State mulls Air Serbia nationalisation
The Serbian Minister for Construction, Transport and Infrastructure, Zorana Mihajlović, has said the country will consider buying new aircraft for its national airline and purchasing back Etihad Airways’ 49% stake in Air Serbia. Ms Mihajlović noted, “Perhaps we will acquire some additional aircraft and we will consider discussion over the buyback of shares from Etihad Airways. Why wouldn’t we buy them back? This situation has clearly demonstrated how important it is to have a national flag carrier. There was a lot of criticism directed towards Air Serbia and questions as to why we have a national airline. Now we can see how important it is. Air Serbia has demonstrated its social responsibility. Now it is our turn to create the necessary conditions for it to be able to commercially function”.
Ms Mihajlović added, “Air Serbia has grown its route network over the past few years, increased its revenue and indirectly enabled others in the tourism industry to benefit. Air Serbia’s current losses amount to over thirty million euros, and we estimate for it to at least double by the end of the year. There is no question whether or not we should help Air Serbia. We just have to make an effective and sound program. That doesn’t mean simply giving out money, but also creating the necessary conditions for Air Serbia to effectively function”. The Minister noted the carrier is ready to resume operations as of May 18, most likely to key European markets including France, Austria and the United Kingdom.
The strategic partnership agreement between Etihad Airways and the Serbian government, unveiled in August 2013, saw the Emirati airline make available a forty million US dollar loan facility to Air Serbia which was converted into equity on January 1, 2014 for a period of five years. This was matched by an equal funding injection by the Serbian government. The two sides each provided further funding through shareholder loans and other funding mechanisms of up to sixty million dollars to meet working capital requirements and support network development. The five-year deal was later extended until further notice, however, Etihad’s involvement in Air Serbia has been significantly reduced, with the state providing subsidies and funds for the airline over the past few years. Etihad registered an 870 million US dollar loss in 2019 and its equity investments in carriers around the world have unravelled in recent years.
0 Response to "State mulls Air Serbia nationalisation"
Post a Comment