Wednesday, October 18, 2017

TAV eyes third airport investment in EX-YU

Turkey's TAV Airports Holding, which has become a global brand in airport construction projects and operations, has identified its third potential investment in the former Yugoslavia following Macedonia (Skopje and Ohrid) and Zagreb. The company held talks in with the Montenegrin Minister for Transportation and Maritime Affairs, Osman Nurković, in Skopje yesterday where they discussed the planned privatisation of the country's two airports - Podgorica and Tivat. TAV Airports' Business Development Coordinator, Giray Colpan, and TAV Macedonia Board Member, Zoran Krstevski, plan to visit Montenegro where they will examine in further detail suitable concession models with the government. Montenegro previously outlined plans to put its two international airports up for concession after it was unable secure a loan with the European Bank for Reconstruction and Development (EBRD) for the expansion of Tivat Airport. "We are currently working on preparing a concession model with the World Bank and I believe this process will be completed swiftly", Montenegro's Prime Minister, Duško Marković, said. He added that the concession is vital in order for Tivat Airport to follow through with its plans to build a new passenger terminal, extend its runway and overhaul its taxiways.

During its talks with the Minister, TAV noted that, "Skopje Airport was handling some 600.000 passengers prior to its takeover and had links to twelve destinations. We now welcome almost two million passengers per year, offering 37 destinations to travellers. The annual growth rate is 15%". Mr Nurković said he was impressed with the results TAV has managed to achieve in Skopje since winning a thirty-year concession of the airport in 2012. It has since invested 110 million euros in Skopje Airport and a further ten million in Ohrid. TAV also holds a singificnt share in the consortium running Zagreb Airport, which earlier this year opened a new terminal building. The French Aéroports de Paris holds a 38% stake in TAV. The Turkish company runs seventeen airports around the world, including Istanbul's Ataturk.

Montenegro's opposition parties have slammed the government's concession plans, noting that operator Airports of Montenegro is one of the country's most profitable public enterprises. It recorded a net profit of 4.3 million euros last year, despite debt of 19.2 million euros towards it owed by Montenegro Airlines. The government is yet to decide whether both Podgorica and Tivat will be offered to an investor as part of a package or whether the two will be put on the market separately. Other details are also being determined. Turkish companies have shown strong interest in airport investments in the former Yugoslavia. Apart from Skopje, Ohrid and Zagreb, which are managed solely or partially by TAV, Pristina Airport is run by Turkey's Limak Holding, while IC Altyapi is bidding as part of a consortium with Incheon International Airport Corporation and VTB Capital for the 25-year concession of Belgrade Airport.

SAS to add new Croatia flights


SAS Scandinavian Airlines will introduce new seasonal summer flights to the Croatian coast next year. The carrier will commence services from Bergen and Stravanger in Norway to Pula, and will also add flights from Denmark's second largest city, Aarhus, to Split. SAS already serves a number of Croatian cities over the summer from its main bases in Copenhagen, Stockholm and Oslo. Further flight details can be found by clicking the appropriate links below.

RouteLaunch date
Aarhus - Split24.06.2018
Stavanger - Pula30.06.2018
Bergen - Pula04.07.2018

Adria Switzerland facing difficulties


Adria Airways Switzerland is facing financial difficulties according to the Swiss Broadcasting Corporation. The airline will lay off twenty of its eighty-strong workforce by the end of October and is evaluating its route network. The carrier's only two scheduled routes from its base in Lugano, to Geneva and Rome, are underperforming but will be maintained until at least the end of the year after which their future will be determined. Adria Switzerland has also wet-leased aircraft to its parent company Adria Airways in Slovenia, which has been using a Saab 2000 and ATR72 turboprop on flights from Ljubljana to Podgorica, Prague, Pristina, Sarajevo, Skopje, Tirana and Vienna. Adria Airways purchased a majority stake in the Lugano-based Darwin Airline through its owner 4K Invest this summer.

