Etihad Airways (EY, Abu Dhabi International (AUH)) will submit its offer to the Serbian government for a minority takeover bid of Jat Airways (JU, Belgrade Nikola Tesla (BEG)) by the end of this week. The offer, which will entail Etihad's proposed share acquisition and price offered, comes after the Emirati carrier completed its screening process of Jat's business last week in which experts scrutinised Jat's sales, destination network and overall business operations with particular attention paid to Jat’s most recent 2012/13 winter season. Jat's acting CEO, Velibor Vukašinović, is in Abu Dhabi this week where he will meet up with key member's of Etihad's board regarding the proposed takeover deal. Among the more critical aspects of Etihad's deal with Jat, in addition to naming Jat's board and controlling its finances, Etihad will also provide the pre-delivery payment for a 1998 order made by JAT Yugoslav Airlines (JU, Belgrade Nikola Tesla (BEG)) for eight A319-100s, which have never been delivered.

Aviogenex (JJ, Belgrade Nikola Tesla (BEG)) has taken delivery of its B737-200 Adv. YU-ANP (msn 23912) again following a D check at Perpignan Rivesaltes Llabanere (PGF). It is the only remaining operator of the type in Europe and will shortly wet-lease its aircraft to Jat Airways (JU, Belgrade Nikola Tesla (BEG)) for two months.

Adria Airways (JP, Ljubljana Joze Pucnik (LJU)) says it is planning to replace its two A319-100s, set to be leased to Jat Airways (JU, Belgrade Nikola Tesla (BEG)) this summer, with two other A319s so as not to adversely affect its operations. According to EX-YU Aviation News, due to their older age, the newly leased aircraft would be more affordable to the Slovenian carrier who in turn, will additionally receive lease payments from Jat for the two jets it plans to use until 2016. The Serbian carrier is said to have already put down USD450'000 dollars for the two aircraft that are expected in Belgrade Nikola Tesla (BEG) early next month. Adria’s A319s operate flights from Pristina (PRN) to Frankfurt International (FRA) and Munich Franz Josef Strauss International (MUC) but are also utilised on services from Ljubljana Joze Pucnik (LJU) to Moscow Sheremetyevo International (SVO), Zurich Kloten (ZRH), Istanbul Atatürk/Yesilköy International (IST) amongst others. The move comes as Adria hopes to end this year on an even financial footing though it will have to consider the possibility of having to repay an EUR85million bailout to the Slovenian government should the EC Regulator rule that the funds contravened EU regulations.

Croatia Airlines (OU, Zagreb Pleso (ZAG)) is facing an uncertain future once Croatia enters the European Union in July owing to EU regulations forbidding state subsidies to individual companies. The largely state-held airline has been struggling to remain afloat since the dissolution of Yugoslavia in 1991 and as such, Zagreb is now considering its options in light of an onslaught from Europe's Low Cost Carriers. This year alone, 1 billion kuna (USD171.14million) will be needed to sustain the loss making carrier however, if no strategic partner is found, Croatia Airlines itself will have to finance roughly 50% of the costs of a restructuring plan already in place, resulting in 200 out of its 1'100 strong workforce being laid off. Government is reportedly in preliminary talks with "potential strategic partners" with Etihad Airways (EY, Abu Dhabi International (AUH)) rumoured to be among them. Etihad recently signed an MoU with neighbours, Jat Airways (JU, Belgrade Nikola Tesla (BEG)), with the possibility of a 49% buy out on the cards. A Star Alliance member, Croatia Airlines currently flies three Airbus A320-200s, four A319-100s and 6 Dash 8-400s on a network that focuses mainly on Scandinavia and Western and Eastern Europe.

Jat Airways (JU, Belgrade Nikola Tesla (BEG)) has made arrangements to lease five additional aircraft in the wake of the signing of a commercial cooperation agreement in Belgrade with Etihad Airways (EY, Abu Dhabi International (AUH)) yesterday. Newswires are reported as saying Jat is to lease two Adria Airways (JP, Ljubljana Joze Pucnik (LJU)) Airbus A319-100s (S5-AAP & S5-AAR) on a 3 year contract with another two Airbus A320s due from BOC Aviation. Jat CEO, Vladimir Ognjenović, has confirmed that his pilots have been undergoing training on the type. An additional ATR72-500 has also been allured to, though not confirmed. The leased aircraft however, will only be used to prevent cancellations as the airline is currently only flying six of its nine B737-300s and only two out of three ATR-72-200s. Meanwhile, the first Belgrade-Abu Dhabi International (AUH) flights are due to begin on June 15, with Jat to codeshare on Etihad's flights to Sydney Kingsford Smith (SYD), Melbourne Tullamarine International (MEL), Mahé Seychelles International (SEZ), Beijing Capital (PEK), Bangkok Suvarnabhumi International (BKK), Brisbane International (BNE), Kuwait (KWI), Hong Kong Chep Lap Kok International (HKG) and Singapore Changi International (SIN). Etihad will codeshare on most of Jat's flights however they have not yet announced the exact cities. Following today's signing, Etihad CEO James Hogan stated that Etihad will discuss "other possible forms of a strategic partnership with Jat after it reviews the Serbian company's operational and financial data."