Serbia denies Adria state aid claims


The Serbian government has rejected a complaint lodged against Air Serbia by Adria Airways over what the Slovenian carrier alleges are unfair state aid practices. The Serbian Prime Minister, Ana Brnabić, said on Tuesday, "Serbia fully respects the [European Union] Stabilisation and Association Agreement which forbids state aid. If someone wants to question that, they can, but I am certain Serbia will win". Last November, Ms Brnabić 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”.

Adria Airways filed a complaint against Air Serbia with relevant European institutions over what it sees as illegal state aid provided by the Serbian government to its national carrier. “Adria Airways is concerned over the aid the Republic of Serbia has illegally granted to Air Serbia and believes such behaviour to be unlawful as it goes against free market principles”, the Slovenian carrier’s legal representative in Serbia, Dragan Gajin, said last month. Adria expressed its concerns to the Serbian Commission for Control of State Aid but received no reply, prompting it to take the matter further with European institutions. However, Mr Gajin has come under fire himself since he acted as a legal advisor to the conclusion of the transaction agreement between the Serbian government and Etihad Airways over the latter's takeover of Jat Airways. As a result, the lawyer could potentially be in a conflict of interest.

Adria Airways has refused to comment publically on its concerns over Air Serbia other than to confirm it has taken action within the EU. The European Commission itself has told EX-YU Aviation News it is not authorised to deal with such matters since it does not have direct enforcement possibilities in candidate countries. The Commission said it stands ready to provide any support or guidance to the Serbian state aid authority in the implementation of state aid control. According to the European Union, a company which receives government support gains an advantage over its competitors. Therefore, the EU generally prohibits state aid unless it is justified by reasons of general economic development. There are exceptions to the rules as aid worth less than 200.000 euros over three years is exempt.

Air Serbia has been listed as one of several companies which will receive subsidies from the state budget this year, however, the country's Finance Minister, Siniša Mali, noted this is in relation to debt accumulated by the airline's predecessor Jat Airways. "We did not have 380 million dollars to pay off Jat's debt straight away. Instead, we will be making payments over a ten-year period. We process the loan as debt repayments either through Air Serbia or directly. However, none of the money goes into Air Serbia itself", Mr Mali, who previously headed the company's Supervisory Board, said.




Comments

  1. This "case" won't work out

    ReplyDelete
  2. Convenient for the government that they can just show all state aid as paying off JAT debt.

    ReplyDelete
    Replies
    1. that is not problematic and that's why mali is saying it.

      however, 2 ways which JU directly gets the money are problematic:
      1. direct subsidies shown in the annual report
      2. "hidden" subsidies that are given to JU, that are used to lower the OPEX and thus not shown in official figures, but only mentioned in the notes of the report

      i do not know a way in which these two are in line with EU rules

      new way of support, Niš PSO, is also not legally problematic

      Delete
  3. All JU has to do is to wait for a few more months and Adria will be long gone. Maybe JU should start preparing rescue fares for the regional destinations where JP flies to. XD

    Adria reminds me of the Ottoman Empire in the 19th century. A decaying system with a misled sense of importance.

    ReplyDelete
    Replies
    1. will you be happy then? will some cents or Euros end up in your pockets?, everyone is such a Nostradamus nowadays, and an Economics studies expert, I'm amazed by your talent that gets wasted online.

      Delete
    2. Are you implying he isn't right? That JP is a stable and successful business? Seems like you seem to be the expert whose potential wasn't recognized elsewhere.

      Delete
    3. I did not predict any future on how this will end or go on, JP has been "bankrupting" since I remember, 10 years ago. As for a stable business, I cant say anything, I will certainly not be influenced by the media. Friends that work there have been getting their salaries without any hiccups or delays.

      Delete
    4. But therefore passengers suffer with all these cancellations, triangle flights, missing compensations etc.
      I suppose you believe these are all good signs?
      Including this one
      https://www.exyuaviation.com/2017/04/adria-reaches-pilot-deal-to-prevent.html

      Delete
  4. Is the Adria/Air Serbia codeshare on??

