Friday, October 28, 2011

Zagreb Airport issues strike threat

Unions want CEO to go

Employees at Zagreb Airport are threatening to go on strike since the airport’s CEO, Tonči Peović, wasn’t sacked by the government today. The airport’s unions are unhappy with the CEOs performance blaming him for diminishing profits, the possibility of foreign ownership over the airport and no revisions to their collective agreements. Božidar Kalmeta, the Minister for Sea, Transport and Infrastructure held a meeting today where Peović’s management practices were discussed. It was concluded that Zagreb has been managed well in the past few years and is reporting a profit.

After successfully managing Dubrovnik Airport for sixteen years, Peović was named as CEO of the country’s busiest airport in 2009. He announced that he would cut the cost of airport handling services in a bid to attract more low cost airlines, adding that negotiations were underway with easyJet and Ryanair. The no frills easyJet commenced flights to Zagreb and now serves the Croatian capital from Dortmund, London and Paris. However, Peović is also associated with several scandals. He was said to be in a conflict of interest while serving as both the CEO of Zagreb Airport and a small airline in Dubrovnik. Furthermore, unions accuse him of having an extremely high salary and in a recent cable revealed by Wikileaks, Peović is said to have complained about Minister Kalmeta and had no nice words to say about Croatia Airlines to the Ambassador of the United States.

Zagreb Airport recorded impressive growth this year and this week handled its 2 millionth passengers of the year. The airport’s management says Zagreb will see a 10% increase in passenger numbers in 2012.


  1. Hmm this is fishy... why no one complained about him in DBV but all of a sudden there are problems in Zagreb?
    Either he has been doing the same in DBV and no one reported OR there is someone that really wants him gone

  2. I've been following this up for years. I know some local people from Pleso village, some employees etc.

    This is how I see things...

    Bad management by Mr. Peović - I don't think so

    Increased sales, increased profits, increased pax volume, average salaries of 1.000 EUR (the lowest being almost 5.000 kn - cleaning staff).
    Those people working there have it well laid out for them... as we in Croatia would say "uživaju ko sjekire u medu".

    This protest is political and being supported by HNS of Velika Gorica. Most people working at LDZA are from Velika Gorica. There are 1.000 employees at Zagreb airport. In reality, only some 700 are needed. Some have land on which they could earn good money in case 2nd runway is built as drawn by the old, old architectural project study ordered by Matković (ex CEO) - a local patriot championing local interest.
    Peović had always been the supporter of "concession model".
    Part of the rationale behind this model is the fact that ZAG needs a strategic foreign partner in order to re-position itself regionally. The other reason is Mr. Peović's alliance with IGH.

    My personal opinion - concession is needed. Afterall, the airport will stay in Zagreb, Croatia. - forever. Let the investor put in his money, develop the business, make some money and say farewell. We'll have a nice airport.

    The interest of Zagreb and Croatia above local, particular interests !!!
    Good staff will stay, extras will need to go at some point - what's wrong with that ?

  3. Because he is from Dubrovnik, and act very significantly against Zagreb and for Dubrovnik especially when he was general manger of Zagreb airport.

    He declare that Dubrovnik should be no 1 airport in Croatia and transit hub while he was general manager of Dubrovnik Airport. In same time he work for IGH and as "consulter" he offer concession for Zagreb airport and in same time he was general manager of Dubrovnik airport. And men like this is general manager of Zagreb airport.

  4. Mr. Peović lowered "parking slot" fees in order to make the airport more competetive. In the first phase (2010) this resulted in lowered revenue, but it's already paying back now through increased traffic volume etc.

    The ex CEO didn't invest much in the LDZA. It was much easier to overcharge airlines with over-priced "parking slot" fees.
    So, no airline wanted to come to Zagreb, only Croatia Airlines because it had no choice. That's why OU's share in overall LDZA's traffic was around 80%.
    LDZA, enjoying the monopolistic position, overcharged, invested none, ruined OU (Ok, OU has it's own share of problems regardless of LDZA) and enjoyed sharing the extra profit with his employees

    His monthly salary was 15.000 EUROS plus huge yearly bonuses.
    NK personnel at LDZA (nisko-kvalificirano osoblje) has salary of 6.000 HRK - which is an average salary of Zagreb city region. etc. etc.

