Thursday, October 27, 2016

Croatia Airlines in Gatwick move after slot sale


Croatia Airlines plans to move its operations from London's Heathrow Airport to Gatwick after it finalises the sale of its nine weekly slot pairs at one of the world's most congested airports. Speaking to national broadcaster HRT, Croatia Airlines' CEO, Krešimir Kučko, said, "The money from the Heathrow sale will be used to maintain investments, which will increase the value of our aircraft and therefore Croatia Airlines' assets". The carrier previously noted that its Zagreb - Heathrow service was operating at a loss, which contributed to its decision to sell its slots at the airport. In 2013, the airline discontinued flights to Gatwick, but continued serving Heathrow. However, at the time, the carrier warned that flights to Europe's busiest airport were struggling and that operations would be reviewed in 2014.

The Croatian Ministry for Sea, Transport and Infrastructure noted that a final decision on selling the slots at Heathrow and moving to Gatwick is yet to be made. However, as EX-YU Aviation News learns, the sale is a done deal. "There are some problems with the business at the moment which have been brought to our attention during talks with the company's management and this move would definitely improve the airline's financial state. However, we also have to look into the matter further", the Ministry said. Currently, Croatia Airlines competes against British Airways on its London Heathrow service. On the other hand, there are currently no flights between Zagreb and Gatwick, however, from April 28, 2017 budget carrier Monarch Airlines will introduce flights on the route.

The former Minister for Sea, Transport and Infrastructure, Siniša Hajdaš Dončić, under whose mandate the carrier underwent a three-year restructuring process and began its privatisation drive says, "With the sale of slots and the company's inability to position itself on the market, Croatia Airlines' survival will be brought into question in two to three years. The solution is to speed up the process of finding a strategic partner, halting the construction of the airline's new headquarters and fresh talks with the unions to decrease their rights. It has to be done". He adds, "My suggestion was to begin tender procedures to find a new management team which would come from outside of Croatia. Nepotism is rife. They need to acquire several new aircraft because the current ones are inefficient for certain destinations. I don't know why they bought them. Croatia Airlines is the victim of political management. What is happening today is simply an attempt to save the company".

100 comments:

  1. wow at the minister's comments. Why didn't he do ANY of that while he was in power? Instead it was his government that named Kucko as CEO. Love how politicians are full of wisdom after they loose power.

    ReplyDelete
    Replies
    1. +1 as they would say "naknadna pamet"

      Delete
  2. meni nikako nije jasno kako neko moze da posluje sa gubitkom na hitrou aerodromu? ne verujem da je slaba potraznja, vec nesposobnost kroatije..

    ReplyDelete
    Replies
    1. Al ce na Getviku da procvetaju....

      Delete
    2. upravo tako, nema veze, ja ću koristiti British na liniji do Heathrowa, zbogom Croatia airlines!

      Delete
    3. I love their logic - they are losing money fling to/from Heathrow, but are going to shift to Gatwick where they have to compete against an LCC - Monarch - which is going to start flying to ZAG frm the same airport.

      And they think they can do better from Gatwick in competing against an LCC ???

      Wow, gimme some of that stuff that they are smoking !!!

      Delete
  3. The company was restructuring and now "There are some problems with the business" less than a year after that restructuring ended. How come?

    ReplyDelete
    Replies
    1. Same with Adria. They restructured for years and then had a loss again in 2015 and had to be sold urgently for peanuts so they would not go under.

      Delete
  4. So they were talking about LHR route being unprofitable even back in 2013. Maybe it was.

    ReplyDelete
  5. So why is it such a big deal if the move from LHR to LGW. They will still serve London.

    ReplyDelete
    Replies
    1. Codeshares on the route and transfer passengers. LGW will rely only on P2P and believe me Monarch will take those. I give them 1 tops 2 years before they pull out of London for good.

      Delete
    2. Adria moved to LGW and they survived on the route.

      Delete
    3. Not really they fly there seasonally.

      Delete
    4. They will serve London p2p yes, but no transfer passengers anymore. And they will have to fight for those p2p passengers with Monarch who will start the ZAG-LGW route. So the entire LON prospect looks very bad for OU if they withdraw from LHR.

      Delete
    5. I think the same will happen with OU. They will start Gatwick and it will eventually turn seasonal.

