Etihad cancels A320neo order for Air Serbia
Etihad Airways has cancelled its order for ten Airbus A320neo aircraft which were to be delivered to equity partner Air Serbia. Deliveries were initially due to begin last November. However, Airbus' latest backlog revision has revealed that the order has been scrapped. They were set to completely replace Air Serbia's existing fleet of A319s and A320s. The Serbian carrier secured the narrow-bodies as part of a major fleet order by Etihad at the 2013 Dubai Air Show, for up to 117 Airbus aircraft. Etihad’s outstanding Airbus commitments, at the end of December, comprised of 22 A350-1000s and forty A350-900s, as well as 26 A321neos. Its first A350-1000 is currently in final assembly.
The delivery of the neos to Air Serbia was originally slated between late 2018 and 2020. A previous deposit payment made by JAT Yugoslav Airlines for eight A319s in 1998 was credited against the pre-delivery payment for the neos. Upon making the order in November 2013, Air Serbia said, "The new fleet of Airbus A320neo aircraft is a key part of our strategy to re-position the airline as best in class with the most modern and comfortable single aisle aircraft. These aircraft will offer our guests the best cabin in the sky. With these A320neo jets we will set the benchmark in both product and service excellence as we extend our network to more destinations across Europe".
In 2013, Siniša Mali, who was at the time the Adviser for Economy and Finance to the Cabinet of the Deputy Prime Minister of Serbia, and who today holds the post of Finance Minister, said the government had agreed with Etihad Airways to take the aircraft for Air Serbia. "This is good for Air Serbia and the people of Serbia, because both have benefited from economies of scale resulting from Etihad Airways' very significant order with Airbus. With the delivery of these ten new aircraft between 2018 and 2020, Air Serbia will be the first airline in the region to have a modern fleet of new Airbus aircraft. The last delivery of a new jet to Jat Airways, the former national carrier, was in 1988", Mr Mali said. He added, "Furthermore, through our partnership with Etihad Airways, a previous deposit payment made by Jat Airways, has been credited against the pre-delivery payment for these aircraft. This is a very good result for the people of Serbia". Air Serbia itself has ignored all inquiries regarding the A320neo order from various media outlets over the past several months.
The 2013 Transaction Framework Agreement between Etihad Airways, the Government of Serbia and Jat Airways, states:
"Without limitation, the GoS (Government of Serbia) undertakes to: fund, and assume all liability for, any costs and liabilities associated with the JAT 1998 purchase contract with Airbus, in relation to which Etihad shall seek to assist JAT and/or the GoS in any discussions/negotiations that JAT and/or the GoS may have with Airbus with a view to reducing JAT's exposure to such costs or liabilities. For the avoidance of doubt, if at any time while the Management Services Agreement is in force, JAT and Airbus reach an agreement to purchase aircraft under the terms and conditions of the 1998 purchase contract then theGoS shall not be liable for the purchase price for any such aircraft;"
The 2013 Transaction Framework Agreement between Etihad Airways, the Government of Serbia and Jat Airways, states:
"Without limitation, the GoS (Government of Serbia) undertakes to: fund, and assume all liability for, any costs and liabilities associated with the JAT 1998 purchase contract with Airbus, in relation to which Etihad shall seek to assist JAT and/or the GoS in any discussions/negotiations that JAT and/or the GoS may have with Airbus with a view to reducing JAT's exposure to such costs or liabilities. For the avoidance of doubt, if at any time while the Management Services Agreement is in force, JAT and Airbus reach an agreement to purchase aircraft under the terms and conditions of the 1998 purchase contract then theGoS shall not be liable for the purchase price for any such aircraft;"
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| A320neo order announcement, Dubai, November 2013 |
Etihad Airways, which has been undergoing restructuring after its strategy of investing billions of dollars in other airlines failed, plans to cut fifty pilot jobs by end of this month, two sources who have seen an internal memo by the airline said. Etihad also said in the memo it made a “significant loss” last year and that this would continue into 2019.
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