Monday, October 21, 2013

High expectations from Croatia Airlines sale

“Partner over price” for Croatia Airlines

Last Thursday the Croatian government initiated the sale of its national carrier with high expectations for its future. It will keep a 50.25% stake, allowing the potential new partner to be outside of the European Union. The government expects for the new owner to pump in much needed capital into Croatia Airlines, which would operate with a fleet of up to twenty aircraft. The Minister for Sea Transport and Infrastructure, Siniša Hajdaš Dončić says, “A fair offer would include creating a regional hub, fresh capital and new planes to refurbish Croatia Airlines, whose routes are limited to European cities with code sharing agreements to four US destinations”. He adds, “As many as four international companies have expressed interest, including Garuda Indonesia”.

However, Mr. Hajdaš Dončić says the government will choose the carrier’s future part owner based on quality and merit rather than the price offered. “We want a process which favours bringing in a stable strategic partner rather than the price offered. We are willing to look into all the possible models. The priority is that the money will not go into the budget but be invested into the company”.

A state agency will determine the value of the company in the next four months. The government has previously stated Croatia Airlines is estimated to be worth 45.9 million euros. The privatisation process will be carried out through two separate tenders. If all goes to plan, an agreement with a potential strategic partner is expected to be finalised mid next year. On the other hand, the government also has a “Plan B” should the privatisation process fail and includes selling the company little by little. “In its present state Croatia Airlines can’t function past 2015”, Mr. Hajdaš Dončić concludes.

33 comments:

  1. What's City Jet doing in Zagreb? Is Air France using them to operate the flights?

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    1. I don't know when the picture was taken, but I assume that they used to send it when it's not so high load factor. Now HOP operates flights in behalf of Air France, and they have all regional jets fleet.

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    2. Thanks. So what did Air France use before sending HOP! into Zagreb? A320 series?

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    3. You're welcome.
      I guess it was a mixture of A320 family, depending on load factor. Just now I am looking at FR24 and there is ARJ85 about to land in Zagreb, opf. by CityJet... It's bit confusing, but I guess it will eventually be overtaken by HOP! , as that's what they wrote on wikipedia.

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  2. One thing is certain. If Croatia decide to sell part of their airline, it will not cost the Government hundreds of millions of euros like the "sale" of Jat..

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    1. Yeah, it will cost them much more because they will not manage to sell it. Do you seriously believe anyone would be interested in OU when there are far more interesting candidates in the European Union? The time to sell the airline was right before you entered the Union, now it's too late. You would be lucky if you managed to have the same scenario as the one we got in Serbia.

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    2. I think there will be poor interest in purchasing stakes, nobody is ready to make such an effort as Etihad made when decided to build a complete new product that will hardly find a competition in region. As we all know, companises like Garuda Indonesia aren't capable to do what Etihad did.
      Also I think that there is no need to make another airline Air Serbia look alike.
      Other airlines in ex-yu have to deal with that Air Serbia will be the one.
      Also I find it very annoying that now every airline in region want's similar future as Air Serbia.

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  3. What a bullshit, the guy above me.
    Like JAT was 'in good condition' when Etihad bought them, if a good and serious company with some good plans buys it, OU & that company can both have succes and there is a win-win situation. Not like the Story of the Turks in Sarajevo with BH-airlines.

    Wich others candidates in the EU offer a 49% stake and are for sale and are not that pricy then?

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    1. Erm... the Polish government would handover LOT for free if they could. They are desperate to get rid of it especially since their cost cutting measures have not yielded the expected results. Other airlines are airBaltic, SAS, Alitalia...

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    2. The government should have sold the airline BEFORE entering the EU.
      Now it will be very difficult,especially with LH
      in their back.LH is like the evil stepmother that does everything to make the marriage between OU and its partner a failure before it even began.
      Then there is also the Air Cargo Germany scenario as someone already mentioned.
      Air Serbias luck is that its home country is still not member of the EU.
      It is as simply as that.
      In this circumstences it would even be legal if Air Serbia was sold to EY 100%.

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    3. I really can not understand why someone would buy CTN rather before entering EU than now. That is not true. Much more benefit buyer has now.

      It is not true Air Baltic and SAS are on sale. But in same time Alitalia is, but for 500.000.000,00 EUR for some 20% ownership.