      Delete
    6. There is a pretty decent network from Gatwick to across the pond.

      Delete
    7. Not even close to LHR. If LGW was such an easy replacement for LHR the carriers would not be paying tens of millions of dollars for a single daily pair of slots on the latter.

      Delete
    8. Nece izgubiti codeshare mogu da ih nastave dalje u FRA,MUC,ZRH i VIE.
      INN-NS

      Delete
    9. Guys Gatwick is becoming THE favourite airport in the UK - chill out.

      Delete
    10. Sure, that's why no one even thinks of leaving LHR except for deeply troubled airlines that need urgent cash injections. And that's why some pay 75M USD for a pair of daily LHR slots - because Gatwick's time has finally come.

      Delete
  6. So are they seriously buying regional jets and basing planes around the Balkans if they are selling slots to stay liquid?

    ReplyDelete
    Replies
    1. I think all of that falls into water now unfortunately :/

      Delete
  7. So when can we expect them to move to Gatwick? This winter? Next summer?

    ReplyDelete
    Replies
    1. I think they will do it during winter at the start of next year,

      Delete
  8. The management needs to be replaced ASAP.

    ReplyDelete
  9. Ovo je vec postalo smjesno a i zalosno. Upropastili su firmu. Svaka im cast.

    ReplyDelete
  10. Let them go bankrupt.

    ReplyDelete
    Replies
    1. A touristic country like Croatia needs an airline, needs an airline that brings loads of tourists. Even if this airline is not a big profit maker the overall economical (indirect) impact is huge through the receipts of tourists. Foreign airlines fly only when they are 100% full and this in peak season.

      Delete
    2. Lufty a.k.a. Eurowings will take care of all the tourists, no problem there.

      Delete
  11. Finally the truth about this Kucko figure which is a joke for the airline business

    ReplyDelete
  12. Well at least they didn't choose Luton or Southend :D Would not be surprised if they did

    ReplyDelete
    Replies
    1. That's a next step, in 2-3 years :)

      Delete
  13. I'm really disappointed, Kucko is an idiot, but Hajdas Doncic had an opportunity to do something and he did nothing, now he's trying to be smart! Yeah, sell the slots at LHR and shut down Croatia airlines! Some other companies will come but you'll lose a national carrier forever!

    ReplyDelete
  14. What time is the Ryan media conference at INI?
    I`m really excited about it. I hope admin is on the way and we get the info in flash news quickly after the announcement.
    Big hug for the admin :)

    ReplyDelete
    Replies
    1. it's at 12:30. I don't think they will announce new routes but we will see.

      Delete
    2. No major developments. A presentation of the 2017 summer timetable which features the same routes which have already been launched or will be launched in the next few days.

      Delete
  15. Ok ending Heathrow is not ideal but I think some people here are getting ahead of themselves. It does not mean they are going bankrupt.

    ReplyDelete
    Replies
    1. Of course it doesn't mean they are going bankrupt, but what else they can do, no strategy at all, just selling assets in order to show profit, same CEO for years doing absolutely nothing, no new routes...

      Delete
    2. Mladi djecace budes ovde dve godine i posmatras ponasanje kompanja i vidis da sve isto rade Malev, JAT, MonteA.,Adria, i sad Croatia A. Nesto je do trzista a nesto do lopovskih ekipa koje vode kompanije. Za razliku od Ceskih energana ceski avioprevoznik se ponasa kao i balkanska mu sabraca. Sve to ide pod led i opstaje samo nekoliko mega kompanija.

      Delete
    3. They won't go bankrupt BECAUSE they sell their assets. Do you think that's a good move?

      Delete
    4. No, they will go bankrupt after they invest the received cash in fixing the created loss and not in development.

      Delete
  16. They are destroying the brand this way...

    ReplyDelete
  17. Mislim da nije nemoguce da ostanu code-shareovi jer ionako ima dosta avioprijevoznika koji voze do Gatwicka pa imaju transfer dalje do Heathrowa. Koliko mi je poznato postoji vlak koji povezuje Heathrow i Gatwick, samo ne znam kome bi se dalo tako zezati s time, uzeci u obzir da OU nece imati nista nizu cijenu od BA koji leti za Heathrow, cak je i sada jeftinije letiti do Londona sa BA nego s OU.

