Sponsor Message:
Civil Aviation Forum
My Starred Topics | Profile | New Topic | Forum Index | Help | Search 
Etihad Confirms JAT Takeover Plans  
User currently offlineTupolev160 From , joined Dec 1969, posts, RR:
Posted (1 year 6 months 3 weeks 5 days ago) and read 10909 times:

As per the latest news available on the subject, Etihad is to formulate the official takeover proposal by the end of next week, with the Serbian government having until the 15th of June to pronounce itself on the matter, the same day EY is to launch daily service to BEG. If everything goes as planned, Etihad is supposed to take a 49% stake in Jat and takeover the airline's leadership from the 1st of July.

According to sources inside JU that are taking part in the negotiation procedures, Etihad plans to bring Jat back to profitability in 2014, while until 2015 Jat's fleet should comprise up to 16 A320 aircraft and 8 regional ATR turboprops.

"Etihad has recognized Jat as the only potential player in an area between Istanbul and Munich, since OS is part of Lufthansa. In all the other countries, the airlines are in a very poor shape or nearing insolvency, while some countries simply lack a national air carrier - Macedonia for instance".

More on the matter:

http://exyuaviation.blogspot.com/201.../jat-takeover-offer-by-sunday.html
http://www.politika.rs/rubrike/Ekono...api-prvog-jula-stizu-u-Jat.sr.html
(Approximate translation: http://translate.google.com/translat...api-prvog-jula-stizu-u-Jat.sr.html )





[Edited 2013-05-25 17:48:54]

38 replies: All unread, showing first 25:
 
User currently offlinecrazyguineapig From United States of America, joined Mar 2012, 71 posts, RR: 0
Reply 1, posted (1 year 6 months 3 weeks 4 days 21 hours ago) and read 10718 times:

Thanks for posting a thread about this. JU has a very bumpy summer ahead as a really anticipated deal with leasing a pair of A319s from Adria just fell through. According to a blog two ATR-72-500s currently in Denmark (anyone have any idea for which operators these a/c flew?) are supposed to be leased by JU in the coming days. Hopefully Jat will go through the summer season in one piece without any catastrophic fleet shortage problems--they only have to survive for a month longer and then EY should be able to step in and gradually bring this airline into efficient organization!

User currently offline777way From Pakistan, joined Dec 2005, 6041 posts, RR: 4
Reply 2, posted (1 year 6 months 3 weeks 4 days 15 hours ago) and read 10429 times:

why didn't they take over B&H when it was doing ok?

Quoting Tupolev160 (Thread starter):
, while some countries simply lack a national air carrier


User currently offlineOA260 From Ireland, joined Nov 2006, 27295 posts, RR: 60
Reply 3, posted (1 year 6 months 3 weeks 4 days 15 hours ago) and read 10361 times:

Quoting Tupolev160 (Thread starter):
"Etihad has recognized Jat as the only potential player in an area

Indeed and with the right management and investment it should do well. Jat have been held back for decades by politics/mis management and conflict so hopefully this can be a new chapter.


User currently offlineTupolev160 From , joined Dec 1969, posts, RR:
Reply 4, posted (1 year 6 months 3 weeks 4 days 8 hours ago) and read 9933 times:

Quoting crazyguineapig (Reply 1):
Thanks for posting a thread about this.

You're welcome.

Quoting 777way (Reply 2):
why didn't they take over B&H when it was doing ok?

I don't remember when B&H was doing ok. Their fleet now consists of a single operational ATR while at its climax the airline had 1 jet and 2 Atr's if i remember well. Besides, their home airport (SJJ) doesn't have the market or the infrastructure to support a regional hub and an affiliated carrier based there.
If MA was alive they would be maybe maybe looking at them, then there is RO whose base is not in such a convenient location as BEG, besides other reasons. You can add to that the political connections between Serbia and the UAE with the fact that Hogan used to be an employee of JU back in Australia and Jat gets out as the 'perfect' choice.


User currently offlinelightsaber From United States of America, joined Jan 2005, 13518 posts, RR: 100
Reply 5, posted (1 year 6 months 3 weeks 4 days 8 hours ago) and read 9719 times:
Support Airliners.net - become a First Class Member!

