Déjà vu?

Adria Airways CEO, Klemen Boštjančič, has announced that if Adria Airways’ pending privatisation process fails, a single airline for the former Yugoslavia will need to be created as no carrier in the region has the chance to survive in the current economic climate. “If the sale of Adria to a foreign partner fails, then our last chance is for regional integration with Croatia Airlines, Jat Airways and Montenegro Airlines”, Boštjančič told one of Slovenia’s most popular web portals - “SiOL”. The news comes a week after the Association of European Airlines urged Adria Airways to take a leading role in the integration of the former Yugoslav aviation market.

Adria’s CEO notes that Brussels has already shown support for the creation of a single airline for the former Yugoslavia. “Croatia will soon become an EU member and Serbia and Montenegro are not far off”, Boštjančič adds. However, Adria will first attempt to put itself on the market to foreign airlines. By the end of the month a financial consultant will be chosen to assist the Slovenian carrier with its privatisation process. While Boštjančič says that there is interest in Adria, he notes, “We and the government have to do everything in order for Adria Airways to get a new owner but I do not know whether we will succeed”, adding that regional cooperation must develop simultaneously with the privatisation process. Currently, many bigger players in Europe such as LOT Polish Airlines and Czech Airlines are awaiting privatisation.

Adria Airways already enjoys cooperation with airlines in the former Yugoslavia. It has code share agreements with both Jat Airways and Montenegro Airlines. Klemen Boštjančič says that regional integration could fail out of purely political reasons. All of the national EX-YU airlines ended 2011 with multi million euro losses. Once again the debate over a single national carrier for the countries of the former Yugoslavia reopens, 21 years after its break up.

Crisis hit B&H Airlines suspends all flights

B&H Airlines has suspended all operations until further notice but has not ceased the sale of tickets to Zurich, Istanbul and Copenhagen. The airline is currently scheduled to resume operations to Istanbul on March 13, according to the Amadeus global ticketing system. However, the Bosnian carrier has suspended its planned seasonal flights to Gothenburg and Stockholm. It comes a week after it indefinitely suspended services to Amsterdam.

Currently, B&H Airlines does not have an aircraft in Sarajevo. Its two ATR72s are in Monchengladbach in Germany’s west. The ATR registered E7-AAD left weeks ago while the other, E7-AAE, took off for Monchengladbach on March 9. They are officially there for regular maintenance. Meanwhile, the Airbus A319 has been grounded in Istanbul since February 27. The government maintains that it too is undergoing technical checks.

It is believed that recent talks between Turkish Airlines’ management, the government of Bosnia and Herzegovina, the Turkish ambassador in Sarajevo and B&H Airlines’ management broke down earlier in the week. The Bosnian daily “Oslobodjenje” reports that B&H’s part owners, Turkish Airlines, have requested for the Bosnian government to cover debt which has been accumulated by the carrier. Turkish maintains it took over B&H not to make a profit but rather to help the struggling airline back in 2008. The government says it no longer has the means to finance its national carrier. It has ordered B&H Airlines to draft a business plan for 2012 after which talks with Turkish Airlines could resume. Whether B&H can bounce back remains to be seen.

New hope for B&H Airlines

Members of Turkish Airlines’ management flew into Sarajevo yesterday for talks with the Bosnian government over a deepening row regarding B&H Airlines, three weeks ahead of the 2012 summer season. The government, which is B&H’s majority stake holder, is unimpressed with the way the Turks have managed the carrier and are requesting for Turkish Airlines to adhere to its takeover contract. Local media report that Turkish Airlines has not fulfilled many of its obligations which it signed up to back in 2008 when it took a 49% stake in the carrier. The Bosnian government is further angered that it has had to pump in 3.4 million euros into the national airline on an annual basis, despite Turkish’s presence.

Recently, in retaliation, Turkish Airlines took back its Airbus A319, which was operated by B&H and flights to Amsterdam were suspended with little warning. The return of the A319 to Sarajevo was discussed in yesterday’s meeting and progress is said to have been made. In February, B&H Airlines saw passenger numbers stumble 40%. It not only battled with constant flight cancellations as a result of its spat with Turkish Airlines but also saw extreme weather conditions.