    Ali nadam se da su svjesni posljeeice prodaje LHR da nema vise povratka natrag - NIKAD. Ako ovako nastave nece OU jos dugo...nadam se da ZAG nece vise imati razumijevanja za OU, pa neka dopuste ekspanziju low cost kompanija.

    ReplyDelete
  18. OT:

    Just registered for flydubai's new loyalty program ahead of my trip to Dubai, and on the Preferences page they have a drop down list of favourite destinations... all appear to be current or future FZ points - but also include LJU and MBX! No TGD or TIV. ZAG still there.

    ReplyDelete
    Replies
    1. There was a bus service from Ljubljana and Maribor to ZAG to shuttle passengers onto the FZ flights.

      Delete
  19. Disaster that we find ourselves in the same position with Croatia Airlines like we did 2-3 years ago.

    ReplyDelete
    Replies
    1. True... and we were promised all sorts of things after restructuring

      Delete
  20. I am deeply disappointed at the state of OU, its leadership and direction. When will the incompetence and poor decision making end??

    ReplyDelete
  21. It's very strange that this line is unprofitable, most of time the flight is full, can't understand why they are loosing money !!!

    ReplyDelete
    Replies
    1. Profitability of any route can be calculated and presented in different ways. So you can represent a profitable route as loss making and vice versa. I'm sure Lufthansa will be happy. Some of OU's passengers will go with British Airways for sure but others (especially those Star Alliance frequent flyers - and there are many) will just migrate to LH and fly via Frankfurt and Munich to LHR. Also LHR route had quite a few premium passengers.

      Delete
  22. I think OU would make a terrible mistake quiting Heathrow! I do wander whether British Airways have been bribing OU to pull out of the uk market, cos as they started adding flights to Dubrovnik and Split, OU reduced flights to split and pulled out completely London and Manchester to Dubrovnik. It seems very strange lots of other airlines now fly UK to Croatia and yet Ou have reduced their flights.

    ReplyDelete
  23. Ex-yu, you used to write frequently about alleged code-share agreement between ASL and MGX. And now, as W16 is approaching, there's total silence on that topic. So what happened or what is happening ?

    ReplyDelete
    Replies
    1. I would not call it an "alleged" agreement as both companies have issued press releases confirming the pending deal. According to the latest information available, the two are yet to agree when the codeshare will come into effect and how revenues will be divided from ticket sales. A review of Montenegro Airlines' current winter operations (which will be published here in the days to come) indicate that the CS will not come into effect on October 30. Also, Montenegro Airlines has not applied for US DoT approval for the codeshare with Air Serbia to New York yet. Of course when new information comes to light it will be shared and published.

      Delete
    2. I hope this deal doesn't come through. Air Serbia doesn't need YM.

      Delete
    3. Sorry, but this deal will be capital punishment for MGX. Hopefully, this deal won't become alive.

      Delete
    4. YM's management is the airline's capital punishment, not JU.

      Delete
  24. OU has so much potential. It is so unfortunate it is not living up to it.

    ReplyDelete
    Replies
    1. Croatia has much potential. OU has none.

      Delete
  25. Singapore Airlines and Air Canada codeshare on the flights from/to LHR. Shame they will cancel it.

    ReplyDelete
  26. OU is making operating loss with substantially lower fuel cost from 2014 onwards. Therefore they need to sell assets to keep the cash flow. Hajdas is now a smart ass but he forgot to mention then during his period 2 A320 NEO are ordered and prepayment is to be done in 2017 plus the overhaul of the engines on current fleet. So, selling LHR slots is only a cash flow issue. I forecast the existance of OU for now longer then 2 years from now.

    ReplyDelete
  27. Sta bese sa Press Conference u Nis'u?

    ReplyDelete
  28. This does not give me much confidence that Croatia Airlines will be expanding its network next summer.

    ReplyDelete
  29. I totally support OU´s move. LHR is an expensive airport and now has other substitues such as LGW, STN, LTN and even SEN. If OU have O&D trafiic, then it´s quite logic to operate to a cheaper airport such as LGW. Many airlines have sold their slots because of their super expensive price. They can use this money, as mentioned in the article, to maintain aircraft. Bravo OU!

    ReplyDelete
    Replies
    1. "Bravo OU"? Irony at it's finest...?

