UPDATED Etihad announces possible equity investment in Jat

Etihad to submit Jat offer in thirty days

Etihad Airways and Jat Airways have held a press conference today, during which the CEO of the national carrier of the United Arab Emirates announced the airline’s equity investment in Jat. The conference was preceded by the signing of a Memorandum of Understanding between Etihad and the Serbian government to explore equity investment opportunities in Jat.

Details of the development were unveiled by Etihad CEO James Hogan and his Jat counterpart Velibor Vukašinmović. Mr. Hogan began by saying, “We are excited about the future and look forward to exploring the possibility of a much deeper strategic commercial partnership with Jat Airways”. He added that Etihad will put forward a proposal to the Serbian government and Jat within the next thirty days. “As we have demonstrated with our minority equity investments in other airlines, significant ongoing savings can be achieved through joint initiatives. These include pilot and crew training, fuel, insurance and procurement and maintenance agreements for common engine types”. Mr. Hogan added that Etihad will now conduct interviews in Serbia with potential employees. “As the partnership between Etihad Airways and Jat Airways deepens, and new codeshare destinations are added, we will see greater numbers of travellers being fed across the two networks. This will increase further with the codeshare between Etihad Airways’ equity parner, Air Berlin and Jat, which will link Belgrade, via Berlin, to Chicago, which has a strong Serbian community. Jat is an airline with a strong history and Serbia is a country with a big diaspora and major tourism potential. That forms the market base. We would not enter discussions if we knew that through restructuring Jat could be successful. We are focusing on returning Jat to profitability", Mr. Hogan concluded.

Etihad recently added its codes on to Jat’s flights to Sarajevo and they will soon be added to the Tivat service as well. Subject to regulatory approval Etihad will also place its own codes on Jat’s services to Amsterdam, Athens, Berlin, Brussels, Copenhagen, Dusseldorf, Rome, Frankfurt, Gothenburg, Istanbul, London Heathrow, Larnaca, Milan, Moscow, Podgorica, Skopje, Stockholm, Stuttgart, Thessaloniki, Vienna and Zurich. Jat recently placed its own codes on Etihad’s service from Belgrade to Abu Dhabi as well as flights to Sydney, Melbourne and Brisbane. Late last week aviation authorities in Kuwait and the Seychelles also approved the codesharing arrangements between Jat and Etihad. The Serbian carrier will further place its codes on to services to Bangkok, Beijing, Chengdu, Colombo, Ho Chi Minh City, Islamabad, Johannesburg, Karachi, Kuala Lumpur, Lahore, New York, Chicago, Shanghai, Singapore, Toronto and Washington D.C.

Speaking at the conference, Jat Airwas CEO said, “It’s is our great pleasure to establish cooperation between Etihad Airways and Jat Airways. We are happy that Jat has been given the opportunity to develop a joint product with the aim of increasing passenger numbers and establishing closer ties between our countries”. Mr. Vukašinović added that Belgrade will become a regional hub thanks to the partnership between the two airlines. “I am extremely proud to be part of this important moment in Jat’s history.

Attending the conference was a group of Australian based tour operators who were flown in by Etihad this weekend from Sydney and Melbourne. Also present were reporters from Australia’s public broadcaster SBS who were interested to learn how the new partnership will better serve the Serbian community in Australia. Serbian media were more interested in the planned 49% takeover of Jat. Mr. Hogan noted that the airline has completed a screening process of Jat with due diligence noting that Etihad has delivered on every promise it has made up until now. “Two months ago we announced a codesharing partnership which is now in place. We announced daily flights from Abu Dhabi to Belgrade which have now been launched. Now we are ready for the next phase”, Mr. Hogan said. He denied claims by the Serbian media that Etihad was angry at the change in management in Jat adding, “The media often has something to say before we do”.

According to previous media reports, Etihad plans to take over Jat on July 15, a month away from now. The airline is reported to be eager to change Jat’s image, brand, introduce new destinations and aircraft. Mr. Hogan referred to Air Seychelles several times noting that by restructuring the carrier Etihad has turned it into a profitable business for the first time. Jat and Etihad will now intensify discussions on collaborative efforts to further integrate their network and help Jat achieve efficiencies, build revenue and reduce costs. Etihad Airways has for the first time today officially announced plans to invest in Jat.