Wednesday, June 24, 2015

Bosnia mulls B&H Airlines bankruptcy

B&H Airlines faces its biggest crisis since launching operations

The Federation government of Bosnia and Herzegovina has said B&H Airlines is facing bankruptcy following another round of unsuccessful talks with the asset management company HETA, which owns the carrier’s two aircraft. The Prime Minister of the Federation, Fadil Novalić, said the two sides have been unable to reach an agreement over the repayment of some eight million euros worth of debt owed to HETA for the financial lease of the ATR 72s. The airline’s bank accounts have been blocked for months as a result. “It is up to the lender to decide whether B&H Airlines will go bankrupt”, Mr Novalić said, adding that the government will no longer provide subsidies to the carrier. While B&H is eligible for state subsidies through passenger taxes, the government has not made payments to the airline in two years. HETA has responded to the Prime Minister’s remarks, stating, “B&H Airlines is majority owned by the Federation government, and as such, it is the government that decides on future steps in order to settle contractual obligations which are designed to avoid a possible bankruptcy. If the government is unable to commit to any of the several solutions offered, and can’t take responsibility for the contractual obligations, we expect to be formally informed about it”.

B&H Airlines’ employees have spoken out about the situation at the carrier. Elvis Žiga, the head of B&H Airlines’ employee union, says, “We have had falls in the past, but this is the biggest crisis in B&H Airlines’ history”. On the airline’s official Facebook page, the carrier wrote, “We are aware of the situation we are in and that we could be shut down yesterday, today or tomorrow. There are many problems which have been building up over the years. As a result of the government’s neglect, we will be forced to stop working. We have been silent, despite four late monthly wages, years of unpaid benefits, a management which is not functioning and a number of educated and trained staff leaving. Tomorrow we will have nothing to do, but at least we will go to work. The government wants us grounded, shut down and moved out of the way so we can become dust”. Over the past few days, another two pilots left the airline, signalling a major loss for such a small carrier.

B&H, which now operates flights only to Zurich via Banja Luka and charter services from Mostar to Italy with a single ATR 72 aircraft, handled 3.604 travellers during the first quarter, down 41.8% compared to the same period last year. Its passenger share at Sarajevo Airport now stands at only 4%. Earlier this year, the airline suspended flights to Belgrade and Copenhagen. Italian tour operators have offered to extend their service agreement with B&H Airlines until the end of 2016 for an additional 250 flights between Mostar and Italy, however, under the current circumstances, the airline is unable to conclude any business arrangements. B&H Airlines recorded a net loss of 6.5 million euros in 2014 and has outstanding debt amounting to 17.5 million euros.

In stark contrast to the woeful state at B&H Airlines, Wizz Air will today open its nineteenth base in Tuzla, by launching flights to Frankfurt-Hahn, Sandefjord, Memmingen, Stockholm-Skavsta and stationing an Airbus A320 in Bosnia and Herzegovina’s third largest city. Previously, B&H Airlines accused the government of lobbying in favour of competitors such as Wizz Air and Turkish Airlines.

41 comments:

  1. Simple solution:

    Shut down JA and give some incentives to Wizz to set up a base in Sarajevo. More traffic will be generated, as well as more jobs. Overall, incentives to Wizz will cost less than constantly throwing money at JA.

    Wizz would bring a high volume of diaspora passengers who can't currently afford to travel to Bosnia often because of high fares. Diaspora plays a big part in Bosnia's economy.

    Relative to it's size and importance, SJJ is the worst performing airport in Ex-Yu. This is because SJJ is neither a base for a LCC or a flag carrier. I don't even consider JA because this carrier is so insignificant.

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    1. I agree. I think the Bosnian market has a lot of potential. I find SJJ in a similar situation as Skopje just before the MAT collapse. MAT was already canceling lots of flights just before it went bankrupt. Practically, in that last year, there was no national airline and a very limited number of foreign carriers. And then Wizz came and a few others and you had a massive boom. Mind you, the entire MAT collapse was very shady and initiated by the directorate and I'm more and more certain it was done in cooperation with Wizz Air.

