The UAE national air carrier Etihad Airways and the Serbian government will invest a maximum of USD 100 million each in a new company Air Serbia.
This was announced on Thursday after the signing of a strategic partnership agreement between the two companies.
Etihad and the Serbian government will first invest USD 40 million each, and then each secure additional funds amounting to up to USD 60 million.
The new management will run the joint company Air Serbia as of October, its director being Dane Kondic, a Serb from Australia.
Etihad signed the five-year agreement with the Serbian government on administering the Serbian national air carrier and will ensure a USD 40 million credit line, which will become the company’s basic capital as of January 1, 2014 after adequate approvals.
The Serbian government will reciprocate by pumping in the same amount of capital.
Etihad Airways and the Serbian government will secure the shareholders’ loan and other financing mechanisms, a maximum of USD 60 million each, thus covering the needs for operating capital and backing the development of a transport network of the new company Air Serbia.
Etihad Airways will purchase a 49 percent stake in Jat Airways, and the agreement on a broad strategic partnership encompasses the introduction of a new fleet and a new integrated transport network of international destinations, which will lead to a greater inflow of business and tourist passengers.
Air Serbia will start flying to Abu Dhabi as of October this year.
After the signing of the agreement, it was underscored that the arrangement will boost trade and investment relations between the UAE and Serbia, having a positive impact on the improvement in tourism of both countries.
In 2012, the trade between the two countries amounted to EUR 23.3 million and increased three times in comparison to 2011, and economic relations continue to develop, receiving an impetus from a series of agreements signed at state level during previous months, which envisage investments in agriculture, defense, technology and tourism.