Belgrade has regained complete control of Air Serbia as Etihad Airways exits the partnership. This development marks a significant shift in the airline's ownership structure. Belgrade now holds sole responsibility for the operations and management of Air Serbia. The departure of Etihad Airways paves the way for a new era for the airline, as it navigates the aviation industry independently. This transition underscores Belgrade's commitment to the growth and success of Air Serbia, as it takes full charge of its future endeavors.
Transaction Details
Serbia's flag carrier Air Serbia (JU, Belgrade) is set to become fully state-owned as the country acquires the stake held by Etihad Airways (EY, Abu Dhabi International). The announcement was made by the country's finance minister, Sinisa Mali, during a news conference. Mali stated that the necessary paperwork would be completed on November 13, without providing further details about the transaction.
Background
Etihad Airways had bought a 49% stake in the loss-making flag carrier Jat Airways in 2013 and rebranded it as Air Serbia. The United Arab Emirates airline will now sell its remaining 18% share, allowing the Serbian state to take full ownership of the airline.
Air Serbia's Success
Mali described the move as "their business decision" and highlighted the success of Air Serbia, stating that it had transformed from a company in bankruptcy to a leader that now flies on four continents and in a large number of countries.
Future Plans
He added that the state intends to further develop Air Serbia, including the procurement of large aircraft and the opening up of new destinations.
Serbian State's Stake in Air Serbia
The Serbian state had upped its stake in Air Serbia from 51% to 82% at the end of 2020. The airline had managed to settle a USD57.6 million loan with an Etihad Aviation Group-affiliated vehicle before it matured at the end of September 2020, followed by a second loan for USD63.9 million a year later.
Partial Privatization and Financial Support
Serbia's ruling Progressive Party has long proclaimed Air Serbia as a success story of partial privatization, but not all of the contracts between Serbia and Etihad have been made public. It is believed that the Serbian state has injected hundreds of millions of euros into the struggling company.
Milestone for Air Serbia and Serbian Government
The acquisition of Etihad Airways' stake in Air Serbia marks a significant milestone for the airline and the Serbian government. It remains to be seen how the airline will fare under full state ownership and what impact it will have on Serbia's economy.
