Dubai: Etihad Airways confirmed on Monday it plans to retain its 49 per cent stake in Air Serbia, though it is not expected to renew its management contract expiring in late 2018.
In a statement, the airlines did not provide details on the future of the management contract, but said that Etihad executives currently managing Air Serbia’s operations will leave at the end of this year.
Etihad executive Duncan Naysmith who has been serving as Air Serbia’s interim chief executive officer since late December 2017 will remain in his management position till December 31, 2018, the statement said. Declan Keller, chief operations officer, will also retain his position till the end of December this year.
Etihad signed a deal to acquire a minority 49 per cent stake of Air Serbia in late 2013, and under the terms of the five-year deal, Etihad could also appoint executives to the Serbian carrier. With the contract expiring later this year, the board of Air Serbia is expected to look for Serbian nationals to replace the current CEO and COO.
Etihad’s plans to retain its Air Serbia stakes come as the loss-making airline undergoes a strategy review that aims to turn around financial performance after some international investments failed. Former Etihad partners Airberlin and Alitalia, in which the Abu Dhabi carrier owned stakes, both filed for administration, leading Etihad to incur millions of dollars in impairments in 2016.
Etihad last month also reported $1.52 billion in losses for 2017, marking the airline’s second consecutive year of losses.
On Monday, however, Etihad and Air Serbia said the equity partnership between them will continue, with Etihad a “fully committed and supportive shareholder” of Air Serbia.
The remaining 51 per cent stake in Air Serbia is owned by the Serbian government.
“We are looking forward to the next phase of our equity partnership as an engaged and supportive shareholder and cooperative partner,” said Robin Kamark, Etihad Aviation Group’s chief executive officer for equity partners.
Air Serbia on Monday reported a rise in net profit for 2017 to €15.7 million as sales revenues rose 4 per cent.