Serbia and Turkey moved closer to an aviation deal on Monday after the countries' leaders pledged to speed up talks that could see indebted Serbian flag carrier JAT Airways merge with Turkish Airlines.

In March, Serbia announced it would split JAT into two separate companies with one assuming debts and the other profitable assets, in order to attract a strategic partner that was likely to be Turkish Airlines.

Turkish Prime Minister Tayyip Erdogan said he and his Serbian counterpart Mirko Cvetkovic discussed cooperation between JAT and Turkish Airlines and the conversion of a military air base in Serbia's Southwest into a civilian airport.

"We are ready for steps that will make that cooperation possible. I am promising to do my best that the people of Serbia have links to every corner of the world through our two companies," Erdogan told a news conference in Belgrade, speaking through an interpreter.

Cvetkovic only said he and Erdogan "tackled aviation industry issues."

In March, JAT Airways announced a EUR€16.5 million (USD$21.97 million) loss for 2009 and said it planned to borrow EUR€51.5 million to renew its aging fleet and prepare for a potential partnership with Turkish Airlines.

JAT Airways operates a fleet of 15 aircraft comprised of older Boeing 737-300, Boeing 737-400 and ATR 72-200s.

In 2008 Turkish Airlines took over a 49 percent stake in BH Airlines in neighboring Bosnia and pledged to invest EUR€5 million to lease a Boeing 737 and secure another aircraft at a later date.

In April JAT announced the sale of its headquarters building in Belgrade to state landline operator Telekom Srbije for EUR€10.3 million, to pay back a government loan from 2009.

The fellow EU aspirants also abolished visa requirements between the two countries.