      Delete
    2. They should use money for market development plans if they had a clear vision of future strategy, fleet and markets. To use it to cover the operational costs is just extending the agony and means they have been operationally totaly unsuccesful so far.

      Delete
    3. Nope, not at all. It´s called savings and cost-cutting. If a route is not making enough money, try an alternative. KQ, OK, SK, AF/KL, SA, AZ and the list goes on, are just good examples. Besides, LGW is a very cool airport and well communicated.

      Delete
    4. U proteklih 3 godine prodana su dva para slotova na LHR!!!! Ne govori li to dovoljno kolik je interes za njega i da ljudi ne odlaze na jeftiniji LGW.

      Orly je bitno jeftiniji od CDG. Zašto kompanije ne odlaze tamo? I Hahn je jeftiniji od Frankfurta. Hoće li Croatia i tamo preći.

      50% putnika se konektiraju na LHR. Ti će preči na British ili druge hubove. Dakle svaki let za LGW ima u startu 50% manje putnika jer nema konekcija. Uz to Monarch leti na Gatwick. Kako će Croatia konkurirati LCC-u?

      Em će imati manje potencijalnih putnika, em će morati letjeti za bitno manju cijenu. Pa sad neka mi netko normalan kaže kako će na koncu LGW biti profitabilniji od LHR gdje postoje konektirani putnici (njih 50%) i gdje se može postaviti bitno viša cijena.

      Delete
    5. Slažem se, Anonymous 6:39, izvrstan post!

      Delete
    6. Although I like their livery, when (if) they solve other things, they should definitely change it into something modern, something for 21st century! Since they have no money, this is hard to expect, among other, more important things. Still, hope they won't fall apart, it's important for Croatia to have a national carrier, hope someone will realize it before it's too late.

      P.S. Is there an official announcement about selling LHR slots from Croatia airlines? All we've heard was on tv/newspaper but not from the officials!

      Delete
    7. Well read the article above where Kresimir Kucko, CEO confirms the slot sale.

      Delete
  30. OU has a chance on P2P on LGW in summer schedule. I doubt there is enough demand to operate LGW in winter at least not daily...

    ReplyDelete
  31. Ne znam koliko im je pametno da prodaju bas sve slotove trebali su 4 pridati ostatak ostaviti za sopstvene potrebe .
    INN-NS

    ReplyDelete
    Replies
    1. Većina kupaca nije zainteresovana za 4 nedeljna slota već traže najmanje 7 kako bi mogli da lete svakog dana.

      Delete
  32. Why nobody is writing about new terminal in Zagreb, the way ot is constructed to nail down OU completely. It is outrageous...
    Tango 6 portal is telling partial stories together with Alen Scuric and are non objective and not helping in any way to support the development of civil aviation in Croatia

    ReplyDelete
    Replies
    1. They write regularly about ZAG terminal on this site. There was an article about it just a week ago.

      Delete
    2. P.s found the link
      http://www.exyuaviation.com/2016/10/zagreb-airport-prepares-for-terminal.html

      Delete
  33. I am a travel agent based in Zagreb and I sell air tickets. Move from LHR to LGW is not a bad idea if they can earn some money and invest it in something else. I am not talking here about OU going bankrupt or not. There is certain number of P2P pax between ZAG and LON. For them it does not matter if it is LHR or LGW. These pax prefer OU timings to LHR at the moment over BA ("early" BA dep from LHR). BA with its timings targets transfer pax and they are not doing excellent on the route generally as per info I got from BA rep. OU has codeshare agreements to LHR with number of airlines. If LHR route is cancelled these will be directed through ZRH, CPH, AMS since OU has codeshare with them on these routes as well. Generally, pax do not like transferring at LHR (and CDG by the way) since it is huge with lots of terminals and often it requires transferring within terminals (for example between OU and VS). Pax will pay little more if they can transfer in VIE, ZRH, FRA or AMS (AMS, VIE and MUC are their preferred choice as per my experience). It is worth mentioning that OU had much better performance on route to LGW while it flew there than LHR. The thing is that they had to quit two very profitable destinations few years ago since European Comission ruled that way when they decided that government gave irregular cash injections. Unfortunately these were LGW and IST (back in those times IST was great, planes were full). These are info I got from OU sales staff. I would say that quitting LHR is not apocalypse if it will help them to continue restructuring. As far as I am concerned LGW will do better than LHR. LHR taxes are horrible (I know as I refund taxes on daily basis :-)

    ReplyDelete
    Replies
    1. I forgot that there is a large number of airlines serving Gatwick that OU can continue code share agreements and maybe even consider some new code shares or special interlining agreements like with VS.