Only last week, the Bosnian government approved a 1.3 million euro cash injection to cover B&H’s operational costs. Today, the carrier will only operate one return flight to Istanbul with other services cancelled. Furthermore, one its ATRs is undergoing maintenance leaving the carrier with a single ATR72. Yesterday’s meeting between Turkish Airlines and the Bosnian government is said to be going in the right direction, bringing hope to employees and passengers that the situation can be resolved.

B&H left with two aircraft as it suspends Amsterdam flights

Turkish Airlines has taken back possession of its Airbus A319, which has been operated by B&H Airlines for the past two years as the crisis within the Bosnian carrier deepens. The A319 jet, which is registered in Turkey (TC-JLR) left for Istanbul on scheduled flight JA106 on February 27. Problems appear to have emerged between the minority and majority share holders of the airline - Turkish Airlines (49%) and the government of Bosnia and Herzegovina (51%). Turkish is unhappy that it has been unable to buy a majority stake in the carrier, which it has been hoping to do so since late 2010.

In a further show of problems, B&H Airlines has now suspended services to Amsterdam indefinitely. The flights were to be temporarily suspended during March and resumed in April with four weekly services. In 2011 the Bosnian state auditor said in his report that B&H was better off prior to the Turkish takeover, noting that losses at the airline have increased ten times.

Turkish Airlines has delivered little on its purchasing agreement with the Bosnian government signed in 2008. It was supposed to spend five million euros for the lease of two jet engine aircraft and make a further five million euro investment. According to plans in early 2009 the airline’s fourth jet was to arrive in the summer of last year.

Government approves Montenegro Airlines privatisation

The Montenegrin government decided yesterday that Montenegro Airlines will be privatised during 2012. It follows a difficult year for the national carrier in 2011. Montenegrin Prime Minister Igor Lukšić said that the airline will be offered to investors through a public tender. Montenegro Airlines has become a costly business to keep running after the government agreed to provide 400.000 Euros to the carrier each month to cover operational costs and write off the airline’s debt to Podgorica and Tivat airports. In order to cover the debt owed to the Serbia and Montenegro Air Services Agency the government has offered them ownership of the Park Hotel in Bijela on the Montenegrin coast. Earlier in 2011, the government wrote off a further 3.2 million Euros in debt and ordered the country’s two international airports to lower its fees to the national carrier. Recently, there has been discontent amongst pilots unhappy with late wages. Unlike its regional rivals, the global economic gloom did not have an effect on Montenegro Airlines in either 2008 or 2009.

The Montenegrin carrier has faced sliding passenger numbers, handling under 600.000 passengers last year, although is reported to have had strong growth in January 2012. This summer the national airline will introduce flights to London from both Podgorica and Tivat and has announced plans to purchase another Embraer jet.

It will be the second time the government has attempted to privatise Montenegro Airlines. In 2010, it unsuccessfully tried to sell a 30% share in the airline. Although El Al Israel Airlines, Etihad Airways and Arkia Israel Airlines all purchased the tender documentation, none of them made an offer. The CEO of the airline, Zoran Djurišić, is firmly against the sale. Late last year he told the media, “The government knows my stance regarding the privatisation which is why I have been completely excluded from the process”. He added that privatising the airline will have long term negative effects on the country. Instead, Djurišić says the government should cover the airline’s losses and pressure Montenegro’s largest petroleum company, Jugopetrol, to reduce its unreasonably high costs.

Authorities unhappy with Limak

The Franco-Turkish consortium Limak Holding and Aeroport de Lyon, which run Priština Airport, are reported to be having problems with local authorities over a range of issues. The public broadcaster, Radio Television of Kosovo, says that authorities are unhappy with various managerial decisions made by the consortium so far. Problems first appeared late last year when authorities accused Limak of violating the concession agreement in respect to the asking price for rent of commercial space at the airport. Furthermore, the airport has recently significantly increased handling fees for carriers using Priština, much to the displeasure of airlines. British Airways, which operates three weekly flights to the city from London Gatwick, has been one of the most vocal in its dissatisfaction with the consortium. The head of Priština Airport, Ferda Yakar from Turkey, resigned from his post in October last year.

