ECONOMY

Belgrade must privatize JAT soon, says airline chief

BELGRADE (Reuters) – Serbia’s government must act swiftly to privatize JAT Airways through a strategic partnership or the airline risks missing out on much-needed capital while waiting for a tender, a top JAT official said. Serbia’s new government has said it plans to launch the privatization of the airline this year, but has not settled on the details. Most Serb state companies have so far been sold through a tender. JAT General Manager Nebojsa Starcevic said instead of waiting for a tender, the state should seek a strategic partner and establish a joint venture. «It would allow the government to keep its package of shares and the foreign partner would boost the capital,» he told Belgrade television B92 late on Thursday. «That would mean additional finances for new planes, additional infrastructure and new total value for the company.» JAT’s assets – its 20-year-old fleet of mainly Boeing 737 planes, plus real estate – are estimated at $150 million. The total value of the airline would be somewhat higher because of the loyalty it has among Serbia’s 7 million people and its large expatriate community. Starcevic said a tender could take another year and a half. «It is a long period, and that is why we think that it would be better if the state opted for establishing a joint venture.» He added JAT had already talked to several companies on possible strategic partnerships, including Russia’s Aeroflot, which had made the best offer so far. JAT was hit hard by the international sanctions imposed on Serbia for its role in the Yugoslav wars of the 1990s. JAT’s entire fleet was grounded for most of that decade. The firm, which employs around 1,700 people, is still burdened with -208 million of debt. It was the first major state firm to downsize and spin off its non-core business in 2005, and posted a net profit of $5 million the following year.