Etihad Airways has been given permission to obtain a 49 per cent stake in Air Serbia.
The airline had initially loaned the company a total of $40 million (£24 million), which will now be converted into equity. This was matched by the Serbian government as part of a new $200 million strategy to revitalise its national carrier.
James Hogan, president and chief executive officer of Etihad, hailed the announcement as an important milestone in its partnership with the Balkan authorities and reaffirmed its commitment to making Air Serbia the leading airline in its region.
The decision is also seen as an important for the UAE-based carrier, as it will enable it to gain a stronger foothold in Europe. It may even allow the airline to use Belgrade as a possible springboard to further grow its network across the continent.
Aleksandar Vucic, deputy prime minister of Serbia, was also pleased with the outcome. He stated: "Air Serbia is the only major airline in the region to have successfully partnered with a leading global carrier, Etihad Airways. We are proud the national airline of Serbia now stands shoulder-to-shoulder with the best in the world."
Meanwhile, the Balkan company's chief executive officer, Dane Kondic, stated his organisation has already undergone a major transformation and is now looking ahead towards a prosperous future in partnership with Etihad. He added his airline now has a strong business plan and aims to be the safest, most profitable carrier in the region.
Etihad has a total of six equity partners, including Germany's airberlin, Air Seychelles and Virgin Australia. It also has agreements with the Irish carrier Aer Lingus and India's Jet Airways.
The airline's investment in Air Serbia is just part of the UAE's partnership with the Balkan state, which last year saw it make the largest cash injection into the country for more than 30 years. This has helped the country climb out of a deep recession.