Air Serbia expected to post 2018 profit
Serbia's Finance Minister, Siniša Mali, has said the country's national carrier has operated with a profit over the past year and has not been a recipient of state subsidies. "Air Serbia has not been receiving subsidies for the past two years, and that is not down to me or the government but the European Commission which monitors state support", Mr Mali said, which is contrary to previous statements. Air Serbia's financial results for last year are expected to be made public in late June or early July by the Serbian Business Registers Agency, if the airline itself does not publicise its data beforehand.
Air Serbia has posted a profit since 2014 but has also received state funds. In 2014, the carrier's net profit stood at 2.7 million euros, which was followed by a 3.7 million euro profit in 2015. In 2016, upon launching its first long haul service, the airline's figures declined 77% with Air Serbia managing a 990.000 euro profit. However, in 2017 its profit soared to sixteen million euros. Those record results were achieved in part due to a significant reduction in expenditures and an increase in revenue. Furthermore, the state provided a twenty million euro subsidy, which is half of what the company used to receive from its majority shareholder, although the carrier was also granted twelve million euros for the "development of tourism". Late last year, Mr Mali said that the payment credited under tourism development is primarily for the support of the carrier's long haul service to New York. "As part of our tourism development strategy until 2025, the Serbian government has decided to extend its support to whatever contributes to tourism growth. In this case, it is flights to North America. Without that support there would be no service to the US. However, Air Serbia's financial performance would remain unchanged", Mr Mali said.
Air Serbia has been listed as one of several companies which will receive subsidies from the state budget this year as well, however, the Finance Minister noted this is in relation to debt accumulated by the airline's predecessor Jat Airways. "We did not have 380 million dollars to pay off the debt straight away. Instead, we will be making payments over a ten-year period. We process the loan a debt repayments either through Air Serbia or directly. However, none of the money goes into Air Serbia itself", Mr Mali said last week.
The Serbian Prime Minister, Ana Brnabić, recently noted, "The government of Serbia will maintain its strong support for Air Serbia. This support will be in line with European Union regulations, as it has been so far, however, no one can prevent us or limit our support for Air Serbia". The PM added, "Air Serbia plays an important role in the development of tourism, improves our economic ties with numerous countries and strengthens our country's brand. It has been an important driver of economic growth and I am certain that we will see even better results ahead since there are good prospects for further growth".
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