The Serbian government has purchased 1.82 million newly issued shares by Air Serbia valued at a total of 15.5 million euros, increasing its ownership stake in the flag carrier by 1.6 points to 83.58%. In turn, Etihad Airways’ share in the company has declined to 16.42%. The right of pre-emptive registration of stocks was excluded in this case as it was determined that Etihad is currently unable to participate in the capital increase in the current circumstances. Air Serbia has said the latest recapitalisation, which took place upon its own request, will further assist the airline in overcoming the effects of the coronavirus pandemic and “strengthen its position as a regional leader which will continue to provide a direct and indirect contribution to the Serbian economy”.
The Serbian Commission for State Aid Control approved the capital increase, noting the measure is in line with the country’s legislation. In late 2020, the Serbian government recapitalised the airline to the amount of 100 million euros and took an additional 31% stake in the company. “We are grateful to the Government of the Republic of Serbia for providing support to the national airline to overcome business obstacles caused by the coronavirus pandemic”, the carrier noted. Air Serbia has previously said it plans to end this year break even or with a small profit. It reported a loss of 77 million euros during the pandemic-stricken 2020, which was decreased to a loss of 21.3 million euros last year.
Commenting on the airline’s ownership structure, Air Serbia’s CEO, Jiri Marek, recently said, “Air Serbia has played an important role during the pandemic, supporting the Serbian government with repatriation flights, as well as the uplift of medical equipment and so on. I think we've proven that our operations do not only contribute to connectivity, but also bring significant economic benefits. We believe the government wants a strong national carrier that continues to grow. There are various models in the industry with different participation structures and different levels of state participation. Even combinations of private and state shareholding is possible. It is up to the Serbian government to find the most suitable model”.
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Just a way to pump more money into Air Serbia.
ReplyDeleteThey don't deny it.
DeleteI thought JU was profitable.
DeleteNo, they had a loss of 21,3 million last year.
DeleteLoss making, like OU?? I impossible!
DeleteUnfortunatelly for you, loss making is the only similarity with OU. Long haul, developed regional network, developed european network, charters, cargo, prompt reaction to market changes, competent management, synergy with hub airport, all these are light years away from OU, not like OU, and only after one productive decade of work, not after three wasted decades
DeleteAnd only two days ago we were reading how AirSerbia is aiming to be profitable by the end of this year. This is bullshit and nonsense in a year where there was so much flight demands and when planes were full. Shame on you and shame on us to allow wasting our money, as tax payers, like this.
ReplyDeleteThey are going to be profitable thanks to this money.
DeleteBe aware, it has nothing to do with profitability.
DeleteIt is about equity, which is completely different thing.
Getting this money means that they are not and they'll continue to not be profitable.
DeletePeople getting their panties in a twist over €15 million is just hilarious. If you actually live in Serbia, you should know that this isn't even 1% of tax money wasted on public enterprises every single year. At least JU has something to show for it.
DeleteSo they paid Etihad 15 million for 1%?
ReplyDeleteNo, read the text. Air Serbia issued new shares. They didn't buy Etihad's shares.
DeleteEtihad is an owner only on paper.
DeleteTypical way to do business in the Balkans.
ReplyDeleteWrong. It is typical way to grow the business globally.
DeleteAnon 09:09 LOL dude!
DeleteYes as I said typical Balkan way to do business. Stuck in the world of Communism.
DeleteAnon 09:10
DeleteWould you be so kind to explain to us what was LOL with Anon 09:09 comment?
If Etihad's 49% stake in ASL 9 years ago, was nothing else but a typical money laundering process, this move by the Serbian gvt now, can be called as rinsing.
DeleteNeither has to do anything with the definition of organic business growth.
Anonymous 09:36 +1000
DeleteAnon 9:36 Neither has to do anything with the definition of organic business growth
DeleteDid you check the number of passengers and destinations Jat had in 2012 to Air Serbia in 2019? Huge growth.
