The state of Serbia will acquire the stake in its flag carrier Air Serbia (JU, Belgrade Nikola Tesla) held by Etihad Airways (EY, Abu Dhabi International), the country’s finance minister, Sinisa Mali, revealed during a news conference, allowing it to take full ownership of the airline.

“From a company that was in bankruptcy, we turned it into a leader that now flies on four continents, in a large number of countries, and we have become an example of how, through a successful airline, you can further contribute to the economic development of your country,” Mali exclaimed. “All necessary paperwork will be completed [on November 13],” he added without giving further details about the transaction.

However, he described the move as “their business decision”. The state now intends to further develop Air Serbia, he said, and “next will be the procurement of large aircraft, the opening up of new destinations.”

The United Arab Emirates airline will quit its co-ownership by selling its remaining 18% share. It bought a 49% stake in loss-making flag carrier Jat Airways in 2013 and rebranded it Air Serbia. At the end of 2020, the Serbian state upped its stake from 51% to 82%.

The Serbian airline managed to settle a USD57.6 million loan with an Etihad Aviation Group-affiliated vehicle before it matured at the end of September 2020, then a second one for USD63.9 million a year later.

According to the Belgrade-based investigative reporting site Balkan Insight, Serbia’s ruling Progressive Party has long proclaimed Air Serbia as a success story of partial privatisation, but not all of the contracts between Serbia and Etihad have been made public. The Serbian state is believed to have injected hundreds of millions of euros into the struggling company.

Etihad Airways and Air Serbia did not immediately respond to requests for comment from ch-aviation.