Serbia's loss-making JAT Airways has secured a marketing alliance with Gulf airline Etihad Airways to share route-booking codes, stopping short of the equity tie-up mooted by Serbia's government.
Mired in recession and struggling to find investors in the crisis-hit European Union, Serbia had hoped Abu Dhabi-based Etihad would buy a stake in JAT, with media reports suggesting 49 percent was up for sale.
Etihad chief executive James Hogan told a news conference on Monday that any investment could be a long way off.
"We have to look at JAT to see if that opportunity exists. It is still a very early stage of that process," he said.
JAT will add its JU code to flights to 21 destinations within Etihad's network, while the Gulf airline will put its EY code on all 23 JAT flights to Europe, Hogan said.
Etihad will start operating flights between Abu Dhabi and Belgrade on June 15, following Gulf competitor Qatar Airways, which started flights between Doha and the Serbian capital via Ankara late last year.
Serbia has been trying to offload JAT for years.
Last month the government said it was ready to take on 170 million euros ($222.66 million) of the carrier's debt, pay leases for six new aircraft from EADS's Airbus and secure severance payments for redundant workers.
JAT operates 10 ageing Boeing 737-300s and four ATR 72-200 turboprop aircraft on 30 routes within Europe and to the Middle East.
Serbia is looking east for investment and sovereign lenders including Russia, China and the United Arab Emirates.
Belgrade has already secured a $400 million sovereign loan from Abu Dhabi for agriculture investment and agreed more than $400 million in investment by the Al Dahra agricultural firm based in the emirate.
Trying to ease the burden on its budget, the Balkans country is also trying to sell its remaining state run firms, including the RTB Bor copper mines, JAT Tehnika aircraft maintenance company and indebted Galenika pharmaceuticals.
On Friday, the Finance Ministry said that the United States-based unit of Canada's Valeant Pharmaceuticals International was the only potential partner for Galenika, having met all the conditions of a tender.