During 1936 at the Zmaj factory, Dušan Stankov, then technical manager, initiated the design and construction of a reconnaissance-bomber. After tests in the wind tunnel at Warsaw and acceptance by the Yugoslavian Air Force, the project was designated Zmaj R-1. The team of designers joining Eng. Djordje Ducić and a few young engineers who worked on the design completed the prototype before the beginning of a large aerospace workers strike in April 1940, with final assembly at the military part of the airport in Zemun.
The first flight was on 24 April 1940, piloted by reserve Lieutenant Đura E. Đaković, a transport pilot with Aeroput. The initial testing justified all expectations in terms of aerodynamic characteristics and performance, unfortunately on the third flight the pilot was unable to lower the landing gear and had to land with the undercarriage extended, damaging the propellers and engines. Replacement parts for the propeller and landing gear were imported from Germany and France delaying repairs considerably. The aircraft was rebuilt so that testing could be resumed at the end of March 1941, but in early April the bombing of Zemun airport damaged the prototype Zmaj R-1 again. In late June 1941 the Germans scrapped the aircraft.
This twin-engine mid-winged aircraft, powered by two 7500NaN0 Hispano-Suiza 14AB, was of mixed construction and well-armed, with two 20abbr=onNaNabbr=on Oerlikon cannon, and four 7.9abbr=onNaNabbr=on machine guns, with 1600kg (3,500lb) of bombs in a fuselage bomb-bay. The reconnaissance variant carried cameras, extra fuel tanks and three crew members in lieu of guns and bombs.
Due to the cessation of flight testing the plans for the Yugoslav Royal Air Force reconnaissance and bomber units to be solely equipped with the Zmaj R-1 came to naught.[5]