Final call for Azerbaijan

Waiting for a partner

The Serbian Ministry of Infrastructure has issued a final call for Azerbaijan to participate in the creation of a new national carrier to replace Jat or to form a strategic partnership with the Serbian airline. The Ministry emphasised that the extended tender call to create a new carrier ends in a week’s time. The tender is widely expected to fail since no one has even purchased the tender documentation, although the Serbian government maintains it extended the original tender deadline by a month due to interest shown by several airlines.

Azerbaijan, which said it would consider taking over Jat in return for some other investments in the energy industry, currently seems to be the only interested party. However, the Azeris are more interested in taking over Jat in its current form rather than creating a successor airline by mid 2012 as the tender outlines, local media report. In turn, the terms set out by the tender seem to have vanished and direct negotiations between the two sides could take place if only Azerbaijan was actually interested. “We kindly ask that our good friends from Azerbaijan express whether they are interested in entering a strategic partnership with Jat. We would be more than happy for you to incorporate Jat into your operations”, Milutin Mrkonjić, the country’s Minister for Infrastructure said last week at the Black Sea Economic Cooperation summit in Moscow.

Despite officials from Azerbaijan holding talks with the airline’s management and surging ties between the two countries, there is little Jat can offer to the oil rich state. Over the past four years media have reported that Aeroflot, Turkish Airlines, Air India, Icelandair and airBaltic have all been interested in a partnership with the Serbian carrier at some point or another. None of them materialised.

It is unknown what the governments’ plans are for Jat if the tender fails. In such case, it has been established that the government won’t be making a successor national carrier. The government has the option to depoliticise the airline’s management, of whose incompetence you could have read last week. It also has the option of injecting state aid into the airline as has been the case with Adria Airways, Croatia Airlines and Montenegro Airlines this year. Finally, a likely scenario is for the government to keep the current status quo at the airline until after the parliamentary elections, expected in May next year. Last week, Mrkonjić stressed that the government would never allow for Serbia to be left without a national airline.