Another major disagreement between the airport operator and local authorities is the airport’s controversial name “Adem Jashari” - a guerrilla fighter regarded as a hero by some but a villain amongst minority groups. The name was given in 2010 based on a government decision, however, Limak is said to be unhappy with it. The operator did not want to comment on the name issue to local media. Limak Holding and Aeroport de Lyon are to run Priština Airport for twenty years under the concession agreement.

Priština saw historic passenger figures in 2011 making it the third busiest airport in the former Yugoslavia for the first time in its history. The airport is likely to hold onto its position in 2012 with several frequency increases and new services announced by various airlines for the upcoming summer season and a number of other additions introduced over the 2011/2012 winter period.

Without a clue what to do…

The Serbian Prime Minister has denied claims that businessmen will invest millions into Jat Airways and take a 50% share in the airline. This is despite the fact that during last week the Serbian Minister for Infrastructure, which oversees the aviation portfolio and is known for various gaffes, claimed that businessmen, together with the government, would create a successor to Jat by May. The Prime Minister says that a decision whether Jat will continue to operate in its current form or whether a new national carrier would be created hasn’t even been made yet, although he remains adamant that Serbia needs a national carrier. Some of the mentioned businessmen interested in Jat spoke out last week saying they are willing to invest.

Source : EXYU aviation news : http://exyuaviation.blogspot.com has since learned that Jat’s management is due to submit a revival plan to the government. The plan entails a solution to Jat’s future as well as a fleet plan. Furthermore, the Serbian government has approved arrangements for Jat to take out a 10 million Euro loan from the banks to be paid off within the next three years. It has not been disclosed to the public as to how the money will be spent. Jat is gearing up for one of its busiest summer operations in years, which it plans to carry out with 13 aircraft.

Meanwhile, a delegation from the Russian plane manufacturer Sukhoi will be visiting Belgrade in the coming weeks in an attempt to sell its Superjet 100 model to the Serbian national carrier. The aircraft has the capacity to seat between 75 to 95 people depending on class structure. Jat still has an unsettled order for 8 Airbus A319 jets from 1998.

In your opinion, what is the way forward for Jat? Send a comment.

Businessmen taking over Jat

The Serbian Minister for Infrastructure yesterday announced that the government is finalising an agreement with local businessmen to invest into a successor to Jat Airways, which will become Serbia’s new national carrier. A total of ten businessmen are willing to invest into the new airline in return for an ownership stake. “I can’t tell you which businessmen are in question because they are very sensitive people who have their own interests and reasons. Give us another week or two", the minister told the media at a press conference.

One of the businessmen being tipped to be interested in investing into the new Jat is Miroslav Mišković, the owner of the Delta Holding company, which has been named the 86th most successful company in Central Europe by Deloitte with recorded revenue of over one billion Euros in 2011. Several years ago Mišković was interested in creating Serbia’s first low cost airline, Air Maxi, in cooperation with Aviogenex but in the end stepped away from such plans.

The Serbian minister for infrastructure states that the new company will be created before the end of the government’s four year term. Serbs are set to go to the polls on May 6 this year. The minister further states that the new Jat would have a completely new management and would take over Jat’s existing fleet with new aircraft to be ordered in 2013. He further adds that the new company would take over Jat’s employees and will operate with a profit.