This will help Air Serbia to become even stronger! Well done!
ReplyDelete+1
DeleteSo much about profitability
ReplyDeletewrong. Read the basics of the economics.
DeleteOnly company cheerleaders in this forum were saying that Ju is profitable. And I seriously doubt that even them believed it.
Delete@Anonymous 09:08
DeleteEconomics 101 says that if you need state subsidies every year to present even a small profit you are not profitable.
You are only profitable when business revenues exceed business expenses.
You have just quoted confirmation it is not about profitability!!!
DeleteCheerleaders (JU), and haters (OU). In between are aviation buffs who think having more aircraft without economic interes is great.
DeleteIf GoS decide to take JU to IPO, I believe either haters onhere will take an opportunity to take advantage of it. Let`s wait a little bit.
ReplyDeleteI just wonder , will they ever publish their real financial results ??!!!
ReplyDeleteSerbia took new loans from the United Emirates in order to repay debts to the Emirates. The interest rate is "only" 3 percent
ReplyDeleteHow is that related to Air Serbia?
DeleteHence the money, Trigger!
DeleteBetter than taking out a loan.
ReplyDeleteThe money would come out of taxpayer's pockets either way.
DeleteWhat a surprise...
ReplyDeleteTo be honest, 15 million is not that much.
ReplyDeleteFor less than 2% of company? That's way too much.
DeleteI think it is much more concerning that Serbian state owned Telekom paid 600 MILLION EUR, yes 600 MILLION for English premiere league broadcast rights than these 15 milloon for Air Serbia.
ReplyDelete+1
DeleteSMFH.
I get the importance of Air Serbia to a small country such as Serbia so in the grand scheme of things it's not that much.
ReplyDeleteYou should add up all the money they receive. Not just this.
Delete-1
DeleteWell done Serbia
ReplyDeleteI said it the other day and I will say it again, without state support, Air Serbia would go bust
ReplyDeleteSo what would be the alternative? Finance Wizz Air in Hungary or let foreign airlines come in who have no intention of registering in Serbia, no intention of paying taxes in Serbia and who only look after their own interests which are in no way related to Serbia.
DeleteWhy do you think this is such a genius conclusion? Without fresh liquidity, a fresh upstart in a very competitive industry would go bust. Wow, groundbreaking.
DeleteWithout support majority of airlines would go bust
DeleteEither way, Serbia would need to subsidies air travel, with or without Air Serbia. Just like pretty much every single European country has. The amount needed is a different subject to debate. However, going by how aviation markets in Europe look when the national carrier goes bust, the amounts given to JU isn't too bad and is, when everything is added up, worth the investment. It would be nice however if the national carrier didn't need these subsidies, but I think in the next couple of years we will see that finally happen.
DeleteGood
ReplyDeleteAt least the airline is expanding and improving services, so the money is being used productively.
ReplyDeletewhen looking at the greater picture Air Serbia is indeed contributing a lot to Serbian economy.
DeleteNo news on Air Serbia being sold-out on their Moscow flights??
ReplyDeleteState increasing stake in the company is a bit more important.
DeleteWhat a stupid media hype built by N1 media... Air Serbia has been sold out to Moscow and all its Russian destinations ever since the war started, neither did prices nor
Deletecapacity have changed since the start of the mobilization.
N1 and Miša Brkić are front line Air Serbia haters, but every time they write something it just shows how ignorant they are.
@13,23
DeleteAll media in Serbia is trash, some are less trashier others.
When it comes to JU and its SVO route, yes, flights are sold out, but being sold out over a month in advance is new. Within 24 hours.of Putins announcement to partially mobilise citizens, reservations massively grew on the flights to SVO. This is a fact. This also could be an opportunity to JU. Opening a daily flight to EVN for example might be a good way for JU to pick up some extra Russian pax since alot of Russians are using Armenia as a transit point to travel elsewhere.
Money well spent.
