Thursday, August 29, 2013

Garuda: “Croatia Airlines a logical choice”

Garuda Indonesia confirms interest in Croatia Airlines

The Indonesian national carrier, Garuda Indonesia, has confirmed its interest to purchase a 49% stake in Croatia Airlines. Following talks with the Croatian Minister for Sea, Transport and Infrastructure in Jakarta, Garuda’s President and CEO Emirsyah Satar said, “The Indonesian market is developing rapidly and Indonesians are travelling more and more which is why we are looking to expand our business into Central Europe, in a country which has solid connections to the rest of the European Union. This is why Croatia and Croatia Airlines are a logical choice for us”.

The Croatian Minister for Sea, Transport and Infrastructure, Siniša Hajdaš Dončić, outlined the government’s plans to sell a minority stake in its national carrier early next year. Mr. Hajdaš Dončić explained there would be two rounds in the tender process, one which will call for parties to express their interest while the second will outline precise sale conditions. The first tender call is expected in mid October, while the second in February next year.

Garuda Indonesia, which has struggled since the early 1990s with safety concerns, an aging fleet and a ban to operate flights to the European Union, has been going through a renaissance since 2009 after it launched its “Quantum Leap” five year plan with a new management team which has seen the airline improve its reputation, safety, modernise its fleet and return to the EU market. Garuda has ambitious European expansion plans which were to begin this November with the launch of services to London Gatwick. However, runway problems at Jakarta Airport have delayed the planned launch by six months with the airport unable to sufficiently handle Garuda’s new Boeing 777-300ER aircraft. Within Europe, Garuda currently operates flights to Amsterdam (via Abu Dhabi). The airline is now keen to make Croatia Airlines part of its future European strategy. Garuda will officially become a member of the SkyTeam airline alliance, a rival to Croatia Airlines’ Star Alliance, next year. The Indonesian carrier has a fleet of 99 aircraft, with a further 39 on order.

40 comments:

  1. and then Lufthansa/Germany will come and say: Nein, das ist unmöglich. Croatia Airlines ist unser Sklave das muss an unseren Flughäfen fliegen und uns unsere Reisenden bringen.

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    1. ^Exactly, and when not then Mrs.Merkel will say:
      Kroatien erfüllt nicht die Anforderungen der EU und deshalb gibts kein Geld ...
      und zwar solange bis Kroatien seine Hausaufgaben nicht erledigt hat!

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  2. I would like for OU to get some help, but for some reason I don't see this happening. Things are much more compliceted, because Croatia is in EU now and Serbia is not.

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    1. That is exactly what I wrote few days ago when this news first time appeared on Ex-Yu forum, but at that time you told me I was wrong.
      Now I do share your opinion

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    2. the EU is actuelly a very fine union, if you understand the fine aims of its legal solutions, the ways to make exceptions, good jurists to put up arguments for you. since balcan countries, including the central european croatia, have no clue on that mechanism, the eu is just a horror for them.

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  3. Well it's nothing new for Balkan politicians to make grandiose statements.
    Let's hope that something becomes of this otherwise it will be just another holiday for the politicians at the expense of the Croatian taxpayers.

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    1. Admin Blog has just seen an article in jutarnji list and posted it here, reality is there are no firm plans only exploratory talks.

      Same talks are being held with Singapore Air and Malaysian, but Croatian Airlines won't be sold before late 2014, likely sale will happen around early to mid 2015.

      Terms of sale aren't clear yet, only that 49% steak is in play, price wasn't determined yet but at present market value of Croatian airlines its around 1.1 billion kuna or 150 million euros, with this price going up by the time of sale as Croatia emerges out of recession and OU picks and improves its financial picture.

      Croatian Government plans to sell 49% steak to help OU expand and not to save the airlines as this blog often likes to point out and jutarnji list, things at OU aren't that bad, there are issues yes, but nothing that can't be solved with a good management restructuring and laying off 400 staff.

      Currently OU has nearly 1100 staff, at least 400 of these can be made redundant, this would save the airline 50-52 million kuna, 3% cost savings across the all departments can be achieved and that would save another 50-55 million kuna, overall airline can save up to 120 million kuna per year and make airline profitable again.

      Beyond 2017, OU could buy additional aircraft on top of 4A319, and with 49% steak and good strategic partner OU could end up replacing its A430s around 2020 with additional A319s.