More challenges ahead for Adria

Adria Airways CEO, Klemen Boštjančič, has said that Adria can expect another “dramatic year” as the airline prepares for privatisation. The Slovenian government has a 70% stake in the carrier while banks hold the other 30%, as of last year. However, the banks want to sell their shares as soon as possible and only agreed to take part in the deal so Adria could avoid bankruptcy. The plan is for a tender to find a strategic partner for the Slovenian carrier to begin later this year and for the sale agreement to be finalised in the second quarter of 2013. With Lufthansa tied with many investments in Europe, Adria expects to see interest from Qatar Airways, Turkish Airlines and Etihad Airways. All are looking to invest in Europe. Qatar Airways was recently locked in takeover talks with Spanair, which ultimately failed, Etihad recently bought a large stake in airBerlin, while Turkish Airlines is eyeing Poland’s LOT.

Despite a tough year ahead, Boštjančič notes that most of the hard work has been done with the suspension of high profile routes and other cost cutting measures already implemented. “Closing the route to Paris and London was a huge media and political story. We constantly hear from people that say because we received money from the government we should continue flying to those destinations. We have to explain to these people that we got the money from the government to stop flying unprofitable routes. There are a lot of people who really don’t get it”, Boštjančič said in a recent interview to CAPA. However, one more major obstacle remains before Adria’s restructuring programme can be deemed a success. It concerns the airline’s fleet rationalisation plans. “Clearly 2012 will be another critical year”, Adria’s CEO concludes.

As the first month of 2012 passes by Adria has already announced the resumption of seasonal flights to London, Barcelona and Manchester and has launched new flights from Priština to Verona. It also plans to significantly increase its frequencies from Priština to Frankfurt during this summer season so as to retain its place as the busiest carrier operating out of Priština. Back at home, this January, Adria holds a massive 77.5% share of all departures and arrivals out of Ljubljana Airport. Its closest rival, easyJet, managed only 8.2% and this share is set to tumble during the summer as the airline suspends flights from Paris.

New plans envisages new aircraft and less employees

The Serbian government is preparing a restructuring plan for its national carrier to be implemented in 2012. Although the task-group working on the restructuring program has yet to decide whether the state should create a new national carrier to replace Jat or leave the airline with its current brand name, it is believed they are leaning towards the latter. “Since there was no interest earlier in the year for a strategic partner to purchase Jat, we have decided to prepare a development strategy because we believe it is important for the country to have a national airline”, the office of the Prime Minister said in a statement. The new program outlines that Jat will have 700 employees (down from the current 1.200), but adds that no one will lose their job. Instead, employees will leave by choice and will be offered bonuses and stimulus packages, which could prove worthwhile for employees who have a few years left until retirement. An attempt to forcefully sack employees several years ago ended in failure as all of those dismissed launched legal battles and were returned to work.

Fleet wise, the plan envisages the purchase of five to eight new aircraft, although Jat’s existing fleet wouldn’t be retired in the near future. Negotiations with Airbus regarding the 1998 order for 8 Airbus A319s will be resumed while cooperation with the ATR aircraft manufacturer will also begin.

Economists have heavily criticised the government over the past few months for not restructuring the airline before putting it on offer in an ambiguous international tender, which ended in failure a few months ago. Once again millions were wasted on financial and privatisation advisors, of which there was no use in the end. Meanwhile, Jat’s catering division, which was divided from the carrier several years ago, will be put up on auction tomorrow. It is the fourth time this year that a 70% stake in Jat Catering has been put up on sale as there has been no interest previously. The minimal asking price is just over 1 million Euros, significantly down on previous sale attempts. The company has 137 employees.

No deal for new national airline

Baltic Aviation Systems (BAS) has officially confirmed it will not join the Serbian government in the creation of a new national carrier, just over a week after its chief, Vladimir Antonov, is arrested for fraud and money laundering in London. Baltic Aviation Systems, which is a part owner of Latvia’s airBaltic, was the only airline to purchase the tender documentation. It marks the second failure to find a strategic partner for Jat Airways. During the first attempt, which took place at the start of the global financial crisis in 2008, the process also ended in failure without a single company purchasing the tender documents.

The Serbian Ministry for Infrastructure says it will now revise its plans for Jat. In a press release last Friday it said that Jat’s privatisation advisor will now decide whether a new Jat should be created or whether the Serbian carrier should be kept in its current form, although a large scale restructuring process within the company should take place. At this point the latter seems more likely. The government says a decision will be made very soon, before the end of the year.