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    Replies
    1. Makes no sense to codeshare with an airline that is reporting you to the EU. And viceversa, with an airline that you think is gaining unfair advantage through state subsidies.

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    2. hehe money makes world go around...

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    3. Pare ne smrde ....

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  5. Mr Mali is well known for cooking the books...who on Earth can believe what he says!?

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  6. I mean Adria's claim is bit silly (knowing the history of JP's benefits) but Brnabic's statement is equally bizzare: "Serbia fully respects the [European Union] Stabilisation and Association Agreement which forbids state aid. " Haha

    ReplyDelete
  7. This has Lufthansa written all over it. Has nothing to do with Adria. And they conveniently rem,embered to report them in the year they introduce 20+ new routes.

    ReplyDelete
    Replies
    1. But why doesn't Lufthansa just complain itself?

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    2. They already reported them over "effective control" and it didn't work.

      Delete
  8. Interesting article

    http://www.novosti.rs/vesti/naslovna/ekonomija/aktuelno.239.html:805128-Slovenacka-avio-kompanija-tuzi-Srbiju-za-ono-sto-trazi

    ReplyDelete
  9. Is JP still running those triangle Balkan bus-like routes?

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    Replies
    1. Really? Do they do it because of empty planes or because they lack planes? I mean if they combine two CRJ flights into one it means loads were pretty bad from the start.

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    2. As of now: Adria today is cancelled (at least one leg): Skopje, Sarajevo, Tirana, Podgorica and tomorrow (at least one leg) Munich, Vienna, Sarajevo, Tirana.

      Delete
    3. What do you mean one leg? Are those flights that are joined?

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    4. Anon 09:39: Exactly. If you can combine two CRJ900 flights into one CRJ900 flight in the top summer season without leaving people on the ground, the original LF must have been very low.

      Which is not surprising, given the mess they've been in for a very long time now.

      Delete
    5. Some are joined and some are completely cancelled.

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    6. So the promise they made that they would stabilise operations in July didn't happen.

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  10. and the worst thing of all is that people of Serbia are cheering for Adria, against Air Serbia. I mean, the hell?

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    Replies
    1. They even got a Serbian lawyer to represent them in this case.

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    2. Why are you surprised about lawyers? It's a well known fact they are soulless.

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    3. I\m surprised because he used to represent the company his new client is now suing.

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    4. Used to, doesn't represent anymore. That's like saying you are surprised to see an engineer start working for a company that competes with their former employer, or a chef moving to work for a restaurant down the street from their previous one.

      He's a professional who sells his services to those who'll pay for them, like any one of us. He's not soulless because of that.

      Delete
    5. Noncompete clauses are a norm in cases where one engineer wants to start working for a competitor. First company will not let engineer take any of their documents or even just proprietary knowledge to the competition and contracts spell this out.

      If that lawer has been exposed to any trade secret documents regarding EY/JU he would be in a clear conflict of interest position. What was he thinking??? Better get a face tat and apply at some Mexican drug cartel.

      Delete
  11. I love the fact that the lawyer representing Adria represented Etihad/Air Serbia in the past. LOL.

    ReplyDelete
    Replies
    1. It's so bizarre and an obvious conflict of interest.

      Delete
  12. Kako Alitalija po zakonu dobija subvencije,kao što je Er Berlin dobio regularne subvencije dok Lufthanza nije preuzela avione i linije tako i ErSrbija dobija novac po zakonu. Čini mi se da je ovde "Laki" malo nervozan jer se bliži prekookeanska ekspanzija pa se boje za transverne putnike sa balkana.

    ReplyDelete
    Replies
    1. Ili kao sto YM dobija subvencije od njihove vlade ali se JP tu ne javlja...

      Delete
    2. Ma postoji još brdo primara ali istina je negde tamo...

      Delete
    3. What You are talking about ? What long haul expansion ?...Doesn t work...

