United Arab Emirates' Etihad Airways has acquired 49 percent stakes in Serbia's JAT Airways.
James Hogan, chief executive of Etihad Airways, and Serbian Deputy Prime Minister Aleksandar Vucic signed the deal in Serbian capital Belgrade which also changed the name of the company to Air Serbia.
The deal also saw Etihad providing a $40 million loan to Air Serbia, which would be converted into equity on January 1, 2014.
Some western Balkan airline companies facing dire straits due to global economic crisis are struggling to survive either by modernizing themselves or through layoffs while others have already gone out of business.
Croatia's Minister of Maritime Affairs, Transport and Infrastructure Sinisa Hajdas Doncic had said they planned to sell either a part or all of Croatia Airlines.
Pilot and crew members of Croatia Airlines went on a strike in May, when the company suffered a loss of 400 thousand euro.
Macedonian airlines MAT was closed due to the global economic crisis in 2009.
Bosnia&Herzegovina's air carrier BH Airlines is marred by crippling fiscal issues and the company was allegedly unable to pay its debts worth of 5 million euro.
All bank accounts of BH Airlines', which owns only 2 airplanes and employs 108 personnel, have been recently freezed.
Turkish Airlines (THY) had agreed to buy 49% of BH Airlines shares but had to sign off when Bosnia&Herzegovina's government failed to fulfil contractual obligations.
A relatively more successful air carrier in the Balkans is Montenegro Airlines.
The company has managed to cut losses by half and increased the number of passengers by 6%. The company's income, which owns only a fleet of 8 planes, was 74.8 million euro in 2012.