Quoting OA260 (Reply 3):
Jat have been held back for decades by politics/mis management and conflict so hopefully this can be a new chapter.

One hopes so. They'll have feed from AB, 9W, EY, and possibly other Skyteam. EY is doing some interesting stuff. I wonder what the business plan changes are. Is is a major route network change or just more day to day efficiency.

Lightsaber



Societies that achieve a critical mass of ideas achieve self sustaining growth; others stagnate.
User currently onlinemercure1 From French Polynesia, joined Jul 2008, 1716 posts, RR: 2
Reply 6, posted (1 year 6 months 3 weeks 4 days 8 hours ago) and read 9719 times:

49% share acquisition is not a "take over".

Its more like and investment.


User currently offlineOA260 From Ireland, joined Nov 2006, 27295 posts, RR: 60
Reply 7, posted (1 year 6 months 3 weeks 4 days 7 hours ago) and read 9466 times:

Quoting Tupolev160 (Reply 4):
I don't remember when B&H was doing ok. Their fleet now consists of a single operational ATR while at its climax the airline had 1 jet and 2 Atr's if i remember well. Besides, their home airport (SJJ) doesn't have the market or the infrastructure to support a regional hub and an affiliated carrier based there.

Yes they were never an attractive investment and BEG is far more of an attractive hub in the Balkans. They may never get to the regional hub they once were under Yugoslavia but they could certainly be a mini hub for the Balkans.

Quoting lightsaber (Reply 5):
EY is doing some interesting stuff.

Indeed they are and it will be interesting to watch over the next 12-18 months.


User currently offlineBEG2IAH From United States of America, joined Apr 2004, 980 posts, RR: 18
Reply 8, posted (1 year 6 months 3 weeks 4 days 2 hours ago) and read 7686 times:
Support Airliners.net - become a First Class Member!

Quoting mercure1 (Reply 6):
49% share acquisition is not a "take over"

True, but the most important aspect of all this is that EY would be taking over the management of JU. If that happens, that would be the best day in JU's recent history



FAA killed the purpose of my old signature: Use of approved electronic devices is now permitted.
User currently offlineDutchBoeing From Netherlands, joined Apr 2010, 99 posts, RR: 0
Reply 9, posted (1 year 6 months 3 weeks 4 days 1 hour ago) and read 7420 times:

Why did the deal with the A319's fall through? I believe they had already made a substantial deposit? What happens now with the fleet? Any A320's to join from another source?

User currently offlinecrazyguineapig From United States of America, joined Mar 2012, 71 posts, RR: 0
Reply 10, posted (1 year 6 months 3 weeks 3 days 22 hours ago) and read 7107 times:

Quoting DutchBoeing (Reply 9):

To be honest I was surprised upon hearing this too. Although I can't make much sense out of it--the press over there said clearly the deposit of $450,000 was made to Adria. The previous CEO (V. Ognjenovic) seemed suspiciously desperate to make a move with leasing Airbus aircraft as opposed to the easier option of leasing newer B737s so that JU's pilots don't have to go through schooling (eliminating the need of a wet lease as opposed to a dry lease). Most people who are familiar with the business in Serbia realize that the decision to go for A319s and not 737s was completely against every degree of rationality--in other words, there was something fishy about the Airbus news from the very beginning. A comment in Skyscraper City said that the leasing agreement with Adria was "saving Adria rather than Jat." There is not a more concise way to describe that contract.

Quoting BEG2IAH (Reply 8):

   Word.


User currently offlineBEG2IAH From United States of America, joined Apr 2004, 980 posts, RR: 18
Reply 11, posted (1 year 6 months 3 weeks 3 days 20 hours ago) and read 7020 times:
Support Airliners.net - become a First Class Member!

Quoting DutchBoeing (Reply 9):
Why did the deal with the A319's fall through?

Apparently, AerCap, the owner of the two (soon) to be sub-leased A319s, now wants to have bank guarantees payable by the State of Serbia in case JU cannot meet its financial obligations. JU has been behaving as a drug addict and nothing makes sense. All "business" decisions are short of insane. Either EY deal goes through or we don't see JU much longer. It's sad what was made of a great company JU used to be.

