Etihad Airways stake in ailing Air Serbia shrinks
The Serbian air carrier Air Serbia announced that the government of Serbia increased its ownership shares to 82% in the ailing airline. Meanwhile, the stake of Etihad Airways, the co-owner of Air Serbia, shrinks from 49% to only 18%.
On December 30, 2020, under the contract between the Ministry of Economy of Serbia and Air Serbia, the Serbian government decided to strengthen its position in the airline’s stake and increased the controlling stake from 51% to 82%. The measure was taken in order to eliminate the negative impact on the airline’s financial stability caused by the COVID-19 pandemic.
Following the change, Etihad Airways, which owned 49% of the Serbian air carrier since 2013, now will control only 18% of Air Serbia’s shares.
"We are grateful to the Government of the Republic of Serbia for providing support to the national airline to overcome business obstacles caused by the coronavirus pandemic in the most difficult year in the history of passenger air traffic," said Duncan Naysmith, the CEO of Air Serbia.
The CEO of Air Serbia hoped that the government would help the airline to take fundamental measures to rationalize its operations and Air Serbia would be able to “overcome difficulties, strengthen its position as a leader in the region“ as well as “continue to provide direct and an indirect contribution to the Serbian economy, primarily transport and tourism," read Air Serbia’s statement.
The recapitalization process was undertaken following Air Serbia’s request in accordance with the governmental decree in October 2020. The government of Serbia has requested the State Aid Control of European Commission to review the proposed measures and the EU authority gave the green light for Air Serbia recapitalization arguing that the state measure of increasing the share capital in the airline was “was harmonized with the positive legal regulations”.
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