ReplyDeleteI find it interesting that in Serbia people get peeved about subsidies or state support for Air Serbia but not to the dozen of other state owned dinosaurs who get the same assistance or even more.
ReplyDeleteProbably because they were made to believe that after Etihad takes over there would be no more need for state assistance.
DeleteAnon 9:49
DeleteNot entirely. It is more likely because Air Serbia is slowly turning into a success story, and their primal instinct is to trash, bash an rage on any success story that comes from Serbia. Their comments on the new railway between Belgrade and Novi Sad are also a nice illustration of that instinct.
They are perfectly happy with other dinosaurs eating their taxpayer money as long as they don't dare to do something good with that money. The moment they do, our concerned taxpayers start firing at will.
Thank you, Anon 9.49, you hit the point completely! Haters Gonna hate, AirSerbia is gonna fly!
Delete@09,46
DeleteI agree. The subsidies into JU aren't that bad considering the funds wasted elsewhere.
@09,49
I think this is the main point. I don't think this regime has completed anything it promised.
@10,36
When the deal with EY was made, one of the key points made was profitability. The airline could of became profitable in this time had the investments into the company been used properly. Instead, a model not fit for the European market was introduced, with a poor pricing policy, expensive aircraft leases, over inflated workforce, amongst other things that brought the company finances down. Fleet size has remained pretty much remained the same since 2016. Finances started to improve since 2018, with exception to 2020 and 2021, but 10 years into the Air Serbia rebranding, profitability is no where in sight.
As for the railway to Novi Sad, the promise was for it to be completed to Budapest (Subotica) by 2018. The new deadline was for Novi Sad to commence by the end of 2021. In the end the line to Novi Sad finally opened in April this year. Not to mention the various scandals that came with it. This is the problem. It's the rampant misuse of public funds the whole country is desperately needing.
Always complaining about something. Strange mentality.
Delete@12,29
DeleteEverything is perfect in Serbia?
Just when I thought JATBEGMEL was sensible, reasonal person: "As for the railway to Novi Sad, the promise was for it to be completed to Budapest (Subotica) by 2018. The new deadline was for Novi Sad to commence by the end of 2021. In the end the line to Novi Sad finally opened in April this year. Not to mention the various scandals that came with it. This is the problem"
DeleteJATBEGMEL read this: https://en.wikipedia.org/wiki/Big_Dig
@18,28
DeleteNot sure what the point of the article was supposed to be.
From what I understand, you are comparing practically upgrading existing infrastructure to the construction of a new project in a city with the population almost that of Serbia. The mismanagement of the project doesn't mean that we should follow it as a benchmark, nor use it as an excuse that elsewhere is worse.
Fact is, Serbia all over is desperate for investment, with tonnes of places where the officials can profit from. We are an awesome country with soo much to offer. However, those sitting in various ministries are soo short sighted that they don't see the potential they themselves would get with completed projects all over the country.
With JU the topic here, the money invested should of been more than adequate to buy a brand new regional fleet. Imagine the lines of 10 shiny new ATR's, imagine a fleet of over 30 ac, imagine BEG looking at 9-10 million pax, imagine more widebodies. Thats the point. EY hasn't done anything in JU that Serbian talent couldn't have done themselves, except overcharge the airline at the expense of the growth of the company. I've got nothing against the subsidies, I do have something against on how it has been spent the past 9 years. I'm happy that our airline is growing and look forward to see where it'll be in the next few years as they execute their intentions, I think it could of been done years back.
Endless money pit
ReplyDeleteIndeed
DeleteI can only imagine how much money will be pumped into it next year.
DeleteSimilar sums are invested in another airline in the region and we get 13 international routes for it.
ReplyDeleteSo only Slovenia couldn't be bothered to save its own national carrier. I guess we know something that the rest don't...
ReplyDeleteNew long haul routes, massive short haul expansion and fleet expansion don't come cheap...
ReplyDeleteI would love to see a table of how much subsidies Air Serbia receives each year. I think the figures would be shocking.
