Air India conducting due diligence activity with Serbian carrier JAT
04 Jun 2007
According to reports, the carrier may complete due diligence procedures by the end of June. After months of talks, officials have indicated, a final decision on a bid will be taken in consultation with Indian civil aviation ministry officials. Air India officials have said that a hub for the carrier at Belgrade, JAT's home base, would provide it with a strategic opportunity as like other international airlines, the carrier is already facing congestion across most of the key European airports that it operates in.
If Air India decides to bid for JAT it can expect fierce competition from Russia's flag carrier Aeroflot, which would hope to capitalise on the strong political links that Serbia has traditionally enjoyed with Russia. (See: Has Aeroflot piped Air India for control of Serbian airline?)
In this regard it may be mentioned that Air India's offer to base its European operations out of Belgrade may provide increased opportunities for generating employment and other spin off benefits to Serbia, as compared to the pure airline-to-airline synergies that Aeroflot has offered to JAT.
Air India, which currently operates with a total fleet size of 47 aircraft, has ordered 68 passenger jets from US aerospace giant Boeing last year, at a cost of nearly $11bn. JAT currently operates 10 Boeing 737-200s, which are 25 years old and four propeller-driver ATRs.
For JAT, a link up with Air India's access to a rapidly increasing air traffic from the Indian sub-continent would be an added allure that it would find difficult to turn away. It is also an access that Aeroflot would find difficult to match.
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