU/YM and OU/J.

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    1. I tol agree with your comment. I personally cannot see one carrier in ex yu and this is because of the nationalism within the region. Two carriers more realistic.


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    2. Just curious, what do you guys think how the situation will look like (in Ex-Yu, of course) in, let's say, 2 years? What will happen to JP, OU, YM?

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    3. By next summer at the latest we will know exactly what will happen with JP and OU.
      They are in the final stages of privatization.

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    4. Let's say Lufthansa buys OU, what do you think will happen with JP, how will the Ex-Yu market look like?

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    5. I agree that nationalistic pride does and will play the role but only in the first round of consolidation (that’s why I see that JU/YM tie-up for example has much bigger chance of success). However, once these companies become private and governments have less influence (which MUST happen), next round of consolidation will only be based on market terms.

      Long term, in my opinion none of these companies stand a chance to survive on their own (here I include Romania, Bulgaria as well). The market will probably be split between MEB3 (EY leading the way), LH group and to a certain extent TK. We are already seeing signs of this battle.

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    6. Anon 4:51

      To me, there is definitely no room for both OU and JP long term (the same with JU and YM). If LH buys OU (and even if it doesn’t) I think JP’s days are numbered. Government clearly wants to get rid of them. I think the only chance for some form of survival is if LH buys it and merges is with its OU investment. It won’t take much in terms of $$$ but the question is if they are willing to afford this headache (even though it’s fairly small). I personally feel that LH is finally in situation to do something now that some of their recent acquisitions are more or less OK and I’m not surprised their name is showing up in possible merger talks.

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    7. Thank you, SM!

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    8. Anonymous 4:27 pm.

      The fact that Adria have not yet been able to secure an investor is a bit of a worry. They need that 8 million for liquidity purposes and they are about to invest a lot more of cash in their Baltic expansion. Any hold up in funds being paid to Adria here could set up a very dire situation for the airline.

      Montenegro will continue to receive support from the government so I think they will still be around in a few years.

      OU, I think will find a buyer. As I said before, they are hugely profitable during the tourist season. They need to find a way they can both increase operations during that period and at the same time reduce or find work for their aircraft and crews during the winter. They can do it themselves if management chooses to think and work outside the box or a buyer (larger airline) could be an alternative to help solve this.

      Air Serbia is also safe as long as both the Serbia government and the Serbian people support it. The only danger I can really see to Air Serbia short term is a change in the Serbia government which could have a view that supporting Air Serbia is not as much of a priority as the existing one.

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  17. It is so strange when a PM speaks of an airline like he is the CEO. Priceless.

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    1. Balkan way all the way!

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    2. No other PM treats the country's airline as his personal property and campaign project.

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    3. I would just like to point out that every PM has a huge involvemt in an airline that is own majority by the state. In AS case serbian gouvermant owns 51% of an airline and they MUST make some decissions. It would be insane to let etihad make every possible decission for AS. I hope gouvermant of Serbia does not let that happend. I love those cooments where they say that other countries PM is not involved when comes to national airline. I use to work for lufthansa from 1997-2009 and I can ensure you that the German gouverment was always involved when comes to major decissions. We went on strike almoast every year and there was never raise approval if gouverment did not say yes. Another point that that I would like to bring forward is when LF placed an order for large amount of AC gouverment had to approve it. It drives me crazy when people talk no sense on here.

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    4. Being involved in an airline is not what Vucic does, can you imagine Cameron or Merkel speaking about new routes from their national carriers?

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    5. Yes, at the very beginning, when they were opening New York, 50 years ago.

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    6. Of course she has no much to say as they do not own 51% of LH. AS does and PM should say something.

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  18. By region they clarified Balkans. So it's not Slovenia. Okay so if it's 2 airlines my guess is Olympic and Aegean. If it's 3 airlines my guess is Olympic, Aegean and Turkish. Yes they are for sale if the price is right and yes Air Serbia has the money if you include the family. That would be nice, JU+A3+TK, largest airline in the Balkans and one of the largest in Europe.

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    1. And where exactly is Slovenia? C'mon, get over it, if, if not geographically (we should ask the Austrains and they would say Balkans start south of us), then mentally you're deep in it. But this is nothing bad, as I told you, get over it. :)

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    2. Geographically speaking, neither Slovenia nor Romania are in the Balkans but they tend to put them there for historic and political reasons.

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    3. A3/OA is for sale? TK for sale? Right price? What are you talking about? Both A3 and TK are not for sale, especially to one of the MEB3 airlines. I suggest you be more cautious, right now its more possible for EY to get rid of JU to A3 or TK than the other way around. Its much cheaper...

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    4. Would love to see JU in A3+JU, kind of Balkan's AF-KLM. After all, GoS stil own 51% of JU, right? So if EY says good bye in 2018, in theory, all cards are open. But that's just my thougts, things are not as simple as that and 2018 is far ahead.

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    5. Ne ložite se.

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  19. Instead of weird theories, just look at facts and draw logical conclusions:

    Regional acquisition was mentioned in 2013 when ASL was formed. It was period of EY investment in airlines in Europe, so JU expansion was likely EY agenda, not PM's agenda.

    If one airline of interest was most likely Montenegro, others have to be from EU (BH Airlines was on a deathbed for a while). If there were political obstacles, then it would have to be from EU. Someone from EU did not like the idea of Ari Serbia expanding in the Balkans. That matters more than "what airline is it?"

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    1. I don't think anyone from the EU takes JU seriously or as a threat. They are just too small and insignificant beyond ex-YU.

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