Friday, October 19, 2012

Croatia Airlines to decide on Airbus order

Croatia Airlines mulls Airbus cancellation

Croatia Airlines says it will have to make a decision on whether to go ahead with a multi million euro order for four Airbus A319s, made in 2008. It has been suggested that the, now controversial, order was made so then Croatian Prime Minister, Ivo Sanader, could secure a meeting with French President Nicolas Sarkozy. The Croatian carrier has denied such claims, saying the order was a sound business decision at the time. “Croatia Airlines is currently in the process of restructuring and will present its plans to the government soon. A decision whether to go ahead with the aircraft order will be made once a decision on the company’s restructuring process itself is made”, the airline said in a statement.

If Croatia Airlines cancels the order it will be forced to pay penalties to Airbus. It is already doing so for deferring the arrival of the aircraft for several years. The 2008 order for the jets amounts to 135 million euros, resources the airline admits it does not have. Croatia Airlines currently has a thirteen member fleet made up of four A319s, three A320s (which were to be replaced by the ordered aircraft) and six Bombardier Dash 8s. The national carrier often sees a shortage of aircraft during the busy summer months leading it to make short term leases. However, during the winter, the current fleet is sufficient to handle the traffic volume.

Croatian media believe that the upcoming restructuring plan the airline is working on will be vital for its future. It will determine whether the carrier has reached its peak and should stay under Lufthansa’s umbrella as a midsized feeder airline within Star Alliance or whether it should spread its wings and cement its position as the leading airline within the former Yugoslavia. The Croatian carrier still hasn’t ventured into lucrative markets such as Russia and the Middle East and has further room to grow if it decides to take that path.

34 comments:

  1. It should definitely spread its wings and cement its position as the leading airline within the former Yugoslavia! Buy JA and establish closer relations with YM, to start with. Possibly include in the company some other Croatian (charter companies), like Traid Air and enlarge the activities of Obzor travel agency...

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    1. If they buy JA, JA could use one of the A319.

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  2. "However, during the winter, the current fleet is sufficient to handle the traffic volume." - If not too much actually.

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  3. "cement its position as the leading airline within the former Yugoslavia!" - How can a feeder airliner be considered a "leader airline" of any region? Even if OU has more yearly pax than JU, JU by far resembles more to a "leading airline" first for being independent unlike OU is and secondly cause JU can take you to far more destinations than OU.
    Once someone said "OU specializes in MUC/FRA", perfectly correct and it should stay that way.

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    1. That is not true, CTN direct lines are (most of those by CTN, few code-share, just regular lines, no charter):
      AMS-PUY
      AMS-SPU
      AMS-ZAG
      ATH-DBV
      ATH-ZAG
      BCN-RJK
      BCN-ZAG
      BEG-SPU
      SXF-DBV
      SXF-SPU
      SXF-ZAD
      SXF-ZAG
      BLQ-ZAG
      BRU-ZAG
      CPH-ZAG
      DUS-DBV
      DUS-SPU
      DUS-ZAD
      FRA-DBV
      FRA-SPU
      FRA-ZAD
      FRA-ZAG
      HAM-DBV
      HAM-SPU
      IST-DBV
      IST-ZAG
      LIS-ZAG
      LGW-SPU
      LGW-ZAG
      LHR-RJK
      LHR-SPU
      LHR-ZAG
      LYS-SPU
      MUC-DBV
      MUC-PUY
      MUC-SPU
      MUC-ZAD
      MUC-ZAG
      CDG-DBV
      CDG-SPU
      CDG-ZAD
      CDG-ZAG
      TGD-ZAG
      PRN-ZAG
      FCO-DBV
      FCO-SPU
      FCO-ZAG
      SJJ-ZAG
      SKP-ZAG
      TLV-DBV
      TLV-ZAG
      VCE-DBV
      VIE-DBV
      VIE-SPU
      VIE-ZAG
      ZRH-DBV
      ZRH-SPU
      ZRH-ZAD
      ZRH-ZAG

      BWK-ZAG
      DBV-SPU
      DBV-ZAG
      OSI-SPU
      PUY-ZAD
      PUY-ZAG
      SPU-ZAG
      ZAD-ZAG

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  4. OT:
    Ex-YU Aviation, PRN pax figures for Q3 are in. Total pax numbers up 10% for the quarter and 8% for the first three quarters of the year. The millionth passenger passed through the airport the first week of September.

    Belle Air Europe becomes the largest air carrier operating at the airport followed closely by Germanwings. It is remarkable how little coverage Belle Air Europe gets vis-a-vis airlines such as SkyWork Airlines. It serves about a dozen destinations at PRN and another four at SKP.

    Also, Belle Air Europe will fill in the gap that will be left with the withdrawal of British Airways by launching two weekly non-stop flights between PRN and STN. Also, it is switching its PRN-BGY flights to MXP at the end of October.