    The airport saw no progression, no infrastructural changes, no traffic increase, no nothing...
    Service was poor - you pay your coffee 20 HRK and you used to get it in an old, communist style-looking mugs, service menues were plastic and dirty, waiters rude, slow and willing to quarrel with guests etc.

    Zagreb airport, Zagreb city and Croatia should really thank the arrival of Mr. Peović !

  5. He declare that Dubrovnik should be no 1 airport in Croatia and transit hub while he was general manager of Dubrovnik Airport.

    But isn't this normal? What else is he supposed to say?
    Plus, he was one of the few who actually didn't just say things, he actually did them. Best proof, the new terminal building in Dubrovnik.

  6. Off course he'd champion Dubrovnik over Zagreb. Fine by me... afterall Dubrovnik could potentially be a significant coastal hub when all the infrastructure in BiH and Montenegro gets completed (highways etc.).

    Dubrovnik has a huge potential, and although I am the LDZA's huge fan (being from Zagreb and all), I wish Dubrovnik to develop further and achieve 2 mil. pax by 2013 !

    Zagreb has a different market, and as such needs to position itself accordingly. There is enough space for everyone to develop.

  7. Professionalism in Croatia overall is scarce and when even by some miracle shows up it is immediately attacked by hundreds of incompetent "lezilebovica". This is one of most important reasons for leaving Croatia and working abroad. Privatization by any means is probably only way out from such lockouts. "Workers Council"(Radnicki Savjet) at LDZA decides what and how business should be done. Incredible.

  8. to last anonymous - what you say is true. I had spent 9 yrs in the U.S. going to school and working.
    I feel the same, yet still prefer to invest my energy in order to contribute in my own country. Abroad, you'll always be a "citizen B" regardless of your micro- environment which may be professional and filled with nice and supportive people...

    There is a professional, innovative and pro-active side of Croatia. That voice needs to get heard. Now it's hard, as the nation is still working through it's "moment of truth" and "re-evaluating" the ethics across all domains of political, business and social life.
    We have to spread the positive and constructive word of support for things that are progressive and good.

  9. Petar,

    The same is in Serbia, however, members of the old school are so determined to keep their positions that they will crush anyone that tries to jeopardize that.

    The main problem in all ex-Yu countries is that people are used to relying on the government to cover the losses and to take care of the mistakes they have committed. The only problem is that the days of socialism are gone and those previously protected marketes are left alone to the mercy of the far superior Western companies.

  10. Jet2 is flying Newcastle-DBV next summer 2 weekly

  11. "Off course he'd champion Dubrovnik over Zagreb".
    Of course, but than he can not be CEO of Zagreb Airport, but Dubrovnik Airpost. Because during his stay in Zagreb he did nothing for Zagreb airport As you know he have 3 lawers in Zagreb airport as full emplyee but he pay for services of soliciter company in Dubrovnik! 700 km from Zagreb... Also some consulting companies from Dubrovnik.

  12. to last anonymous - the part about solicitor - that's totally trivial. perhaps that was not sensitive to his colleagues and community, but I don't know if it's illegal.
    One should keep a perspective on the big picture.
    I am sure he wasn't selected as the head of the Regional Airport Forum for Euro airports up to 5 mil pax. for no reason !

    What you say, sounds very much like "malograđanština i sitničavost".

    You probably qouted Matković from Aeronautika magazine interview who had said that exact thing - that Peović wanted to position Dubrovnik as a head hub in Croatia. It was probably taken out of context as no serious CEO would say things like that.
    matković is being bitter about cancellation of his contract and is probably eager to discredit Peović.
    Now, in a long run Dubrovnik may dominate over Split (as both are geared towards summer tourism traffic) and thus become the main coastal hub for foreign tourists. That's in a way logical and I don't think Peović meant that Dubrovnik, whose population is 20 x smaller than Zagreb could compete on the same basis with LDZA.

