July 17, 2013 / 9:57 AM / in 5 years

Serbia's JAT agrees marketing alliance with Germany's Airberlin

BELGRADE, July 17 (Reuters) - Serbia’s loss-making JAT Airways has secured a marketing alliance with the German Airberlin carrier to share route-booking codes, the two companies said on Wednesday.

The deal with Airberlin, which is 29.21 percent owned by the United Arab Emirates Etihad carrier, increases the likelihood of an equity investment with the fast-growing Arabian-Gulf-based company.

Serbia is aiming to offload loss-making state firms including JAT, to keep its 2013 budget deficit at 4.7 percent of output and secure growth of up to 3 percent.

In June, Etihad and JAT signed a preliminary agreement over a possible equity investment. Last week, the Belgrade-based Politika daily newspaper quoted a source as saying that the deal could be signed on July 22. Other media also suggested Etihad may take over 49 percent stake in JAT.

Serbia’s Deputy Prime Minister Aleksandar Vucic recently said he was hoping for a successful deal with Etihad, adding that JAT Airways should be renamed Air Serbia.

The codeshare deal will allow passengers to book Airberlin flights through JAT from August 1, pending approvals by the two governments.

“Under the agreement, Airberlin will offer ... JAT flights between Belgrade and Berlin, Dusseldorf, Frankfurt and Stuttgart under an AB flight number,” Wolfgang Prock-Schauer, Airberlin’s chief executive said in a statement.

As many as four million Serbs are living and working in Germany and the deal would secure them better connection with Belgrade, JAT’s CEO Velibor Vukasinovic said in the statement.

Previous attempts to sell JAT have failed due to lack of interest from prospective buyers.

Earlier this year, the Serbian government said it was ready to take on 170 million euros ($219.5 million) of JAT’s debt, pay leases for six new aircraft from EADS’s Airbus and secure severance payments for redundant workers.

JAT currently operates 10 ageing Boeing 737-300s and four ATR 72-200 turboprop aircraft on 30 routes within Europe and to the Middle East. (Reporting by Aleksandar Vasovic; Editing by Ron Askew)

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