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Government set to privatise national carrier

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Before Serbia plans to privatise flag carrier JAT Airways, the government must resolve the company’s outstanding legal issues, JAT’s Chief Executive Sasa Vlaisavljevic said in an interview with Belgrade’s daliy Blic. Vlaisavljevic added that JAT Airways must resolve open issues with its former maintenance subsidiary, JAT Tehnika, Belgrade’s Nikola Tesla airport and the country’s Flight Control directorate. “The most important issue that has to be resolved is the strategy for JAT’s privatisation which is based on the assumption that a special law would regulate the matter, having in mind specific nature of the company and its importance for Serbia,” Vlaisavljevic said.

Serbia will also begin a tender process for JAT Airways, Beta news agency reported. It was noted that efforts to search a private partner for the airline started last year, and six “large” unknown companies expressed interest. Serbia wants to sell 51 percent of its stake in the national airline to a strategic partner and in 2007 it appointed Rotschild Investment Bank as privatisation advisor. Vlaisavljevic said that Rotschild Investment Bank “is finalising final reports and analyses including for the first quarter of 2008, and as soon as they complete their work, the report will be forwarded to the Privatisation Agency for approval and then to the government.” “I believe the privatisation tender will be launched before the end of summer,” he said.

According to official data, in 2007 JAT Airways had accumulated a debt of 209 million Euro and in 2006, it had a net income of 3.8 million Euro. Vlaisavljevic said the company’s nominal value is as much as 120 million Euro. JAT Airways operates flights to 38 cities in Europe, the Middle East and North Africa.

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The company has a fleet comprised of 10 Boeing 737- 300, one Boeing 737-400 and five ATR 72-200. Aeroflot is reportedly eager although current law restricts a controlling stake to a Serbian or European Union-based company. General manager Sasa Vlaisavljevic told Flight that the fleet needs renewal, ideally to include four to five each of 120-seat and 70- seat regional jets and another four or five “ATR-like turboprops.” He added that a 10- year-old, 339 million Euro Airbus contract is an issue for a future owner to deal with but is not the obstacle for successful privatisation. JAT Airways is a part of key Serbia’s project to sell state-owned enterprises worth 30 billion Euro and to distribute free shares to some four million people. The Initial Public Offering includes Telekom Srbija AD, the staterun land line and cell phone provider, sales of stakes in Elektroprivreda Srbije electrical power utility, JAT Airways, JAT Tehnika, Belgrade airport and Galenika pharmaceuticals.

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