The mysterious case of Boeing

“A girl certainly won’t become prettier in time, and now we have to put some makeup on her face and dress her up nicely”, Srđan Radovanović, Jat Airways CEO

There are conflicting media reports regarding Jat Airways’ fleet renewal. With a delegation from Boeing meeting with Jat representatives on Monday and the Serbian government on Tuesday many have said that Jat did not and will not discuss any aircraft orders. However, the true story is not so simple. According to insider news, Jat and Boeing on Monday discussed possible aircraft types the airline could order. Boeing proposed for Jat to order 5 Boeing B737 Next Generation aircraft. Boeing will also compose a “dream fleet” for Jat, meaning it will formulate an exact list of aircraft Jat should order based on its financial results, current fleet age and cabin occupancy indexes. The aircraft manufacturer did a similar study for Jat in 2004 when, among other aircraft, it proposed the purchase of 2 Boeing B787s. The Boeing delegation is also said to be extremely interested in making Jat Tehnika its European technical base. Bombardier similarly named Ljubljana as its European hub. On Tuesday the Serbian government announced that it is firmly with Boeing ruling out a possible purchase of Airbus aircraft. Serbia’s minister for infrastructure says that aircraft orders can be made only after Jat’s new business strategy, to be published on Friday, is carefully analysed. Jat’s management is said to be furiously working on diverting its 1998 order for 8 Airbus aircraft and replacing them with ATRs. The Boeing delegation will meet up with Jat’s management again today.

Meanwhile, in an interview to the Serbian edition of the Economist Magazine, Jat’s CEO Srđan Radovcnović said, “A lot of money has been spent at Jat. The classification of jobs includes even a shepherd with a flock of sheep in the city of Vršac. The former reorganisation was carried out hastily and in a wrong manner. It couldn’t have been otherwise, since someone made show business instead of real business”. He continues, “In Vršac, where we have a pilot academy stretching on about 400 hectares of land, there is a flock of sheep. While I was analysing balance sheets, I saw an item named ‘biological assets’. I was astounded, and started wondering whether it was possible that someone at Jat had purchased parrots or aquariums. Then I was told that Jat also had a flock of sheep and that there was a shepherd position in the job classification”. However, in spite of all of this, Jat is a valuable company, according to Radovanović, since the liquidation value of its property amounts to at least 250 million Euros. Jat’s shares have already been listed at the Central Securities Registry, and formally everything is ready for the distribution of free shares to citizens. "It seems that an experiment was carried out with the Montenegrin market. We left it to Montenegro Airlines, and it is not quite clear why we did it, since due to large scale passenger interest we could almost have organized regular tram-car transport”, Radovanovic says. Radovanović also states that Jat pays some of the highest prices for kerosene in the world, the highest handling fees at its hub airport Belgrade and that a Nigerian airline as well as MAT Macedonian Airlines owes Jat a large sum of money.