Jat’s “Airbus saga” spreads westwards
Croatia Airlines does not have the resources to finance four Airbus A319s it ordered in 2008 at the price of 135 million euros. The weekly “Globus” writes that Croatia Airlines CEO, Krešimir Kučko, will have to meet up with Airbus officials to renegotiate the deal otherwise the national carrier could be facing bankruptcy. The delivery of the aircraft has been delayed by several years, with the first jet now planned to arrive in Zagreb in 2015. Originally they were to begin arriving this year. The deferral of the delivery date has already cost the airline 9.1 million euros while the cancellation of the order would result in a further 5.6 million euros in damages.
The “Globus” publication writes that the order for the aircraft was made for political reasons and was a prerequisite for then Croatian Prime Minister, Ivo Sanader, to meet with his French counterpart Nicolas Sarkozy. Last week, the Croatian carrier told the government the order was damaging and that the airline did not actually need the aircraft at the moment. Furthermore, it presented its plan to finance the aircraft which sounded alarm bells at the government, since the proposal is unsustainable.
Krešimir Kučko will attend an annual Airbus gathering this weekend but will have to act quickly in order to set up a meeting with officials at the plane manufacturer, in the hope of renegotiating the terms of the 2008 order. In September 2011, the Croatian Competition Agency cleared 42.4 million euros in state aid to Croatia Airlines for the purpose of settling its contractual obligations for the purchase of the Airbus jets. However, the airline must repay the state the borrowed money. In 2008, when the Airbus order was made, CEO Ivan Mišetić said, "This strategic decision will allow us to meet the future demand of our customers with the most modern, fuel efficient and environmentally friendly aircraft". At the time, Airbus CEO John Leahy added, "We are very pleased that Croatia Airlines, one of the largest and most successful airlines in the region, has further confirmed its confidence in the A320 Family by expanding its order backlog with Airbus. This shows the airline’s satisfaction and clearly demonstrates the high demand for the A320's advanced technology and efficiency in the years to come".