Etihad has confirmed it will acquire a 49% stake in Jat Airways, with the Serbian carrier to be renamed Air Serbia under the deal.
The Abu Dhabi-based airline has been awarded a five-year management contract for Air Serbia and will inject US$40 million into its transformation, with the sum to be matched by the Government of Serbia. Both parties have committed to providing further funding of up to US$60 million.
James Hogan, Etihad president and chief executive, welcomed the carrier to its equity alliance which also includes Virgin Australia, Airberlin, Air Seychelles and Aer Lingus.
"In addition to creating scale, our renowned business model provides a unique common platform to drive synergies and cost savings which will be of considerable benefit to Air Serbia as the new airline evolves," he said.
"We will have tough decisions to make but the financial investment by Etihad Airways and the Government of Serbia, together with the positive impact of our joint management expertise and experience will help ensure this airline, with its proud history, now has an even brighter future."
Its fleet of 10 Boeing 737-300 aircraft will be retired from service and replaced in the short term by leased aircraft as an order is placed for 10 new narrow body aircraft.
Its network will also be expanded, with a new four times weekly Airbus A319 Belgrade-Abu Dhabi service to fly from October, complementing the daily service launched by Etihad in June.
Other new destinations will include Banja Luka, Beirut, Bucharest, Cairo, Kiev, Ljubljana, Prague, Sofia, Varna and Warsaw.
Meanwhile, Dane Kondic has been named as the new chief executive of Air Serbia. Kondic holds dual Australian and Serbian citizenship.
