Etihad Airways will stay on as a minority shareholder in Air Serbia, despite a recent recapitalisation reducing its stake in the carrier to just 16.4%. The Serbian airline is Etihad’s last remaining equity partner following a disastrous run of investments in near-bankrupt carriers including Air Berlin and Alitalia. “Etihad is Air Serbia’s strategic partner. It should not be forgotten that the company used its know-how, knowledge, and experience and fundamentally influenced the transformation of Jat Airways into a modern European carrier that Air Serbia is today”, the Serbian airline said. It added, “Our partners from Etihad shared their knowledge and resources to develop this joint project. To this day, Etihad representatives actively participate in the work of our Supervisory Board and cooperate with the company’s management”.
Etihad has four members on the Air Serbia Supervisory Board, including its Senior Vice President Technical, Chief Human Resources, Chief Financial Officer, as well as Vice President for Corporate Investments and Subsidies. Furthermore, it has its authorised representative as part of the Shareholders’ Assembly.
Etihad, which had a 49% stake in Air Serbia just two years ago, decreased its stake to 18% in December 2020 when the Serbian government stepped in to recapitalise the airline to the tune of 100 million euros to alleviate the effects of the coronavirus pandemic. In late August of this year, Air Serbia issued 1.82 million new shares which were purchased by the government, further decreasing Etihad’s stake. The Emirati carrier did not participate in the acquisition of the stock due to “current circumstances”. For its part, Etihad said, “Etihad is and remains fully committed to Air Serbia and to the strategic partnership with Air Serbia’s majority owner, the Government of Serbia”.
Etihad Airways has devested from all of its other equity partners over the past years, including Virgin Australia and Air Seychelles. Under the leadership of Tony Douglas, who has been heading the company since 2018, the carrier’s focus has been on returning to profitability following years of steep losses. Mr Douglas previously branded the equity investments as “mistakes”, noting the company was part of a “failed quasi-alliance strategy”. Since 2018, engagement between Air Serbia and Etihad Airways has been significantly reduced. However, Mr Douglas is set to leave the company along with many Etihad executives at the end of the year, as they are believed to be headed to Saudi Arabia to help launch the country’s ambitious new mega-carrier RIA.
Air Serbia’s CEO, Jiri Marek, who was the first to be selected to run the rebranded airline without Etihad’s direct involvement, recently said, “Air Serbia has played an important role during the pandemic, supporting the Serbian government with repatriation flights, as well as the uplift of medical equipment and so on. I think we've proven that our operations do not only contribute to connectivity, but also bring significant economic benefits. We believe the government wants a strong national carrier that continues to grow. There are various models in the industry with different participation structures and different levels of state participation. Even combinations of private and state shareholding is possible. It is up to the Serbian government to find the most suitable model”.
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Etihad reducing its involvment in Air Serbia has probably been the best development Air Serbia. It gave them the chance to focus on themselves.
ReplyDelete+1
Delete+1
DeleteEtihad management being intrested in JU is the worst thing that can happen to JU!
The turning point was when revenue management & scheduling was moved back to Belgrade from Abu Dhabi. That's when they started growing again.
DeleteEspecially since EY was bad at doing both :)
DeleteI still laugh when I remember they programmed 2 AM flight from Belgrade to Tivat!
DeleteExactly. You can't have a guy in Abu Dhabi planning schedules for several airlines with no clue on passenger flows and habits.
DeleteAir Serbia is one of the best bets they made.
ReplyDeleteThe Goverment of Serbia offered them a deal they couldn't refuse.
Delete@Anon 07:52
DeleteOf course it was. Where else you can give loan to buy 51% of state airline, get that loan repaid with interest and take profit money every year. Oh and you don't even need to invest anything because state will do that instead of you. 😂
What are you talking about? They converted their loan into equity, and it was 49% and not 51%. And of course, nobody repaid the loan that was converted into equity. If somebody did that, he would be taken to a jail.
DeleteThat is bad news for Air Serbia.
ReplyDeleteWhy exactly?
DeleteAnonymous 07:55
DeleteBecause EY involvement in JU was horrible. Their stupid strategy of new wings of Europe caused the airline tens of millions of Euros in losses.
But all it means they will keep a small stake in JU. It's more than obvious they make no decisions at the airline anymore.
DeleteThay have a stake while offering nothing in return.
DeleteEverything good that we have today, starting from an live airline itself, we can thank to Etihad. If we didn’t have Etihad and their devoted team, we would still have 6.5 planes for a summer season, leased broken aircraft from Air Bulgaria and a CEO that talk on television about “chemtrails”. We should get more serious about these comments on EY.
DeleteAno@09:07 Exactly! A lot of rubbish is thrown here about Etihad, but without EY, JU would be still Jat Airways, without any funds (even Goverment was not able to offer decent guarantee Banks would take), point to point airline without basic hub&spoke, no decent knowlegde or know-how, relying on old employees with way of thinking stuck in 80s.
DeleteDo JU and EY still have a codeshare agreement?
ReplyDeleteI don't think so. EY has no codes on Air Serbia flights anymore as far as I can see.