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    4. The Latvian government went to Abu Dhabi last year in an attempt to sell the company and just recently Dombrovski made a statement that they were in negotiation with Asian which was supposedly interested in getting a minority stake.
      As for SAS, their privatization talks were speeded up the moment the Norwegian government said that they were too happy about covering the losses of the airline- probably because they have Norwegian now. Recently Lufthansa made a statement that they might consider getting a stake in the airline. So why would they say that if SAS was not really up for sale? Hmm?

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  4. OT:

    A newly established Greek airline, Ellinair, with its base at Thessaloniki airport has said that it will base its business on linking Greece (I suppose primarily Thessaloniki) with ex-USSR and neighbouring Balkan countries. They currently have two RJ85 while they plan on getting two Airbus A320.

    I wonder which Balkan countries they will aim at. I doubt they will consider Belgrade with Air Serbia's enhanced presence in Thessaloniki.

    They do have a nice livery:
    https://fbcdn-sphotos-e-a.akamaihd.net/hphotos-ak-frc3/1394266_609868072409146_1197742569_n.jpg

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    1. And it's owned by Mouzenidis Group, the largest Greek tour operator (and by far in the North), they have a nice fleet of tourist busses as well, so I guess they are looking to offer one-stop-shop type of deal to their customers.

      Kon Tiki in Serbia tried to do the same with leased B732 I believe - and failed - hopefully, these guys are more competent.

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    2. You mean the Kon Tiki experiment with the MAT bird? Yeah, that was pretty bad. However the Greek market is much bigger and they can survive the winter season by basing their business around Athens and Thessaloniki.

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  5. I enjoy reading this comment section... So much "funny" people...

    When they talk about Air Serbia it's all so nice and slick, and when they talk about Croatia Airlines it's about how it's "the worst company in the world with oldest planes, and awful landing slots"...

    Let me remind you, gentleman, that Croatia Airlines has much more to give to it's future owner, that the JAT has given to Etihad.

    Etihad will make Air Serbia real strong and modern airline company, but it will need a lot of time for people to recognize this. Croatia Airlines is complete, you just need new leadership and that's it. You don't need complete makeover or something.

    On the other hand I highly doubt that Air Serbia will have some bigger success in domestic market, as I just don't see Serbian "buying power".

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    1. Oh ok, so is the current anti-Jat/Air Serbia chant 'it will not work because of Serbian buying power'? What's that, sixth or seventh anti-Jat song? I am just happy that each and every time all of you were proven wrong. I am sure this time will not be the exception.
      As ex-YU posted at one point, their sale did really well with something like 30,000 tickets being sold. They did really well in Prague and Ljubljana especially for flights to Greece and Russia.

      So what were you saying again?

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  6. ^ You are totally right about OU being the better airline.
    But JU is and will in near future not be an Eu-airline.
    Thats why they got bought by Etihad.
    Not that i would be the first one to mention this...

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  7. OU will be sold thats for sure. Just it need to buy some time and the biggest problem for OU is LH and bad OU bad management.

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  8. Pozdrav svima koji čitaju i komentiraju ovaj blog! Volio bih da mi Purger, čije mišljenje izuzetno cijenim, objasni što misli kako će prodaja završiti za Croatiju Airlines, ima li kakve informacije o mogućim zainteresiranim tvrtkama, ako ih uopće ima. Usput, želim puno sreće Air Srbiji u daljnjem radu! Pozdrav!

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    1. Upravo sam dobio informaciju iz samog vrha kompanije, vrlo pouzdan izvor. Kučko ne želi stranog vlasnika i trudi se da hrvatski kapital (jedna fond, ne smijem reči koji) uleti u vlasništvo.

      Bojim se da ovo što ministar pokušava prodati nije realno i da će se samo osramotiti. Prodaja Garudi bi bila nacionalna katastrofa, no nakon prodaje ZL Zagreb francuskim građevincima uz garancije države to bi bila daleko manja i samo još jedna katastrofa u zračnom prometu.

      Kada bi se našao kvalitetan kupac bilo bi to savršeno za Hrvatsku, no, nažalost, iz svega ne vidim da će se tako što desiti. Bojim se da će ovaj natječaj biti jedan ogroman fijasko.

      Istovremeno ministar je vrlo oprezan čovijek. I mislim da se ne bi zaletavao bez da nešto ima. Samo to što ima (Garuda) je enormno loše, po načelu nek uzme bilo tko samo da mi više nemamo problema, i ni sam nema pojma koju štetu radi Hrvatskoj. Kako sada stvari stoje to je svjetlosnim godinama daleko od deala Jat-Etihad, kojim je Srbiju Bog pomilovao po glavi.

