Etihad to retain equity stake in stronger-performing Air Serbia

Air Serbia has posted a €15.7 million ($18.3 million) net profit for 2017 and announced that Etihad Airways plans to continue as a 49% equity partner.

“Air Serbia and Etihad Airways agreed that equity partnership of two airlines is going to be continued. Etihad continues to own 49% of Air Serbia and remains a fully committed and supportive shareholder in partnership with Air Serbia’s majority shareholder, the government of Serbia,” Air Serbia said in a statement July 2.

Etihad Airways bought into Air Serbia five years ago, but the Abu Dhabi-based carrier has faced strong headwinds among its equity partner network with the demise of airberlin and Alitalia entering administration.

On July 2, Etihad Aviation Group CEO for equity partners Robin Kamark said the group will remain “an engaged and supportive shareholder and cooperation partner” for Air Serbia, as the equity partnership enters its next phase.

Air Serbia also released its financial results for 2017, announcing that net profit rose €14.8 million to €15.7 million, from a 4% revenue increase to €288 million.

“Based on detailed business analysis and thanks to the new approach and measures, operating expenses have been decreased by 7%, while at the same time, sales revenue was increased by 4%,” Air Serbia said.

During the year, the Belgrade-based airline introduced new Recaro seats, which added 4% capacity, but passenger numbers remained “in line with the previous year” at 2.6 million. Load factor was up one point at 73%.

Air Serbia’s charter arm, Aviolet, performed a record 749 charter flights and carried 174,000 passengers. Cargo volumes also rose by 25.3% to 6,156 tonnes.

The airline added that this performance was achieved despite network consolidation and “a sharp increase in competition.”

“2017 was a pivotal year for Air Serbia that saw the airline implement fundamental changes to strengthen the business, which have already positively impacted on many key operating metrics,” Air Serbia interim CEO Duncan Naysmith said.

Air Serbia also confirmed that Naysmith and COO Declan Keller will remain in their roles until Dec. 31, 2018.