  13. Peter: “increased pax volume”

    That is also not true. Peovic just bring easyJet which is sponsored by Zagreb airport and Tourist office. In same time Croatia Airlines because of that decrease CDG line to just 5 per week (easyJet decrease line to just 1-3 per week). Because easyJet Wizz get out of Zagreb. So, just one new route is Dortmund, and he change regular non-sponsored companies with sponsored one.

    Number of passengers increase but not thanks to Peovic but to price-politics of Croatia Airlines. Because of huge discounts they increase number of passengers for 17%, and Zagreb Airport just to 14%!!!! Result of Peovic politics Wizz does not fly, MALEV, Lufthansa, ČSA, Aeroflot, Austrian, Spanair, easyJet decrease capacity or even stop operating from Zagreb. We did not see new line in Zagreb for more than one year now (opposite to Belgrade).

    So, what he did with discount? Attract more companies? No! More passengers? No, that is result of Croatia Airlines new prices...

    Profit in last year was just 20 million kunas. Much less than profit of DBV, or SPU which are much smaller than Zagreb

  14. That is not true. Matkovic invested 280 million kunas ( approximately 40 million EUR) Here are data from my interview in Aeronautika with Mr. Matkovic (sorry not to translate it):
    - premjestili smo bodiček i napravili potpuno novi sustav kontrole (domaći i inozemni putnici na jednom mjestu)
    - preorganizirali smo prostor čime se dobio kapacitet od dodatnih 500.000 putnika
    - potpuno smo preuredili prostor domaćih dolazaka
    - potpuno smo preuredili prostor međunarodnih dolazaka
    - napravljen je potpuno novi prostor kontrole putovnica, preorganiziran prostor policije/viza i drugi službi
    - uredili smo i potpuno novi prostor carinske kontrole u dolasku i odlasku
    - preuredili smo glavni hol i prostor check-ina
    - napravili smo nove stepenice i galerija prema restoranu
    - ugradili smo panoramsko dizalo na prvi kat
    - preuredili smo prostor rent'a'cara i poslovnica kompanija
    - zamijenjenje su socrealističke pločice kamenim pločama, te socrealističko drvo modernim materijalima
    - izgradili smo terminal generalne avijacije, popularno nazvan “VIP terminal”
    - sredili smo statiku zgrade koja nije bila adekvatna jer je zgrada rađena puno prije vremena postavljenih stanarada, te je predstavljala istinsku opasnost, a na što je potrošeno vrlo mnogo novaca
    - potpuno smo klimatizirali zgradu
    - izmjenjen je krov ZLZ
    - izmjenjeno je i modernizirano osvjetljenje glavne zgrade
    - uveden selfservice check-in
    - promjenjene su sve nadstrešnice i osvjetljenje prema stajanci
    - promjenjena je i nadstrešnica i osvjetljenje prema bus platformi
    - osuvremenjen je izgled bus platforme (podovi, natpisi, obelicsi, kamene klupe)
    - asfaltirano je i uređeno parkiraliste P2
    - uvedena je automatska naplata parkiranja
    - uredili smo park sa fontanama, klupama i parkom za djecu
    - srušena je baraka i premješteni uredi
    - uređen je novi restoran društvene prehrane
    - uređena je i nova catering kuhinja
    - 2005. su kupljeni svi novi autobusi za stajanku
    - nešto kasnije kupili smo VIP autobus
    - obnovljena je flota automobila za stajanku
    - kupljen je i novi sustav obavijesnih displeja
    - instalirane su nove informacijske ploče
    - uveli smo najmoderniji komunikacijski sustav
    - promjenjene su sve instalacije struje na stajanci i manevarskim površinama
    - uvedeni su novi sigurnosni sustavi
    - uveden je CAT IIIb
    - uvedeno je 20 kW napajanje sa dva pravca
    - modernizirana je trafo stanica na visokom i srednjem naponu
    - izgrađen je reciklažni park
    - nabavljeno je navalno vozilo jedino takvo u Hrvatskoj i koje se moralo pribaviti radi uvođenja CAT IIIb, samo ovo vozilo koštalo je skoro 7 milijuna kuna
    - izrađene su studije, lokacijske dozvole, parcelacija zemljišta, prostorni planovi...
    - uveden je napredni sustav kvalitete ISO9001 i 14001
    - 2007. je napravljen novi master plan

  15. Purger - OK. fair enough. Perhaps I was a bit rough on Mr. Matković, but I wanted to illustrate my point.
    Than again, what about some of the vital facilities for the actual users...?
    such service level that was horrifically low for years (restaurant, ugly menues, bad choice of food, lack of shops etc.)
    And the "parking slot" pricing policy ?

