Jat to get 140 million Euros

Ending the Airbus saga

The Serbian Government has announced that it will give guarantees for a 140 million Euro loan to Jat Airways in 2011 for the purchase of 4 Airbus A319s and, as a result, solve the airline’s outstanding 12 year old order for 8 Airbus jets. Both Jat and the government have proposed to revise the original agreement from 1998. Instead of 8 aircraft, Jat would receive 4 and pay a further 140 million Euros, on top of the 17.9 million Euros already given to the European plane manufacturer. If Airbus approves the revised deal, aircraft should begin to arrive in 2012.

In 1998, the Yugoslav Government ordered 8 Airbus A319s for JAT Yugoslav Airlines, a deal worth 580 million American Dollars at the time. However, the order was seen as political stunt by the government at the time and Airbus was criticised for the extremely high price of the order. Furthermore, international sanctions forbid Airbus from delivering the planes and the aircraft did not fit into JAT’s fleet of over 20, mostly Boeing aircraft.

Just last month Jat Airways received a 51.5 million Euro loan. The airline will use part of the cash to finance the lease of 2 aircraft, most likely Boeing B737-700s. Last week, the airline withdrew the first 2 million.