Etihad Airways says it is “fully committed” to its 49% stake in Air Serbia following reports the Emirati carrier was considering reducing its share in the airline. “Speculation about a change to Etihad Aviation Group’s investment in and support for its equity partner, Air Serbia, is totally inaccurate and wholly unfounded. Etihad is and remains fully committed to Air Serbia and to the strategic partnership with Air Serbia’s majority owner, the Government of Serbia”, the Etihad Aviation Group said in a statement. It added, “Since its relaunch, just over three years ago, Serbia’s national airline has been transformed into a profitable, sustainable, and best-in-class, airline”.
The Serbian Deputy Prime Minister and Minister for Transport, Construction and Infrastructure, Zorana Mihajlović, said yesterday that the government had no knowledge or information concerning the alleged withdrawal of Etihad Airways from its Europen equity investments, including its 49% stake in national carrier Air Serbia. Questioned on the matter, Ms Mihajlović said, "That's speculation. The Serbian government has not been informed of any plans that would involve Etihad decreasing its ownership stake in Air Serbia and neither has the Supervisory Board advised us of such plans, or Air Serbia itself for that matter". She added, "Whether there will be some managerial changes, I am not sure, and we will see in the days ahead. However, continued development and cooperation is important because Air Serbia has generated significant benefits for us". The Minister for Transport noted that the government has contingency plans in place. "Any sort of information we receive is discussed, be it positive or negative. It is important for us to always have a plan in place for the future. We have all possible strategies prepared concerning Air Serbia", Ms Mihajlović said. She added, "We have a very straightforward agreement with Etihad and clear rights and obligations of each shareholder". The Serbian airline is believed to have added $1 billion to the country's economy this year by providing 13.230 people with employment (both direct and indirect). Furthermore, Etihad is supporting 3.900 jobs through its operations in Serbia this year, which equates to an economic contribution of $45 million.
Over the past week, company and industry sources have said Etihad is reviewing its strategy of investing in European airlines in a shake-up that could lead to the departure group CEO James Hogan. It comes following investments in Air Berlin and Alitalia which continue to struggle financially. On the other hand, Air Serbia has posted two consecutive years of profit, while the Serbian government has proved cooperative with the Gulf carrier. Earlier this month, Etihad Aviation Group President and CEO, James Hogan, said the company was pursuing further investment opportunities in the Serbian aviation sector, while last week Air Serbia's Supervisory Board Chairman, Siniša Mali, said this could involve a stake in aircraft maintenance company Jat Tehnika. Etihad and the Serbian government signed a five-year investment and management agreement for Air Serbia in 2013.
Comments
"Ona je, gostujući na RTV rekla da država od sredine 2015. godine ne namiruje nikakve dugove.
Upitana kako se kompanija Er Srbija našla u budžetu za 2017. godinu Mihajlović odgovorila je: "Moguće da je to nešto od ranije, ali ja zaista imam pouzdan podatak da je sve što je bilo u odnosima između Nikole Tesle i Er Srbije već regulisano".
Does it mean that Dane or some other people might lose their job? I wouldn't be shocked if he leaves, he is pretty much hated by everyone here.
It is extremely unlikely Etihad would pull out altogether. You ditch bad performers, not good ones like Air Serbia.
plus 18000€ to all high management positions
And this is not just concerning Air Serbia but other airlines from ex-Yu where commentators here give their 'expert' opinion on routes based on the load of their own flight.
"Već mesec-dva u Beogradu među poznavaocima avioprevoza ozbiljno se spominje izlazna strategija Etihada iz Er Srbije koja bi trebalo da bude operativna u januaru 2017. godine. Prema tim izvorima, pravni stručnjaci u Abu Dabiju dobili su zadatak da pripreme novi ugovor i, navodno, u njemu će Etihad predložiti Er Srbiji drastično smanjenje svog vlasničkog učešća u srpskoj aviokompaniji koje se graniči s faktičkim izlaskom iz zajedničke firme."
