Garuda Indonesia interested in Croatia Airlines stake
Despite previous plans not to privatise the Croatian national carrier until at least 2015, the country’s Ministry for Sea, Transport and Infrastructure is set to launch tender procedures for the airline’s sale by October 15. According to Croatian media reports, Garuda Indonesia and China Southern Airlines are interested in purchasing a stake in Croatia Airlines. A high ranking government delegation will travel to the Indonesian capital Jakarta next week upon the invitation of the Indonesian government where the sale of Croatia Airlines will be discussed. Tender procedures are likely to run until February 2014.
It is the first time plans have been made for the sale of Croatia Airlines, a move previously ruled out. The airline has had a difficult year so far as it faced industrial action from employees and has been forced to cut down on its route network and fleet. Furthermore, Croatia Airlines has seen it its revenue and passenger numbers decline so far this year. With Croatia recently becoming a European Union member, the national carrier faces a more competitive market with strict limitations on government aid.
In addition to Croatia Airlines, China Southern Airlines is also eying a possible stake in Adria Airways. While the tender for the sale of a majority stake in Adria was carried out last year, the results have never been made public. The Slovenian government aims to sell Adria by the end of the year. So far, only two national carriers in the former Yugoslavia have been privatised. In 2008 Turkish Airlines bought a stake in B&H Airlines. However, the Bosnian national carrier was renationalised last year when the Turks left, unhappy with the government’s attitude towards the partnership. This year Etihad Airways bought a stake in Jat Airways. Whether Croatia Airlines will be successful in its quest remains to be seen but with a large leisure market, solid fleet and plenty of potential to expand, the airline could garner some interest.