Etihad to rebrand Serbian national carrier
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Etihad Airways will acquire a 49% stake in Serbia’s national carrier, JatAirways, and rebrand it as Air Serbia.
The Abu Dhabi-based carrier has been awarded a five-year contract by the Serbian government to manage the Belgrade-based carrier. Under a deal, Etihad will rebrand the airline, build a new fleet of aircraft and develop a network of international destinations, in line with Etihad’s network.
Etihad will invest US$40 million in Air Serbia, in an loan facility, which will be matched in funding by the Serbian government.The two parties will also provide an extra US$60m in working capital.
“We are delighted to welcome Air Serbia to our equity alliance and look forward to work constructively with them and their stakeholders to build a sustainable, competitive and profitable airline,” said James Hogan, Etihad’s president & CEO. “In addition to creating scale, our renowned business model provides a unique common platform to drive synergies and cost savings which will be of considerable benefit to Air Serbia as the new airline evolves.
“We will have tough decisions to make but the financial investment by Etihad Airways and the government of Serbia, together with the positive impact of our joint management expertise and experience, will help ensure this airline, with its proud history, now has an even brighter future,” he added.
Serbia’s deputy prime minister, Aleksandar Vucic, said the partnership would allow Air Serbia to develop “new products and services… an extensive route network and smooth flight connections”.
Under the rebranding exercise, the tailfins on Air Serbia’s aircraft will feature the Serbian national coat of arms and the country’s colours.
Among other planned developments will be new codesharing arrangements with Etihad and airberlin, adding another 12 destinations in Africa, Europe and the Middle East to Air Serbia’s current network of 33 cities. The new destinations will be Abu Dhabi, Banja Luka, Beirut, Bucharest, Budapest, Cairo, Kiev, Ljubljana, Prague, Sofia, Varna and Warsaw. Flights to Abu Dhabi will operate four times a week.
In terms of fleet expansion, Air Serbia will take delivery of a new Airbus A319 aircraft in October 2013. Eventually the current JatAirways fleet of 10 Boeing 737-300s will be replaced by 10 new narrow-body aircraft.
Air Serbia will become Etihad’s sixth equity partner following earlier investments in airberlin (29.21%), Air Seychelles (40%), Virgin Australia (10.5%), Aer Lingus (2.99%) and Jet Airways (24%).
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