- See more at: http://www.danas.rs/ekonomija.4.html?news_id=335403&title=Direktor+Etihada+D%c5%beejms+Hogan+dobija+otkaz%3f#sthash.aitEqIGa.dpuf
Everyone goes, Dane stays.
If 7 million are right, please tell me why economic situation in Serbia was and is bad?
And why are 4 Million People in Finnland or Singapore are wrong?
Don't forget that the government of Serbia owns 51% and of course they put pressure on Dane and Air Serbia. So still government influence in the company, but still better then in Jat Time!
Not sure what his or anyone else's pay has to do with anything. He and the other Etihad people are Western executives earning Western salaries, no matter where their company sends them to work
http://www.exyuaviation.com/2016/12/belgrade-airport-begins-terminal.html
Can anybody tell me what is, at least approx, condition of the company atm?
Has nothing to do with Hogan / AB / AZ and other conspiracy theories.
AZ and AB possible disinvestment is a consequence, not a cause of the crisis.
Abu Dhabi emirs panicked because they realized that they might not have enough money to pay for all these ordered airplanes.
They try to blame Hogan, but the fall of oil incomes is due to circumstances beyond their control.
Serbia already has a similar self-defeating populist model in health services. Doctors earn "modest" salaries officially, and compensate that with bribes. If you stop that, they will go abroad and in a few years, you will be treated by Megatrend doctors, that bought their degrees. Good luck!
They are there to protect its investment.
To the point made by AirCEO - if Etihad decides to cancel the mgt contract, then it will also withdraw frm the airline as well.
Do you honestly think that they would stay with their investment if the govt put in its people to run the airline ?
We have been there before and that is what brought Etihad to the table in the first place.
The govt proved incapable of running the airline and would do the same again if it was allowed to put its people in to the positions currently held by Etihad executives
otherwise, what? airline business is something that sheikhs use for fun and past time?
hogan approach, although very innovative, didn't work due to different reasons (i am not sure that one of the companies besides jet air are profitable?) and now we will see a downscale in EY, while emirates and quatar will have by far less cuts with no change in management and little change in strategy.
let's just hope they will not leave JU
They show that you cannot prepare for a post-oil world in 10 or even 20 years and that with low oil prices the transition will be longer than expected.
Hogan is not responsible for lower oil prices. It is beyond anyone's control.
His strategy was not stupid. Instead of putting all eggs into one box (Etihad), it invested throughout the world, decreasing risk.
This is obviously not the right strategy for the risk-averse sheiks of Abu-Dhabi. Unlike their poorer Dubai cousins, they were much more cautious in diversifying their investments. And they seemingly go easily into panic mode. Not very smart.
strategy itself was not stupid at all, but the execution was all wrong and ant the baskets were all wrong.
and to blame falling oil prices for this bad investments is c.r.a.z.y.
if nothing, they were supposed to make them even more profitable.
Spolja gladac, a iznutra jadac.
Indeed, at the end the investments were supposed to make Etihad, safer, not necessarily more profitable (airlines are not casinos, and while you are still there please report ROI for LH, AF, KL and TK). But AB and AZ required tons of additional investments, and Abu Dhabi emirs are obviously not ready to go along with it.
They have no problem in loosing millions in a stupid Yemen adventure however.
Executive compensation is fair as it continues to prove effectiveness for investors around the world. That discussion is not specific to airline business and is better suited elsewhere.
Why would they ? They can go elsewhere to earn their salary which is driven by forces of supply and demand.