      Delete
    4. Priča se,a gde ima dima ima i vatre. Toronto,Čikago, Peking,šangaj...

      Delete
  13. What does this mean?

    "The European Commission itself has told EX-YU Aviation News it is not authorised to deal with such matters since it does not have direct enforcement possibilities in candidate countries."

    Does it mean Adria's claim is totally useless? Did Adria know that EC is not authorised in this case?

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    Replies
    1. No, it doesn't say that Adria reported Air Serbia to the European Commission it just says "European institutions".

      Delete
    2. It doesn't have enforcement means that it can't do anything since a candidate country ins't a member of the EU. So let's say they find some wrongdoing and then what? What can they do? Nothing. Just write a complaint to Belgrade and that's it.

      Delete
    3. They can stop or stall the accession process. And before you say how Serbia will never join the EU or that even the Serbian government only officially wants Serbia to join, that may be, but the reason Serbia is vigorously negotiating and trying to open new accession chapters are the millions in pre-accession funds it gets as it opens each chapter.

      Delete
    4. They are already stalling the accession process. Instead of at least 3 chapters only 1 was opened in June 2019...So they are obviously doing it.

      From the other side it is true that they could stop it, but Air Serbia is not enough good reason to do it. At the same time they would have to do it with Montenegro, because of YM.

      Delete
    5. Only naive people think the EU will jeopardize its relationship with Serbia over JU. They saw now that policies from 1990s no longer work because circumstances have changed. Russia and China are heavily involved in various projects and Chinese sent a new ambassador who is no joke, she is one of their brightest and most competent people from the ministry in charge of our area. So the EU would be shooting itself in the foot. So JU is safe, nothing to worry about.

      Delete
    6. @10:08 agree
      also vučić would take this very personally, since this is his showcase project
      if they however pressure you on this that means that vučić - eu relation went sour

      Delete
    7. Luckily for JU the EU doesn't seem to care. They have far more pressing issues in Brussels.

      Delete
    8. Petar Čelik: ...this is his showcase project

      Find me a politician in Serbia that will firmly commit to unconditionally shut down Air Serbia as soon as they take over. There is 0, ZERO, chances anyone will ever do that. Just look around! Previous government and Miskovic wanted to make Air Serbia their showcase project. Once someone else is in charge, they will put couple of their people in charge (partokratija), make a few minor changes, cut a route and open another one, and that's it! Anyone thinking Air Serbia is his project forgets that airline has been going on for 92 years.

      Delete
  14. If the EU was concerned over these subsidies which are peanuts in the grand scheme of things they would have written something in the progress report, like they did for Montenegro Airlines. But they didn't.

    ReplyDelete
    Replies
    1. Let's wait and see if something changes in the next progress report.

      Delete
  15. I just find it funny that a month ago Adria, which is 100% private company was asking for government aid. And then they go and report Air Serbia.

    ReplyDelete
    Replies
    1. Had they got the aid, they probably wouldn't have reported Air Serbia.

      Delete
  16. I also think someone nudged Adria to do this.

    ReplyDelete
  17. And yet nobody says anything against Turkish Airlines - the MOST heavily subsidised govt owned airline flying the skies of Europe

    ReplyDelete
    Replies
    1. Very true. I think it surpasses even the Gulf carriers.

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    2. Correct.

      But nobody can threaten them that they won't become EU members as they already know it.

      Delete
    3. And Turkey is not part of Single European Sky system. So they can do whatever they want.

      Delete
    4. But they have open skies with the US and not one US carrier makes any noise about them in the same way they do about the Gulf carriers

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    5. Turkish Airlines is a company in stock exchange market. 51 % of its share are privately owned. There is no state subsidizes.

      Delete
  18. Looks like Air Serbia (read as Serbian government) found a bug in EU aviation system. As a candidate country it can benefit all advantages of Single European Sky system, but when it comes to the state aid issue, EC can't intervene because: "The European Commission itself has told EX-YU Aviation News it is not authorised to deal with such matters since it does not have direct enforcement possibilities in candidate countries."

