100% Turkish

B&H sell off soon
The national carrier of Bosnia and Herzegovina will sell its remaining 51% government owned stake to Turkish Airlines. As a result, Turkish Airlines will own the full 100% of the airline. The “Dnevni Avaz” newspaper reported last week that the sale would go ahead after the new Federation government takes office, though this process has been slow and power sharing negotiations are still ongoing, three months after the general election. If the process drags on, the sale may be approved by the outgoing government in order to avoid the company’s closure, the paper quoted an unnamed source as saying. Despite rising passenger numbers B&H is still operating with multi million Euro losses.

Turkish Airlines bought 49% of the airline in 2008 and promised to spend 5 million Euros for the lease of 2 jet engine aircraft and make a further 5 million Euro investment. Since Turkish Airlines’ takeover, B&H Airlines has opened several new routes. According to plans drafted back in 2009, B&H should receive another new aircraft during the 2011 summer season, bringing its total fleet size to 4. Turkish Airlines is expected to make some major management changes and name B&H’s CEO after the takeover.

Comments

  1. Anonymous15:45

    When are LCCs coming to bosnia and hercegovina?

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  2. Anonymous17:45

    This is old news...

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  3. Anonymous20:01

    I wonder what's TK stratgey behind BH Airlines? Couldn't be commercially driven. Multi million losses, small niche market....
    Must be part of the Turkish state-agenda to broaden their influence on the Balkans.

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  4. Anonymous20:57

    @Anonymous

    That's the whole idea. If you see where Turkish investments go, they go to Sarajevo and Sandzak predominantly. B&H takeover is another investment designed to broaden influence. While this is economically good for Bosnia, politically it might not be so. If Bosnia is planning to enter the EU it cannot have its flag carrier under control of another state outside of the EU, and it doesn't look like Turkey will be joining any time soon :)

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  5. Anonymous21:04

    I absolutely agree. Turkey is not going to join EU in the next 50 years if ever....and unfortunately under Erdogans government it is dragged deeper and deeper in islamist waters. Most probably Turkey is trying to establish itself as medium-power in the heart of the Turkic World and as a "bridge" between east and west. BH Airlines future depends on political issues rather then economical. As quick as it was acquired it could be dropped as a hot potato.

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  6. Anonymous21:10

    Well done my friends! Hope is going thru.

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  7. Zrak22:07

    Well I do not agree with any comments above. Bosnia has approx 4 million inhabitants. Its airports are having less than 700k pax / year. Now compare that with countries in the region and you will see that it is enormous potential for development.

    BiH Airlines is very sound business decision for TK no matter what biased news papers would like you to think.

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  8. Anonymous00:09

    Bosnia is a niche market. Geographically the Banja Luka region easily gravitates via ZAG, western Herzegovina via SPU, eastern Herzegovina via DBV and TIV. Northeastern Bosnia via BEG. So what's SJJ needed for then? A "hub" for central Bosnia with around 800000-1000000 people.BH Airline is a politically motivated company to demonstrate statehood and to create jobs for some cronies and family members of the ruling party.

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  9. frequentflyer02:44

    Let's separate the company from the politics.

    For the airline, this is possibly the best possible chance of success this floundering airline will ever get. A changing of the guard, new managers and a competent parent that will demand results. Who wins? Everyone - airports, passengers and ultimately the airline's bottom line if this works out.

    Politically, this is the sort of decision which could further fracture the sensitive political structure in the country. There is significant investment coming from Turkey and Saudi Arabia into Bosnia, with strings attached. Is this one of these situations?

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  10. ANONYMOUS03:21

    If B&H becomes greater than 50% owned by non-Bosnian entities, it will lose it's route rights to everywhere it flies (apart from Istanbul of course).

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  11. Doot11:21

    "If Bosnia is planning to enter the EU it cannot have its flag carrier under control of another state outside of the EU"

    Says who?

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  12. Zrak11:52

    @frequentflyer

    Actually it is a myth that there is great amount of investment flowing into Bosnia from Arab countries.

    If you look at the statistics of foreign aid and direct investment you will see that majority comes from Slovenia & Croatia.

    Only Arab country that has made any substantial investment into BiH is Kuwait which is about to finance Zenica Bypass (whole 6km...) and previously purchased Steelmill in Zenica (which they resold with good profit to Arcelor). Loan for the highway is granted on commercial basis and doesn't differ from loans that IMF has granted for other parts of A1.

    @some other people on this forum

    Every time an arab or muslim country makes an investment into Bosnia there is a stir about this. However when other parts of Yugoslavia are getting investments from these same countries there is no discussion at all (see Macedonia selling its airports to Turkish companies, Tadic going to Lybia to celebrate dictator birthdays, Kosor and Mesic going to Algeria, Slovenia trying to sell Adria to Qatar airways and so on).

    @Anonymous

    I do not really agree that Bosnia is nice market but I certainly see your point. Truth is probably somewhere in between our standpoints.

    Anyway you mentioned three areas (i.e. Bosanska Krajina, Herzegovina & Soli) - you could change these areas into cities (SA, TZ, BL, MO, ZE) as probably most of the traffic is generated by these cities.

    For BL I agree. It will gravitate towards ZAG.

    ZE is as of next year connected to SA by motorway making SJJ mere 45 minutes away from ZE.

    TK gravitating towards BEG. Yes and no. Too much political baggage imo. Also highway is approaching Zepce (although at slow pace - 10-15km / year) making TZ much closer to SJJ for every day.

    When it comes to Mostar distance to SPU is 180km and 100km to SJJ (120km to SA). Also you have a border in between with everything it brings.

    In February they are starting the work on southern section of A1 between Sarajevo & Tarcin. Again very slow pace (~10km) but again there is tendency that distance between MO and SJJ will decrease while distance to SPU stays the same.

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  13. Bosnian12:09

    @ Zrak: Very nice post, agreed absolutely! ;)

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  14. Anonymous19:15

    When talking about this, it should be possible to mention political influence, since this transaction is not 100pct economically motivated. There is a turkish agenda in Serbia, Macedonia as well...airports, motorways etc.

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  15. Anonymous15:51

    I visit Herzegovina yearly and I fly into SJJ. I find it easy and prefer not having to go through multiple border checks that I do if I fly into SPU. Recently the prices have been slightly better into SJJ as have the rental car prices.

    I do agree that there may be political motivation to this buy, but there is definitely potential as well.

    Zrak, that is a great post.

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  16. A well worded opinion there 'Zrak'

    Many anonymous and J..........’s can learn from the example you set. Not confrontational but a well put opinion
    .

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