Jat to stay in state hands

New strategy or no strategy for Jat?

Milutin Mrkonjić, Serbia’s Minister for Transport, has announced that there are several ways in which the state carrier’s problems could be solved and says Jat Airways will not be privatised in the foreseeable future. Earlier in the year, Mrkonjić, who served as the Minister for Infrastructure in the previous government, proposed for the carrier to be bought by local businessmen who would invest in a new fleet and brand. However, the minister is now singing a different tune, “The entire story with businessmen buying Jat won’t materialise. My proposal is for us to keep our national airline and for it to stay in state hands. However, restructuring and the purchase of new aircraft would be necessary”.

The Serbian national carrier is burdened by debt, an aging fleet, a decade old order for Airbus aircraft and too many employees. Two previous privatisation attempts, one in 2008 and the other only last year, have failed. Many are now waiting to see how the new government will deal with the abovementioned problems. A new CEO for the airline is expected to be named. However, according to internal sources, not a single party within the Serbian government has put up their hand to take control of Jat and name a new CEO. “Offcourse things will be difficult and we won’t be able to solve all of the problems straight away”, Mrkonjić admits.

Meanwhile, Jat’s employees are still hoping that a plan they drafted for the government just prior to the May elections will be taken into consideration. In the report, the independent union of Jat Airways pilots says that the Serbian carrier can be stabilised if the right decisions are made. “The public has the wrong idea that Jat is a loss making business financed by tax payers”, the union says. It adds that the government is to blame for intentionally cutting bits and pieces from the airline such as its technical, catering, and agriculture divisions. Furthermore, the union notes that Jat has 50 million euros worth of property in Croatia. They include apartments in Pula and various office space taken over by Croatia Airlines. They claim that this property should be returned to Jat and that legal action should be taken. Employees have also drawn attention to the large scale competition the airline faces from its hub. It notes that despite Serbia being only in the first phase of implementing the Open Skies Agreement, the Serbian Civil Aviation Directorate is issuing licenses to any airline wishing to fly to Serbia, as a result hurting the national carrier and national interests.