Friday, May 27, 2016

Bosnia in talks with Etihad over B&H future


The Prime Minister of the Federation of Bosnia and Herzegovina, Fadil Novalić, has said his government is in talks with both Turkish Airlines and Etihad Airways over the future of country's flag carrier - B&H Airlines. "We held talks with both Turkish Airlines and Etihad because we are being responsible towards our company. We are in discussions", Mr Novalić told the "N1" network. He added, "B&H Airlines has received 567.5 million euros in support over the past ten year. It had 91 employees. For each passenger carried by B&H, the government provided 160 euros in support. That's crazy". B&H Airlines, which enjoyed subsidies for much its existence, said last year that it received its last payment from the state in 2013.

It is the first time that Etihad has been directly linked to B&H Airlines and its future. In the summer of 2013, unnamed investors from the United Arab Emirates held confidential talks with the then Federal Minister for Transport and Communication, Enver Bijedić. It was widely speculated that Etihad was involved in the talks. At the time, Mr Bijedić said, “It is true that we have held talks with partners from the UAE and we offered them to become a strategic partner of the government of the Federation of Bosnia and Herzegovina by acquiring a 49% stake. As a result, they have been offered everything which was previously on offer to Turkish Airlines”. Etihad Airways, which owns a 49% stake in Air Serbia and has forged a Strategic Commercial Cooperation Agreement with Montenegro Airlines, has not commented on the matter.

The Prime Minister of Bosnia and Herzegovina, Denis Zvizdić, said last month that Turkish Airlines is ready to resume talks with the government concerning the future of the country's flag carrier. Mr Zvizdić said the airline is willing to explore new models for commercial cooperation. "They [Turkish Airlines] are prepared for such negotiations to resume and for us to determine new models of cooperation. I am certain that talks between Turkish Airlines and the Federation government will resume soon and that they will head in the right direction", Mr Zvizdić noted. Turkish Airlines told EX-YU Aviation News it is "unable to make any comment on this issue for the moment". It added, "For any major issue to become definite, we first have to inform the Istanbul Stock Exchange in advance". In late 2008, Turkish Airlines took over a 49% share in B&H. However, the relationship between the carrier and the Bosnian government deteriorated by the start of 2012, with Turkish relinquishing its share in B&H later that year. Due to mounting debt, B&H Airlines discontinued all scheduled and charter flights on June 11, 2015, while its Air Operator's Certificate was suspended by the country's regulator a month later.

54 comments:

  1. I don't understand what Etihad could see in a bankrupt airline.

    ReplyDelete
    Replies
    1. I think it has more to do with the market than the airline.

      Delete
  2. Why does the Bosnian government care so much whether they have a national airline? It had only 90 employees so its not like it was some massive enterprise and now they have to deal with thousands of layed off workers. Why not just let foreign carriers, Wizz Air and others swoop in?

    ReplyDelete
    Replies
    1. Why is everyone obsessed with a Hungarian airline here? I don't see that anyone forbid Wizz or anyone else from flying to Sarajevo.

      Delete
    2. Sarajevo has extremely high airport fees for airlines so defacto they are closed to all LCCs. That is why Wizz flies from Tuzla.

      Delete
    3. "Why does the Bosnian government care so much whether they have a national airline?"

      It's a polical thing. Just like Croatia Airlines, Montenegro Airlines and Air Serbia.

      Delete
    4. Not quite the same comparison.

      Delete
  3. Since a politician announced this I would be very cautious believing it but it is an interesting development if true.

    ReplyDelete
  4. Are they trying to create some pan-ex-yu airline?

    ReplyDelete
    Replies
    1. No because besides Serbia and JU they have nothing. Macedonia belongs to W6, Montenegro still has YM, Bosnia will become another Macedonia once W6 launches SJJ and Croatia and Slovenia have their own flag carriers.

      Delete
  5. It would be the same as it was with Turkish. If Etihad wants to get involved into operations from Bosnia airports, the company can set its own company up in Bosnia.

