BELGRADE (Serbia), October 23 (SeeNews) – Serbia’s troubled flag carrier JAT Airways is seeking licences to fly to neighbouring Bosnia and Macedonia from next spring, aiming to cut losses and turn to profit in 2011.
“We plan to reach 1.5 million passengers in 2010, up from current 1.1 million, which should cut our losses next year and make us profitable in 2011,” JAT General Manager Srdjan Radovanovic told a news conference on Thursday, adding that the transportation of 1.5 million passengers will generate an annual revenue of 150 million euro ($225 million) for the company.
Looking at the region, JAT plans to take advantage of the grounding of privately-held flag carrier Macedonian Air Transport (MAT) earlier this year and Serbia’s close ties with the Serb Republic, one of the two autonomous regions that form Bosnia.
“Someone needs to transport former MAT passengers,” Radovanovic said, adding the administrtive centre of Bosnia's Serb Republic, Banja Luka, is vastly underused.
JAT will seek new aircraft once it turns to an annual profit of 10 million euro, Radovanovic said. The company, which has not renewed its fleet for about 20 years, posted a loss of 30 million euro in 2008. It posted a loss of 11 million euro in the first nine months of this year and plans to end the year with a loss of slightly below 20 million euro.
The company also plans to farm out its aircraft maintenance and lay off 550 out of its 1,500-strong workforce as part of a cost-cutting programme, Radovanovic said. State-owned aircraft maintenance company JAT Tehnika held a two-day strike earlier this month over a failure of JAT Airways to meet debt payments.
The government in Belgrade will give JAT a guarantee for a 40 million euro loan towards the purchase of a Boeing 737-700 that can fly to the Middle East without refuelling. JAT’s $23 million advance payment on eight aircraft to Airbus from 1998 will be used to acquire a smaller-sized aircraft, Radovanovic said.
The company also plans to sell its headquarters building in Belgrade and use 20 million euro it hopes to get from the sale towards acquiring new equipment.
Serbia has begun a search for a strategic partner or some other turnaround option for its loss-making flag carrier, Infrastructure Minister Milutin Mrkonjic said last week.
A tender for the sale of 51% of JAT Airways at a call price of 51 million euro failed last year as no bidders turned up. The Serbian government has said JAT will remain state-owned until it can attract a financially sound bid.
JAT posted a 18.5% annual drop in the number of passengers it carried in the first eight months of the year to 659,600, data of the Association of European Airlines indicated earlier this month.
($=0.6661 euro)