Etihad Airways Agrees to Possible Investment in Serbia’s JAT Air

Etihad Airways PJSC, the third-biggest Gulf airline, signed a memorandum of understanding with the Serbian government that would lead to a possible tie-up with unprofitable JAT Airways AD.

“These are early days, we are excited about the future, we look forward to exploring possibility of a much deeper strategic commercial partnership with JAT Airways,” said Etihad Chief Executive Officer James Hogan at a news conference in Belgrade today. A detailed proposal is expected in the coming weeks.

The Abu Dhabi-based Etihad began regular daily flights to Belgrade on June 15 and attached its code to 23 of JAT’s European flights, with the Serbian company doing likewise on 21 Etihad services.

Serbia has been trying to find a strategic partner for the money-losing air carrier for years. Prime Minister Ivica Dacic’s Cabinet said in March it would take over 170 million euros ($220 million) in liabilities. A strategic partner will help JAT renew its fleet.

The Belgrade-based airline’s loss widened to 3.68 billion dinars ($43.2 million) in 2012 from 3.33 billion dinars in 2011, according to its financial results posted on the Serbian Business Registers Agency’s website.

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