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  5. Croatia Airlines = Paper tiger

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  6. KRS - DBV new route strating April 25th 2013 should be added on the right, also STN-PRN October 28th 2012

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  7. OT: there are plans about starting a route BEG - MSQ (with a possibility to extend the route to LED). Flights will be organized as charter flights at first.

    Source aviokarta.net

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    1. Great! We lose London by British, Paris by Air France...and we will get Minsk by Belavia. Could it be more direct answer about where we go East or West?

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    2. Nope since you still have Jat to both Paris and London. Actually 3 airports in London during season, and soon 2 to Paris ;)

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    3. Plus Air France is coming back. We also got Qatar, additional frequencies by flyDubai and Air One.

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    4. Both East and West have good things. We shouldn't be afraid of connecting to any.

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    5. Why are air france tickets still bookable for july then?

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    6. AF will discontinue ticket sales next week.

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    7. where did you hear of additional frequencies by Air One

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  8. Maybe they would be better off using that money to buy 1 or 2 used A332s and deploy them on developing N. American and Asian markets such as EWR, PEK and possibly NRT. A330s would be also great during summer months for charter flights

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    Replies
    1. Why would Lufthansa allow this to happen?

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  9. One À330 in their fleet wont do any good. Imagine what would happen if it goes Tech.

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  10. Being under LH's umbrella is good until certain point and I think OU has reached that point where they have to decide whether they want to remain feeding LH's hubs in FRA and MUC, which is safe and secure business with minimal growth or do they want to risk and venture on their own to explore other markets. Croatia and ex YU in general is far away from its potential. This area is still to grow economically, not to mention all the tourism potential. How is OU going to approach it is yet to be seen. I wish them all good and many more years of flying.

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    1. Being under Lufthansa's umbrella is not good business if it does not equate to profits. Time for OU to say thanks Lufti but this ain't working for us so either buy a stake or we'll take our business somewhere else.

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  11. Being a feeder is nothing bad.
    But when, please feed a hub far far away from ZAG like LHR,CDG or AMS!

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    Replies
    1. Luxair od 21.4.2013 otvara liniju iz Luxembourg-a za Dubrovnik jednom tjedno sa Dash-Q400

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    2. DBV should be a hub for all ex YU :)

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  12. Might sound as a joke to some, but I thought it would be a nice note to end this week :)

    "A perfect Ex Yu Airline should have an airport like BEG, airplanes like Croatia, hospitality like Bosnians, professionals like Slovenians, beautiful crew like Montenegro and with good spirit and happiness like Macedonians".

    Have a great weekend everyone!

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    1. Should have an airport like BEG ???!
      An airport where foreign airlines are banned to fly there like Pegasus and Easyjet?!
      Where the government ,its airline and its directorate wet their pants because of too much competition?!

      So they have to fly instead to PRN and SKP where you find airlines Belgrade only can dream of!
      Pfff...Belgrade is overrated.

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    2. And yet it is served by the most airlines and low cost airlines out of any other capital city airport in ex-Yu

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  13. In the left bar you can link to Anna Aero site.
    In their country feature they have a country feature of Macedonia mentioning Wizzair base and flydubai.

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  14. The arguments above miss the most important fact. OUs three ageing 320s (including some of the earliest frames for the model) still need replacing given they are now approaching end of life, and end of lease. Two are off lease at the end of this year, one at the end of 2013. (Can anyone confirm these dates are still correct?)

    Also, the 4 new non-NEO* 319s were to replace the 320s in a capacity-neutral shift: like replacement of one of the 320s for two Q400s, it would allow growth to more markets without a glut of seating capacity that an added aircraft would normally provide. It allows a better amount of seating to be provided to the right markets, thus improving yields. OUs decision to refit the 319s with slimline seating further verifies this point.

    (* thankfully they are not for the New Engine Option for the 319s - which would provide too much range for OU without the economic windfall. The Bombardier CSeries would be a better alternative)

    I strongly believe the airline *could* afford new aircraft, and without having to pay the absurd order cancellation payments. It is a matter of choosing whether to own or lease (operating or capital could be debated) to ensure they have the RIGHT aircraft requiring minimal maintenance time and cost while still providing the level of service expected by its customers.

    From a purely business point of view, the airline would have good line of credit (being owned by govt) by banks for loans, but lacks the right management strategy in both short- and medium-term. The Q400s have been an incredible success story and possibly the best acquisition OU ever made, but this deal re 319s could easily become the airlines downfall.

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  15. We forget that Croatia is heavily dependent on charter traffic. Croatia Airlines with its cost structure and continental hub in ZAG is not the right company to develop this segment. On the other hand it is a pity to leave this huge market to foreign carriers. An answer could be to establish a joint venture like Sun Express with a 50/50 share and grab that market.

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