Flights Cancelled Until Further Notice Due to Jat Tehnika Strike

COMPENSATION FOR DAMAGE OUTWEIGHS DEBT

Jat Tehnika's strike has undoubtedly inflicted the greatest damage on the passengers of the Jat Airways Company, whose planes continue grounded, but also on itself because the national air carrier will be seeking reimbursement from the strikers. By Friday noon Jat Airways losses are expected to outweigh the debt to Tehnika. Damage for each day of strike amounts to around 500,000 euros. Thus, the whole absurdity of the strike that came about because Jat Tehnika employees, despite their exceptionally low productivity and poor work quality, believe their wages should come from the budget, that is from the taxpayers' pockets and not earned, will become completely clear also to the strikers themselves. Damage was sustained by the tickets having been returned and by transfer of passengers to other airlines as well as hotel and other costs as a result of the strike.

Under a previous agreement that Jat Airways had with Jat Tehnika, the national air carrier was under obligation to pay Tehnika a fixed annual sum amounting to 16 million euros, regardless of the type and volume of work it performed. Jat Airways has resolutely discontinued such payment practice, and has signed a new agreement with Jat Tehnika based on sound economic principles that came into force on September 1. Thus, now the cost of aircraft maintenance is paid only for the work actually performed by Jat Tehnika and not on the basis of Tehnika's estimates how much money they believe they need to take care of their overhead in this unsoundly organized enterprise. Jat Airways' debt to Jat Tehnika under the old agreement is not in dispute and will be covered, but the money first needs to be earned.

In the meantime, Jat Airways is intensively working to find ways to resolve the current situation and to see its aircraft airborne again, whether this be in cooperation with Jat Tehnika or not. Forming its own line aircraft technical maintenance such as enjoyed by all other large international air companies is seen as a way of avoiding repetition of similar situations in the future. This is something that Jat Airways would be endorsing in further talks on the Company's future.

Today too, Jat Airways continued providing various forms of assistance to passengers on cancelled flights, primarily by making possible transfers to flights of other air companies that the national air carrier has existing agreements with or by ensuring hotel accommodation for them.

Flights are cancelled until further notice, and Jat Airways will keep informing passengers about all fresh developments on a regular basis.