Quoting crazyguineapig (Reply 10):
leasing Airbus aircraft as opposed to the easier option of leasing newer B737s so that JU's pilots don't have to go through schooling

There's also some transition training needed to switch from a classic to NG 37 aircraft, but considerably less than switching to an A320 family.

B737 Classic - B737 NG Transition training example: http://premairflighttraining.com/fli.../boeing-737-classic-to-ng-variant/



FAA killed the purpose of my old signature: Use of approved electronic devices is now permitted.
User currently offlineJoKeR From Serbia, joined Nov 2004, 2245 posts, RR: 9
Reply 12, posted (1 year 6 months 3 weeks 3 days 17 hours ago) and read 6893 times:

Serbian daily Politika has detailed the EY plans for JU, as published on ex-YU blog...

http://www.politika.rs/rubrike/Ekono...api-prvog-jula-stizu-u-Jat.sr.html

From the current 1.243 employees, numbers will be cut to 800 in the initial phase and will eventually be brought down to 600. Cuts will mostly be made in administration rather than among pilots and cabin crew personnel.

Fleet wise, Etihad plans for the Serbian carrier to have between 14 and 16 mid size aircraft of up to 150 seats by 2015 and a further 8 ATRs for regional flights.

Here: http://exyuaviation.blogspot.ae/2013...tihad-takeover-offer-revealed.html



Kafa, čaj, šraf?
User currently offlinemig21umd From Australia, joined Feb 2005, 270 posts, RR: 1
Reply 13, posted (1 year 6 months 3 weeks 3 days 13 hours ago) and read 6736 times:

Jat and the Serbian government is in such a mess right now that there is a high chance that this deal will fall through.

It is reported that the deal will require the Serbian government to sell Jat debt free and with a workforce of only 600. To do this, Serbia will have to use almost half of the money it received from Russia as a loan to stop the country going bankrupt on Jats debts and the 600 employee redundancies.

If Serbia cannot afford to sell Jat debt free than I doubt Etihad will be prepared to pay the total 500 million Euro's or so in both settling Jats debts and the acquisition of new aircraft and would probably not be worth the investment.



Once you have tasted flight, you will forever walk the earth with your eyes turned skyward, for there you long to return
User currently offlineEagleboy From Niue, joined Dec 2009, 1911 posts, RR: 2
Reply 14, posted (1 year 6 months 3 weeks 3 days 13 hours ago) and read 6709 times:
Support Airliners.net - become a First Class Member!

Quoting JoKeR (Reply 12):
Serbian daily Politika has detailed the EY plans for JU, as published on ex-YU blog...
.....From the current 1.243 employees, numbers will be cut to 800 in the initial phase and will eventually be brought down to 600. Cuts will mostly be made in administration rather than among pilots and cabin crew personnel.

Following precedent here....perhaps EY will provide administrative/HR/payroll functions for JAT.


User currently offlineTupolev160 From , joined Dec 1969, posts, RR:
Reply 15, posted (1 year 6 months 3 weeks 3 days 13 hours ago) and read 6679 times:

Quoting crazyguineapig (Reply 10):

Exactly. The deal was backdoor-brokered by some EADS-related interests coming-in from the EU, that lobbied (read: bribed) Jat's management and government's task-group for JU to enter the story with Adria's Airbuses at such an important moment and without any tender on selecting the company to lease from (when they could have easily leased several older B733/734 for a far cheaper price) and especially in order to avoid Adria becoming bankrupt cause they're being not able to pay the lease to AerCap* anymore, they're several months late. For the money, Adria will comfortably re-lease a couple of older A319 so you can imagine how much they're getting out of the deal.
(*which is essentially an Airbus lessor, with connections to EADS)

Strangely enough, according to the contract, the maintenance is not gonna be performed by BEG-based Jat Tehnika (which now holds the license for A320 family) but by the technicians at Adria in LJU so we can see that everything was systematically done in the favour of Adria and certainly not Jat. I personal hope the deal falls through, better to loose 450.000$ than millions in the coming years.

