Serbia’s JAT Airline to Axe 700 Jobs

Serbia’s ailing flag carrier JAT will slash nearly 40 percent of its workforce next year in an effort to return to profit after its stalled privatization, its general manager said in an interview.

Serbia tried to sell a majority stake in the troubled airline in July, but not a single company expressed interest. The government blamed the global financial crisis and said it would wait for better conditions before publishing a new tender, in the meantime bankrolling a restructuring plan to make JAT more competitive.

In the times of socialist Yugoslavia, JAT was a thriving national airline with a domestic market of over 20 million people and a loyal following among the expatriate community. It was heavily hit by United Nations sanctions imposed on Serbia for its role in the wars of the 1990s, and was banned from flying to any international destinations throughout that decade.

JAT has 209 million euros ($295.2 million) of debt but its assets, a 20-year-old fleet of mainly Boeing 737 planes plus real estate, are estimated by analysts to be worth $150 million. As carriers like Austrian Airlines and Lufthansa entered the market, JAT has seen its market share slip to 45 percent of all traffic through the capital Belgrade last year from around 60 percent in 2002.