Friday, August 23, 2013

China Southern close to Adria deal

China Southern eying Adria, Ljubljana Airport and Flight Academy

China Southern Airlines is close to purchasing a stake in the Slovenian national carrier Adria Airways and has expressed strong interest in a complete takeover of Ljubljana Jože Pučnik Airport, its CEO Zmago Skobir confirms. China Southern would also purchase the Adria Airways Flight Academy, which is currently on sale, as part of the package. As the Chinese carrier trains up to 3.900 pilots per year, the flight school was what triggered the most interest at China Southern. The 25 year old airline is Asia’s largest and busiest and is also the sixth busiest airline in the world.

Both Adria Airways and Ljubljana Airport form part of fifteen government owned companies which have been marked for privatisation as part of Slovenia’s drive to leave the recession. “Big European airlines have no interest in small markets such as Slovenia but perspective and growing Asian airlines do. Ljubljana Airport and Adria could operate soundly if a deal is reached with the Chinese airline and traffic would grow”, Mr. Skobir says. He adds, “On the contrary another chance will be missed for Slovenia”. However, the CEO of Ljubljana Airport warns that a potential difficulty to the deal could surface in the form of political problems between China and the European Union.

China Southern is a member of the Sky Team alliance, a rival to Adria’s Star Alliance. The airline has this week been linked as a potential buyer of Croatia Airlines which is also set to be privatised early next year. Asian interest in European airlines is not new. Earlier this year, Korean Air bought a 44% stake in ČSA Czech Airlines for 2.6 million euros. Central and Eastern Europe has become attractive for non European airlines looking for regional hubs as a way of gaining a toehold in the European market.

23 comments:

  1. So could it be that they checked out both airlines and then decided to go with Adria? What could make Adria more appealing than Croatia Airlines?
    Is it only because of the flight academy?

    Good to see another airline securing its future. I wonder what this means for OU whose home airport is right next to LJU. Could we see more and more Croats fly from Ljubljana in the future?

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    1. I think is whole package: airport, airline and academy... it is good to be 100% master as just a host like it would be on ZAG

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  2. As I am happy to see the developing ideas of state-owned companies in this region being better employed I must admit that I am strongly against joint package sale of the national carrier and state's main airport. As the EU and all normal countries regulations forbid carriers to own the airports due to monopoly reasons I am sure EU will have it's own input in this case. In cases as it might be in Slovenia either carrier or airport has to suffer. I'm positive it's always better to have separate sacks but to work tightly. In any case I wish you all the best.

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  3. Just "wet dreams" of Zmago Skobir. He is conscious that the mafia connection priority style Ljubljana Airport - Adria Airways state owned to state owned is going to end later or better sooner.

    China Southern it's interested in the Flight Accademy but complete take over of Ljubljana Arport directly by Chinese is impossible due to EU regulations.
    Going thru a ghost company (intermediary Slovenia or EU located) would make China Southern suffer only. It's money and business that's the Chinese are interested in no trouble and debts.

    sorry

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    1. Anyone buying Adria in total
      good luck if any

      must bring all the senior managing staff (that is taking decisions and plans) from it's own country or at least Western Europe EU countries.

      limited number of selected Slovenians -from the industry, air business- can work like consultans only -without the power to take decisions-
      anything different from this

      means

      instant 100% business suicide.

      Air business that is market oriented is trasnational and can not be managed by corrupted people or clean people friends of corrupted or non competent people.

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    2. I sure that new owner would bring new people fo sure

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  4. Admin

    Avion na istorijskoj slici nije Convair
    (CV340 / CV440) vec Douglas DC-6B! ;)

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    1. Absolutely right.Even Tito used this plane DC-6

      Delete
  5. If this is true, and considering that Etihad yesterday flat out denied they're interested in OU, does this mean that the only remaining possibility for OU privatization are the Indonesians? And considering that press talk about the Chinese and the Arabs were clear lies, I don't have much faith in the 3rd partner either.

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    1. Etihad was never on the cards, like ever, jutarnji list is known for its trash journalism. China Southern might be of interest but as someone already pointed out if China Southern did take over OU, it would be the best of the worst deals, considering how unreliable China Southern as an airline is, their time keeping and aircraft interiors cry for new designs.

      Garuda is another option but even that doesn't look well for OU, Croatian needs a good strategic partner that will help OU expand rapidly, currently OU can't cope with numbers simply put they have under capacity during summer season and for no apparent reason they have overcapacity in winters.

