State-owned Serbian airline JAT Airways plans to trim 500 jobs, or 30% of its workforce, as it downsizes given the poor prospects for a privatization in the global economic downturn.
JAT has given its 1,697 staff a Feb 27 deadline to apply for redundancy, offering €300 ($388) for each year of service. “This is a one-off offer. Workers who miss the Feb 27 deadline will be declared redundant and granted less favorable (financial) terms,” General Manager Sasa Vlaisavljevic was quoted by his press office as saying on Monday.
Serbia’s efforts to sell a majority stake in JAT failed last July following a zero investor response. The government of Prime Minister Mirko Cvetkovic blamed the global financial crisis and said it would wait for better times before launching a new tender. In the meantime, it has bankrolled a restructuring to make JAT more competitive.
It also pledged additional funds to overhaul JAT’s ageing fleet, last renewed in the early 1990s and comprising 16 aircraft, mainly Boeing 737-300 and ATR 72-200. JAT has €209 million ($270 million) debt. Analysts estimate the value of its assets including the fleet and real estate at about $150 million.
As carriers like Austrian Airlines and Lufthansa entered the market, JAT has seen its 2007 market share slip to 45% of all traffic through the capital Belgrade from around 60% in 2002. (Reuters)