Wednesday, October 12, 2016

B&H Airlines with big plans prior to demise


The remaining 42 employees of the recently liquidated B&H Airlines have revealed the carrier’s plans prior to its collapse, which included an aircraft lease arrangement with Air Serbia, an increase in charter flights and the acquisition of a jet-engine aircraft. The head of B&H Airlines' employee union. Elvis Žiga, said at a press conference in Sarajevo on Monday, “Just before we were grounded, Air Serbia requested to lease one of our ATR aircraft for the entire summer season and we were also about to ink deals with Italian and Polish tour operators. Had we been in business this year, we would have run some 500 charter flights from Mostar Airport. There was also the possibility of acquiring another larger aircraft. Scandinavia was always a strong market for us and we had scheduled flights to Copenhagen, Stockholm and Oslo, while services to Amsterdam were maintained daily”.

B&H Airlines has accused the former government of lobbying in favour of competitors such as Wizz Air and Turkish Airlines, which they say ultimately led to their company’s demise. “Low cost carriers came and they were given preferential treatment. Despite debts of almost 150 million euros, the Serbian government found a way to attract a strategic partner. Despite entering the European Union, Croatia Airlines found a way to survive on the market. Adria Airways also has its fair share of problems but they are fighting”, Mr Žiga noted. B&H Airlines' employees are to be dismissed over the next month despite being owed late wages and several years in unpaid benefits.

The company amassed significant debt over the years, which currently stands at 21.8 million euros. The airline owes 12.9 million euros to the asset company HETA for the financial lease of two ATR72 aircraft, 3.2 million to Sarajevo Airport, as well as 2.1 million euros to foreign providers. In May, the Prime Minister of the Federation of Bosnia and Herzegovina, Fadil Novalić, said his government was in talks with both Turkish Airlines and Etihad Airways over the future of the country's flag carrier, however, there have been no developments since. The company suspended operations in the summer of 2015 after its Air Operator’s Certificate (AOC) was revoked by the local regulator due to mounting debt.

69 comments:

  1. I was never a big fan on B&H but I must admit it is a shame they have gone bankrupt. The company did link Sarajevo with some European capitals. None of these have been covered since their bankruptcy. If Wizz Air had come and established a base in Sarajevo then I would say OK, letting B&H Airlines go was not that big of a price. But the problem is nothing has happened at Sarajevo since then except that we have fewer options to fly to Europe.

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    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. I can’t believe that B&H Airlines was such a massive competitor and threat that they had to sink it in order to allow a Hungarian airline to start flights to Sarajevo.

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    2. It does not have to be Wizz Air. I'm surprised no one has stepped in to replace BH or at least some of their routes.

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    3. Croatia Airlines will base a plane in SJJ next year.

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    4. Basing a plane there would be too costly in my oppinion. You would have to provide hotel accommodation for at least two batch of crew. The alternative is to hire local crew which is also expensive. If they do fly from SJJ they should start off with 2-3 profitable destinations and the plane could come back to ZAG at the end of the day.

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    5. Vienna, Munich, Frankfurt, Zurich would be ideal to start with. Leave Istanbul to the Turks. That would be a lost battle.

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    6. How can OU base an aircraft in SJJ if they do not have a Bosnian AOC ?

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    7. Same way Wizz Air based a plane in Tuzla without Bosnian AOC or in Belgrade without Serbian AOC.

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    8. Most of BH's routes were a disaster anyway.

      Belgrade performed very poorly. The problem was the departure time which is too late to catch connections on Air Serbia's morning wave. They can't leave earlier because Sarajevo Airport is closed and doesn't wan't to open a minute earlier!
      Copenhagen - Absolute disaster. No one wanted to fly the world's longest commercial ATR service at expensive prices.
      Zurich - the only route that performed decently thanks to Banja Luka mainly. Even Swiss failed on SJJ-ZRH route.

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    9. B&H had about the same number of passengers from Banja Luka to Zurich as it did from Sarajevo. Goes to show that there is potential in BNX-ZRH route.

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    10. Edelweiss Air applied for slots to fly ZRH-BNX last year but the airport management didn't let them.

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    11. What was the flying time on the SJJ-BNX sector?

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  2. Air Serbia could have really used that plane. It was long rumoured they would lease it from BH.

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  3. It’s interesting that Banja Luka and Mostar were much more affected by B&H’s bankruptcy then Sarajevo itself.

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    1. Quite ironic actually.

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  4. What will happen now with the ATRs? Can they be leased to someone else? How old are they?

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    1. With BH liquidated I think they can be leased or sold. It depends what HETA decides. They have been sitting in Sarajevo for over a year.

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    2. They are both 21 yrs old. One is stored in Sarajevo, the other is stored in Monchengladbach in Germany since it never returned from maintenance checks there.

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    3. Despite their age those two planes are actually in good shape. They have low hours and were unterutilized by BH (flying only one return flight per day if they were not grounded)

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    4. They belong to HETA and the leasing company will lease them to some other airline...

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  5. Best fleet solution for B&H Airlines in my opinion would have been 1 A319 and two regional jets – maybe CRJ700/900.

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  6. Feel sorry for the workers but it is time to let this airline go.

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  7. Did they ever get rid of the taxes at SJJ intended for BHA after they stopped flying?

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    1. No. They keep collecting taxes for a non-existent airline.

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    2. wow talk about corruption. Where is the money going then?

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  8. The only way BH could ever work is if they could sell 100% of the airline to a foreign partner.

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    1. There is no need for anyone to buy them. Everyone can just set up their own airline if they wish to. I think OU has the best chance of becoming some sort of main airline there if they base an aircraft in Sarajevo next year like they plan.

