Etihad may invest in Serbia's JAT airline next week

Serbia's JAT Airways will meet a delegation from Etihad Airways next week, a Serbian government official said on Wednesday, raising speculation the Abu Dhabi-based carrier could take a 49 percent stake in the indebted airline.

Serbia has been trying without success to offload the airline for years and Finance Minister Mladjan Dinkic said last month that Etihad was interested in a long-term partnership in which the expanding Gulf airline would take a 49 percent stake.

"The Etihad delegation will meet with their counterparts from JAT and they will then have a joint press conference to announce some hopefully good news," said a government official who asked not to be named.

The Serbian government said last month it was ready to take on 170 million euros ($218.6 million) of JAT debt, pay leases for six new aircraft from EADS's Airbus and secure severance payments for redundant workers.

JAT currently operates 10 ageing Boeing 737-300s and four ATR 72-200 turboprop aircraft on 30 routes within Europe and to the Middle East.

With Europe in economic crisis, Serbia is looking east for investment.

It has secured a $400 million sovereign loan from Abu Dhabi for agriculture investment and agreed more than $400 million in investment by the Al Dahra agricultural firm based in the emirate.

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