Air Serbia (JU, Belgrade) public debt will be assumed by its primary backer, the Serbian government, Belgrade announced earlier this week. Debt coverage was part of the terms and conditions laid down by Etihad Airways (EY, Abu Dhabi International) in its acquisition of a 49% stake in Jat Airways (Belgrade).

The Serbian parliament is expected to pass legislation enabling the state to assume the airline's outstanding liabilities, estimated to stand at RSD19.3billion (USD194.94million).

Among the carrier's creditors are Belgrade operator, Aerodrom "Beograd - Nikola Tesla" P.E., the Serbian national oil company (Naftnoj industriji Srbije - NIS), the Serbian civil aviation authority (Direktoratom Civilnog Vazduhoplovstva - DCV), MRO firm Jat Tehnici, the Air Traffic Control Co. of Serbia and Montenegro (SMATSA), and several local banks.

Payments will be disbursed in two tranches - the first half due by December 31 this year, and the second by 31 March 2015.

A year into its operations, things are looking decidedly rosy for the fledgling carrier with the president of its supervisory board, Siniša Mali, stating that Air Serbia is on track to register EUR1million (USD1.25 million) profit for its current financial year.