Sunday, February 8, 2015

Government to bail out B&H Airlines

Government to save B&H as debt reaches thirteen million euros

The Federation government of Bosnia and Herzegovina has said it will provide financial assistance to its debt-stricken carrier, B&H Airlines, following a meeting in Mostar earlier this week. In a statement, the outgoing Minister for Transport and Communication, Enver Bijedić, said, “We have a very complex situation as several international suppliers have blocked B&H Airlines’ accounts. The debt owed to HETA and the Hypo Alpe Adria Bank for the financial lease of two ATR 72 aircraft, acquired under unfavourable terms in 2005, now amounts to 7.5 million euros”. Minister Bijedić added that the two turboprops will be owned by the Hypo Leasing group once the financial lease expires at the end of this year. In addition, B&H also owes Sarajevo Airport 3.5 million euros and is in need of a further 200.000 euros for the maintenance of one of its ATR 72 aircraft, which has been grounded in Germany for several weeks.

The Federation government will discuss ways to reprogram B&H’s debt towards Sarajevo Airport and HETA at a meeting next week in order to unblock the airline’s accounts. Furthermore, the government will urgently seek funds to service B&H’s grounded aircraft, however, the Ministry warns it will be “very difficult to find such means”. The CEO of B&H Airlines, Amir Jažić, said, “The Federation government of Bosnia and Herzegovina is B&H’s sole owner and we hope it will do its utmost in order to save this state-owned company”. The President of B&H Airlines’ Supervisory Board, Goran Jovanović, said earlier that the situation at the carrier is “alarming”. “We are dealing with a thousand things at once. We pay the highest price for fuel in Europe and we have a complicated relationship with Sarajevo Airport, just to name a few. The current situation is incomprehensible and we will soon know how this story will end”, Mr. Jovanović said.

B&H Airlines has been plagued by flight cancellations in recent weeks as one of its aircraft has been out of service. Furthermore, the airline’s summer season operations have been compromised due to its inability to sign business contracts worth over four million euros, including an agreement for 200 summer charters, new services to Podgorica and Skopje and a one-year business arrangement with Air Serbia. The Prime Minister of the Federation, Nermin Nikšić, says B&H Airlines won’t be able to survive in the long-term if it does not find a strategic partner. Turkish Airlines purchased a 49% stake in the carrier in 2008 with a promise to expand its fleet and operations. However, in 2012, it withdrew from B&H’s ownership structure, citing problems with the government.

29 comments:

  1. They pay extra expensive fuel, but in same time they did not mention how every other airlines to fly to SJJ must pay taxes which go to B&H Airlines, so every passengers on Air Serbia, Croatia Airlines, Austrian, Adria, Lufthansa, Turkish, Germanwings, Pegasus etc. pay money to B&H Airlines like thery are their passengers.

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  2. And they will be bailing it out again in a year or two

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  3. Why are all the airlines in BiH so dysfunctional?

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    Replies
    1. cause government is dysfunctional

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  4. Already amounted debts and turkish pullout are clearly showing that B&H government is unable to provide effective corporate governance, which would enable the airline to, at least, break even. Close it down and use the money for subsidies like Macedonia. All the best from Ljubljana

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    1. Same for Adria.

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    2. Hello Anonymous at 12:03 PM, yeah, the pot calling the kettle black, the fact is, Adria came off worse long ago, a few years after Yugoslavia was buried.

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  5. Btw that Libyan airline Buraq Air, which BiH government wanted to buy B&H in 2012 has suspended operations after 4 of their crew were killed by militants in Tripoli o.O

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  6. They couldn't pay 200 000 euros for repairs on their ATR, Shouldn't that be priority, since it provides means for more revenue by providing more flights. If they couldn't pay that, for aviation standards small sum, then they are really screwed. I would be worried if I was passenger on their planes, because this kind of financial troubles usually follows all kinds of safety issues and cutting corners.

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    1. This will be the same as MAT. As soon as they are unable to pay Eurocontrol to fly over certain countries they are as good as gone

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  7. Mr. Bijedić has shown that he doesn't know anything about financial lease. Those aircraft have been the property of Hypo Alpe Adria bank this entire time. That is what financial lease really is: Somebody else buys an aircraft for you that you operate that remains in their property and you only pay for using the aircraft. Only after the financial lease is finished and you have paid everything you owed to the lessor, only then the aircraft becomes your property. In this case, since BH hasn't paid the proper amount, Hypo Alpe Adria can REPOSSESS those aircraft which it has owned this entire time.

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  8. Balkan politicians destroy everything which is within the reach of their hands. Bribery and corruption have eaten BH Airlines.

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  9. The situation with BH Airlines was alarming from the beginning. 110 employees can't feed on two small airliners, especially if all the lucrative routes are taken away from the airline. Even if they bought one A319 the income will not increase much.

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  10. OT

    Air Contractors flight, operated by FedEx Atr-42F, took off from BEG and is returning to the airport now (it Senta). Anyone have any more information?

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    Replies
    1. *it was over Senta

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    2. test flight - jat tehnika

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    3. So they are servicing Atrs now? Good for them! The more the merrier.

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    4. Jat Tehnika have been servicing ATR's for years. They do B737 (both classic and NG), DC9, B727, DC10, A320 family...

      The hangers in BEG can accomodate aircraft as large as B747 and A340.

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    5. I meant that I didn't know they had Atr customers. Obviously I knew they could service Atrs, after all they do service JU's.

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    6. What's with JU's ATRs today? Looks like only 2-3 are flying.

      http://www.beg.aero/strana/7701/Одласци

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    7. Fedex AT4 vrati se prema CDG

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    8. @JATBEGMEL

      They can service DC-10's up to B-check if i remember well.

      On another note, talking about Atr's, the Taiwan accident reminded me a lot of JU's flight 102 to Banja Luka: engine flame-out right after take-off, whereas, unlike JU pilots, the Taiwanese FO in panic apparently switched off the wrong engine. This might lead to a more serious investigation on a possible serial malfunction of the engine's model. The plane was brand new btw. Credits to to the captain for turning the plane away from Taipei's dense residential areas. May they all rest in peace.

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    9. The -200's seem to be the ones flying. Today it was:

      YU-ALN (PRG, ZAG)
      YU-ALO (ZAG, TIA, BUD)
      YU-ALP (VIE, BNX, PRG)

      YU-ALT hasnt flown for 2 days since coming back from LJU (JU195). YU-ALU hasnt flown in over a week.

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    10. Ah, ok, thank you.

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    11. At Belgrade airport yesterday:

      http://www.novosti.rs/вести/београд.491.html:532962-Divlji-taksisti-tukli-komunalne-policajce

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  11. ^
    Why can't they rid the airport of that vermin taxi driver scum? Is it really that difficult? Why not just allow stray dogs in packs into the arrivals hall while you're at it - cementing Serbia's position as a 3rd world country once and for all

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    1. I am actually glad they got beaten-up.

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    2. Those taxi drivers are actually worse than the community police. If you pay for your ticket in the bus the community police will not bother you, while the taxi scum does the following things 1) rip off people especially foreigners 2) Curse at you if you do not want to go with them ( their taxi) 3) Represent BEG and Serbia as a third world country 4) Beat other legit taxi people
      so overall community police is better, even thought I have a negative view of them.

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  12. Had the fed gov decided not to bail out BH Airlines, consequently, bnx would have faced a serious decline in the number of passengers since BH Airlines has been the most loyal business parter to bnx in the last six years and from time to time the only airline serving that airport.

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