    I also don't see how is it realistic for Mr. Matkovic to believe that Zagreb management alone is capable of achieving regional re-positioning which is of vital interest of Croatia as a country. In that sense, the concession model is completely justified. Off course, it must be well defined and designed in a way so that both lessor and concessioner are reasonably happy- so to say to have a win-win situation as otherwise the cooperation would be pointless.

    So, what's to be done now ?

    I think that a much worse damage at this point is that "Sindikati" group manage, helped by politicians, to abolish the public tender.

    Imagine what damage that could bring to Croatia ? In terms of our image etc. It'd clearly show how rules of a business conduct change with the change of government, something that no investor cares about and doesn't want in his business.

    My point: Get on with concession, invite "sindikat" to participate in negotiations, but while all that is done - a big picture needs to be kept in a prospective. The model in which the actual facility would benefit the most, traffic, national tourism and such...

    Again - with the expansion of the terminal - new jobs will be created too.
    Otherwise - we can count on another 10 yrs. of lost time - at least.

  16. Peter,

    Very well explained.

  17. Peter: "such service level that was horrifically low for years (restaurant, ugly menues, bad choice of food, lack of shops etc.)
    And the "parking slot" pricing policy?"

    OK and what is changed after 2 years Mr. Peovic is in charge?

    Peter: "I also don't see how is it realistic for Mr. Matkovic to believe that Zagreb management alone is capable of achieving regional re-positioning which is of vital interest of Croatia as a country."

    Tipical neocolonialistic presentation. You are stupid, you are thiefs (yes, those which were put on possition by West to make as more poore), you are not able to live without us to be your tutors... How can Belgrade airport work well without owners and managers from West. Zagreb airport invest 280 millions kunas + in same time had profit of 45 million kunas per year. That is not good?

    And last but not least:
    how comes that workers love Matkovic, and hate so much Peovic?

  18. When workers "love"their boss something is terrible wrong. Or with workers or with the boss. Business is not matter of love. Service at LDZE is crap.

    Who prevented Matkovic to follow Belgrade example? Just another example of incompetency.

    Some people are biased by knowing a person as a "nice"guy, but Mr.Matkovic's results were nothing.
    Peovic has done more in two years than Matkovic in all his time in charge. Presented list of achievements by Mr.Purger do not reveal real picture.

  19. „Result of Peovic politics Wizz does not fly, MALEV, Lufthansa, ČSA, Aeroflot, Austrian, Spanair, easyJet decrease capacity or even stop operating from Zagreb.“
    Wizzair – do we need that crappy airline? Easyjet came as a replacement flying to LGW – much better. And offered DTR and CDG.
    Malev, ČSA, Spanair – all have their own problems. Malev and ČSA do not offer reasonably priced connections – Often *A is cheaper. Who would fly with Spanair if you can fly with OU for a better price?
    And Lufthansa – I believe they reacted reasonably if they slashed capacity by 5%. All airlines are repositioning on the market. As they have codeshare flights with OU this is of no importance.

  20. Excuses. Why than Belgrade Airport can have increse capasity and new lines... Also with airlines "that have problems".

    "Easyjet came as a replacement flying to LGW – much better."
    ???? I flow Wizz several times to Luton and service was much better than EasyJet, and price was cheapear. I flow EasyJet to LGW twice, and from than on I choose Croatia Airlines. In same time EasyJet is sponsort from Zagreb airport and Tourist board, so we spent money for tham to fly to London. That was not case for Wizzair and sure is not for Croatia. Clasical LCC discrimination!

