Serbia okays national airline leasing 10 Airbus planes

The Serbian government approved Friday plans by the national airline JatAirways, in which it sold a 49 percent stake to Etihad Airways last week, to lease 10 Airbus aircraft.

Transportation Minister Milutin Mrkonjic was quoted by B92 private broadcaster as saying the airline would lease Airbus planes and that first instalment of a $750,000 (560,000 euros) deposit would be paid for first five aircraft.

Last week Abu Dhabi-based Etihad Airways signed an agreement with Serbia to acquire 49 percent of the loss-making JatAirways, which is to be renamed Air Serbia.

The Gulf's fast-growing carrier will inject $40 million into Air Serbia that will be converted into Etihad equity on January 1, 2014, after approval of the acquisition by regulators.

Both Etihad and the Serbian government will also each provide up to $60 million further funding.

Etihad's chief James Hogan said last week that first 10 new air planes will be A319s, part of Airbus' family of single-aisle medium-haul aircraft that can carry 124 passengers in its normal configuration.

JatAirways has a fleet of 14 planes, 10 Boeing 737-300s and four ATR 72-200s, all of which are around 20 years old.