BELGRADE, Oct 6, 2008 (AFP) - The government of Serbia said Monday it would prepare a business strategy for the state's only air carrier JAT after the airline failed to attract foreign buyers.

The government in July sought bids for 51 percent of JAT Airways for at least 51 million euros (68.8 million dollars) but had received no offers by the September 26 deadline.

The government said its 'working team, led by Prime Minister Mirko Cvetkovic, will prepare a business strategy' for the company by October 23, an official statement said.

'The government is ready to support JAT Airways in its efforts to find measures for normal functioning of the company.'

JAT Airways, whose debts amounted to 247 million euros at the end of 2007, said it carried almost 580,000 passengers in the first six months of 2008, a nine percent increase compared with the same year-ago period.

Once the pride of communist Yugoslavia, JAT Airways has fallen on hard times since its heyday in the 1980s, when it had more than 40 planes and carried more than five million passengers a year.

But the Balkan wars, international sanctions against the ousted regime of Slobodan Milosevic and the 1999 NATO bombing of rump Yugoslavia -- Serbia and Montenegro -- took a heavy toll on the carrier.

Nowadays it has an ageing fleet of 17 planes, and experts say JAT still employs at least 40 percent more staff than it needs, a hangover from the communist era.