Serbia to sell national airline

Serbia has now officially confirmed that it is ready to sell a 51 percent stake in JAT Airways, the country’s national airline, later this year. The asking price is set at €150 million and any potential buyer will be offered the option of purchasing an extra 24 percent stake in the carrier, thus giving the new majority owner up to 75 percent of the airline. Mladjan Dinkic, Serbia’s economy minister, pointed out that while the government will obviously consider all bids from companies and investors within the European Union, those from outside the EU will only be able to make an offer if they form a consortium.

There are, however, at least two potentially serious non-EU bidders for the airline, namely Russia’s Aeroflot-which has long had an interest in the region and has also traditionally been a very close ally of Serbia-as well as Air India. Despite the fact that JAT Airways can boast a lengthy history spanning 80 years, the carrier is arguably not in the best financial shape. The airline has a debt of around €209 million and its fleet is modest in size, consisting of only 14 airplanes, including older Boeing 737 aircraft as well as a small handful of ATR72 planes. JAT did, however, see better days, before the disastrous Yugoslav Wars of the 1990s, which all but crippled the company.

If everything goes according to plan, JAT Airways’ privatization tender will be made public on July 15^th, 2008.

www.jat.com