ReplyDeleteIf you are someone seeking shock thrills, then your best bet would be to check the figures of neighbourhood airlines, with a special focus on one.
DeleteThe topic here is JU and how the public in Serbia has been mislead for years into believibg that JU is profitabile and not costing the taxpayer anything, while the reality is that more than 200 millions euros have been pumoed into the company since Air Serbia was started. That is the topic.
DeleteSomehow when the topic is pumping more money into Croatia Airlines, comments always bring up comparisons to Air Serbia. So if that's allowed, let's compare how much better Air Serbia is doing. Plus Air Serbia existence is in national interest, unlike OU where other EU airlines can operate all routes including domestic.
DeleteFully support this decision.
ReplyDeleteAs they would say in Serbian "nema zime" for Air Serbia.
ReplyDeleteTroll LVL over 9000
ReplyDeleteThe ASL cartel begins
ReplyDeleteNew Charter Company, tourists only, 10 A340-300, 1.5 million euros each and start with Charters, like Thomas Cook and for others.
ReplyDeleteScheduled destinations, no money.
Even if you ask 500 euros rt, your load factor is low%.
😂😂😂 OMG!!! Lol! Cringe!!!
DeleteOne way trip was not less than 350 euro with Ryanair.
DeleteRyanair is in life, because they make enough money in those 3 months.
They don't live with 9.99 tickets.
Air Serbia has no aircrafts for those flights and A319 is not for that.
With A343, all Economy and low hours that you make, low cost of A343, you can make money.
They are still with Lufthansa, Swiss and others, even if many others dont use anymore quadjets.
They consume maybe even less fuel than A330-200.
I hope GoS continues recapitalising and soon acquires 100% stake in JU since the current silent partner isn't much more than a ball on a chain.
ReplyDeleteWhy it matters if it's 85 or 100%, it's not like there's some profit to share.
DeleteThere will be. JU is on the right path to profitability
DeleteNo, it is not. It is a political toy of the Dear Leader and his wet dreams.
DeleteMaybe tone down your language a bit.
DeleteAnonymous18:50 airline has been around for 95 years. Your paranoia is funny.
Delete15 million is peanuts in the aviation industry.
ReplyDeleteLooks like GoS found a legal way to pump money into JU. Increase stake by 1% each year.
ReplyDeleteThis company is not profitable
ReplyDeleteDefinitely more profitable and with some kind of a growth plan compared to the rest in the region.
Delete^ true
Deletehttps://www.exyuaviation.com/2022/06/croatia-to-grant-454-million-in-airline.html
Obnova flote,uvođenje novih prekookeanskih i evropskih letova. Ukoliko želimo jaku i stabilnu nacionalnu avio kompaniju treba uložiti dosta para u naredne 2-3 godine,da bi se pozicionirala na tržištu i krenula ka održivom poslovanju. A zabrinute poreske obveznike bih pitao samo da mi objasne u kom biznisu se može ostvariti dobit a da se u isti ne uloži?
ReplyDelete+100
DeleteMoze u ovom. Evo na primjer : Ulaganje od 0 eura/dolara/kuna/dinara/bilo cega. Dobit : ogromna, racuna se u stotinama milijuna, ukljucuje cjelokupno trziste ex-yu republike s najrazvijenijim zracnim prometom i najvecim brojem putnika. Nacin ostvarivanja dobiti : koruptivnom radnjom postavljanja osobe u Izvrsni odbor Alijanse. A porezni obveznici
Deletecak nisu ni zabrinuti nego pjevaju Danke Deutschland
There is something terribly wrong in this equation. If 15.5 million euros equals to 1.6% share in the company, it means that the company is valued at 968 million euros?!?!?!
ReplyDeleteLufthansa, which is a HUGE airline group (Lufthansa+Austrian+Swiss...), is valued 7 billion euros (market cap), and 13 billion (enterprise value). Source: https://finance.yahoo.com/quote/LHA.DE/key-statistics?p=LHA.DE
The price per share was 1000 RSD
DeleteWith all those unnessesery moves like Havana and Tianjin and some villages in Europe like Bari , I think and I hope I'll be wrong they are gonna have the fate of Olympic airways .
