|Croatia Airlines eyes €30 million investment by strategic partner|
The CEO of Croatia Airlines, Krešimir Kučko, has said the carrier is in need of a partner in order to expand its operations and believes a thirty million euro investment would be appropriate for the airline. The comments were made days after it was confirmed that an external consultant, the International Finance Corporation (IFC), would source out potential partners for the carrier by the end of October. “The arrival of a strategic partner won’t generate much money for the state but will allow Croatia Airlines to develop at a quicker pace”, Mr. Kučko said at a press conference. He noted that over the past four years the airline has been obliged to cut capacity and limit its network as a result of its restructuring process, but has still managed to return to profitability. Despite this, the CEO says a strategic partner would be “absolutely welcome”.
According to the head of Croatia Airlines, a strategic partner does not necessarily have to be another carrier, but rather an investment fund which would inject fresh capital into the company. “We have now secured a clean start. We are not producing losses nor do we have any significant debt. We are operating with a profit”, Mr. Kučko said, noting that the airline competes against forty scheduled, as well as fifty charter and low cost airlines on its home market during the high season. The IFC, which finances and provides advice for private sector ventures and projects and is a member of the World Bank Group, has guaranteed it will find Croatia Airlines a partner within a year. The Corporation has a strong presence in the Middle East and China, where the government hopes to find a strategic partner for the carrier. The IFC is already active in Croatia and has invested nineteen million euros in Zagreb Airport’s new passenger terminal. Furthermore, the Finance Corporation has an 18% stake in the holding firm Zagreb Airport International Company (ZAIC), which runs Croatia’s busiest airport. It has also provided a loan of 35 million euros for the construction of the new terminal.
The CEO of Croatia Airlines has previously said the carrier will develop regardless of the outcome of its privatisation process. In 2016, the airline plans to lease two Embraer E190 aircraft and is considering opening bases outside of its home country, with Sarajevo being considered as a likely option. Furthermore, the carrier will put a greater emphasis on the Eastern European market next year. “At first, Eastern European countries within the European Union are our priority. At a later stage we intend to fly East outside of EU boundaries”, Mr. Kučko said. According to its CEO, the airline’s ultimate goal is to expand across the Atlantic. “We should not forget the significant demand for flights between North America and Croatia and we are keeping an eye on this market as well. But to achieve this goal we will first have to significantly develop our regional network”, Mr. Kučko noted. Croatia Airlines’ restructuring process, which has limited its opportunities for network growth over the past four years, will be completed at the end of 2015.