Kingdom of Serbia became part of the new state, Kingdom of the Serbs, Croats and Slovenes. which was formed on 1 December 1918. Even though the industry was on a very low level of development, the state was among the first 10 countries in the world which developed their own aircraft production. Originally, only the parts produced in foreign factories were assembled, but very soon the production of domestic components began, so as the engineering. The forerunner of the domestic aircraft industry was the Airplane workshop (Aeroplanska radionica), which was established in 1920, at the airfield in Novi Sad. The assembling of the trial series of Hansa-Brandenburg C.I. The series was named SBr, as this type of plane was known in Serbia as srednji Brandenburg ("middle Brandenburg").
From 1923 to 1941, there were 7 aircraft factories in Serbia, 4 of which were located in the capital, Belgrade, and 2 airplane engines factories. Also, some planes were produced in the aircraft workshops, aero clubs and private workshops. There were also factories for the aircraft equipment and workshops for the repairs and overhauls of the aircraft, engines and components. A major boost to the industry was a decision by the state from 1926 to acquire over 800 fighters and several hundreds of trainers and school planes. Additional foreign licenses were obtained. The advance of the industry was halted in 1932 when the state stopped with the further acquirement of the aircraft due to the Great Depression. The production rebound from 1937 onwards.
According to the State union of the aircraft industries of the Kingdom of Yugoslavia, the state's aircraft industry and the auxiliary industries employed 300 engineers and technicians, 500 employees and 6,000 workers. In total, 1,729 military and civilian aircraft were produced in Serbia between two World Wars. Of those, none were cargo or reconnaissance aircraft. One of the most important people in the technical development of the aircraft design was engineer Milenko Mitrović "Spirta", who developed numerous designs for the airplanes in the 1928-40 period.
Factories
Ikarus (1923-62)
First proper factory was established on 20 November 1923 in Novi Sad. The driving force behind it foundation was Dimitrije Konjović (1888-1982), former pilot in the Austro-Hungary's air forces in World War I. He founded Ikarus together with brothers Dušan and Milivoj Kovačević and engineer . Jointly with the Rogožarski factory, founded a bit later, they were given a task of producing the trainer aircraft "ŠB" (školski Brandenburg, literally "school(ing) Brandenburg"). In April 1924 first planes were delivered while in November 1924 the factory produced the first homemade aircraft as the company's designing bureau drafted the trainer flying boat "ŠM" (školski mornarički, "school naval (plane)").
In 1927-28 Ikarus built new facilities in Zemun, equipped for the serial production of airplanes and its own airfield. By the end of 1932, the headquarters of the company also moved to Zemun. The production in Novi Sad was completely discontinued in 1932. In 1934 the town of Zemun was officially merged into Belgrade.
In the 1923-41 period, Ikarus produced a total of 441 aircraft. Some of the best aircraft produced in the factory include observation plane Potez XV, light bomber Bristol Blenheim and fighters Hawker Fury and Ikarus IK-2. It was the first company which began producing gliders, in 1928. They also constructed the first Serbian and Yugoslav fighter plane, completely domestically designed, IK-1, in 1935, designed by and .
Right after occupying Yugoslavia, Germans commandeered the factory on 17 April 1941. The complex was heavily bombed during the massive Allied Easter bombing of Belgrade in April 1944. The facilities of Ikarus were almost completely destroyed during the war, but the factory was rebuilt. In 1946 Zmaj and Rogožarski were merged with the Ikarus, after previously being nationalized. In 1954 the company began producing buses and, starting from 1960, the production of aircraft was being shut down and relocated to the SOKO factory in Mostar, Bosnia and Herzegovina. Production of the aircraft was completely discontinued in 1962 and, until that date, Ikarus produced a total of 475 planes after the war. The facilities were completely demolished and the area is today occupied by the residential buildings, stretching between the Hotel Jugoslavija on the east, and Palmira Toljatija Street (roughly blocks 9-A and 11-C. divided between the municipalities of Zemun and New Belgrade). The engineers and the design bureau were transferred to the Aeronautical Technical Institute in the Belgrade's suburb of Žarkovo. The company was ultimately renamed to Ikarbus.