ReplyDeleteTianjin will make more money than New York.
DeleteOn another note Hainan's flights to from BEG are full.
Anonymous12:20
DeleteYour cynical bitterness is seeping through your pores. Coo down with the comments.
A city of 330k people is a village to you? What planet are you living on?
DeleteIf Bari is a village with 300k people, than we are safe to assume that some other hamlets are also not worth flying, such as any city in Croatia besides Zagreb for example, and that's obviously not the case.
DeleteBravo Serbija!
ReplyDeleteIf they paid 15.5 million for 1.6%, it means the whole company is worth close to a billion. And then some people try to convince you how this is a perfectly normal way of doing business. LOL.
ReplyDeleteEtihad dao pozajmicu AS kako bi postao većinski vlasnik. Država vratila pozajmicu uz masnu kamatu. Država nakon toga otkupljuje od Etihada udeo u AS. Etihadu čist profit od ovog posla na uloženih 0 evra. Uz to Etihad dobijao deo profita svake godine dok je država upumpavala svoj novac kako bi AS prikazivala profit. Magovi avijacije sns-a.
ReplyDeletePa nije sad nista otkupljeno od Etihada niti uplaćeno Etihadu
DeleteHoće mehaničar da bude CFO.
DeleteObjektivno, Etihad je resio cuveni problem sa Airbus narudzbom. Nemojmo to zaboraviti. I, u krajnjem, i da nista novo nisu uradili, uradili su reset u odnosu na Jat Airways. To je moralo da se uradi. Ovo sto je danas Air Serbia ipak ne moze da se poredi sa rasulom sa 25-godisnjim 737-icama i svim vrstama jatovanja...
DeleteI don't know what is the fuss about. Federal Reserves prints (adds million of Zero's on digital terminal) to the tune of 6 Trillions of dollars during Covid times, few billions are given to US airlines and they call it Capitalism LOL
ReplyDeleteAll Central banks worldwide ZERO interest policy for 20 years, fire the bubble of Real Estate of biblical proportions and they call it Capitalism LOL
JU is important for the region and needs support. Once China opens up and it will be soon, the cargo business will skyrocket. US will start "real" recovery around 2024, when next election rinse all the "printers" at the Fed. By that time interest rates will stabilize around 4-5%. We already had 3 increases from the January. So all in all I see better future for the JU and the region.
What's your estimation, when is Serbia taking over US?
DeleteAnonymous00:37
DeleteIn terms of collective consciousness it already is ahead of US. The whole region from Slovenia till Bosphore and from Hungary till Peloponese is already ahead of US.
US will have to go through some tough times from this October/November but it will manage it through. I have huge doubts about Western and northern part of Europe.
Whatever happened to a free market. If a company cannot survive on its own, it gies bankrupt. Companies all over the world have just become use to getting handouts. If they don't, they threaten to leave or some will go bankrupt. Every company should keto the market dictate hiw successful they will be.
ReplyDeleteFree market didn't crush OU in EU, let alone JU that will be outside of EU for a couple of decades.
DeleteBut they will not have this level of political support never again. So if they don't create sustainable business, they won't be cancelled but will be downgraded to OU level.
DeleteWe do not have 'capitalism' or a 'free market' anymore. We have a world economy based on greed. It was forced this way mainly due to the free hand we all gave to China plus stimulus (money printing) which started during the last GFC (2009) which was done to ensure China did not steam ahead while the western world recovered but never stopped. Funny thing, Trump did try to address this but he had no follow through, got scared or something.
DeleteThe west is doing the same thing the Soviet Union and the Warsaw pact did before it all collapsed (including Yugo). A new system is coming..... probably a major conflict which history tells us is needed as a schism to divided the old system to the new.