Jat, which has recorded a 20% passenger increase this year, has already released part of its 2012 summer season timetable which will see the introduction of many new routes and big frequency increases across its network. It raises the question as to how Jat can operate all of these flights with its current fleet. Earlier in the year, the airline’s management stated that Jat will need new aircraft at the start of 2012 in order to operate normally.

Head of Baltic Aviation Systems arrested

One of the five owners of Baltic Aviation Systems, the only company to buy the tender documentation for the creation of a new Serbian national carrier to replace Jat, has been arrested. Vladimir Antonov was arrested in London on Thursday after Lithuanian authorities issued extradition warrants. Prosecutors in the country want to question Antonov as part of an investigation into claims involving Snoras Bank. Snoras went into temporary administration last week. Antonov is also the owner of Portsmouth Football Club which became the first Premier League club to be placed into administration. In 2010 he unsuccessfully attempted to buy Swedish car maker Saab.

“In the public’s interest and in order to protect Jat’s reputation we are closely following and analysing all information regarding persons associated with Baltic Aviation Systems”, a statement from the Ministry of Infrastructure of Serbia said yesterday. However, the ministry seems less than phased that it will go ahead and hold talks with Baltic Aviation Systems whose owner is under suspicion of fraud and money laundering as it announced that it is anticipating the company’s offer by December 12. Baltic Aviation Systems owns 47% of airBaltic which several months ago filed for protection and announced it was cutting half of its workforce and 700 flights.

Meanwhile, Jat Airways’ pilots are demanding for the airline’s acting CEO, Vladimir Ognjenović, to resign and have launched a judicial process against the company’s Head of Training following a scandal earlier in the month for which no one has still faced any consequences.

Government determined to set up new national airline

The Serbian Ministry for Infrastructure has announced that it will go ahead with the creation of a successor national carrier to Jat Airways even if a strategic partner for the new venture is not found. The Ministry said it hopes to begin talks with Baltic Aviation Systems, the only enterprise to purchase the tender documentation for the creation of the new state carrier. They have been given a month to send in their offer, after which “flexible” negations are set to take place in December. Baltic Aviation Systems is headed by a group of businessmen who partly own Latvia’s national carrier, airBaltic.

Milutin Mrkonjić, the Minister for Infrastructure, said that neither Turkish Airlines nor Aeroflot, who have in the past been linked to Jat’s privatisation process, have participated in the tender. He explains that this is because of the bad experience airlines from the two countries have had in similar ventures, giving the example of Turkish’s takeover of B&H Airlines. The new company which will be set up would be freed of Jat’s debt, according to Mrkonjić, while a social benefits program for Jat’s employees would be drafted. This is in stark contrast to the minister’s announcement from last week when he promised job security for the airline’s workforce.

Meanwhile, the acting CEO of Jat Airways, Vladimir Ognjenović, has said that the carrier will need new aircraft next year regardless of the privatisation process outcome. He adds that the airline will hire younger cabin crew next year while negotiations regarding commercial cooperation with AZAL Airlines from Azerbaijan will begin later on in the month. Such an agreement could pave way for AZAL to begin flights to Belgrade.

Do you think a new Serbian national carrier will be created next year? Will Jat become history in 2012? Send a comment with your thoughts.

Status quo to be upheld at Jat until 2012

UPDATED

The tender call to find an interested partner to create a successor national carrier to Jat Airways ended today. The tender began on August 1 and was extended on September 30 for another month. Not a single company purchased the tender documentation. The Minister for Infrastructure, Milutin Mrkonjić, said yesterday that a solution for Jat’s problems will be found by the end of 2011 and that 1.300 of the airline’s employees shouldn’t worry about their livelihoods. According to the minister, two large companies are interested in taking over Jat Airways, one of which is airBaltic from Latvia which bought the tender documentation. Over the past two months, it has also been rumoured that AZAL Airlines from Azerbaijan considered participating in the tender. However, the Azeris might be interested only through direct negotiations with the government.

