IGOR SALINGER / BELGRADE
JAT Yugoslav Airlines is to undergo a major restructuring over the next four years as the carrier refocuses on its airline operations and sheds a raft of non-core subsidiaries.
The break up of the flag carrier has been approved by the government of Serbia and Montenegro, says JAT general manager Predrag Vujovic. The Federal Republic of Yugoslavia ceased to exist on 4 February and is being replaced by the Union of Serbia and Montenegro - a hybrid state consisting of the two former Yugoslav republics.
The formerly JAT-owned Tivat and Podgorica airports have already been handed over to the Montenegrin government; next to go will be the airline's ground handling business at Belgrade Airport, two Belgrade hotels due to be privatised in April, and apartments in Kopaonik, which are to be sold by the end of 2003. The agricultural, ground handling, catering, fuel supply and general aviation divisions are also set for divestment.
Over the next four years, Serbian government-owned JAT plans to cut 1,500 staff, reducing its workforce to 4,700, and restructure its fleet around seven Boeing 737-300s and two ATR 72-200s. It also has eight Airbus A319s on order.
Six 727-200s and three McDonnell-Douglas DC-9-32s - already grounded - will be sold, and two more DC-9s, one 727-200 and one DC-10-30 will be grounded or leased out. JAT hopes to gain $13 million in 2003 from the leasing deals, helping it meet its $5 million net profit forecast for 2003 despite anticipated restructuring costs of up to $20 million.
Vujovic hopes profits can be further increased because federal and local taxes have been cut. JAT has renegotiated its contract with local fuel monopoly NIS-Jugopetrol, cutting the price it pays per tonne to $373 from $594. Vujovic claims the airline had been paying for "the most expensive fuel in the world".
JAT intends to focus on bolstering frequencies on its mainline routes to Brussels, Frankfurt, London, Moscow and Paris, and regional flights to Tirana, Albania and Ljubljana, Slovenia. Prospective new destinations are Budapest, Sarajevo and Timisoara.
The airline carried just over 1.1 million passengers in 2002, a 3.4% increase over the previous year and 7.8% ahead of target. It aims to achieve an 8% increase in passenger numbers this year.
Source: Flight International
