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Etihad and Serbia’s JAT in investment discussions

BELGRADE — JAT Airways, Serbia’s flag carrier, is in contact with Etihad Airways on a possible cooperation as the Balkan country’s unprofitable airline seeks investors and new aircraft for its aging fleet.

Belgrade-based JAT and Abu Dhabi-based Etihad may soon decide on a form of cooperation “depending on Etihad’s plans for southeastern Europe,” JAT general manager Vladimir Ognjenovic told reporters in Belgrade on Tuesday.

JAT also seeks offers from aircraft leasing companies, including International Lease Finance Corp, Nordic Aviation Capital and CIT Aerospace International, for four jets and two turboprops to renew the fleet, whose average age is 23 years, he said.

“It’s high time for us to get new aircraft with better fuel efficiency” as the company aims to break even in 2013 after years of losses. The four jets would seat 140 to 180 each, he said.

State-owned JAT’s debt is now at €170 million ($227 million), including €70 million in state-backed loans. The carrier owes more than €40 million to suppliers, including Naftna Industrija Srbije for fuel, and to Belgrade airport Nikola Tesla for services.

The debt to the Gazprom Neft-owned oil and gas company will be repaid as of May when JAT expects a seasonal increase in cash flow, Ognjenovic said.

Some of JAT’s liabilities will probably be assumed by the state under a restructuring plan the government will complete by the end of March, Transportation Minister Milutin Mrkonjic said.

The plan includes reducing JAT’s workforce of 1,300 by “several hundred” through voluntary severance, Ognjenovic said. Mrkonjic ruled out turning JAT into a low-cost carrier, though some of its current planes may be taken over by Belgrade-based Aviogenex airline for offering chartered and low-cost flights.