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Oct 16, 2009 17:29 EEST
BELGRADE (Serbia), October 16 (SeeNews) – Serbia has today started the search for a strategic partner or some other turnaround option for its loss-making flag carrier JAT Airways, local broadcaster b92 reported on Friday.
A commission that will be formed by Prime Minister Mirko Cvetkovic will be in charge of the negotiations with possible strategic partners, b92 (www.b92.net) reported, quoting Infrastructure Minister Milutin Mrkonjic.
There is consensus within the government that JAT Airways should get back on its feet and that the financial problems dogging the company should be resolved by the end of the year, Mrkonjic said, adding that the cash strain could be eased through the disposal of some of the carrier’s assets.
Earlier this year, local media quoted JAT Director General Srdjan Radovanovic as saying that the airline is expected to pare its loss by at least 5 million euro this year from 29 million euro in 2008.
JAT needs to boost passenger numbers to 1.5 million a year from the 1.36 million it boarded in 2008 if the company is to fulfill the plans that have already been outlined, Mrkonjic said.
"If JAT were to borrow 40 million euro, and the government put down the required guarantee, the carrier would have a successful year-end,” he said.
JAT Airways will be ready to go private in six to 12 months from now, Mrkonjic was quoted as saying in a government statement issued on Wednesday to mark the endorsement of an agreement between Serbia and the United Arab Emirates (UAE).
The deal will allow JAT and five UAE airlines to perform an unlimited number of routes between the two countries, State Secretary at Serbia's Infrastructure Ministry Miodrag Miljkovic was quoted as saying in the statement.
The agreement will permit the Emirates airline to launch flights to about 100 destinations from Serbia’s capital Belgrade, Serbian daily Blic reported on Wednesday.
JAT should be in a good enough shape for its sale after the agreement takes effect, Mrkonjic said in the statement, adding that he expects interested bidders to include one of five UAE airlines. 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 government in Belgrade 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.
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