Winds of change

New government to deal with Jat’s old problems

The newly formed Serbian government is set to take office on July 23. Many are looking to see as to how the new government will deal with Jat Airways and its impending problems. So far, it is only certain that the Serbian carrier will get a new CEO. Vladimir Ognjenović’s Democratic Party is heading to the opposition benches and is unlikely to hold onto his post. The Serbian carrier has had a bad run of general managers recently as politics has taken centre stage over professionalism.

According to a coalition agreement between the parties that have formed the new government, all state owned companies will get a professional management without party affiliation and interference. However, it remains to be seen whether the government will deliver on its promise. Many old faces will be back in office. They include Milutin Mrkonjić as the Minister for Infrastructure. Mrkonjić has proposed for a new national carrier to be formed as a successor to Jat Airways with the help of local businessmen. Also returning to government will be Velimir Ilić, part of the 2004 - 2008 cabinet under whose order various Jat divisions such as Jat Tehnika and Jat Catering were divided from the carrier and set up as new companies, a move which has hurt the national airline.

The new coalition agreement outlines that Belgrade Nikola Tesla Airport will be one of several state owned companies which will not be privatised within the next four years. However, Jat is not on the list. The new management will have to deal with both a shortage of aircraft and an aged fleet, debt and a surplus of employees which counts over 1.200. The management will also have to deal with the 1998 order for eight Airbus A319s, which have never been delivered to the carrier. Ironically, many entering the new government were in power when the damaging Airbus order was made. Despite all the odds being stacked against it, Jat has had a relatively good year so far with record passenger numbers over the past few months and an increase in revenue, despite widespread competition.