Air Serbia’s financial report for 2018 shows that the Serbian government has paid it 21 million euros to the airline in subsidies and donations.
Prime Minister Ana Brnabic explains that the money was used to cover the former national air carrier JAT’s debts which is shown in the report as subsidies,
Last and the year before last, the Serbian government disbursed nearly 21 million euros in grants, subsidies and donations to Air Serbia, which was shown in the financial sheets as the airline-‘s income.
Brnabic refutes this and says: “Serbia’s Government hasn’t given a dinar, a euro, a dollar or any other currency to subside Air Serbia. What you are interpreting as revenue is book-kept as debts we took over from (the former Yugoslav flag carrier) JAT,” she said, adding that the amount would appear in the reports until 2023 because of JAT’s debts.
Misa Brkic, a journalist, is convinced that the money is state aid: “State subsidies amounted to 21 million euro or 9 million euro more than the profit. Just a glance at these two figures shows that Air Serbia would have recorded a loss if it wasn’t for the state aid. Air Serbia is not a sustainable company,” Brkic said.
He believes that the state is looking for ways to financially help Air Serbia while facing an appeal before the European Union’s institutions launched by the Slovenian Adria Airways.
With those 21 million Euros, Air Serbia managed to show a profit in 2018, though less than the year before. The number of passengers dropped, additional services and charter flights became more expensive.
“People ask why Etihad (the owner of a 49% stake in Air Serbia with the remaining 51% belonging to the state) is still here. The answer is simple – that partnership doesn’t cost it anything, and there is no reason to leave,” Brkic said.
On top of it all, Air Serbia is paying off a loan to Etihad Airways obtained in 2015 and 2016 under very unfavourable terms and conditions. Also, last year, Air Serbia took a new $40 million loan from Etihad, which is due to be paid in December this year, at 3% interest rate. Air Serbia’s financial report also states that, at the time of compiling the report, the company held $ 40 million in deposit accounts with commercial banks at an interest rate of 3.5 to 4.%.
Source; Serbian Monitor