By Jelena Virovkic Ivanovic

National air career of Serbia, Jat Airways, has not been privatised simply because nobody was interested in buying 51 percent of its shares nether for 51 million euros. No one took participation in open competition. The truth is that there are objective reasons for that. First, global oil price has overthrown aircraft - more than ten air companies have disappear, while those larger have survived thanks to association with more powerful ones. The exception is Alitalia, which exists on the edge of bankruptcy.

An absence of interested clients is not the main problem that concerns Jat Airways, but the fact that in all these years selling this company was not taken into consideration. Executive Board officials never bothered explaining it. Although it is still unknown what have Serbia and Jat Airways employees lost due to privatisation failure, it is perfectly easy to specify how this situation has reflected on citizens.

Serbia (then Serbia and Montenegro) has signed the Open Sky Agreement in June 2005, which was not ratified by the Parliament in the next three years because of one reason - saving Jat Airways was top priority.

Open Sky Agreement is a revolutionary step in European air transport and it enables equalising rights of air traffic participators, which practically means that the principle of national airline companies` protection is abandoned. For example, this agreement gives permission to Air France to fly from Belgrade to Skopje, or from Helsinki to Berlin, if it is economically feasible. Open market stimulates competition, and these circumstances reduce prices, improve quality of service and make passengers satisfied.

Instead, Serbian government has decided to keep Jat Airways, together with its 30 years old fleet, and market closed. Furthermore, the Civil Aviation Directorate of Republic of Serbia has to ask for approval of Jat Airways, before providing transportation licence to any air company for operations in Serbia. This practice is scandalous, absolutely unthinkable in Europe. Serbia thus has no powerful and modern Jat Airways, and no low-cost companies (with the exception of GermanWings and Norwegian Air Shuttle, which have miraculously received transportation licences).

Government has tried to convince that these measures were taken due to preparing for Jat Airways privatisation that was, in fact, constantly delayed to the point when everybody gave up on buying this company. It is up to Jat Airways to decide if surpassing probably the most serious crisis in the history of aircraft needs the government assistance, as Minister of Economy Mladjan Dinkic has promised, or not.

Serbia will have to intervene and enable Jat Airways to do business. It requires dismissing of 600 employees, fleet renewal, which takes tens million euros of investment per plane (in case of leasing) and useless property sell. The question is - is this in the interest of our citizens? Why would they, indirectly, pay the irresponsibility of national government, for Jat Airways was not sold in spite of many chances for that move?

Alitalia case proves that even in Europe there are bad, as well as good examples on this issue. This gigantic state company has been at financial collapse in the past ten years, with one million euros loss a day. During election campaign, all political parties have been coquetting with powerful Italian trade unions, trying to convince Alitalia that this company will not disappear or be sold, alike KLM has been purchased by Air France.

Elections were brought to an end, crisis got more serious and government has decided to donate 300 million euros to Alitalia with a view to survive upcoming year. But the European Union has then announced that Italian government has to take back the money, for these interventions suggest that a state does a favour to a company, which is not allowed. Now Italian authorities try to sell Alitalia, but Air France, considering aircraft crisis, doesn`t want to buy this company. Other offers do not exist, with the exception of a group of Italian businessmen, but they have also decided to withdraw.

Serbian authorities may learn what is the price of flirting with trade unions and making impossible promises on this case. The illusion of this kind will cause expensive headache. In the meantime, the European Union and USA have accepted Air Transport Agreement on March 30th 2008, according to which European and American skies are equalised. The agreement, which permits European air companies to fly from any EU city to USA and vice-versa, has replaced restrictive bilateral agreement dating from the Second World War. Unfortunately, Serbia is still on that level of thinking.