Tuesday, October 17, 2017

Croatia Airlines' new CEO to decide on fleet

Croatia Airlines' five-month wet-lease arrangement with Iberia Regional (Air Nostrum) for Bombardier CRJ1000 aircraft has come to an end. The two jets, which are both under a year old, have proven popular with passengers and have allowed the airline to launch four new routes this summer season. The first of the two aircraft left Croatia Airlines' fleet this past Sunday, while the second will follow at the end of the summer season in two weeks time. The Croatian carrier has previously said it would use the two Bombardiers, which were operated by Spanish crew and a Croatia Airlines member on board, as a trial for its future fleet expansion. However, at this point, the airline has again outlined plans to wet-lease equipment next summer season, without committing to purchasing or leasing 100-seat airframes on a more permanent basis. Croatia Airlines utilised the two CRJ1000s on services from Zagreb to Brussels, Dubrovnik, Stockholm, Helsinki, Oslo, Skopje, Barcelona and Lisbon.

The airline's outgoing CEO, Krešimir Kučko, previously noted that the carrier would introduce aircraft of similar capacity to the CRJ1000 in 2018 as an addition to its existing fleet. This would bridge the difference in the capacity of its Airbus aircraft, which have 144 to 174 seats, and the Dash 8 Q400 with 76 seats. He added, that the introduction of a third type of aircraft (100-seater) would further optimise the entire fleet and allow even better adjustment to capacity on the Croatian market, which is highly seasonal. Despite plans to add up to six additional jets, this will not materialise and it will be up to the carrier's new CEO, which is yet to be appointed, to make a decision on the future make-up of the fleet. Mr Kučko previously said that an aircraft from a third manufacturer, which is neither Airbus nor Bombardier, would'nt increase costs. "Manufacturer commonality isn’t such a huge advantage when you operate turboprops but want to introduce jets. For us, it’s about cost effectiveness. The CRJ and SSJ100 can take a maximum of 100 seats while the Embraer can take more. So, if your other variables are taken care of, the Embraer’s unit cost can actually work out less than Bombardier’s CRJ. But while the Embraer E-Jet has a slightly better operational performance, its heavier weight means it is more expensive to operate given its higher handling fees and air navigation charges", Mr Kučko said. 

The future make-up of Croatia Airlines' fleet will also depend on its potential privatisation process. Mr Kučko has said the airline is in contact with financial institutions, as well as investment funds and could draft a proposal to the carrier's majority owner, the Croatian government, over plans to seek a new strategic partner by year's end. A new partner would provide much needed capital to speed-up the airline's fleet expansion process. In addition to the one CRJ1000 still flying for the carrier, Croatia Airlines boasts a fleet of twelve aircraft. Five of them are owned by the company itself (four A319s and one A320), while the rest are on lease. Next year, the airline will have to decide whether it will extend the financial lease agreement for its six Dash 8s. Furthermore, Croatia Airlines has four Airbus A320neos on order. The first two jets are scheduled to arrive in Zagreb in 2021, while the other two are due a year later. However, sources claim the carrier is considering an interim lift before the delivery of the A320neos, meaning it could lease aircraft from Airbus prior to 2021. According to its 2015 agreement with the European plane manufacturer, Croatia Airlines is to begin advanced payments for the aircraft this year, while the remainder will be payed upon their delivery.

Government to support Montenegro Airlines


The Prime Minister of Montenegro, Duško Marković, has said his government will continue to support the country's debt-ridden national carrier. Mr Marković noted that the state will “initiate procedures to take responsibility for” and pay off Montenegro Airlines‘ obligations to creditors. He added, “Only irresponsible individuals, frustrated politicians and political calculators can criticise the government’s commitment and intention to support Montenegro Airlines". The government has come under scrutiny after it injected 2.2 million euros into the carrier three months ago. Furthermore, it ordered Airports of Montenegro, the profitable public operator of Podgorica and Tivat airports, to use its profits as a guarantee for a 2.3 million euro bank loan for the airline, taken out some ten days ago. The Prime Minister noted, "Others will decide whether we are respecting the law. We did this in accordance to the law and our powers. Those who think differently can contact the public prosecutor and the police". This coming Thursday, the former head of Montenegro Airlines, Zoran Djurišić, who ran the airline for almost twenty years, as well as the former President of the Board of Directors Daliborka Pejović, and an opposition politician will face off in a live televised debate which will focus on Montenegro Airlines and its operations.