Serb businessmen in talks on JAT Airways: source

A consortium of Serbian businessmen has been in talks with the government for two weeks about buying indebted flag carrier JAT Airways following the failure of previous privatisation plans, a government source said.

"We had talks with all of them individually and we should have a plenary meeting next week," the source said on Friday.

"We are looking at the sale of about a 50 per cent stake and how they will share that - it is up to them."

Miodrag Kostic, the owner of the MK Group agribusiness, had said in a B92 TV broadcast on Thursday evening: "I am ready to buy it out of sheer altruism".

The Belgrade-based daily Blic reported the consortium would likely include another three partners, including the Delta company owned by Miroslav Miskovic, the country's richest man with wealth estimated at €1 billion ($1.3bn).

Attempts to sell JAT, which made a 2010 loss of €26 million, to Turkish Airlines and Latvian operator Baltic Aviation Systems failed last year.

An earlier attempted sale, when Serbia offered a 51 per cent stake for €51m collapsed in 2008.

Two years ago, JAT borrowed €51.5m from the government to renew its fleet and prepare for a new partnership.

The government source said the new owners would retain the best of JAT's fleet of 15 aircraft and would procure another three planes by 2013.

"They would preserve only profitable destinations and also cut the workforce from existing 1,200 to about 400," he said.

Obsolete aircraft will be sold or leased, while the government would take over redundant workforce and secure a severance programme, the source said.

Earlier this week, the carrier secured government guarantees of €10m for a loan to cover short-term liabilities. The guarantees will require approval from parliament before it dissolves in March ahead of an election in May.