ECONOMY

Post-September 11 concerns of security hamper JAT’s recovery

BELGRADE – Post-September 11 security and other market concerns are hampering the recovery of the Yugoslav flag carrier from a decade of international isolation during the Balkan wars of the 1990s, a company official said on Monday. «JAT has nowhere to go but up,» Jugoslovenski Aerotransport’s (JAT) commercial director, Novica Vulic, told Reuters in an interview. JAT is steadily rebuilding its business from a low base. Its planes were grounded and overseas markets cut off during the violent breakup of the former Yugoslav federation and subsequent sanctions against Slobodan Milosevic. The disintegration of Yugoslavia, which now comprises only Serbia and tiny Montenegro, reduced its once-lucrative home market to around 8 million people from 23 million. Unlike other carriers hit hard by a drop in passengers since last year’s attacks on the United States and a world economic slowdown, JAT has steadily expanded its operations, focusing on its core European and Mediterranean destinations. «But existing conditions on the world market caused by talk of a possible US attack on Iraq, as well as the overall security problem, are holding up our business plans,» Vulic said. «Our plans to open flights to Tehran and Kuwait this year have been put on hold,» he said adding the talks with Kuwait had reached an advanced stage. North American barriers Vulic said regaining access to North American destinations was also a slow process because of US and Canadian concern about the potential risks associated with flights incoming from Balkan states whose border controls may fail to spot threats. JAT wants to resume flights to Toronto and New York. «The Balkan postwar environment we operate in still hinders JAT’s return to the North American markets, with various security issues being the main barrier,» Vulic said. State-owned JAT reopened the Dubai route in June after an 11-year break, hoping it would become the backbone of its long-haul operations in the future and provide links with the Far East, Australia, New Zealand and South Africa. It is currently flying to Dubai via Beirut, but had planned to open Belgrade-Kuwait-Dubai and Belgrade-Tehran-Dubai lines. «But it seems that the only certain new destination will be to Tirana,» Vulic added. In August, JAT reported a 20.8-percent year-on-year increase in the number of international passengers to 94,392, and a 52.2 percent year-on-year rise to 29,356 passengers on charter lines. Vulic said the most important results for him were that JAT had exceeded its ambitious 2002 target, to achieve 19-percent growth, and that the company’s share of flights in and out of Belgrade was greater than that of foreign airlines. «Despite our low starting base, this (2002 result) is the minimum we must achieve next year,» Vulic said. «Matching and exceeding those results in 2003 would be the best proof that JAT has regained its status abroad,» he added. «Even if we are ready with approval by the end of next week, we may still not choose to proceed. We may decide that market conditions are not good enough and that we can theoretically wait until Christmas,» he said. He said road show stops will include New York, and probably Boston and London as well.