Furthermore, from my contacts with Jat engineers and fleet planners, they're saying not only the two A319 are catastrophically expensive but that JU needs at the moment additional planes of the A320 capacity, and not the A319 that is similar in that regard to their existing Boeing 737-300.

I hope someone will bear the criminal charges for all that.


User currently offlinecrazyguineapig From United States of America, joined Mar 2012, 71 posts, RR: 0
Reply 16, posted (1 year 6 months 3 weeks 3 days 8 hours ago) and read 6541 times:

^I would wish so too, but I don't think Serbia or Slovenia have any clear anti-corruption laws which would make paying under the table a reason for legal prosecution.

Quoting mig21umd (Reply 13):

In February 2013 JU was in a debt of 170 million euros. Chances are, a considerable portion of those debts are to domestic enterprises (like Aerodrom BG, Jat Tehnika, etc) because they are the first candidates to be shunned when it comes to Jat paying for services. The editor of the Ex Yu Aviation Blog has confirmed this when it was written that in 2012 the sole source of Airport Belgade's profit losses were in fact because of JU not paying them the fees that other carriers payed. So it is conceivable that there is a grey area within the 170 million euros that may never even be covered by the government, meaning that if the unpayed enterprises like Airport, Tehnika, etc are not on the verge of bankruptcy they might through some form of business or trade "forgive" the debts from years ago. Otherwise, the debts to foreign enterprises and airports will certainly compose the most important part of this debt that needs to be payed off.

If 170 million euros is half of "Russia's loan to prevent bankruptcy of Serbia" as you state it, then this is in no way a "loan to prevent bankruptcy of Serbia." The extremely small proportion of this debt to Serbia's total debt is unlikely to make conditions for Etihad to suddenly forget about JU. I honestly don't see how it's more expensive for the government to sell half of an airline to another airline which wants to halve its workforce than to keep a blackhole of an airline filled with political party parasites with 1.300 employees. When you can explain to me how the latter is better I will be convinced the EY deal is doomed to fail.


User currently offlinemig21umd From Australia, joined Feb 2005, 270 posts, RR: 1
Reply 17, posted (1 year 6 months 3 weeks 2 days 22 hours ago) and read 6317 times:

Quoting crazyguineapig (Reply 16):

I never said the deal is doomed but in my personal opinion there is high chance it will collapse.

The devil here is definitely in the detail.

All we know now is that EY have submitted an offer to the Serbian Government and Serbia has until the 15th of June to respond. There is some speculation as reported in one of the Serbian newspapers of what is included in the offer but until we see something official from EY, I would advise you to take anything reported from Serbia's media as pure speculation especially when it has to do with Jat. There is a history going back 20 odd years of promises and plans for Jat which has never and I mean never materialised.

All I am saying and I will admit this is part speculation on my behalf but also based on following aviation in the region for years now, is that there could be a real possibility that Serbia may not be able to meet or it side of the agreement. It could be either too expensive for Serbia to sell Jat debt free or the deal might not in the end be seen as fair from the Serbian side. Again, we don't know what is in the detail and it might not be acceptable to Serbia.

I would agree with you that the status quo is not good and that this is a great opportunity for Serbia and the region but the situation still remains that Serbia has to decide if it is worth writing off the debt or paying off the 170 million Euro's just to secure the jobs of 600 people!

My proposition would be, close the airline and sell any assets needed to pay off the debt, because I don't know why other companies should also be made to both suffer and be disadvantaged by Jat not to mention the Serbian tax payers who has to the detriment of its own future had to pay to keep Jat going. From here just simple invite Etihad to set up a new airline from scratch with the full support of the government!

If you really want to you can still call it Jat and the government owns the slots so you're not going to lose them but you get a fresh start with a management team who knows what they are doing who are interested in both growth and profits which will be of great benefit to Serbia and the region.



Once you have tasted flight, you will forever walk the earth with your eyes turned skyward, for there you long to return
User currently offlineBEG2IAH From United States of America, joined Apr 2004, 980 posts, RR: 18
Reply 18, posted (1 year 6 months 3 weeks 2 days 17 hours ago) and read 6211 times:
Support Airliners.net - become a First Class Member!