    That's hilarious. In that case, nothing can prevent Air Serbia to become one of the biggest airlines in Europe. You benefit all the advantages of the system but avoid all disadvantages/restrictions. Kudos!

    ReplyDelete
    Replies
    1. "In that case, nothing can prevent Air Serbia to become one of the biggest airlines in Europe."

      Hehe, do you have problem with that?

      And before you reply let me remind you that it is correct that EU state members are not allowed financially to support their air carriers, but from the other side they are receiving incomparably more money from EU funds than EU candidates countries, so therefore generally speaking Serbia is here not in the better position.

      Delete
    2. i think there is a rule that once you join EU you need to return all the subsidies you received while being a candidate

      Delete
    3. No,that rule does not exist.
      Otherwise Croatia Airlines would be a history by now
      https://www.exyuaviation.com/2012/11/aid-for-croatia-airlines-ahead-of-eu.html

      Delete
    4. i'm pretty sure it does, since it is hampering a lot of privatizations and business in Balkans. it covers a period up to 10 years back to date of EU accession

      Delete
    5. Any source?

      How come OU did not have to pay the money back?

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    6. They didn't have to pay it back but they had to go under restructuring.

      EU allows state aid like it says in the article above - "justified by reasons of general economic development". But you can't give it to the same company for the next 10 years.

      Delete
    7. He is talking about the time when the country was only EU candidate and that rule does not exist

      Delete
  19. Ok so say they have reported JU now, when can we expect some decision to be made? They are very vague with the details

    ReplyDelete
    Replies
    1. They know they can't do anything so they will most likely let this matter fade away.

      Delete
    2. Nothing will happen.

      Delete
  20. From her comments, it looks like Brnabic is hearing about this for the first time, so it obviously isn't a massive issue.

    ReplyDelete
  21. Adria filed same claim against Alitalia last year and there has been no reaction. This will go down the same way

    ReplyDelete
    Replies
    1. Agree. There will be no consequences.

      Delete
  22. I understand JP's concern about JU.

    ReplyDelete
    Replies
    1. You mean fear?

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    2. Well JP's 'new' or should I say recycled strategy is transfer airline between East and West. It has no serious chance of becoming that with Air Serbia so close by with a much more larger network. That is why they are doing this.

      Delete
  23. What an odd thing for Adria to do at this point in time.

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    Replies
    1. The Nis subsidy seemed to be the last straw.

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    2. Haha yes and Adria got 4 million EUR to maintain Ljubljana-Brussels route. Air Serbia got 5 million for 12 routes, Adria got 4 million for one route and to Brussels of all places.

      Delete
  24. What airline was the one that reported Adria about the state aid they received a couple of years ago?

    ReplyDelete
    Replies
    1. Thanks. Forgot about that. I got to wonder what their interest was in reporting Adria.

      Delete
    2. They report any EU airline that gets aid. Interest or no interest

      Delete
  25. Haters are up and early today :)
    Air Serbia exist, it makes profit and is expanding its network.
    Its by far the best airline among EXYU airlines.
    Have a good day.

    ReplyDelete
    Replies
    1. Yea it is like it has any real airline to compare with!?! ... they are all 4 of them peanuts airlines!

      Delete
    2. It has among Eastern Europe and it is one of the beat ones officially.
      To criticise using arguments is good and welcomed.
      To hate is unhealthy.

      Delete
    3. Air Serbia exists - true
      Air Serbia expanding network - true
      Air Serbia the best of all ex-yu - partly true ;the biggest, yes, not bad as Jat before , yes, but the best no, they are all more or less the same, within the same quality group - average
      And Air Serbia making profit, for this one I can only say LOL LOL LOL. And if LOL to this makes me "hater", let be it so :)

      Delete
  26. Adria better start focusing on how to survive the winter season which is coming. They have been close to insolvency and bankruptcy several times during winter period and this year will be the toughest.