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    2. Hvala na brzom odgovoru, nadam se da ipak neće tako završiti! Obavještavaj nas ukoliko bude novih informacija!

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    3. Purger, ovo je još jedna stvar koja je bila pokušana i sa Jatom (ulazak domaćih tajkuna). Vrlo interesantna podudarnost. Počinjem ozbiljno razmišljati o mogućnosti da će se podudarnosti nastaviti te CTN na kraju biti prodata ino partneru u poslednji čas. Bumo videli :)

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  9. Some people here don't understand how bad Jat Airways has been, and how low it has fallen during last 20 years.

    They refuse to admit humiliating conditions of Etihad's takeover/makeover, and the fact that Serbia is remaining only and only in new company's name.

    They refuse to accept the fact that Serbia as a state is in the worst possible position - as EU candidate, it HAS TO obey ALL EU rules and regulations, and at the same time it has no rights that full members have. Therefore, new company WILL NOT be granted favour of extra-EU (Arabic/UAE/Etihad's) management. So, the main number of markets are questionable, at least for a while, untill new bilateral agreements are signed, which implies the income from those markets as well.

    Some people here also refuse to think how the hell will JU manage to have good LF on daily Varna or Beirut or similar nonsenses, and make such routes profitable.

    Some people here who talk about superior inflight product, refuse to admit that purchase power in Serbia, and whole region, is low, and that "C" class with such superb product will probably remain mostly empty most of the times, which brings additional questions of expected incomes, and the success of the entire project.

    And finally, some people here are forgetting that the entire fairytale is created in the "kitchen" of Mr.A.Vucic, and is starting literally few weeks before Serbian elections this winter.

    To conclude : Some people here pretend that Air Serbia is at least Air France, or Etihad itself, and that poor Croatia Airlines has no future, no chances, no market, no name, no product, no human or other potentials, shortly no nothing.

    Actually, it's quite opposite, and unfortunately, those people will very soon be much disappointed with the development of the situation, not only in OU or ZAG, but in civil aviation in Croatia generally.

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    1. What an unbiased and rational post.

      ...not.

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    2. If civil aviation in Croatia depends on more guys who are ready to drain their entire life energy to spit on civil aviation in Serbia (and Serbia in general), then it is no wonder OU and ZAG are in such bad shape. I hope civil aviation in Croatia will have more people like Purger (positive and proactive dreamers) and less spitfires and haters. That is the only way to achieve something.

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    3. "Proactive dreamer" hahahahahahaha
      It's either proactive, or dreamer. Those two can't make it together.

      Few lines of one post "entire life energy"
      Again hahahahahahahaha

      And except calling me names, did you give one single argument what's not true in my post and why am I"hater" or whatever? Because I wasn't in Arena tonight, ha ?...

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  10. Although I respect mr. Purger on this blog very much, I have to say that his "minister Hajdas Doncic" is somewhat ridicolous...

    for 20 years Croats lived like there's no tomorrow, and now when we have to pay for it everyone is "playing dumb"...

    He HAS TO SELL the croatian highways... First of all the reason is to change people mentality... YOU HAVE TO WORK TO GET YOUR MONEY.

    Same sh*t with Croatia Railways... In WHOLE OF THEIR HISTORY they didn't arrive on time... They need 2 hours to connect cities apart 50km... People in HŽ have 15 000kn salary (2000€)...

    Croatia Airlines HAS TO BE SOLD, even if that means that it will go bankrupt in 5 years... If we are to succed in anything we have take Croatian companies from croats, from corruption and nepothism,... 20 years of "Hrvat gazda" is enough. Our children need jobs, I don't give a f**k if Indonesia, France, Arabia, Morrocco, or whoever gives me salary, as long as I have one...

    Patroitism is for someone else, not for Balkan.

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  11. I agree with minister Hajdas Doncic.

    Sell everything, let the private money in, and someone will have interest to make profit and our people will have jobs and paychecks...

    This playing "domaće je domaće" is getting sick... It 21. century, people from India live in Spain and work as Russian - English translators, what are we talking about?! Globalizacija, dopustite.

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  12. From winter time-table Croatia will start code-share with United on flights from AMS, BRU, LHR, CDG, FRA, MUC, ZRH to ZAG, and from FRA and MUC to SPU and to DBV, with connections to USA.

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  13. Wishful thinking!
    The reality is that Croatia will have to pay for the disposal of the airline.

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  14. Big expectations lead to big dissapointment...

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