Jat left out to dry

Has the Government given up?

Several months ago the Serbian national carrier, Jat Airways, called on banks to offer loans to the airline so it could repair several grounded aircraft. After the consortium made up of Société Générale and Unicredit Bank won, the Serbian Government, as the airline’s owner, was expected to give guarantees that the loan would be returned in due course, which is standard procedure. Instead, there has been no word from the Government and as a result the banks refused to issue Jat the much needed loan, the Serbian daily “Blic” reports. Furthermore, after Jat recently sold its headquarters to the telecommunications company “Telekom Serbia” (owned by the Government) all of the 10.3 million Euros are yet to appear in Jat’s bank account.

The above mentioned finances were supposed to be used to get Jat’s grounded fleet into the air. A total of four aircraft are currently grounded. Two are expected to be in the sky by the end of June, after their engines arrive from Lufthansa Technic, while the other two will have to wait for better times to come.

Meanwhile, the Serbian Government is planning to create a new national carrier which would be the successor to Jat Airways. It will inherit everything the airline has minus the financial burden. Recently, it was revealed that the Jat Airways’ CEO, Srdjan Radovanović, held talks with the Serbian Prime Minister, Mirko Cvetković, however, the content of the talks was never revealed.

Jat has seen mild growth in passenger numbers this year. In the first four months of 2010, the Serbian carrier recorded a net loss of 7.2 million Euros, down from 16.3 million the same period last year. Revenue decreased from 26.4 million in 2009 to 25.5 million in 2010. However, losses were down from 42.8 million in 2009 to 32.8 million this year.

In a surprise move earlier this year, Jat cancelled its plan to lease two Boeing B737-700. Negotiations are continuing with Airbus about a 12 year old order for 8 Airbus A319s. It is now expected that the airline, or its successor, will receive 4 A319s between 2012 and 2013 with training for pilots and maintenance personnel to be provided by Airbus.