As a result, the current situation in Jat, or the status quo, will be upheld until the end of the year. The entire tender procedure cost the government millions while the consultant company used in the process (said to have close ties with the government) was also paid a hefty sum. It is not the first time that a consultant company has been paid to advise Jat on its future.

The Minister for Infrastructure did not reveal the names of those companies interested in taking over the Serbian state carrier (with the exception of airBaltic), saying instead that by the end of the year it will be revealed where Jat is “heading towards”. He added that talks between the government and potential investors will be “flexible”. Last week at an economic summit, Mrkonjić pleaded for airlines from Azerbaijan, Russia and Turkey to participate in the tender. airBaltic, the only airline to answer the tender call filed for bankruptcy last month.

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.

Adria prepares for privatisation and keeps Banja Luka flights

The Capital Assets Management Agency of Slovenia has announced that it will begin Adria Airways’ privatisation process in March 2012 at the latest. Economists believe the Slovenian national carrier could attract interest from Qatar Airways, Emirates and the Air France-KLM group. Over the past year, Star Alliance partner Lufthansa has also been rumoured as a potential buyer as well as the financially troubled Air India.

Adria recently began its restructuring process by suspending several destinations, formulating a new fleet plan and composing a new collective agreement for its staff. However, the airline is still facing problems. Robert Vuga, the carrier’s Executive Director who has played a key role in securing a government bailout over the past several months has announced he will resign from his post. Furthermore, the airline recently endured negative publicity after it cancelled one of its Ljubljana - Sarajevo - Ljubljana flights due to poor loads. The few passengers were put on a bus and were driven to their final destination. They were not offered alternatives on other airlines nor were they offered a refund for having to travel by bus.

Meanwhile, Adria has reconsidered its decision to suspend flights to Banja Luka. The airline will continue four weekly flights to Bosnia and Herzegovina’s second largest city, operated by a CRJ200. However, flight times have changed with aircraft departing Ljubljana late in the evening while the return trip to Slovenia’s capital takes off at 05.30 in the morning the next day. The news will be warmly welcomed by Banja Luka Airport which will see direct flights to Copenhagen, Zurich and Ljubljana this winter.

Government cheering for Turkish takeover

The Montenegrin government has announced that “Turkish Airlines is close to taking over Montenegro Airlines and the country’s airports”, national broadcaster RTCG reports. However, the government adds that it won’t sell the national carrier at any cost. If it decides that it is not the best time to privatise Montenegro Airlines, the government will offer Turkish Airlines certain privileges at either Podgorica or Tivat Airport, would initiate stronger cooperation between the flag carriers of both countries and would offer the Turks an opportunity to redevelop Berane Airport in the country’s north-east. This kind of approach will be made possible by the signing of an Intergovernmental Agreement which is being drafted at the moment.

Earlier in the year, the Government of Montenegro announced that it will sell a 30% share of Montenegro Airlines through a public tender by the end of the year after a failed attempt in 2010. This led to fierce criticism from Montenegro Airlines CEO, Zoran Djurišić. “The national carrier is having financial problems but in reality every airline is except for Turkish Airlines which is why we want them as partners”, the Ministry of Transport said in a statement. The extent of Montenegro Airlines’ troubles are unknown to the general public. Problems began this year when the airline was forced to suspend several routes and the government wrote off multi million Euro debt. Recently, the company that runs both of Montenegro’s international airports said its business was being jeopardised at the hands of Montenegro Airlines’ unpaid debt to Podgorica and Tivat.

Montenegro Airlines against privatisation

The CEO of Montenegro Airlines, Zoran Djurišić, has launched a scathing attack against the government for attempting to privatise the national carrier. “The government knows my stance regarding the privatisation which is why I have been completely excluded from the process”, Djurišić said. He added that privatising the airline will have long term negative effects on the country. Instead, Djurišić says the government should cover the airline’s losses and pressure Montenegro’s largest petroleum company, Jugopetrol, to reduce its unreasonably high costs.