  21. Excuse me for quoting in Croatian;
    Poslovanje Zračne luke Zagreb (ZLZ) veoma je uspješno, jednoglasno je ocijenjeno na danas održanoj Skupštini.

    Tonči Peović Tonči Peović Kako ističu iz ZLZ-a, ''time su na najbolji način opovrgnuta sva medijska nagađanja o smjeni glavnog direktora Zračne luke Zagreb, Tončija Peovića''. Skupština je jednoglasno usvojila izvješće o poslovanju Zračne luke Zagreb u prvih devet mjeseci ove godine u kojem se ističu ostvarenih 42,8 milijuna kuna dobiti, što je 41 posto više nego lani, dok je istovremeno porasla i vrijednost njene imovine za 27 milijuna kuna ili 2,7 posto. Iz ZLZ-a napominju i kako su vrlo pozitivni i fizički pokazatelji poslovanja, o čemu svjedoči činjenica da je dvomilijunti putnik ove godine kroz Zračnu luku prošao 48 dana ranije nego prošle godine.

    Involved in discussion, your comments welcome.

  22. Purger - I believe I am realistic when I say that LDZA is not alone capable of achieving what the set goals are. That doesn't mean that Mr. Matković was incompetent, and no concession is not selling something -hence no colonialism. What do you mean by colonialism in this case anyway?

    And the service level has been increasing. THe rastaurant is better - at least they fixed their menues :)
    And the big thing - the signalization in the building - no damn, ugly yellow "Departure, Arrival" boards.

    The pax numbers, revenue and profits all went up. Again, Matković was doing fine before too. Except that we in Croatia want more than fine. We aspire to overtake Belgrade as a regional hub, which I believe we easily can with right set of policies - in 10 yrs. or so.

    If you believe that a handful of "sindikalisti" has a right to protest for people that are way overpaid for what they do, sabbotaging the project... than say that. Perhaps you too have a land that you want to sell ? :) j/k, but seriously - my point is that the basis on which they are complaining are discussible. Certainly in a way to allow for strike or project sabbotage.

  23. Again that comparison of Zagreb with Belgrade which makes no sense at all!
    As only airport in Serbia, Belgrade airport does not have the competition
    Zagreb has with the coastal airports.
    All coastal airports have more pax than Zagreb or even Belgrade!

  24. Zagreb, Dubrovnik, and Split together have 5 mil passengers!

    Zagreb 2.35
    Dubrovnik 1.35
    Split 1.3

  25. to the 2nd to last anonymous - comparison is completely fine, as I believe that long term potential of Zagreb is there thanks to being the capital of the rising tourist star country. Tourists are fascinated by our coast, but also are discovering Zagreb - and are loving it there. The city has done lots on implementing new services; I would say one has plenty of things to do...
    It's architectural heritage, cultural offer, more and more quality restaurants, clubs, bars, events (conference events too) help this too.

    Belgrade is a large, nice, interesting city. But unfortunately it is the capital of a country that's, besides Belgrade itself, completely lacking in offer - and that will stay so for some time.

    To Purger - another service improvement at LDZA is the opening of the outdoor bar with terrace ("vidikovac") which is absolutely great.

  26. To Petar:
    Croatia is and always was a tourists paradise...even in times of Yugoslavia!
    I can remember the 70ies and 80ies!
    The coast was full of tourists from nearly everywhere even the US!
    Only difference to today is that flying is cheaper and more people take plane and not car!

    Belgrade never can and never will compete with this...but difference is that Croatian aviation is dominated by foreign tourists ....and Serbian aviation is dominated by demand of its population.
    Without tourism WHOLE Croatia would have less flights and passenger numbers than Belgrade!
    : )

  27. Croatia Airlines in the first nine months of this year reported a loss of 5.3 million euros, according to financial reports published on the Zagreb Stock Exchange.

    These results represent a strong reduction in loss compared to the same period last year, when it amounted to 14.6 million euros. Total revenue of Croatia Airlines in the first nine months increased annually by 17 percent to 168 million EUR and total expenditures of 173.5 million, an increase of 9.6 percent.


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