DeleteYes they do, but it's minimal and weirdly set up as it only works for certain destination. For example, you can book BEG to Australia return but you can't book Australia to BEG return.
DeleteThat's so odd. What's the point?
DeleteIt is hard to have any meaningful code share without connection between Belgrade & Abu Dhabi.
DeleteWill Etihad ever restore AUH-BEG? It was published here the loads they had each month in 2019 versus capacity on BEG route and it turned out they had 98% average cabin load factor for the entire 2019, which is amazing.
DeleteHope they come back in 2023.
DeleteI wonder what the future holds for Etihad itself
ReplyDeleteThey are actually recovering really well. They have also improved service compared to a couple of years ago when they started cost cutting a lot.
DeleteDidn't know that. Good for them. Getting out of all the "equity" partners was the smart thing to do.
DeleteThis might be first year with positive result since 2015, I think.
DeleteEY is making profit during the pandemic, so there's your answer.
DeleteEY is only a shareholder on paper' regardless of what Air Serbia says.
ReplyDeleteThat's a lot of board members for a 16% stake.
ReplyDeleteTrue dat.
DeleteAir Serbia should really try to get rid of any reminders of Etihad, since they made so many wrong decisions for them.
ReplyDeleteThey also did a lot of good. One of the most important things they did is settle Jat's old Airbus order which was a huge headache and in the end JU even got its 1998 deposit back
DeleteWho would have thought that Air Serbia would be Etihad's last remaining investment.
ReplyDeleteAir Serbia was Etihad's only successful equity partner.
DeleteI came, I went, I laundered money.
ReplyDeleteLOL
DeleteHahahahahahah
DeleteEY will remain partner of JU as Serbian government offers lucrative incentives to UAE in other spheres.
ReplyDeleteThere is no good reason for Etihad to divest from Air Serbia.
ReplyDeleteAs long as they do not have to give a single penny to JU, they will remain committed.
Delete^ Exactly
DeleteGood news
ReplyDeleteDoes anyone know who are the members of the supervisory board?
ReplyDeleteSupervisory Board
DeleteBranislav Pejčić, Chairman
Suzana Vasiljević, Member
Bassam A. Al Mosa, Member
Milica Jovanović, Member
Ana Jović, Member
Adam Boukadida, Member
Nadia Quassim Mohamed Yousuf Bastaki, Member
Paul Hathaway Kear, Member
Miroslav Knežević, Member
Shareholders' Assembly
DeleteIgor Popović, Chairman of the Shareholders' Assembly authorized representative of shareholder Republic of Serbia
Henning zur Hausen, Member - authorized representative of shareholder Etihad Airways
Thank you
DeleteWho is Air Serbia's CFO at the moment?
DeleteMarija Sokić. Since February
DeleteDetails of her career path: https://novaekonomija.rs/vesti-iz-zemlje/finansijska-direktora-ems-a-presla-u-er-srbiju
DeleteAli Suzi, strucnjak za aviokompanije…
DeleteSince 2019 they let JU do their own thing and became a silent partner. I think JU has done much better that way.
ReplyDeleteI wish all the best to Air Serbia
ReplyDeleteI hope they just keep their nose out of EY as they have been doing the last few years.
ReplyDeleteThis is the best possible scenario for Air Serbia.
ReplyDeleteAgree. I think is the best outcome we could hope for. No more Etihad 'KNOW HOW' but JU stays part of the Etihad family.
DeleteWell it's the best scenario from a generally messy situation.
DeleteI get nausea from that term KNOW-HOW! :))
Delete@Ano 09:15 You can get as much nauseous as you like, but ask anyone how are they are doing things nowdays in JU - are they still following Jat logic or maybe they have adopted something new which has been brought when Air Serbia was founded...
DeleteSo basically trying to concentrate on running the main business back home while retaining all the lucrative of engagement with Serbian government
ReplyDeleteIndeed
DeleteGood news actually
ReplyDeleteWhen I hear "Etihad know-how" my blood boils.
ReplyDeleteEtihad "know how" :D this was their favorite catchphrase when they came to Jat. So much for that.
DeleteWhat, and Jat know-how was better ?
DeleteExcellent
ReplyDeleteSo now JU is in charge of it's destiny.
ReplyDeleteIt has been for a while now.
DeleteJU will go bust in a couple of years.
ReplyDeleteSure...
DeleteEven if JU goes bust, which it certainly wont, it will be the last of the ex-YU airlines to go bust. There are some more promising candidates for busting in the region at this stage.
DeleteKeep dreaming @anon 09.12.
DeleteGood luck for the future Air Serbia.
ReplyDeleteSo basically Etihad is a shareholder and close partner for the next five year period but without any financial and investment obligations and without influence on companys future decision making?
ReplyDeleteExactly
DeleteThat's usually the case with minority shareholders.
DeleteCan Air Serbia finance itself and be profitable without government money?
ReplyDeleteNo
DeleteNot yet.
DeleteTime to find a more reliable partner.
ReplyDeleteWell, they are in love with Turkish for some time.
DeleteI would be committed as well if the Serbian government would give me coffers of cash every year for absolutely no reason.