      OU need a fleet of 12-15 A319s and at least 6-8 Dash 8-400Q to cover summer season and all the scheduled lines OU currently has, or around 70 operations per day.





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    2. No, the article hasn’t been seen anywhere. It reports what the CEO of Garuda Indonesia and the Croatian Minister for Sea, Transport and Infrastructure said. Whether they stay true to their words and outlined deadlines is their own responsibility.

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    3. This admin does that all the time. He translates some article he didnt wrote or he reads some info from the comments than deletes them, and magically article with that content appears tomorrow... He will probably delete this one as well

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    4. First of all, comments are not deleted, only the ones that are based on non-truths and usually throw in some offensive slur from behind an anonymous ID. Second, the announcements made by the CEO of Garuda and the Minister for Transport were issued in a press release by the Croatian ministry. Whether you like the content or not is up to you. Since this morning the news has been published by most of the relevant press Thirdly, the site has always had a mix of original and aggregated content and it’s been working well for me. I don’t plan on changing anytime soon. If you dislike the editorial policy you are more than welcome to stop visiting.

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    5. I could now prove to everyone that you practically stole some articles, and I can make you look like a fool, but I do not want to do that. Usually I like the content, but rewriting is much different than stealing.

      Couple days ago there were comments about passenger numbers at some airports and you deleted them for no reason... At least you can get some more information and create articles about those airports... You cant just delete stuff to get some use out of it. It is not OK for your readers.

      I wish you all the best, but if you want to get more money for the adds you have put on this blog you have to get more readers and before that you need to change your editing behaviour

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    6. There were no comments deleted relating to airport numbers (why on earth would they be deleted). Since I do have a database with all deleted comments I have rechecked just to make sure and I can assure you that your statement is false. I only delete comments which are insult based or are written in such a way that they would create massive arguments. Furthermore, I am very lenient with off topic discussions as long as they are aviation related. Also, I never delete comments which are critically related to this blog, so your initial statement on how your comment would be removed is false. I usually do delete critical comments relating to other websites and portals because they are a) not related to EX-YU Aviation and b) if a certain person has a problem with another website they should write to them. In addition, comments which leave links to other aviation websites or articles are never deleted either. As for your other point, I have said I use a mix of own and other sources and I do not intend on changing that. When information is used from other sources they are never taken word for word.

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    7. Omg leave ex-yu alone. He/they does a service to aviation geeks like me and he does it for free.

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    8. I am not talking about that. I am talking about someone who spends days writing one article, and you dare to just translate it on English. As a journalist I do not think that is OK...

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  4. Now we miss "No-Pork-No-Alcohol" "funny" guy's comment on this news.

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  5. OMG they are gonna say bye bye to Lufthansa and loose most profitable Frankfurt and Munich.

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    1. +1

      Not to mention that it will result in Lufthansa flooding the market with its own flights leaving Croatia Airlines with no alternative but to withdraw. Maybe only keeping Frankfurt as I am sure it has enough O&D demand and a lot of business passengers.

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    2. Have you ever thought it could be the other way round. That LH needs OU to fly cheap to Croatia .

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    3. Profitable for who LH grows and OU down sizes

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  6. I don't like to comment what's happening in the neighbour countries, but if Garuda really buys or makes a strategic partnership with OU then whats the point of that when you can't connect Zagreb airport with Jakarta because it needs a big plane with the capacity of 250 or even more passengers but there aren't so much passengers from Zagreb.

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  7. We (if this even happens) do not know what Garuda's interest are when it comes to OU. Do they believe it is a company with stand alone profitable potential and so a good investment opportunity or do they plan to use Zagreb as a transit point to some parts of Europe.

    If they are looking for a cheaper alternative into Europe than if managed properly by OU they could continue to be a feeder for Star/LH and at the same time offer a transit option for Garuda into Europe. Win win win win scenario for all involved here especially if it is mainly Indonesians flying via Zagreb into Europe. This will totally be a new market for OU and Zagreb.

    Star/LH would be OU first option for flights into Croatia, so nothing changes here but OU is used to transfer Garuda's passengers originating from Jakarta for example to Europe some of which could still feed into LH/Star network.

    As a result OU could open new routes as well which at this time O&D passengers from Croatia alone could not sustain the service.

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    1. I agree with your points. The only problem I see there is that if Garuda buys OU, I highly doubt OU would stay part of * alliance. Why would Garuda feed OU which in turn feeds LH? Unlike some here, I don’t think OU’s entire business model and future depends on LH. The entire arrangement between them suits LH much more than OU anyway.

