MALI: Procurement of planes for Air Serbia postponed until 2022-2025

Serbian Finance Minister Sinisa Mali stated yesterday that the state had not been subsidizing Air Serbia for two years, but that it repaid debts incurred until 2013, under the contract. He added that the procurement of new planes for the company had not been stopped, but postponed until 2022-2025.

Mali said that the Government of Serbia met the obligations under the contract, and “one of the things in the contract is the taking of the old banking debts and other things from the past not concerning Etihad”.

– If I'm correct, we didn't have USD 380 million in our budget to repay the debts immediately. Instead, we are repaying them over a period of around ten years. As they are becoming due, we repay those old debts or credits either through Air Serbia or directly – Mali told the press.

The minister said that the company had not been subsidized for two years, “as this is not a question of Sinisa Mali, or even the Government of Serbia, but a question for the European Commission, which supervises state aid”.

He said that any subsidy “would be defined as state aid to Air Serbia, which the Government of Serbia has no right to do”.

As for the procurement of ten A320 NEO by Etihad for Air Serbia, the minister said that “it has not stopped” and that “it has been postponed” until the period from 2022 till 2025.

Mali pointed out that the company was profitable at the moment and that “if the effect of new planes on the profitability of Air Serbia were taken into consideration, it would turn out that they would jeopardize the profitability, considering the costs of the procurement”.

The planes Air Serbia already has have turned out to be efficient, Mali said.

– Within this model, the current A320 and A319 are doing the job. The new ones are more efficient when it comes to fuel consumption and other factors, but considering the short routes Air Serbia currently operates, this efficiency would not realize its full potential – Mali said.

Ministarstvo finansija Republike Srbije

Air Serbia ad Beograd

Etihad Airways

Siniša Mali

Ministry of Finance

Air Serbia

Etihad

debts of Air Serbia

A320 NEO

A320

A319