State to maintain support for Air Serbia

The Serbian government will continue providing support to the national carrier in the coming years, the country's Prime Minister, Ana Brnabić, has said, after the state gave some twenty million euros to the airline last year. She noted, "The government of Serbia will maintain its strong support for Air Serbia. This support will be in line with European Union regulations, as it has been so far, however, no one can prevent us or limit our support for Air Serbia". The PM added, "Air Serbia plays an important role in the development of tourism, improves our economic ties with numerous countries and strengthens our country's brand. It has been an important driver of economic growth and I am certain that we will see even better results ahead since there are good prospects for further growth".

Air Serbia has posted a profit for the past four years but has also received state funds. In 2014, the carrier's net profit stood at 2.7 million euros, which was followed by a 3.7 million euro profit in 2015. In 2016, upon launching its first long haul service, the airline's figures declined 77% with Air Serbia managing a 990.000 euro profit. However, in 2017 its profit soared to sixteen million euros. Last year's record results were achieved in part due to a significant reduction in expenditures and an increase in revenue. Furthermore, the state provided a twenty million euro subsidy, which is half of what the company used to receive from its majority shareholder, although the carrier was also granted twelve million euros for the "development of tourism". The Serbian Finance Minister, Siniša Mali, has said that the payment credited under tourism development is primarily for the support of the carrier's long haul service to New York. "As part of our tourism development strategy until 2025, the Serbian government has decided to extend its support to whatever contributes to tourism growth. In this case, it is flights to North America. Without that support there would be no service to the US. However, Air Serbia's financial performance would remain unchanged", Mr Mali said recently.

Air Serbia has justified the support by noting it gives back one billion dollars to the Serbian economy each year and that it plays an instrumental role in the country's economy. It provides some 13.230 people with employment (both directly and indirectly) and adds $210 million to the Serbian economy through its core operations including expenditures on fuel, maintenance costs and local Serbian suppliers. This includes over 1.600 direct jobs at Air Serbia in Serbia, 5.450 indirect jobs supported by the airline’s procurement of goods and services and 6.130 additional jobs supported by staff spending their wages in Serbia. Furthermore, the airline maintains it carries over half a million international visitors, predominantly from Europe and North America, to Serbia. In addition, Etihad Airways, which holds a 49% share in the company, supports some 3.900 jobs through its operations in Serbia, which equates to an economic contribution of $45 million. "The contribution that Air Serbia makes to the national economy and the job market in Serbia cannot be overstated. We support thousands of jobs directly, through our airline operations, and indirectly, through the powerful domino effect that Air Serbia has on stimulating economic activity throughout the country. Our flights benefit many jobs in Serbia, such as the local suppliers we use for inflight catering, to the many industries that rely on business from air travellers, including hotels, restaurants and other tourism and hospitality-related sectors", the airline said in previous years.