MANILA, Philippines - Etihad Airways, the national airline of the United Arab Emirates, has unveiled plans to acquire 49 percent of Jat Airways. The Abu Dhabi-based carrier has also been awarded a five-year management contract for the Serbian national airline.
These are two of the key components of a wide-ranging strategic partnership agreement, signed by Etihad Airways and the government of Serbia, which includes a fleet of new aircraft and a new integrated network of international destinations enabling greater access for business and leisure travellers to Serbia.
Economic ties between the two countries, valued at 23.3 million euro in 2012 — three times greater than in 2011 — continue to expand with a number of key government agreements signed in recent months which will see investments in agriculture, defense, technology and tourism.
The strategic partnership agreement was announced by James Hogan, president and chief executive officer of Etihad Airways and Aleksandar Vucic, Deputy Prime Minister of the Serbian Government, at a media conference in Belgrade.
Within the agreement Etihad Airways will make available $40 million loan facility which will be converted into equity on Jan. 1, 2014, subject to regulatory approval. This will be matched by an equal funding injection by the government of Serbia.
Etihad Airways and the Serbia will also each provide further funding through shareholder loans and other funding mechanisms of up to $60 million to meet working capital requirements and support network development for the newly created Air Serbia.
James Hogan said: “We are delighted to welcome Air Serbia to our equity alliance and look forward to working constructively with them and their stakeholders to build a sustainable, competitive and profitable airline.
“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,†he added.