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    2. I assure you W6 was not involved in any shady business regarding MAT.

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  2. OT: Yesterday's Sky Greece flight from Toronto to Zagreb

    220 pax

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    1. Does anybody know how many continued on to ATH? Does SkyGreece sell tickets between ZAG and ATH?

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  3. Just shut it down already. I would understand if it was a bigger company with hundreds of employees but it has something like 90 employed.

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    1. Yes, but those 90 are political appointees who must have preferential treatment over regular citizens.

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    2. I really doubt cabin crew members are political appointees.

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    3. Just a stupid comment...

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  4. Best news from BiH is about increase of meat export. I do not want to hear anything against management of Mahovljani Airport.

    JA is dead company as well as Montenegro Airlines.

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  5. OT :: Air Serbia is obviously well prepared for summer season. The night before last Big Blue Agency tourists spent extra holiday night at Sharm el Sheikh airport waiting for inbound flight, which was eventually 11 hours late.
    Yesterday three charter flights were on average 90 minutes late.
    This morning first flight to Tivat was cancelled, while the second was nearly one hour late.
    At the moment group of Serbian tourists is stuck at Belgrade airport because the plane for their flight to Antalya is simply missing. But they are cheerful and optimistic about spending next night at their hotels.

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    1. And then to think that they wanted to block additional charter flights... Greed mixed with incompetence.

      One B733 departed for Corfu this morning while another one went to Ljubljana. I wonder where are the other two.

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    2. Only the incompetent are greedy.

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    3. Well, Dane has proven incapable to run a smooth show especially in terms of solving the luggage problem.

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    4. My mother was on Aviolet charter back from Turkey last saturday. It was on time but she said there was no air conditioning on the flight, a very unpleasant experience.
      I have nothing against maintaining the right balance between Aviolet and foreign charter companies, but not if that is at the expense of customers.

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    5. Imagine how nice it is when there are not enough a/c trucks for Aviolet birds so passengers board a plane and it's 50 degrees inside and the crew is all sweaty.

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    6. @ AnonymousJune 24, 2015 at 1:51 PM

      There definitely was air conditioning on your mothers Aviolet flight otherwise she along with the rest of the crew would not be with us anymore. (dead)

      It was probably just set at an uncomfortably high temperature or they cruised back to Belgrade at 10,00 feet the whole way??

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    7. @Q400 lets put it this way: it was very very hot in the plane. I didnt ask details but I imagine that was particularly true before take off which could last in excess of 30 minutes.

      Personally, I had similar experiences on the old JAT ATRs where during those 20-30 minutes before take -off there would be barely any air coming out of the ventilation system so in summer you would sweat. There would be people waving with the newspapers to cool down. Well into the flight things would improve. Then you would have the same coming down.

      When I enter Austrian airplane it is always cooled down already on the tarmac.

      Regards to all objective and well intentioned people.

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    8. ...the point is we need to strive for high standards also on charter flights! on all flights! like that ASL will go forward like we all hope. No point branding people as "internal traitors" or the 5th column because one points out something that is sub standard. This is the old trick of peasant and lazy politicians and their families that are leeching on the people for centuries.

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    9. There is a real issue with the a/c trucks (or whatever you call them). I think there are only three now and there are times when only one is available.

      This is especially bad for the Atrs as they become living ovens until the aircraft can turn on its engines, that is until its own air-conditioning starts.
      This also negatively impacts Aviolet on the ground.

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    10. @ AnonymousJune 24, 2015 at 3:07 PM

      I was trying at a little humor but technically speaking the air conditioning is linked with the pressurisation of a pressurised aircraft and the engines need to be working for the aircraft to be air conditioned or the APU which is usually the case when on the ground and this is how the plane can be at a comfortable temperature while on the ground. Old school turbo props which don't have APU's can suffer from being very hot before takeoff and it can take some time to cool the aircraft.