      But I think we will have to see some response from LH. The LH group is the only one amongst foreign carriers this year which has seen its pax numbers decrease at BEG airport which is not surprising since if you can choose from Qatar, Etihad and Fly Dubai you are not going to transit through Vienna or Munich to Asia. LH is now on the verge of losing OU and is also on the verge of losing JP (China Southern is Sky as well). So, I think we will see some sort of response. I’m not saying ex-Yu is a priority market for LH but it’s certainly a comfortable feeder market.

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    2. Like I said, if managed properly I see no reason why they can not do both.

      They could even make the argument to LH/Star that with an expanded network they could increase their net effect on Star/LH.

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  8. today's article about OU's network on CAPA

    http://centreforaviation.com/analysis/croatia-airlines-could-its-network-attract-a-bidder-125405

    bit surprised that SKP is OU's 2nd biggest international route by seats ( for that August week at least) , according to that article .

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    1. @SKPAugust 29, 2013 at 1:56 PM


      thanx for posting this,

      from looks it, Croatian Airlines was run by current management like an Holiday Airline not a proper airline with an international prestige, no wonder airline is in deep trouble atm when its run by a gang of idiots.

      Clearly OU lacks at least 10-12 destinations, Prague x7, Stockholm x5, Budapest x7, Warsaw x5, Helsinki x3, Oslo x3, Edinburgh x3, Madrid x5, Istanbul x4, Hamburg x3, Milan x5 and Dublin x3.

      Imagine if OU was run by a smart people and good management like Austrian or Lufthansa, OU would be by far the best airline in Central Europe and entire region.

      OU really need to sort its act and start acting like an airline and not a tour holiday company, that being said OU desperately needs at least 10 more aircraft, clearly 12/13 won't do, to cover 40 destinations and to do it full time, not just seasonal and twice weekly flights.

      OU seriously must get its act together fast.




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    2. "Imagine if OU was run by a smart people and good management like Austrian or Lufthansa, OU would be by far the best airline in Central Europe and entire region."

      OMG, I hoped that at least people coming to this forum knew that Croatia and OU are not compiting with Central Europe, and as a metter of fact are nowhere outside Croatian school books concidered to be a Central European country.

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    3. http://en.wikipedia.org/wiki/Central_Europe

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    4. Hahahahah the modern-day Croatian dream, not be considered as a Balkan country but as a central European one! :D

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    5. we can all come up with maps,

      http://upload.wikimedia.org/wikipedia/commons/thumb/c/c0/Grossgliederung_Europas-en.svg/2000px-Grossgliederung_Europas-en.svg.png

      same source btw.


      What matters is way the Croatian Airlines operates and where it operates, where is its market.

      OU's market is squarely in central Europe, with domestic market playing significant role as well.


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    6. well, according to this map: http://upload.wikimedia.org/wikipedia/commons/f/f5/CentralEurope.png - Croatia is as much Central Europe as is Serbia

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    7. Hm.. just answer the simple question: are Dubrovnik, Split, Osijek, Zagreb compiting with Sarajevo, Tivat, Belgrade or with Vienna, Prague and Budapest :S

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  9. Bit by bit this part of Europe is starting to show it's true value. Uprising market (despite economic crysis) has big potential, and when more people realize that traveling with airplane is not so expensive any more we could see extraordinary numbers.

    Kind regards to all aviation fans from Croatia!

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  10. "Croatia Airlines a logical choice..."
    Yes,especially when you consider Croatia being part of the EU.
    The same EU that did ban Garuda from flying into its territory.

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  11. That is what we call the past.They are flying to Amsterdam.

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  12. But what is in the future?
    What if the morons in the EU again decide to ban the airline.
    Especially if a foreign airline becomes a too big threat to the dominance of Lufthansa and the likes.
    The only choice that seems somewhat logic to me is that of Etihad.

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  13. If they banned the airline because of 'threat' to EU airlines than Etihad would be banned too. Indonesia airlines had shocking safety records (and still do). Garuda has become an exception the past few years and as a result the ban on Garuda has been lifted.

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  14. on 03.09. Minister of Maritime Affairs, Transport and Infrastructure Sinisa Hajdas Doncic said that Hainan airlines is also intrested purchase a 49% Croatia Airlines stake

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