Djurišić’s claims mark the first big rift between him and the government with which he has been in good relations since setting up the national carrier back in 1994. Under the government’s proposal, Djurišić was recently re-elected as the company’s CEO for another four year term, which will see him serve at the top of Montenegro Airlines’ management for 21 years. Djurišić also said that potential ownership by an Israeli or Turkish company would have a negative impact on the country’s tourism industry. “This year we saved the tourism season by carrying almost 300.000 passengers within three months, we filled the state’s budget and thanks to us many other companies have profited, including the airports, Jugopetrol and hotels. With a foreign owner none of this would be required of the airline”, Montenegro Airlines’ CEO concluded.

Meanwhile, Airports of Montenegro, which runs both Podgorica and Tivat airports, accused Montenegro Airlines for not making good on its financial obligations. The company claims Montenegro Airlines owes over 8 million Euros to Podgorica and Tivat. More than half is on airport taxes. Airports of Montenegro says its business is being seriously affected by the national carrier. Montenegro Airlines also owes millions to the country’s air traffic control and Jugopetrol with media sources adding that no one really knows the extent of Montenegro Airlines’ losses or debt.

Last month, the Government of Montenegro said it would soon begin tender procedures to sell a 30% share in Montenegro Airlines after which the new owner would have the ability to take a majority stake in the carrier. A similar attempt last year failed despite interest from El Al Israel Airlines, Etihad Airways and Arkia Airlines.

New deadline October 31

The Serbian government has extended a tender call to find a potential strategic partner for a new national carrier, to be set up as a successor to Jat Airways. Although officially the government said the tender is being extended upon the request of interested parties, media speculate that no airline has bought the tender documentation. A similar move was made during the last attempt to privatise Jat back in 2008, when no interest was shown either. The new tender call will last until October 31. The tender originally began back on August 1.

A month before tender procedures began, the Ministry of Infrastructure sent letters to a total of sixty airlines across the world hoping to get companies interested before the tender got underway. Experts say that there are no set guidelines to the tender, that it is unreasonable to ask for an airline company to be a part owner of a still nonexistent future national carrier and that Jat should have been restructured and then put up for sale. Statements made by the government that Turkish Airlines interested in purchasing the Serbian carrier (or setting up a new one) have turned out to be false. The only condition for the future part owner of Serbia’s national carrier is that it must have handled 1.5 million passengers in 2010.

Over the past month, media has speculated that airBaltic was interested in purchasing the tender documentation as well AZAL from Azerbaijan.

Azerbaijan snubs Jat

Tomorrow afternoon the tender to find a strategic partner for the creation of a successor national carrier to Jat Airways will end. Not a single company has answered the tender call. On Monday, a delegation from Azerbaijan visited Jat Airways’ head office in Belgrade to get acquainted with the airline’s business. According to media reports, the Azeri Government is interested in taking over a part of Jat, rather than setting up a new airline, but would in return request shares in several other companies in Serbia and ownership over a future port construction project on the Danube. In the end, the Azeris did not purchase the 10.000 Euro tender documentation.

An unnamed source from the national carrier told the press, “No one has even purchased the tender documentation. We heard that the Azeris were interested but to be honest I doubt anything will come of it”. Economists and analysts blame the government for yet another failure to privatise Jat. They argue that it is illogical for a tender to seek for an owner of a nonexistent future national airline. Furthermore, it has been said that the eight party governing coalition has different views on what to do with Jat.

Over the past few months, it has been reported that the government is considering several scenarios for the airline following the tender failure which includes hiring a new professional CEO and providing state guarantees for a loan to purchase four new jets in January 2012. Another possibility is for the government to extend the tender as it lacks a definite strategy for the carrier. Nevertheless, the State Secretary for Aviation firmly denies that there is no interest in the loss making state airline. Meanwhile, the Privatisation Agency has once again delayed the auction of Jat Catering, which was originally scheduled to take place in early September and then moved to last Friday. Since there is absolutely no interest, the auction has now been rescheduled for November 11.