Etihad plans long-term partnership with Air Serbia

The President and CEO of the Etihad Aviation Group, James Hogan, says his carrier is planning on a long-term partnership with Air Serbia, which will see the latter further develop its long haul operations. Mr Hogan's comments, made to the "N1" network, indicate that Etihad's involvement in Air Serbia will continue past the initial five-year investment and management agreement signed in 2013. "Air Serbia today is an integral part of our group. We entered this partnership for the long-term, we are not here for the short-term. But what is important is that we grow the business in a measured way. We want this business to be successful in the long-term, we want this business to continue its network coverage, we want to improve the depth of the network", Mr Hogan said.

Commenting on Air Serbia's future plans, the head of the Etihad Aviation Group said, "We see more opportunity over the next five years to do more long haul flying. However, to be successful in long haul flying you have to develop a destination and tourism strategy and cooperate with stakeholders. In aviation terms, it's about the mix of traffic. We have transfer traffic and destination traffic. Today it's probably more destination traffic among Serbians and ethnic traffic coming back. We want to bring in more holiday traffic, more leisure travellers and more business travellers through the system". He added, "I have every confidence that as the airport is upgraded, as the destination becomes more known all over the world, we can grow more the long haul element of Air Serbia in the next five years".

Mr Hogan rejected claims that Air Serbia is being subsidised, insisting that both Etihad and the government settled on an investment cycle, which is outlined in the agreement the two sides inked three years ago. "There are no subsidies, there is a clear shareholder contribution where we both contribute money and the airline is profitable. You have to clarify investment and state support. We have invested in the airline and Serbia has invested in the airline, same as we've invested in other airlines. At the end of the day, when you are developing a business, you have to have seed money, working capital and see the return on that capital. Both Etihad and the Serbian government, as shareholders, are investing equity in the business", Mr Hogan noted. He continued, "We entered into a partnership and we have a very simple model as we have with other airlines we invest in. What the government did is write off the debts of the past and these debts confuse people. We were not involved in the former Yugoslav Airlines. We were very clear that we would invest with a clean sheet of paper. That means that the debts were written off, we brought new money into the airline and we've grown from scratch. The annual report reflex the reality of that".