Etihad Airways, the national airline of the UAE has unveiled plans to acquire 49 percent of Jat Airways, the Serbian national airline.
The Abu Dhabi-based carrier has also been awarded a five year management contract for the carrier.
Air Serbia will become Etihad Airways’ sixth equity partner following investments in airberlin (29.21 percent), Air Seychelles (40 percent), Virgin Australia (10.5 percent), Aer Lingus (2.99 percent) and most recently Jet Airways (24 percent) — which is awaiting regulatory approval confirmation, but is expected to succeed after facing several hurdles with India’s regulatory authorities.
These are two of the key components of a wide-ranging strategic partnership agreement, signed by Etihad Airways and the Government of Serbia, which includes a fleet of new aircraft, and a new integrated network of international destinations enabling greater access for business and leisure travelers to Serbia.
Etihad started flights to Belgrade in June, and the new partnership is expected to significantly boost trade and investment between the United Arab Emirates and Serbia, as well as helping to boost the tourism sector in both countries.
Trade between UAE and Serbia tripled from 2011 to reach EUR 23.3 million in 2012. The various agreements signed between the two countries in recent months will further expand investments in agriculture, defence, technology, and tourism.
The strategic partnership agreement was announced by James Hogan, President and Chief Executive Officer of Etihad Airways, and Aleksandar Vucic, Deputy Prime Minister of the Serbian Government, at a media conference in Belgrade.
Under the terms of the agreement, Etihad Airways will make available a USD 40 million loan facility which will be converted into equity on 1st January 2014, subject to regulatory approval. This will be matched by an equal funding injection by the Government of Serbia.
Etihad Airways and the Government of Serbia will also each provide further funding through shareholder loans and other funding mechanisms of up to USD 60 million to meet working capital requirements and support network development for the newly created Air Serbia.
James Hogan, Etihad Airways’ President and Chief Executive Officer;
“We are delighted to welcome Air Serbia to our equity alliance and look forward to working constructively with them and their stakeholders to build a sustainable, competitive, and profitable airline.
We will have tough decisions to make, but the financial investment by Etihad Airways and the Government of Serbia, together with the positive impact of our joint management expertise and experience, will help ensure this airline, with its proud history, now has an even brighter future.”
Aleksandar Vucic, Deputy Prime Minister of the Serbian Government;
“Etihad Airways’ reputation, financial strength and stability will be of significant benefit to Air Serbia and we are delighted to launch this strategic partnership. Air travellers to and from Serbia will soon benefit from an incredible range of new products and services.
The partnership will provide passengers with an extensive route network and smooth flight connections. It will also consolidate and enhance both airlines’ market competitiveness as the relationship deepens over the coming months.”
The rebranding and renaming of JatAirways to Air Serbia is a significant moment in the history of the Serbian carrier which is more than 80 years old. Tail fins on Air Serbia aircraft will feature the Serbian coat of arms and the country’s state colours on both sides.
The new livery was jointly designed by a team in Serbia and the UAE, and provides a new look and feel for the national airline. The aim was to make a break with past practice, but not with Serbian heritage. Care was taken to offer an unmistakable national identity.
Planned developments will include:
- An enhanced flight network
- Codesharing with Etihad Airways and airberlin, adding another 12 destinations in Africa, Europe and the Middle East to Air Serbia’s current network of 33 cities
- New destinations — Abu Dhabi (complementing Etihad Airways’ daily service), as well as Banja Luka, Beirut, Bucharest, Budapest, Cairo, Kiev, Ljubljana, Prague, Sofia, Varna, and Warsaw
The strategic partnership agreement will also offer unprecedented career development opportunities for Air Serbia cabin and flight deck crew, who will have access to the world-class Etihad Airways Training Academy and facilities in Abu Dhabi.