Etihad Airlines has bought half of JAT Airways, Serbs will renew the route to Prague
Airlines from the United Arab Emirates Etihad Airways will acquire 49 percent in the Serbian national carrier JAT Airways. It was immediately renamed Air Serbia. Within five years, the Arabs in JAT want to build a profitable company.
According to the agreement, Etihad will provide JAT with a loan of $ 40 million (787.3 million crowns). At the beginning of next year, Etihad will receive airline shares for this money. In total, they want to invest one hundred million dollars in the development of Air Serbia. The Serbian government will provide the company with the same capital injection.
Etihad Airlines financially supports the government of the emirate of Abu Dhabi. The company began a wave of acquisitions in 2003. It currently owns stakes in Air Berlin, Air Seychelles, Aer Lingus and Virgin Australia and is awaiting approval to acquire a stake in Indian Jet Airways. It has a code-sharing agreement with about 40 companies. Among them are Czech Airlines, which together with Etihad offers joint long-haul flights via Abu Dhabi.
JAT Airways was established 66 years ago. The airlines were seriously affected by the sanctions imposed on Serbia during the war in the 1990s, when most of the fleet remained on the ground and the company survived only thanks to huge support from the government. JATs currently fly Boeings 737-300, but these aircraft will be phased out and Air Serbia should use new aircraft, including ten Airbus A319 aircraft. JAT currently flies on 30 routes in Europe and the Middle East.
Air Serbia are to take over these routes and plan to add several more, including a daily connection from Belgrade to Prague. In total, the airlines will launch 12 new routes, including Abu Dhabi, Beirut, Cairo and Kiev.
Other Balkan airlines are also looking for a foreign partner to help them survive. There are reports in the local media that Turkish Airlines is interested in the Greek carrier Olympic Air and Aegean Airlines, which are soon waiting for a merger.
For Air Serbia, the entry of Etihad can also boost the competition with rival Croatia Airlines. The Serbian carrier was ignored by foreign partners for many years, mainly for political reasons, and Croatian airlines grew at its expense. That could change now.