      Poor management and strategy with in OU is what makes Croatian Airlines loosing money now.

      Management is afraid to start new lines cause the know they can't afford new planes but in summer season they won't have enough planes to support their ever growing tourism, so they choose to compromise and do nothing.

      Croatian needs a fleet of 25 aircraft to cover summer season and maintain 32 destinations, currently OU has half that.

      Any strategic partner would need to see this as an opportunity, and as long as OU is run by morons it can't happen, so that also has to go if new strategic partner takes 49% steak.

      It is possible that KLM/AF might take over OU now that Zagreb Airport is being run by Paris Airport, its a possibility, but I think the silent strategic partner to Croatian Airlines might be Qatar Airways or even Malaysian Air.

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    2. AF/KL is out of the picture, Air France is losing money hand over fist and most profit KLM makes is heading over to Paris to keep AF afloat. They sure as Hell won't buy OU, especally since they have a large stake in loss making Alitalia.

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  6. Sve su ovo gluposti. Sada kada je Etihad uzeo JAT nema vise velikih deal-ova za ex-YU zrakoplovne tvrtke, mozda OU da postane hybrid low cost ostali ce polako da propadnu

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  7. What I don't understand is the best airline of the three Croatia Airlines and nobody wants to buy them , maybe because of Lufthansa , can anybody help me out .
    Why ?????????????

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    1. In fact, nobody wanted to buy ANY of those 3 airlines. Jat just got lucky because Serbian politicians somehow managed to include it in a much broader deal with UAE. Etihad of course can and will turn Jat into a profitable regional airline but I am 100% sure they wold not enter this acquisition if they were not asked by the sheikh to have a look at Jat's books and see if anything can be made out of it. Which is OK, many good business deals start with political contacts.

      Unfortunately Croatia has no such political-economic deal at the moment and can only offer OU on the international airline market. And the potential buyer now has to twist his brains thinking not only how to clean up the mess created by years of heavy mismanagement of OU but also how to fight with Etihad over the regional market.

      Sometimes nothing works in one's interest. I guess OU is now in such situation.

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  8. ^Its not that nobody wants to buy them.
    But EU-law prohibits airlines from outside to buy more than 49% of OU
    or to take over the management completely.
    I think OU should have been sold before EU-accession of Croatia.
    Now its probably too late.

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    1. What about Adria also EU. So it cannot be the excuses of EU.
      Something is missing .Maybe its the management that they know that they would have no job after take over .Example JAT

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    2. I think the last anonymous is onto something. We all know that OU management has close ties with the government. I am sure they have lobbied hard to keep this status quo so that they can keep their jobs, in other words for their incompetence to be funded by the tax payer's money.
      I do not know if it is a coincidence but the airline is being privatized only now when Croatia is in the European Union and when all major decisions are being taken in Brussels and not Zagreb.

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  9. Come on... that is at least stupid to say... for sure Brussels will not decide about selling Croatia Airlines, but Zagreb will... Croatia is still independent country and for sure Brussels will never decide will we or to whom we will sell companies such as CTN.

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    1. Not if Croatia is getting ready to join the rather long line of countries wishing to takes money from Merkel's purse.

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  10. I wouldn't be surprised if the Chinese are merely interested in the flight academy but the government is spinning this around hoping that the Chinese might take the bate and take over Adria too.

    I am sorry but I really don't see ANY interest in why should the Chinese even think about Ljubljana or Adria. Much bigger players are available, both airports and airlines. I think even Croatia Airlines has a bigger shot at being sold.

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  11. Its obvious that Croats are mentally not prepared for their European Union membership!
    Zoki is right when he says that there are conditions set by Brussels in regard to foreign ownership.Some people here seem to ignore this fact.
    Stupid and arrogant attitude a la "They can do us nothing - we do what we want!".
    Do they think Croatia can take the billions from Brussels and waste the money just for fun?
    There are rules in the European community.If you dont respect them you get to feel the consequences!

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    1. What is your problem???
      U think Croats don't know about 49% rule ???

      Of course they do, there was never a question of selling the entire airline, actually we never planned to sell Croatian Airlines until government minister came with the idea.

      Another idea is to give 48% steak to Croatian pension fun, which has loads of money but little of it is invested at home in Croatia.

      This way airline stays in in Croatian hands 100%, but this option is not seen as beneficial to OU.
      OU needs a strategic partner that will buy a 49% steak in the airline, its a long process that might take a year to complete, so do not rush with harsh judgments, plenty of time to do that afterwards.



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