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UPDATE 1-Serbia looks to form new airline from JAT
October 22, 2012 / 2:15 PM / 5 years ago

UPDATE 1-Serbia looks to form new airline from JAT

* Serbia wants to lease 12 new planes from Airbus

* Considers partnership with Etihad (Adds finance minister comments)

BELGRADE, Oct 22 (Reuters) - Serbia wants to set up a new airline from its loss-making JAT Airways and plans to lease 12 new aircraft from EADS’s Airbus, in a precursor to a deal with another carrier.

Finance minister Mladjan Dinkic said on Monday the government would guarantee the aircraft leases before seeking a tie-up with an airline such as fast-expanding Etihad, a state- controlled carrier in the United Arab Emirates.

“ The new, better company would receive $140 million worth of sovereign guarantees..,” Dinkic said on the sidelines of a business forum in Belgrade.

“The old JAT will have to go bankrupt ... It is unsustainable,” he said.

Serbia, struggling with a budget deficit projected at 6.2 percent of gross domestic product, has long wanted to sell JAT, which last year made a loss of 3.2 billion dinar (27 million euros).

Dinkic said he had discussed the possibility of Etihad buying a stake in the new Serbian airline and taking over the lease guarantees with UAE officials during a recent visit to Dubai.

He said Etihad may also want to build a new cargo terminal at Belgrade airport.

In March JAT, which operates 14 ageing aircraft, received government guarantees of 10 million euros ($12.6 million) for a loan to cover short-term liabilities.

Last month, Serbian officials said Belgrade was negotiating to sell the airline to AirAsia but the Malaysian company denied that it was interested. ($1=0.7674 euros) (Reporting by Aleksandar Vasovic; Editing by Erica Billingham)

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