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Subsidies 40 times bigger than profit? – Profit of Air Serbia EUR 900,000 along with state subsidies of EUR 40 million
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The national airline Air Serbia realized a profit of RSD 105 million (around EUR 900,000) in 2016, as the company’s management reported, over which the chairman of the Supervisory Board, Sinisa Mali, has expressed great pleasure.
What Air Serbia failed to report, Danas writes, is that it received RSD 4.95 billion (around EUR 40 million) in state subsidies in 2016. The subsidies (which are recorded as operating income) made up 14% of the company’s total operating income, which amounted to around EUR 320 million, an increase by 5% compared to 2015.
Despite a growth in operating income and subsidies (which amounted to a billion dinars less than in 2015), Air Serbia had an operating loss of RSD 309 million, as opposed to an operating income of RSD 487.7 million in 2015, which was primarily down to the “other revenues” item, amounting to a billion dinars, and containing revenues from the collected penalties and previously written-off claims.
According to the annual report, signed on February 28, 2017, but published only on August 9, the amounts provided by the state to the company in line with the agreements and the government’s decisions from 2014 on the conversion of all JAT’s pre-2013 liabilities equaled around EUR 140 million on the date of December 31, 2016.
The notes submitted along with the financial support say that, in 2016, Air Serbia had costs for court disputes initiated before 2013, to which subsidies in the amount of RSD 4.95 billion relate, as does the amount of RSD 935 million of Air Serbia’s claims from the state.
Economists believe that the state and subsidies do not belong in the company dealing in commercial operations in the market, Danas writes.
– If the profit is EUR 900,000, and the subsidies are EUR 40 million, Air Serbia has big problems and I wonder what would happen if there were no subsidies, and there shouldn’t be any. The state should provide equal conditions for everybody, and the market should decide who is successful and who is not – economist Danilo Sukovic points out.
What Air Serbia failed to report, Danas writes, is that it received RSD 4.95 billion (around EUR 40 million) in state subsidies in 2016. The subsidies (which are recorded as operating income) made up 14% of the company’s total operating income, which amounted to around EUR 320 million, an increase by 5% compared to 2015.
Despite a growth in operating income and subsidies (which amounted to a billion dinars less than in 2015), Air Serbia had an operating loss of RSD 309 million, as opposed to an operating income of RSD 487.7 million in 2015, which was primarily down to the “other revenues” item, amounting to a billion dinars, and containing revenues from the collected penalties and previously written-off claims.
According to the annual report, signed on February 28, 2017, but published only on August 9, the amounts provided by the state to the company in line with the agreements and the government’s decisions from 2014 on the conversion of all JAT’s pre-2013 liabilities equaled around EUR 140 million on the date of December 31, 2016.
The notes submitted along with the financial support say that, in 2016, Air Serbia had costs for court disputes initiated before 2013, to which subsidies in the amount of RSD 4.95 billion relate, as does the amount of RSD 935 million of Air Serbia’s claims from the state.
Economists believe that the state and subsidies do not belong in the company dealing in commercial operations in the market, Danas writes.
– If the profit is EUR 900,000, and the subsidies are EUR 40 million, Air Serbia has big problems and I wonder what would happen if there were no subsidies, and there shouldn’t be any. The state should provide equal conditions for everybody, and the market should decide who is successful and who is not – economist Danilo Sukovic points out.
Tags:
Air Serbia
Etihad
Government of Serbia
Air Serbia subsidies
Air Serbia profit
Air Serbia results
EA partners
JAT
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