    ReplyDelete
    Replies
    1. Yes but that way they wouldn't get the support of the government.

      Delete
    2. Hello Anon at 9:59 AM,
      government which takes credit lines from IMF can not support anyone. Etihad isn't that crazy to get into relationship with such corrupted government.

      Delete
    3. Etihad went into relationship with Government of Serbija so why not Bosnia?

      Delete
  6. How does Federation of Bosnia and Herzegovina government imagines their cooperation with a private shareholder? An airline with one or two small planes can not exist. If Etihad bought Bosnia Airlines, Etihad would provide more planes establishing new routs. That way, their percentage of shares would increase up to 80%. Bosnia Airlines wouldn't be national airline company any more. Federation of Bosnia and Herzegovina is not capable of having a national airline. That's the fact. The same is with the other Bosnia entity. In my opinion, both entities together, wouldn't be capable too.

    ReplyDelete
  7. Don't forget that UAE is a strong supporter of Bosnia since years. I wouldn't be surprised if this happens. They won't be after the money there for sure!

    ReplyDelete
  8. Just a thought... If Etihad gets somehow involved in B&H and also in Montenegro (doesn't matter if it is directly or through Air Serbia), does that mean that Turkish will set up a Macedonian national airline (alone or with the help of govt)?
    In my opinion this might happen, because of two reasons:
    1. Turkish has said that it wants to invest in foreign airlines, but much more importantly..
    2. ...This would be more of a Star alliance fight vs Etihad. Thia region might not be of primary importance for Lufthansa, but it wouldnt want to lose to an airline that is not part of * alliance. This region is much more importan to Turkish than it is to Lufthansa, and although they are not on best terms, Lufthansa would prefer *alliance partner to take over this market, rather than Etihad.

    Every opinion is welcome, especially those of people who have worked in the airline industry.
    Cheers!

    ReplyDelete
    Replies
    1. I agree. It seems interesting and who knows Etihad might have much bigger and longer term goals for this region than people think.

      Delete
    2. Thanks for letting me know that my opinion is welcome on an open aviation forum.

      Delete
    3. wow tone down the attitude a bit.

      Delete
  9. What are the chances on creating a pan-exyu airline? I mean, if Bosnia, Macedonia and Montenegro invest together with the help of a major airline, they can create a worthy "Balkan" airline that flies to these places and can compete with ASL and CTN?

    ReplyDelete
    Replies
    1. I remember reading that Atals jet from Turkey was interested in doing that - extractly with those three countries - Macedonia, Montenegro and Bosnia but nothing seems to have happened. For something like that to work out you do need a strong partner.

      Delete
    2. Yes indeed, strong partnership and cooperation. But it would be awesome to have that! But, I've been thinking, what if Adria does that? I mean, would be better than expanding in Poland. They even had plenty of chances in SKP, and could of become very successful IMHO.

      Delete
    3. Stop dreaming, will never happen. Why, korupsioni.

      Delete
  10. OT: Yet another Turkish flight makes an emergency landing at Belgrade:

    http://www.b92.net/info/vesti/index.php?yyyy=2016&mm=05&dd=27&nav_category=16&nav_id=1136467

    At this rate, BEG should get a dedicated emergency parking area for the Turks.

    ReplyDelete
    Replies
    1. Aman Turci, dosta više!

      Delete
    2. Nekad nas tlačili sa Kadetima, sad sa avionima... :-)

      Delete
    3. unfortunately, the person on-board died

      Delete
    4. Ajde sad likujte još malo nad "nesposobnim Turcima koji ne umeju najobičniji on board medical da reše jer nisu adekvatno trenirani". Kako vam bre ne dosadi da budete tako zlobni i pakosni?

      Delete
  11. Very interesting development with Etihad especially considering that they were interested in B&H around the time they bought Jat.