ReplyDeleteWhat coffers of cash? Could you give us some figures to back up your claims?
DeleteI'd like to hear too :)
DeleteWhat exact benefit does JU have at the moment from this Etihad stake in the company?
ReplyDeleteEtihad guest programme
DeleteAirSERBIA was lucky to get such a partner and not someone from EU. Etihad made AS to what it is today.
ReplyDeleteGreat job!
+1000
Delete+1
DeleteI agree. Had a western European airline bought it, it would have simply become a feeder with few routes and few things to offer.
DeleteJU no longer has any obligations towards etihad. Previously it had loans to pay off to them.
ReplyDeleteOvde se nekako lako zaboravlja da se letovi za JFK nikada ne bi dogodilo da nije Etihad. Na vreme su se povukli kada su shvatili da njihov model ne pije vodu u Evropi i prepustili upravljanje Er Srbiji
ReplyDeleteDon't forget that thanks to Etihad they got here!
ReplyDeleteDon't forget 2013-14, that's when Serbian aviation developed!
It's been quite expensive to bring them to where they are today. Serbian aviation is over 100 years old, Serbia was amongst the first countries in the world to regulate air travel, I seriously doubt that local talent could not have been found to transform the airline at a significantly lower cost. Problem raging Jat at the time was corruption and severe mismanagement.
DeleteJat had alot in place when EY came. Air Serbia branding came from a Serbian student and not EY management. EY management overcharged JU for aircraft, crew, training, as well as in the initial years brought the boutique model that costed JU easily a brand new factory fresh fleet of 10 ATR's with money to spare.
Im not denying alot of progress has been made since the rebranding, but the price of bringing JU to where it is today is significantly higher than necessary.
Jat didn’t have anything when Etihad came. They had 6.5 very old airplanes ready for a summer season intended for 10, they just leased 2 broken aircraft from Air Bulgaria based on some shady private deal and they had a CEO that talked on tv about chemtrails. Etihad devoted their team and made a 180 degree turnaround, under the tough conditions, with a serious resistance of the old JAT “chemtrails”, “working 3 hours a day”, “never seena a suit or a tie”, “eating burek on the working table” and “kradeze” staff. Luckily, they made to engage a new young blood that broke the continuity with the old “Jat” people. I’m putting “Jat” under quotes, because we shouldn’t make a mistake to think those “Jat” people where the one of the good old Jat before the country broke up and the nineties. They want to be considered as a same, but they are everything but.
Delete@17,11
DeleteI beg to disagree that Jat didn't have anything. To start, the ATR fleet from the JAT era are still flying for JU until the end of the year, that is 9 years into the rebranding. Not to mention 4 B733's were kept in service for 7 years into the rebranding. Next are the slots all over Europe. Jat also had its offices that JU took over. Quite a few more things can be added to that, but I think the point has been made.
As mentioned, the biggest problem with Jat was the corruption and severe mismanagement in the company. Once that changed things improved. And that management could of been changed with local talent, while the changes made by EY management could of been done for alot cheaper. 9 years on, the airline still isn't profitable without government subsidies being pumped into it. Hundreds of millions of Euros were wasted in the EY deal, as mentioned earlier, which could of funded a fleet of 10 factory fresh ATR's with money to spare. EY hasn't been key to the management in 4 years and JU seems to be doing quite ok without them.
Btw, you can differentiate the eras as pre 2003 being JAT and post 2003 as Jat (Jat Airways).
+1 JATBEGMEL
DeleteFor the sake of clarity, the offices were already under heavy mortgages and passed to the borrowers very soon after EY came.
DeleteAs for the slots, lot of things was written through the years - the only tangible, money worth slot is for LHR. Any other slot is worthless. Any new airline can fly to any of the airports in Europe that Jat used in 2013 - nothing too special about that. As for the planes, the total value of all ATRs and B737’s in 2013 was probably around 10-12M USD, which is almost nothing for this kind of operations - one semi empty plane can generate higher losses than that in just few months.
Etihad know how, that must be a joke, with that standup comedian Dane, it was quite a show hopefully never again
ReplyDeleteYee, must be very difficult with all that hard work, accountability, non-smoking offices, crews walking together at the airport, tidy ties and suites, shaving and all that crazy staff that crazy Dane introduced.
DeleteThink whatever you like about that person, but Dane or 'Dane' was much needed for JU to change how employees are doing their job.
DeleteDon't get all the Etihad bashing in the comments. Without it, there would no Air Serbia.
ReplyDeleteWithout government subsidies, JU would of had the same fate as with everything else it touched. Even EY themselves without government subsidies would be long gone.
DeleteMaybe they would go down as you said, but Etihad brought a lot of positive things into Air Serbia. The problem is people there are too proud to admit it.
DeleteYou're so right. Without Etihad's money, JU would be long gone. I mean, JU still uses Etihad Guest as FFP.
DeleteNow all we need is a BEG-AUH flight operated by either of them, which will be useful for both.
ReplyDeleteFlyDubai and WizzAir Abu Dhabi are just awful and expensive for no reason.