Quoting mig21umd (Reply 17):
All we know now is that EY have submitted an offer to the Serbian Government and Serbia has until the 15th of June to respond.

As much as I don't like this government, it is the very first one that started handling this hot potato called JU. Serbian government's deputy prime minister (Mr. Vucic) made some behind the scene deals with the UAE crown prince and head of state Sheikh Mohammed bin Zayed Al Nahyan (chairman of EY). Shoot me if I know why they call each other "brother". There was one quick voice of discontent (from the newly appointed CEO of JU) with the whole proposed deal with EY and it was promptly silenced, i.e., within 12 hours. Even the deputy prime minister personally (in writing) contacted Mr. James Hogan on May 3 to let him know everything is still per the previous conversations and on track.

I know this is borderline lunacy, as it's predicting the future of JU, but I'm willing to take a bet that this deal will go through. It's cheaper to eat 170 m euros now and have a cash cow which will fill the budget in the near future, than be in a far worse position and finance yet another rescue plan, which is inevitable with current state of JU. Current minister of finance (who has had a similar role in the last 12 years) seems to be fed up with JU as well. The time has come to either accept the deal or kill JU. I hope it's the former.

Let's talk after June 15. I say the deal goes through.

Cheers.



FAA killed the purpose of my old signature: Use of approved electronic devices is now permitted.
User currently offlinemig21umd From Australia, joined Feb 2005, 270 posts, RR: 1
Reply 19, posted (1 year 6 months 3 weeks 1 day 23 hours ago) and read 5993 times:

Quoting BEG2IAH (Reply 18):
Let's talk after June 15. I say the deal goes through.

Yeah, I agree.

Quoting BEG2IAH (Reply 18):
There was one quick voice of discontent (from the newly appointed CEO of JU) with the whole proposed deal with EY and it was promptly silenced, i.e., within 12 hours. Even the deputy prime minister personally (in writing) contacted Mr. James Hogan on May 3 to let him know everything is still per the previous conversations and on track.

I wonder if he was complaining about being CEO for possibly only a few months or if he had some reservations when it came to the proposed offer? This we may never know.



Once you have tasted flight, you will forever walk the earth with your eyes turned skyward, for there you long to return
User currently offlineBEG2IAH From United States of America, joined Apr 2004, 980 posts, RR: 18
Reply 20, posted (1 year 6 months 3 weeks 1 day 22 hours ago) and read 5955 times:
Support Airliners.net - become a First Class Member!

Quoting mig21umd (Reply 19):
I wonder if he was complaining about being CEO for possibly only a few months or if he had some reservations when it came to the proposed offer? This we may never know.

He actually brushed aside the whole deal saying that he doesn't care about it. Like he knew how to manage JU better... The extent of crisis management went that far that even online and print newspapers were heavily edited hours after his 'words of wisdom' were published. EY asked for a press clipping to see what the genius said. That's when Mr. Hogan was contacted by the deputy prime minister. Go figure...  



FAA killed the purpose of my old signature: Use of approved electronic devices is now permitted.
User currently offlineLuka From Serbia, joined Aug 2006, 186 posts, RR: 2
Reply 21, posted (1 year 6 months 1 week 2 days 11 hours ago) and read 5563 times:

On Monday Etihad CEO James Hogan and Jat Airways CEO will hold a press conference in Belgrade. Agenda is unknown. EY starts BEG flights this Saturday.

Source: http://exyuaviation.blogspot.com/201...etihad-tipped-to-announce-jat.html


User currently offlineTupolev160 From , joined Dec 1969, posts, RR:
Reply 22, posted (1 year 6 months 1 week 1 day 20 hours ago) and read 5270 times:

No takeover can be signed, intentions expressed at best: the takeover must happen between the government of Serbia (the owner) and Etihad in a separate ceremony. Let's see.