    ReplyDelete
  12. It would be fantastic if Etihad invested in B&H or some new airline in Bosnia. They have done a good job with Air Serbia and would definitely open up much needed destinations such as Paris, London, Brussels, Amsterdam...

    ReplyDelete
  13. Not to offend anyone but this airline just doesn't seem to go away. It's been a year since they have been grounded and they are still in the news. And it had 90 workers!

    ReplyDelete
    Replies
    1. The saga continues.

      Delete
  14. Would be an interesting development.

    ReplyDelete
  15. This could work if government gives complete control to Etihad without interfering.

    ReplyDelete
    Replies
    1. Not sure - take over old B&H for 1 KM price, get rid of most of the debts (to be paid by the government or split to be paid by the entities) and then - what would they do?

      Create an Etihad Regional v2.0 with small planes again? Don't think so. But they will not just think of offering few O&D routes to SJJ - that is for sure, too.

      Open up a new airline with just few (small) planes cannot possibly be sustainable and would not support any of Etihad's or Etihad's groups aims (if there are any).

      They should also not forget this is not an airline from an EU country, so they will not have rights to serve any intra-EU route with that "new" airline.

      I am puzzled what could be their strategy - if their interest is indeed real...

      Delete
    2. What "entities"? Federation of B-H is only entity involved with B&H Airlines. The other entity runs away screaming from anything with "Bosnia-Herzegovina" written on it(well, maybe except for Bosnian Maks bills)

      Delete
    3. Bosnian MARKS, that is...

      Delete
  16. And suddenly talk about B&H Airlines reapers as we await for Wizz Air to announce flights from SJJ.

    ReplyDelete
  17. Bilo bi zanimlijvo da se preuzmu YM i JA i onda bi mogla odlicno da se feed-a mreza ASL.
    INN-NS

    ReplyDelete
    Replies
    1. Mda, umjesto da direktno lete za Bec ili Frankfurt Sarajlije i Podgoricani su trebali dodatno presjedati u Beogradu....
      Da mi je samo znati o cemu sanjas nocu?

      Za "feed-anje mreze ASL" Air Serbii treba vise letjelica, a ne finansijske pustolovine u stranim drzavama....

      Delete
    2. Pa da ner mislite da ce ako dodje do kupovine i jedni i drugi da dobiju 10 Aviona.
      Nije se odnosilo naravno na sve linije nego na pojedine.
      INN-NS

      Delete
  18. Opsta Karamarko opstace i Kucko, ali nece CTN.

    ReplyDelete
  19. OT:
    I'd appreciate your thoughts on the idea.

    Since Lufthansa group accounts for ~650k passengers and 6k operations per year at BEG , would it make sense to have a locally established company to operate all flights on their behalf?
    How much could they lower the cost and would the unions object to the idea ?

    ReplyDelete
    Replies
    1. Would that idea encompass a LH aircraft based at BEG?

      Delete
    2. To have "local" flights, they would require a local partner and they would not be allowed to own more than 49%.... They would be better to enter into a full codeshare codeshare with Air Serbia and allow them to fly the route for them, as already does KLM and Air France. Their short haul product is better and their costs are cheaper....

      Delete
    3. It could be Air Serbia, or a new airline, which would fly Star Aliance branded aircraft or LH/LX/OS branded aircraft, as franchise for example or some similar arangement, providing the same/similar product and look & feel.

      Delete
  20. It could be Air Serbia, or a new airline, which would fly Star Aliance branded aircraft or LH/LX/OS branded aircraft, as franchise for example or some similar arangement, providing the same/similar product and look & feel.

    ReplyDelete

Before posting a comment be mindful of other participants and readers. EX-YU Aviation News does not tolerate insults, excessive swearing, racist, homophobic or any other chauvinist remarks or provocative posts with the intention of creating further arguments. Such comments will be deleted as soon as possible. The opinions expressed by those providing comments are theirs alone, and do not reflect the opinions of EX-YU Aviation News. Thank you for your cooperation.