The Serbian Minister for Construction, Transport and Infrastructure, Zorana Mihajlović, has said the state is yet to issue aid to Air Serbia to cover the losses incurred during the ongoing coronavirus pandemic but noted it would do so after Air Serbia completes talks with its partners. “Even though we have approved it, we still haven’t issued any financial aid to Air Serbia. The carrier is in talks with its partners. Once those are complete, we will, of course, as the state do our part. There is no doubt that we will help, as it is being done around the world. The EU itself is suggesting for governments to help their national carriers”, Ms Mihajlović said, without specifying the amount that would be provided to the airline.
The Serbian government had previously said it would offer wide-ranging support for its national carrier. The Minister for Finance, Siniša Mali, noted it would assist Air Serbia with the repayment of two loans, valued 52.9 million US dollars and 63 million dollars, labelling the airline as being of national interest. The company will see the first of the two loans mature this month. Mr Mali said, “We are negotiating with the creditors. While I can’t reveal the contents of those talks, I can say that we will certainly help Air Serbia. We are working towards resolving this problem together with our partners at Etihad Airways”.
For its part, Air Serbia has said it was developing several business scenarios for the coming years but noted it was difficult to make concrete plans when travel conditions are unknown and constantly changing. The company is undertaking a number of cost saving measures in order to alleviate the effects of the Covid-19 pandemic, including rationalising its fleet and renegotiating aircraft leasing terms. It launched a program entitled “Deliver” back in March, aimed at reducing capital investments and services which are not of vital importance for the company. “This continues to significantly contribute to the company’s liquidity. Furthermore, the company has used the suspension of slot rules in Europe and the United States, as well as its primary markets, to secure the same slots for 2021”, Air Serbia said. The Serbian carrier has secured credit lines from commercial banks up until December 31 and has deferred deposit requests from several airports. Based on its financial report, Air Serbia was the beneficiary of 19.7 million euros in donations last year.
I'm wondering how many hundreds of millions of euros this aid will amount to.
ReplyDeleteProbably less than what some smaller and less useful airlines got.
DeleteAbsolutely everyone is getting it. Even LCCs.
DeleteMost airlines got aid in the form of loans which will have to be paid back. Not direct financial assistance.
Delete@9.24 Wizz Air and easyjet are receiving aid?
DeleteEasy jet has received a £600 million coronavirus loan from UK Treasury and Bank.
DeleteWell like I said they are receiving loans. Quite different from what Air Serbia will get.
DeleteDo you really believe that OU will repay its "loan"? Sure.
DeleteNon-EU Airlines among which is JU didn't get loans because they don't have to my friend. You are competing frogs to grandmothers.
DeleteThe UK loans are based on credit rating, any company (not only airlines) could get it, if they are investment-graded. Your typical basket-case national airline isn't.
DeleteIf they are operating normally without aid it means that their revenue streams aren't that bad at the moment
ReplyDeleteWho knows how much the government gave them but they don't count it as aid. Probably hidden subsidies.
DeleteGood, as long as they keep uninterrupted operations.
DeleteIf the banks were willing to issue them credit lines, then it means there finances are in good shape.
DeleteTrue. If they were able to secure credit lines it means banks are generally satisfied with their finances and ability to pay off debt, contrary to what people write in the comments here.
DeleteIt could also be the case that the government is acting as a guarantor for the loans.
DeleteGood to see the airline is taking some concrete action with its finances.
ReplyDeleteI'm interested to see what all this will mean for the Air Serbia-Etihad partnership.
ReplyDeleteI'm guessing the outcome of that is what the government is waiting for too.
Delete"The carrier is in talks with its partners."
I'm still hoping it won't get nationalised.
DeleteFor now, it seems Etihad is staying.
DeleteThe government said that will depend on whether EY covers part of the corona losses.
DeleteYou can't nationalise something that's already national.
DeleteI fear much more state involvement in the airline after this is over.
ReplyDeleteThey deserve this aid.
ReplyDeleteWhy?
DeleteThey brought people stuck around the world home free of charge throughout the lockdowns and brought essential cargo to the country on a daily basis. Reason enough.
DeleteNow is the best time to change planes. I am sure it was never cheaper to acquire planes then at the moment.
ReplyDeleteFrom what money?
DeleteLet me remind you that they can't repay the Etihad Partners loan.
DeleteNow would be the time for market consolidation, perhaps for some airline to merge in the region or form partnerships. But this is the Balkans so that would be a miracle.
DeleteI don't see many mergers happening at the moment. Airlines with good balance sheets will just bet on smaller airlines collapsing, so they can take the market without much competition.
DeleteConsidering how many airlines are getting state aid it makes sense.
ReplyDeleteMy guess is the government will invest 100 million in Air Serbia.
ReplyDeleteDouble or triple more of that.
Delete+1000
DeleteAt least half a million to secure funding until March 2021. Don't forget they have a debt to pay.
You are really not realistic. 300, 400 mil? LOOL
DeleteDo you mean half a million or half a billion? @anon 9.47
DeleteHalf a billion at least if not 650 million. The airline needs this cash badly.
DeleteI believe it will be between 650 and 988,74 million
DeleteNot sure if about 1 billion, but at least half a billion for sure. BT doesn't have that high debt compared to JU nor do its aircraft require high maintenance costs but the EC approved a €250 million aid:
Deletehttps://ec.europa.eu/commission/presscorner/detail/en/ip_20_1274
Talking about BT
Deletehttps://news.err.ee/979989/air-baltic-continues-to-make-losses-but-still-flies-on
Anon 10:57
DeleteBut JU did not ordered 50 aircraft in past 7 years and it did not replace all older aircraft in the fleet wit brand new ones. And BT has 5 mil. passengers while JU 2.8 million.
