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["Yugoslav Airlines is now restructuring, and Kostic made it clear he 
favoured privatisation and cooperation with other regional airlines in the 
future." despite the fact that "we managed to keep our offices abroad open, 
to keep our fleet in excellent technical condition and our pilots and 
technical staff in training."]

INTERVIEW-Yugoslav carrier sees U.S. flights by 2002
By Fredrik Dahl
  
BELGRADE, Aug 2 (Reuters) - Yugoslav Airlines said on Thursday it expects to 
resume flights to North America by 2002, a decade after being barred from the 
U.S. and Canada because of Belgrade's role in the violent breakup of the old 
socialist federation. 

General Director Dusan Kostic also told Reuters in an interview the flag 
carrier was seeking changes to an agreement to buy eight aircraft from 
European plane maker Airbus, which was signed when Slobodan Milosevic still 
ruled the Balkan country. 

Last year, European and North American governments lifted sanctions against 
the airline, which struggled to survive in the 1990s. Yugoslav Airlines is 
now restructuring, and Kostic made it clear he favoured privatisation and 
cooperation with other regional airlines in the future. 

"We are not in a crisis. We are at the beginning of a new era," Kostic said. 
"We have to see a good future." 

Kostic said the company, also known as Jugoslovenski Aerotransport (JAT), had 
lost a key decade in aviation history, when it had not been able to follow 
technical developments or cooperate with foreign partners. 

With the collapse of old Yugoslavia, its domestic market shrank to eight 
million people from 22 million. The carrier's passenger volumes plunged by 75 
percent in the 1990s to one million last year, and the workforce more than 
halved to 5,000. 

The final months of the turbulent Milosevic era also saw the killing of then 
JAT chief Zika Petrovic, gunned down in April last year outside his Belgrade 
home by unknown assailants. 

JAT A SURVIVOR, CHIEF SAYS 

But, said new head Kostic, "we managed to survive, we managed to keep our 
offices abroad open, to keep our fleet in excellent technical condition and 
our pilots and technical staff in training." 

As a result he said JAT, owned by Yugoslavia's dominant republic Serbia, had 
managed to resume flights in Europe shortly after sanctions came to an end. 

The 15-nation European Union decided in February 2000 to suspend its flight 
ban to ease the lives of ordinary Serbs and boost opposition against 
Milosevic, then Yugoslav president. 

The United States lifted its embargo after Milosevic's downfall in a popular 
revolt eight months later. 

He said JAT had 30 aircraft, but that it wanted to renew its fleet. "We do 
not need more aircraft, we do need new aircraft." 

JAT has reopened talks on a letter of intent signed with Airbus in 1998 on 
the purchase of eight A-319s by 2005, he said. 

The implementation of the contract, whose present value Kostic put at $620 
million, was originally postponed during international sanctions and NATO's 
1999 air war on Yugoslavia. 

"It should be different in terms of the number and type of aircraft," he 
said. "We do believe that a satisfactory solution will be found together with 
Airbus." 

Kostic said Europe was JAT's main market, but that it wanted to fly to the 
United States and Canada partly because of a growing Serb community there. 
"There is a market demand for that traffic." 

Kostic said that before resuming flights, the airline is awaiting U.S. 
aviation authorities' approval, which has been postponed while Yugoslavia 
reorganises its own aviation authorities. He was confident flights would 
start in 2002 at the latest. 

"Hopefully we will be able to resume that part of our business by the end of 
this year," he said. 

09:49 08-02-01

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