Sunday, July 6, 2014

Croatia Airlines’ privatisation stalls

Croatia Airlines awaits new owners

Just under a year after Croatia Airlines’ privatisation process began, plans to sell the country’s national carrier have stalled. The Croatian government announced its intention to resume the process this summer following a failed attempt late last year. Its initial plans to sell the airline represented a break from its previous policy to keep the carrier state owned. The Croatian Minister for Sea, Transport and Infrastructure, Siniša Hajdaš Dončić, recently outlined that the government will conduct a thorough analysis of the aviation market in order to identify potential investors before resuming the privatisation process. “We cannot allow for Croatia Airlines to be purchased by a predator, which would in turn destroy the company. Croatia Airlines needs a strategic partner and not a predator”, the minister said. He added, “Croatia Airlines needs to consolidate its operations and expand throughout region”.

Since the failed sales attempt late last year, Croatia Airlines has managed to post an annual profit, the first in years. However, it faces difficulties on other fronts. The airline has continued to see its passenger numbers decline and its market share in Zagreb weaken. Croatia Airlines welcomed 292.524 travellers on board its aircraft in the first quarter, a decrease of 6.5% on the same period last year. In addition, the consortium running Zagreb Airport warned the carrier it January it had six months to bring its business in order before the airport began courting low cost airlines. Croatia Airlines’ presence in the region has also declined with the carrier terminating services to Podgorica and slashing flights to Pristina and Skopje this summer season.

There have been varying opinions as to how Croatia’s national carrier should be sold. Only recently, the airline’s CEO, Krešimir Kučko, said the government should avoid adopting similar privatisation models to those used by the Czech Republic and Serbia for the sale of their respective national carriers. Mr. Kučko believes that Croatia Airlines should instead be recapitalised by local companies after its restructuring process is completed at the end of the year.

With summer already in full swing, it is likely the Croatian government will wait until autumn or the end of the carrier’s restructuring to resume its privatisation process. This time around it will send direct invitations to interested parties to put forward their bids. This is because companies from the far East rarely participate in tender procedures due to their corporate culture as seen in Etihad Airways’ recent acquisitions of Jat Airways and Alitalia. However, the Croatian government has a “plan B” if its second attempt to sell its national carrier fails. The airline will continue its restructuring program which has already seen the carrier cut its fleet by one aircraft, reduce its destination network by 7% and cut down on employees. In the coming year it would sell some of its slots and infrastructure and continue the search for a strategic partner. Mr. Hajdaš Dončić recently said, “You can’t persuade someone to invest in a company if they see no interest in it. We have to forget these stories that investors will spend their money in Croatia just because it is beautiful. They won’t. They will invest in Croatia only if they see an opportunity to make a profit”.

25 comments:

  1. Is Etihad a predator?

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    1. More like Lufthansa

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  2. So what I understand bad management so what are they waiting for fire this management and get one that wants to safe Croatia Airlines instead of saving their own ass like this Ceo ( Kucko ).He has done nothing good for CTN accept his own bank account

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    1. Kucko is carrying out the restructuring plan as recommended by their external consultants report, so far it has go the airline back into profit. The above story is utter garbage, the Croatian government has said that they will finish the restructure before they consider privatization.

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    2. No they haven't said that. The only person who said that is you.

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    3. I have never seen what you are telling here. You have said it and I cannot find the document. Kucko has a double notebook! But first he is filling his own pockets. This man is a complete disaster for OU.

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  3. Judging by people's comments Croatia Airlines is absolute perfection and anything negative about it is trash and garbage. No matter that they have a corrupt CEO who registered himself as living in Amsterdam so he can get salary benefits, a house and car for his family still living there, no matter that the airline's passenger numbers are constantly decreasing, its market share falling, its fleet shrinking, the government having an unresolved Airbus order... It made a profit in 2013. Yep, a minimal profit after selling a plane. Big surprise. The airline has deep and massive problems, a lot of which is not reported here actually. But doesn't matter, Croatia Airlines is a model airline for everyone here. lol

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    1. The same way Adria will have a great profit this year after selling 3 planes.

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    2. And air serbia will make an even better profit by screwing the sebian people in the ass.

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    3. Both airlines are screwing their people in the ass. Or do you think Croatia Airlines's losses are not covered by taxpayers? The difference is that with the latter they at least get a few new planes and a few new routes and lower prices. With Croatia Airlines you get fewer destinations and fewer planes.

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    4. You just keep believing that if it makes you happy.

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    5. I can see it with my own eyes and I don't live in some disillusion world where I try to act as if I'm better than everyone else.

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    6. You are right. This is fraud what he is doing. I hear from inside information that he is looking for a new job in the Netherlands.

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  4. Croatia Airlines - So many ways to fail

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    1. Air Serbia - Another way to drive the nation bankrupt, along with Fiat, EPS, Srbijagas & Smederevo.

      http://inserbia.info/today/2014/07/afp-serbia-could-sink-into-bankruptcy/

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    2. All ex-Yugoslav countries are on the brink of bankruptcy. ;)

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    3. Koliko ostrašćenih gubitnika na jednom mestu. Podmlađena flota, zapošljeno preko 200 mladih ljudi, jak proboj na okolna tržišta, veliko povećanja tranzitnih putnika, rekordan broj putnika na aerodromu, a vi sedite za kompjuterima i kukate, pronalazite članke očajnih bivših ministara koji samo to umeju i da rade -da pišu.

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  5. http://m.thenational.ae/business/industry-insights/aviation/etihad-partner-air-serbia-clears-us-regulatory-hurdle

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    1. Which regulatory hurdle does this relate to? Is this only related to CAT1 ? Is there an official source?

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    2. What 'hurdle' does this relate to? Is there an official source?

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  6. ex yu why are news a last couple of days so boring
    1) Privatization of Croatia Airlines
    2) Privatization of Adria
    3) Serbian Politics: A bunch of people discussing about who is right and who is wrong

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    1. It's the middle of the summer....What do you expect...For ex-Yu to make up news so its more exciting

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  7. Etihad calls Lufthansa out on government aid:

    http://www.theage.com.au/business/etihad-calls-lufthansa-out-on-government-aid-20140706-3bgek.html

    Hogan quote from the article:

    "He cited examples of direct state aid totalling €14.2 billion ($20.6 billion), including an €800 million payment by the German government to Lufthansa to support a pension fund gap, state aid of €1.1 billion for SWISS following the collapse of its predecessor, Swissair, and the Austrian government's absorption of €500 million of Austrian Airlines debt."

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  8. We will have to wait until this plan of reconstruction of OU finishes to see what the future of croatian carrier will be.
    Until the other half of 2015. OU can't add new aircrafts or new lines to it's current ones so this stagnation, or better and more honest to say, bad pax number are expected.

    Regarding Etihad - Air Serbia. From my view, and I've been in aviation for more than 35 years, anyone who expected that Etihad will buy JAT with it's own money and invest in serbian carrier without some "under the table" deal is, at best, is optimist. Whole world operates in this way but only a few can pull this out without getting to courtroom. Best example is Lufthansa.
    In my opinion, this Etihad talk about Lufthansa giving away state aid (which Lufthansa did!) is really brave :D

    Pozdrav svim ljudima dobre volje!

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  9. Seems like the A320 is becoming the default equipment of Air Serbia to Beirut!

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