These are really massive amounts we are talking about.
DeletePeople are really forgetting 1 thing when they discuss aid. They say as if the Serbian government will cover the entire value of both loans which is simply not true.
DeleteFirst the government said that talks are being held with the creditors and Etihad. It is likely that Etihad will cover some of the loan. Also the loan is being renegotiated. That means a certain amount may be reduced and payments might be deffered.
Exactly. Let's see what the outcome of the talks with EA partners is.
DeleteSo despite Etihad said no, Serbian Goverment will negotiate with them until they say yes?
DeleteGood luck Air Serbia!
ReplyDeleteThey are lucky they have the government on their side.
DeleteVery bleak times ahead. That's for sure.
ReplyDeleteThey will pull through this.
DeleteIt's going to be a difficult year.
ReplyDeleteYou don't say...
DeleteWinter is coming...
Deletelol
DeleteThat was my line dude... Lol
DeleteIf EU companies can get possibility to receive money why not Air Serbia?
ReplyDeleteBut they will have to repay that money.
DeleteYou must be kidding.
DeleteI am really currious to see how OU will repay 33 mil EUR they got before pandemic (dec 2019+jan 2020) + huge Government help for this year.
Fairy tales.
Case by case. Depends what is deal like. LH got 9 billion from goverment for 20 % of shares. But LH will need to give back money to gov while gov will exit from shareholding position.
DeleteI doubt OS can repay it's aid.
DeleteIt can because it is 100% owned by LH.
DeleteBut OU isn't.
DeleteProbably it will, but in period of like 10 years probably. Depends what is aid like and what EU thinks its legal.
DeleteOuch
ReplyDeleteI'm just wondering for how long some airlines will be considered as national interest! This is getting so outdated!
ReplyDeleteBut they are...
DeleteMore countries have national airlines than own their food supply chain. Which do you think is more important for everyday life?
DeleteMaybe countries do not own food shops, but they own some food factories.
DeleteJU will be ok in the long run.
ReplyDeleteHave the salaries of pilots and crew that are working in Air Serbia be effected?
ReplyDeleteAnd are there any plans to reduce the workforce?
DeleteThe travel restrictions must be having a big impact on their bottom line unfortunately.
ReplyDeleteIt's having a big impact on every single airline in the world...
DeleteFew airlines have most of their core markets banning their primary passengers from entry.
DeleteGood luck to every Ex-Yu-Airline in this crisis! Hopefully everybody will survive this!
ReplyDeleteThey will. But I don't think the problem will be surviving this initial period. I think problems will come up in 3-5 years, in the aftermath of corona.
Deletein the west they need official gov statements for this here we do it secretely or we dont report it at all and put it down in the year report
ReplyDeleteReally? Has Alitalia paid off any state aid it received in the last 15 years?
DeleteGood news are that JU is extending charter season! Well done!
ReplyDeleteThey are?
Delete^ Yes
Deletehttps://www.exyuaviation.com/2020/09/air-serbia-extends-charter-operations.html
Oh I missed that. Good news. Thank you.
DeleteIt's no surprise that their manager said the other day in the article here that leisure travellers were returning to the skies first.
Delete- it looks like53+63= 116mil USD will probably be restructured, and will be a long term problem in years to come
ReplyDelete- we all know that JU cannot create cash flow to finance the return of these loans, so it would be nice for government to pay these while everyone has a COVID excuse for subsidies, but:
a) is there money in the budget for this? probably no
b) saudis surely wont pay, so will the serbian stake in the airline increase and by how much? also, it would be fun to see which magician in Big4 would be willing to sign this evaluation.
this is a big question in future shareholder relations. company requires constant subsidies, but 49% owner doesn't bother to give 1 cent
so unless problems with EY are solved and money is found in the budget can will just be kicked down the road for our 2025 government to deal with
- also, current 2020 missing cash is probably something like ~50mil USD
- plus you will need something like 20mil USD to shove in JU yearly (
==========================
problems when not treated are becoming monsters
Saudis?
DeleteIt can't be true....
Those questions for Air Serbia, why not ask their Head of sales while at it?
DeleteThis is more than expected and the losses will be seen by all airliners.
ReplyDeleteWasn't the government talking about adding an extra plane supposedly for long haul flights? What happened to that.
ReplyDeleteWell let's wait and see.
DeleteIt was just one more episode of "Jatovanje" where goverment thinks they know something about the aviation but actually they have no clue. Maybe someone remebers that lady from ministry who said for the news how JU should continue JFK route to Mexico City.
Delete¿Does the current Serbia-US agreement allow fifth freedom flights JFK-MEX?
DeleteWhy not?
DeleteYes it does
Delete@17.48 It was the lady that quoted in this article :D
DeleteThe measures the airline has taken seem to be good. It is still flying a relatively respectable network of 30 destinations from BEG, it has managed to secure better slots for next year, reduce airport costs, respond quickly to any new market opportunity (OSL) and increase flights as soon as circumstances permit (Montenegro, Switzerland, Cyprus). On top of that, like we saw in trip reports, they have not eliminated on board service. So all in all I would say good for them.
ReplyDelete+1
DeleteDon't forget the success they have in JFK these days!
DeleteGood archive photo.
ReplyDelete