State takes over remaining Etihad stake in Air Serbia

The Serbian government has announced today it has taken the remaining 16.42% stake in Air Serbia from Etihad Airways, officially ending the Emirati carrier's involvement in the airline, which commenced ten years ago. Etihad's minority share in its Serbian counterpart decreased from 49% to 18% in 2020 and from 18% to 16% last year. However, it had no effective control of the airline for past four years and had no input on its management or strategy. A wide-ranging codeshare agreement between the pair was terminated last year. As a result, little is expected to change at the airline, which has undergone a major expansion of its fleet and network over the past two years. On the other hand, Etihad has now fully exited all its equity investments in airlines, a strategy which unravelled several years ago, leaving it with major losses at the time. At one point, it owned stakes in Aer Lingus, Alitalia, Air Berlin, Darwin Airline, Jet Airways, Air Seychelles and Virgin Australia.

Commenting on the development, Serbia’s Minister for Finance, Siniša Mali, said, "Air Serbia is the largest airline in the region. From a carrier that was facing bankruptcy we created a leading company that now flies to four continents and a significant number of country markets. It has become an example of how an airline can become successful and can further contribute to economic growth". He added, "The state will focus on the continued development of our Air Serbia, which includes the acquisition of wide-body aircraft and the launch of new routes. I would like to thank officials from Etihad Airways, who have been Air Serbia's partners and part-owners since 2013. They are leaving Air Serbia due to their own business decisions, while we continue to develop our airline".

Air Serbia's CEO, Jiri Marek, recently said, “Etihad Airways is a minority shareholder but has no involvement in the company’s management. We are not looking for a strategic partner at the moment. Of course, I cannot comment on behalf of the shareholders, they might have a different vision. As an airline, our strategy is to cooperate with everybody with whom we can and where it makes sense”. Air Serbia is expected to handle a record four million passengers this year, registering a net profit of 22.4 million euros during the first half of the year. The carrier added 23 new routes to its network in 2023 and has said the coming years will see a focus on long-haul expansion. Air Serbia, which still utilises the Etihad Guest frequent flyer program, has signalled it could exit the scheme next year. “We are evaluating many options. We were evaluating [joining] Turkish Airlines’ Miles and Smiles and also the program offered by Air France - KLM. At the moment, we are more inclined towards developing our own program, however, we have many other projects which have priority that are in the pipeline, so we believe that within 2024 we may have some solution but we are inclining to developing", Mr Marek said recently.