What next for Jat?

Jat and other EX-YU carriers face an uncertain future

With the elections in Serbia done and dusted, everyday problems will once again come into the spotlight. The future of Jat Airways, which in less than a month celebrates 85 years of operation, will once again be up for discussion. Prior to the elections, held earlier in May, it was suggested that local businessmen were gearing up to buy a 50% stake in the carrier. According to media reports, this idea is still probable and could be pushed through later on in the year when the new government is formed.

The Serbian carrier’s most pressing issue is an outdated fleet. Despite immense competition, the airline has seen passenger numbers rise this year, with aircraft full on key routes such as London, Amsterdam, Brussels, Moscow and Paris this summer season. However, the airline also suffers from an unprofessional, politically appointed management. The new Serbian government, which is expected to be formed soon, will most likely be made up of the same parties which led the country in the past four years. One of the key election promises of all the major players was for politically appointed management boards and CEOs in government owned companies to be replaced with professionals chosen upon merit rather than party lines. It remains to be seen whether this promise will be kept and whether Jat will benefit from it.

The two attempts to privatise Jat have both failed. In 2008 no airline answered the government’s tender call while in 2011 only Baltic Aviation System bought the tender documentation but decided not to pursue it further. At a time of severe economic turbulence in the aviation industry, particularly in Europe, it is highly unlikely anyone would be interested in purchasing the carrier. Jat’s most valuable possessions are its numerous expensive slots at airport across Europe such as London Heathrow as well as a loyal diaspora. For now the status quo at the airline is being maintained. The issue of Jat has been put under the carpet for years with no one willing to take any serious action. It is unlikely that such a stance will be taken for another four years.

Other national carriers from the former Yugoslavia are also experiencing problems. Adria’s future will be decided this year as the airline awaits privatisation after being bailed out by the government last year. Meanwhile, Croatia Airlines is suffering from sliding passenger numbers and rising discontent amongst employees as well as a non functioning management awaiting to be replaced. B&H Airlines is fighting for survival as its owners feud over the carrier while the government in Montenegro recently forbid its country’s airports to enforce taxes on Montenegro Airlines due to its mounting debt.