Serbian salaries are for Serbian public servants. That's what Jat Airways had and they proved how incapable they were of running the airline
it is not the case these ventures required additional investments, because more money burned wouldn't solve their structural problems. simply, they were failed business in which somebody would invest only by mistake.
now, if the oil prices stayed high, those business would lose even more money and hogan would get fired anyhow. yes, the emirs would be less anxious to do that, but those business wouldn't turn profitable in another 10y. they were stubbornly losing money each year.
thirdly, hogan got fired precisely because of these non-performing investment made in europe, which are not connected with oil prices.
emirates are on the other hand profitable and are cutting because the oil plunge lowered the travel demand from the gulf region. they will not change their management or will have major strategy changes. etihad will have to rethink its position completely.
fourthly, i am not talking about modest industry ROI (the industry is ridiculous and has probably negative or 1% historical returns), but serious 1.2 mil€/d drain from berlin and 0.5mil€/d loss from AZ. nobody in europe is losing that much money.
Izgleda da ce ova vest mnogima pokvariti vece :-)
Today, Emirates deferred 12 A380 aircraft which were due next year. This simply reflects softening demand across the globe and all airlines are responding accordingly.
Time Clark a few months ago spoke about the structural changes happening in relation to demand and teh fact that premium travel is softening enormously, forcing them to start charging some economy passengers for seat selection. Moreover, they will be introducing a premium economy cabin to respond ot these changes.
As more LCC's take to long haul travel, the longhaul legacy carrriers will be forced to make even more changes to their businesses - incl staff cuts as well as cuts to in cabin service - such as eliminating free alcohol and food ....
Unfortunately, the winds of change are bringing dramatic changes to the existing busines models of legacy carriers ..
Who are you kidding ?
None of them would be in Serbia if that was the case.
here i o again with the oil prices, but the deferment is always happening in low oil cycles since the benefits of flying newer and more efficient planes is diminished due to lower savings on oil consumption. i believe every fleet planner is looking to defer the deliveries and prolong usage of existing fleets.
as for other points, i completely agree. i see the future of industry as it is in all other transport branches - to be cheap, punctual and reasonably comfortable. this premium flying never made sense to me. for that money you can always get much better experience to wherever you are traveling to.
I for one will be hesitant to book this summers vacation on Air Serbia if there is a chance of the NY route being cancelled. I experience this before with unstable charter airlines and don't plan on being fooled again.
Or are we not getting all the real information?
This is the worst admission of guilt I ever read. Shifting the blame doesn't work any more.
Company owners would profit immensely, in that rat race passengers would get crappier and crappier service (sorry I mean "cheap and reasonably comfortable") and all would be subsidized from pubic purse. What is not to like!? Perfect Wizz/Ryan capitalism.
Unlike in EU and in US, fuel price is not an issue for 3 ME carriers. While others had to pay high prices, 3ME profited hugely. I let you figure out why.
Even if that was reason for deferments (and it does not seem so), it does not explain cuts and layoffs. Deferments saved a lot of money. Why downsize additionally?
Again, first you make a conclusion, then you reach for arguments. It should be the other way round.
BTW, prime minister knew about hogan's future and because of that cancelled his appearance at the T6 "summit" in December
2014 ey profit was about 70mil€, out of that they had 700mil€ revenue by selling their frequent flier program to a daughter company. meaning they actually had 630mil loss. So lets think again why ey needed to cut. UNPROFITABLE!
As for other gulf carriers their cuts will come because of indirect effects. Less oil money = less travel.
No changes in management.
A zasto su se tome radovali, e to vec moras da pitas one koji su postavljali zlurade komentare, ne mene.
Be proud and happy that your airline is on the map as a success story for one of the world's leading airlines - as well as an affiliate of that same airline and it's other partners.
Chaotic leading of JU over the last two years will significantly contribute to the weaknesses when cooping with future challenges.
http://gulfbusiness.com/abu-dhabis-etihad-dismiss-group-ceo-james-hogan/
Shirlene Adrn
Has anyone read his ""trimming the tree"" news letter to the employees? He gave orders to his extermination squad to fire close to 10,000 staff. These are alll at the lower end of the employment chain. He has thrown so many poor families into turmoil because of his stupid investment policies. Etihad went broke because of his poorly informed investments. As the head of Etihad he should have accepted responsibility for the disaster,and resigned, not fire staff. Disgusting !!
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