Serbia's JAT Airways Likely To Cut '09 Loss by at Least 4 Mln Euro Under Worst-case Scenario - Media

“If nothing positive happens during the last four months of this year, the 2009 loss of the company will be between 20 million and 25 million euro and unless we break even by January 11, 2011, we will be in big trouble,” JAT Director General Srdjan Radovanovic told EMportal (www.emportal.rs) in an interview.

“JAT expects to transport 1.1 million passengers in 2009, down from the 1.3 million it boarded last year,” Radovanovic said told EMportal.

JAT is currently the region's laggard with an occupancy rate of 60% at present, the company executive said. 

JAT transported 118,300 passengers in July, which is 15.9% fewer year-on-year. The carrier boarded 540,900 passengers in the first seven months of 2009, down 19% year-on-year, data of the Association of European Airlines showed.

The main reason for the poor performance is JAT’s outmoded business model that dates back a quarter of a century, Radovanovic said.

Moreover, JAT offers an overpriced service that is not particularly good in quality, lacks promotion and is failing to make a firm impression on consumers, Radovanovic also said.

He added that JAT will manage to transport about 1.5 million passengers next year owing to the pending liberalisation of the visa regime with the European Union next January and the commitment of the present management to modernise the ailing carrier. The European Commission said in July it has adopted a proposal for granting visa-free travel to the citizens of Serbia starting from January 1, 2010.

“The main task of the new management will be to boost the number of passengers on JAT flights and, for starters, it will be enough that the stewardesses have smiles on their faces, that the quality of service is better and that we are more competitive because other companies, such as [budget carrier] Germanwings, are becoming more aggressive,” Radovanovic said in the interview.

JAT's new management is expected to table the company’s new business plan to the government in Belgrade over the next week, local broadcaster b92 (www.b92.net) reported on Friday, quoting Infrastructure Minister Milutin Mrkonjic.

($=0.686 euro)