Jat handed ultimatum to resolve A319 order

Belgrade
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Time is running out for Serbian flag-carrier Jat Airways to settle a long-outstanding agreement centred on eight A319 twinjets, after Airbus warned that it needed to see a clear intention from the government to resolve the issue by 30 March.

Airbus will no longer attempt to settle the 14-year old issue, meaning that Jat Airways is facing not only loss of a $23.5 million deposit but other penalties.

Vision Tehnologies, representing Airbus in Serbia, states that it has "been working hard on making an annex to the contract, which would be more favourable for Jat and Serbia in terms of price, number of aircraft, delivery and financing".

One of the options would have included delivery of four A320s instead. But the decision is in the hands of Serbia's government which, according to sources familiar with the situation, "failed to reply" to several contact attempts from Airbus. The contract for delivery of the eight A319s was signed in 1998.

Serbia's government is still trying to find strategic partners for Jat and, according to sources from the ministry of infrastructure, is close to a decision to axe Jat Airways and form new airline with help of a consortium of local investors.

These would including companies identified as Delta, Farmakom and MK Komerc. With the exception of Delta, which attempted to create low-cost carrier Air Maxi, none has been involved in the airline business.

Minister Milutin Mrkonjic says that the government "wants this resolved in this mandate" ahead of elections in May.