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    2. A smart investor with aviation background could still make B&H Airlines would with a big investment. Couple of ATRs, Embraers would be udeal.Bosnia's tourism is growing significantly especially from Middle East and regular flights to Kuwait and Dubai would work. Connecting Sarajevo and Mostar with Italy, Poland, France would also be profitable.

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  9. Interesting that Air Serbia never took up the opportunity to benefit from B&H Air bankruptcy. First they could have taken one or both aircraft and introduced a second daily flight.

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    1. They could have based a 737-300 and started flying to a couple of destinations from Sarajevo. In 2007 JAT was about to start Belgrade-Sarajevo-Tripoli flights. Then Vlaisavljevic, the guy running BEG Airport now stopped all that.

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  10. SOF +26% in September :o

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    1. holy sh...! wow

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    2. thats pretty amazing growth..ryan vs. wizz bar-brawl in full swing!

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    3. OMG! 500 000 pax in 1 month! Great job SOF Has Wizz based their A321s already?
      Hopefully BEG 5 and half million next year and 7 million with IKA and PEK ;)

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    4. Does anybody know how Bulgaria air doing in passenger numbers and load factor? Thanks.

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    5. @ Anonymous October 12, 2016 at 12:35 PM
      No, they haven't based it yet. They will base it in late December. Next year they will have 4 A321 and 3 A320 @ SOF.

      @ Anonymous October 12, 2016 at 2:22 PM
      FB for the last year had 1.1 mln passengers @ LF of 85%

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  11. I'm waiting for the next government experiment. Wonder what they will call it? Air Bosnia and Herzegovina probably. They will wait two years, all debt they accumulated will be unplayable so no one cares and then they will create a new company which will mount losses for a decade. Then they do exactly the same as they did with Air Bosna and now with B&H Airlines.

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  12. Bosnia has much more pressing issues then a national airline. Just let Wizz into Sarajevo and problem solved.

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    1. Who is not letting Wizz to fly to Sarajevo?

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    2. B&H Airlines was NEVER an issue for Wizz Air.

      Costs at Sarajevo Airport are too high and that's the main problem. Wizz Air was supposed to announce flights to Sarajevo last November, everything was agreed with Sarajevo management and then a day before the flights were supposed to be announced at a press conference, mafia man Ivica Velican increased fees for explainable reasons and the whole thing was cancelled.

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  13. Their livery looked great on the A319/B734 :)

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    1. +1 one of the better ones in ex-Yu and beyond.

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  14. So much taxpayers money wasted into nothing. For the millions that were spent, there is nothing to show for it.

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  15. Is the JA code now available to be used by another airline?

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    1. IATA requires for an airline to stop flying for at least 6 months for the code to be available for re-use, although they usually let it rest for much longer.

      However, when there are debts and problems with credits like there is with B&H they usually don't reasign the code for several years.

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    2. Don't think anyone will be rushing for "JA" code.

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    3. Much better than codes like X9, Z3 etc.

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  16. OU nece bazirati nista u Sarajevu, nece siriti flotu. Sve su te price samo zbog marketinga. Nemaju prebivene kinte ni za sta. A o strategiji da ne govorimo.

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    1. Kako ti znas da nece bazirati avion tamo?

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    2. DOI-dobro obavjesteni izvori

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    3. to i nije neka tajna vec par meseci

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  17. Why doesn't the government set up a low cost airline? Everybody would be happy that way. You have a national airline and you have low cost flights.

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    1. This government and countless previous ones have destroyed everything they have touched. They are incapable of running anything let alone something as complex as an airline.

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  18. Replies
    1. I'm under the impression that they are recovering and have made some plans. Unless you think these plans are the same as BH had before they went bust :D

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    2. I work for Adria and I can tell you, they have no plans. Our salaries are the same (which is great), about five people were fired in the administration (again, great to see people not losing jobs), destinations are the same (great), roster is the same (super), we fly a bit less than before (great) - but somehow we are now making a profit?

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    3. At JP I hve the feeling that the rightern hand sometimes does know what the leftern hand is doing. Heard that the new schedule with the short txfer times in LJU is going to be a big challenge especially during winter operations
      Regarding salaries, I heard that even the new owners were increasing salaries of flt and cabin crews. Why the heck for, I dont know.

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    4. Regarding salaries: they are the same as before.

      Although the new owner said in an interview that a massive restructuring is taking place, I can tell you it isn't. Absolutely everything is the same as before, with a slight difference, that no one is asking the simple question how on Earth does Adria have the money for salaries, fuel etc, knowing, that the new owner hasn't put a dime into it.

      So I'm expecting a similar scenario as in Bosnia.

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    5. Where is our Arno Schuster? we need a statement sir!

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    6. His eyes are becoming more slitty with each month more checking JP's books...

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  19. Better say "with big dreams".

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    1. Sve smo mogli mi,
      Da je duži bio daaaan...

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  20. Which airline will inherit the authentic "JA" IATA code? It was like JU, JP part of Yugoslavia. Such a pity really.
    Any news about Macedonia national carrier?

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    1. Kazu da ce Binic da otvori aviokompaniju samo zbog JA koda.

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    2. ko bre turbo binic?

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  21. The biggest revolution in Bosnian aviation would be if Banja Luka follows the Nis example : lower the fee to 3 euro per pax
    and attract WizzAir as well Ryanair!
    Somehow i have the feeling it will happen anyway ...the big question is when ?!

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    1. The biggest revolution would be if WizzAir would start flying from similar airports but willing to pay fair market fee of 7-8 eur. That would for example raise the 25.99 eur fare to 29.99 eur. But WizzAir is not operating well in competitive market economy, they prefer to secure monopoly-like conditions.

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