User currently offlineTupolev160 From , joined Dec 1969, posts, RR:
Reply 23, posted (1 year 6 months 5 days 2 hours ago) and read 4931 times:

EY launched flights to BEG yesterday and placed its codes on JU's flights to SJJ. The 17.06 marks the 86th birthday of JU, as one of the oldest airlines in the world still operating, while on the same day (June 17th), Etihad is to hold a joint conference with Jat's CEO over future steps in cooperation. The celebrations over JU's birthday were held jointly by the senior staff from both airlines on Saturday.

More can be read here:

- http://exyuaviation.blogspot.com/201...ihad-touches-down-in-belgrade.html
- http://exyuaviation.blogspot.com/201...etihad-tipped-to-announce-jat.html


User currently offlineTupolev160 From , joined Dec 1969, posts, RR:
Reply 24, posted (1 year 6 months 3 days 13 hours ago) and read 4451 times:

Etihad confirms Jat purchase plans:

http://www.exyuaviation.blogspot.com...6/etihad-jat-press-conference.html


25 dhr : I think we can now change the title of this thread as its obvious Etihad has no intention of taking over this carrier.
26 777way : dosent sound like it.
27 acabgd : Actually, I would call this a step back from Etihad. It was announced they will submit a takeover proposal by mid-June, now they announced they are r
28 Tupolev160 : Press report from the conference: "11.00: Attending today’s conference is a group of Australian tour operators flown in from Sydney and Melbourne b
29 BEG2IAH : Today, June 19, Minister of Finance and Economy (Mr. Dinkic) confirmed that Serbian Government received an offer from EY and that negotiations started
30 NonRev : Surely this is just a way of being able to operate Trans-Atlantic services ex. Europe and to be able to work the intra-European market? As a Middle-Ea
31 BEG2IAH : They will not buy more than 49%.
32 s4popo : Are you saying EY is targeting 5th freedom on something like BEG-ORD, BEG-YYZ, BEG-JFK? I never thought about that before, but I guess it's possible.
33 acabgd : They will "officially" not buy more than 49%, but will run the airline with Etihad management and will have a final say in all the major decisions. I
34 nonrev : I wouldn't restrict it to just BEG TATL. Theoretically, at least, they could offer LHR/FRA/CDG flights Trans-Atlantic under the JAT banner. They woul
35 JoKeR : EY pushed Serbian CAAD to obtain a Category-1 ops certificate ASAP. This should be ready in early autumn. So my guess is yes, EY is quite keen on TAT
36 rutankrd : Wrong Serbia is not in the EU or a signatory to the US/EU openskys treaty. So they could not operate those fifth freedoms with JAT.
37 rutankrd : Again not the case -EY could very easily operate flights via many EU points on their own frames right now. Many EU-UAE agreements already allow fifth
38 acabgd : Some more details about Etihad - Jat deal have leaked out: - Etihad should takeover management of Jat as of October 1st. - Existing aged B737 fleet wi
Top Of Page
Forum Index

This topic is archived and can not be replied to any more.

Printer friendly format

Similar topics:More similar topics...
WFAA: AA-US Merger Announced Next Week (sources) posted Wed Feb 6 2013 15:39:34 by blueflyer
Body Scanners Coming To PER Next Week posted Wed Dec 5 2012 19:39:32 by Quokkas
FI's Upcoming Big News Next Week? posted Tue Sep 25 2012 16:35:46 by wedgetail737
WN Begins DSM-MDW Next Week posted Sun Sep 23 2012 21:49:02 by dbo861
More New G4 Hawaii Routes Next Week posted Fri May 11 2012 16:54:11 by fatflyer
F9 To Announce Bloomington, IL Next Week? posted Fri Jan 27 2012 09:25:14 by FlyPeoria
Allegiant - "Big News Coming Next Week" posted Fri Jan 20 2012 10:58:50 by Boeing773ER
Terminal Changes In SJC Effective Next Week posted Thu Jan 12 2012 09:18:56 by olddominion727
EDI/GLA To Either DOH Or AUH: News Next Week? posted Sun Jan 8 2012 02:54:23 by damian
Bloomberg: FedEx May Order 30 767s Next Week posted Wed Dec 7 2011 16:40:07 by PITrules