      Once airborne and above 10,000ft, it is usually a fast process cooling the cabin because of how cold the outside air temp is and the temperature is then controlled from the engine heat, controlled from the cockpit.

      This is why the you sometimes get a oil burning smell in the cabin. The air you breath is coming from the engines.

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    11. @Nemjee

      I think they call them 'air carts' and they are becoming more rare around airports all over because pretty much all planes above 20 pax come with APU's.

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    12. and ATR -200 and Boeing 737 -300 have APUs?

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    13. I might add, 10 years ago when I worked in trip supports for universal aviation at Sydney Airport we needed a 'air cart' for a British military L1011. We could only get it from Qantas and they only had 1!! So for an airport which serves 30 million passengers per year, there was only 1.

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    14. I'm guessing that most ATR - 200 version wouldn't, the newer versions I would say they do.

      733, I would say yes but was it working or were they using it?

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    15. Boze dragi sta stari od mene ne znaju
      ATR na zemlji dobija od GPU
      Sve i jedan Boeing od serije 300 ima APU.
      INN-NS

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    16. Q400,

      Thank you, I am not very familiar with these things but I remember that there were times when they even attached the air cart to the A319. Though I heard it happened only once.

      INN-NS, chill out. You are not funny and you are highly annoying.

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    17. BEG airport is responsible for baggage handling at BEG - not Air Serbia or any other airline that operates there. Every airline that flies to BEG airport is held hostage by the incompetance of their antiquated systems and people

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    18. Air Serbia had its own people in the luggage sorting facility last summer. They were there for a few months though I don't know what happened once the winter season started.

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    19. This evening things are significantly improving for ASL, they are short of only two ATRs. The flights to BUD and TGD are pending till aircraft from BNX and TIV come back.

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    20. Thats right Nemjee, they did. You know why ? Because the airport didn't have enough people and didn't want to employ anymore either ....

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    21. Yes, I know that there was a shortage of workers but the government was at fault there. BEG wanted to hire more people but they wanted to continue with their 'good'old practice practice of employing people via the Omladinska zadruga. The government put a ban on it and with good reasons as the Omladinska zadruga has become something of a modern day slave agency.
      Even though I don't support the Omladinska zadruga, I think that the government should have turned a blind eye and allowed it at least for the summer season so that Air Serbia doesn't suffer, which it eventually did.

      Unfortunately, it seems like BEG has continued hiring via the Omladinska, at least as far as foremen go. Other BEG employees had their salaries cut as the topli obrok and GSP are no longer paid. Some, like their flight dispatchers, saw their salaries drop from 60.000 to roughly 47.000.

      As far as the luggage sorting facility goes, the directorate was also at fault for forcing every singly transfer bag to go through a scanner... a useless procedure which took a lot of time.

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  6. Bribery and corruption, it means federation politicians have destroyed BH Airlines. Shame on them.

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  7. Nazalost Federacija je unistila JAi nema pomoci od Vlade RS .
    INN-NS

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    1. Vlade Republike Srpske ni zanima JA. Ovo sto si rekao nema veze s icim.

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  8. http://www.airlinereporter.com/2015/06/business-class-reimagined-why-air-serbia-is-the-one-to-beat-in-europe/?utm_source=twitterfeed&utm_medium=twitter
    Kao i uvek od osoba sto se razumeju pohvala za ASL.
    INN-NS

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    1. Da li ti shvataš da je on dobio upgrade da bi pisao to?

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    2. Paid advertising material.

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    3. Actually, the comments (on the review) are the most interesting.

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  9. OT: JetPrivilege, the frequent flyer programme of Jet Airways has entered into a frequent flyer programme partnership with Air Serbia.

    http://www.financialexpress.com/article/travel/latest-updates-travel/jetprivilege-enters-into-partnership-with-air-serbia/89508/

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  10. WIZZ AIR IN SARAJEVO!!! LOW COST COMPANIES!!! WHAT ARE YOU WAITING???

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