No new Jat

Jat Airways to live another day

In April, the Serbian Government decided that it would create a new national carrier as a successor to the debt ridden Jat Airways. The new company, set with 400.000 American Dollars, would be freed of Jat’s debt but would inherit its fleet, destinations, international agreements and employees. The new company would have made the airline more attractive to potential buyers and many believe the move was requested by Turkish Airlines (which has shown interest in purchasing the airline). On the other hand, some argued that the decision to create a new company was rash, decided through a Government conference phone call and that many would lose their job. However, the “Blic” newspaper reports that the Government has now decided, instead of creating a new airline, to invest in the current carrier and privatise it in 2011.

After the Government announced that it would create a new airline banks were apprehensive of loaning Jat money for future aircraft leases and new engines for its aircraft because they feared the money would not be paid off as it would stick to the old Jat. Furthermore, Jat has been reporting better results, has invested heavily in new advertising and has begun solving its fleet problems which has swayed the Government against creating a new company. “Blic” reports that the Government will announce a tender to find a privatisation advisor next month and would look to privatise Jat through the same model as it did the carmaker Zastava, which was successfully sold to the Italian Fiat in 2008.

The Serbian Government is keen to sell Jat before the 2012 parliamentary elections.