    ReplyDelete
  27. I'm afraid it will be over for JP before winter.

    Official records at AJPES (www.ajpes.si/register transakcijskih računov) from today show us that JP doesn't have enough financial means to cover her outstanding liabilities that are due and also claimed by creditors.

    It is not published which creditor claimed payment and thus "blocked" the accounts.

    Few days ago it was only one business account "blocked", today there are all five (opened at different banks).

    Also the newspaper FINANCE just published two articles on the topic.

    https://www.finance.si/8950456/Nordica-zahteva-osem-milijonov-ki-so-jih-posodili-Adrii-Airways

    https://www.finance.si/8950199/Rezervacije-na-TRR-Adrie-Airways-prevoznik-je-reven-kot-cerkvena-mis

    ReplyDelete
    Replies
    1. What does this mean for Adria now?

      Delete
    2. Well, that CAA is not doing their job properly.

      They have 3 blocked accounts today due to unpaid obligations (it takes a court order to do it).

      In EVERY normal European country, CAA would have revoked the AOC effective immediately to protect safety of passengers.

      How can they pay maintenance or spare parts with blocked bank accounts? Pay the salaries (15th is coming)?

      Not in the Balkans though...

      Delete
    3. Bye bye love
      Bye bye happiness, hello loneliness
      I think I'm-a gonna cry-y
      Bye bye love, bye bye sweet caress, hello emptiness
      I feel like I could di-ie
      Bye bye my love goodby-eye
      There goes my baby with-a someone new
      She sure looks happy, I sure am blue
      She was my baby till he stepped in
      Goodbye to romance that might have been
      Bye bye love
      Bye bye happiness, hello loneliness
      I think I'm-a gonna cry-y
      Bye bye love, bye bye sweet caress, hello emptiness
      I feel like I could di-ie
      Bye bye my love goodby-eye
      I'm-a through with romance, I'm a-through with love
      I'm through with a'countin' the stars above
      And here's the reason that I'm so free
      My lovin' baby is through with me
      Bye bye love
      Bye bye happiness, hello loneliness
      I think I'm-a gonna cry-y
      Bye bye love, bye bye sweet caress, hello emptiness
      I feel like I could di-ie
      Bye bye my love goodby-eye
      Bye bye my love goodby-eye
      Bye bye my love goodby-eye
      Bye bye my love goodby-eye
      Bye bye my love goodby-eye

      Delete
    4. It really does look like the end is near :(

      Delete
  28. I believe that even if JP does go bust as some predict, some other airline will make a similar case against Air Serbia with the EU.

    ReplyDelete
    Replies
    1. Someone would have done it by now if they were concerned.

      Delete
  29. Desperate measures in desperate times.

    ReplyDelete
  30. Did Air Serbia screw up Adria or was it their own management? From Darwin nonsense to SSJ disaster, from Paderborn fiasco to unstable fleet choices, it was all Adria management. They never took responsibility for a whole string of just horrible management choices. It's time to say goodbye. Adria is a great brand and it will go on as something else, perhaps as Adria Milk Chocolate or something else, but Adria Airways is at the very end.

    ReplyDelete
  31. Information about block accounts of AA is not true, at least at this moment. All five accounts are without mark, which shows blockage. It does not help the debate to use false facts.

    ReplyDelete
    Replies
    1. The accounts were blocked yesterday. The fact that they are not blocked today doesn't change the facts from yesterday.

      Delete
  32. Bypassing all those irrelevant comments from Adria haters to the actual subject of this article. It is not a level playing field when one competitor is having heavy subsidies and another paying higher cost.
    Now to those Adria haters - we dont need to care any of their comments because they are the same ones that cry Adria is 10 euros expensive than Air Serbia on my travel.

    ReplyDelete
    Replies
    1. Air Serbia and Adria have no route on which they directly compete. Adria competes with LH Group and is at LH's mercy right now. LH can end leases and decide Adria faith.

      Delete

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