Serbia has decided to privatize JAT Airways, the Balkan country’s national airline, over the course of the summer. The flag carrier will be officially listed for sale by the end of the month, but the government must first spell out the terms of the privatization contract, which will likely include a clause that would require any potential buyer to preserve the airline’s national status. The Serbian government is looking to sell off 51 percent of the carrier’s shares and has reportedly asked the Rotschild Investment Bank to serve as its advisor.
JAT Airways’ financial picture, however, is not very positive, as the carrier has amassed a debt of €209 million and its net annual income over the past two years has hovered at around only €3.8 million. In essence, JAT has still been trying to rebuild after the disastrous Yugoslav Wars of the 1990s, which nearly brought an end to the carrier’s operations. For example, the airline is only likely to start operating direct flights to Croatia later this year, after it was finally granted a license to land in this former Yugoslav country. The carrier presently flies to 38 destinations, the vast majority of which are in Europe, with a few extra to cities in North Africa and the Middle East. Most of the airline’s modest fleet is comprised of Boeing 737 aircraft, as well as much smaller ATR regional planes.
In the past, Aeroflot Russian Airlines and Air India have both expressed interest in JAT Airways, but these potential bids were terminated due to the political uncertainty in Serbia. The Serb government, however, now appears keen to sell JAT, along with several other state-owned companies, worth a total of €30 billion.