      Delete
    2. I agree there is a chance to operate LGW instead, the question is if they will invest the money in new strategy, new destinations, or just cover the loss produced in last two years. SInce start of the restructuring program the sold 2 or 3 engines and now LHR slots, so I do not see any recovery in business...

      Delete
    3. You are right and I agree. The problem is what they will do with the money. However replacing LHR with LGW can be a good a scenario in a different perspective.

      Delete
    4. Let's wait for the final decision, hope Croatian Ministry for transport won't allow this to happen. They should definitely remove Kucko as a CEO before he ruins everything.

      Delete
    5. 1. They will not spent money in investment but in costs, to make red numbers smaller!

      2. I am also travel agent based in Zagreb and I have data also. LHR number of pax in last 10 months were huge. More than 95%. Even in October planes are full!!!! In same time those two LGW flights are empty. LGW flights did have smaller prices than LHR but still plane was empty back in 2012.

      3. LHR flights have 54% of transfer passengers, LGW not even 10%. I rest my case.

      Delete
    6. First comment: Travel agent???? Sure... I heard for your agency:

      Kucko travel!

      Delete
    7. Very well said travel agent. People just think that selling slots at LHR and moving to LGW is a downgrade and can assure you that most of them haven´t even been in both airports. Very well said btw, congrats on your speech.

      Delete
    8. U proteklih 3 godine prodana su dva para slotova na LHR!!!! Ne govori li to dovoljno kolik je interes za njega i da ljudi ne odlaze na jeftiniji LGW.

      Orly je bitno jeftiniji od CDG. Zašto kompanije ne odlaze tamo? I Hahn je jeftiniji od Frankfurta. Hoće li Croatia i tamo preći.

      50% putnika se konektiraju na LHR. Ti će preči na British ili druge hubove. Dakle svaki let za LGW ima u startu 50% manje putnika jer nema konekcija. Uz to Monarch leti na Gatwick. Kako će Croatia konkurirati LCC-u?

      Em će imati manje potencijalnih putnika, em će morati letjeti za bitno manju cijenu. Pa sad neka mi netko normalan kaže kako će na koncu LGW biti profitabilniji od LHR gdje postoje konektirani putnici (njih 50%) i gdje se može postaviti bitno viša cijena.

      Delete
    9. no one here believe you are travel agent. You are PR of Croatia, nobody else would make such a statement. And please can you write at least 20 more „other“ persons to support your funny statement.

      Delete
    10. Prodaja slotova je samo trenutno gašenje vatre. treba im keš pod hitno, nema više baš puno za prodati, i eto ti slotova. S tim će preživit 2017. a šta će prodavati 2018.? I to bi sve bilo ok kad bi oni imali neki plan. Prelazak na LGW je očito glupost, možda čak to ni ne planiraju, ne vjerujem da su tolko blesavi. I još kažu da su u minusu na LHR. Samo me zanima dal je ta informacija točna.

      Delete
    11. Ostaje još tehnika, što će biti dostatno za dvije godine. Ako uspiju prebaciti hipoteke nastale NAKON restrukturacije na "samo" dva aviona sa svih preostalih, a što se svojski trude, ostat će još 3 aviona i nekih 3-4 motora za sell and lease back.

      Dakle, ima se prodavat do 2019. I inercijom na odgodi plačanja dugova preživjet će još 2020. A onda piši kući propalo je!

      Morate znati još jednu stvar. Poslovanje Crotatije je sve skuplje i skuplje nakon što prodaju obiteljsku srebrninu (leasing aviona kojeg su sell and lease back je vrlo skupa stvar posebno ako prije niste imali ovaj trošak jer je avion bio vaš). A do sada nisu uspjevali biti pozitivni, zamislite tek kako će biti sada kada su im troškovi poslovanja skuplji.

      Delete
  34. That is exactly what I am saying, LGW was never good idea as many airlines in the past tried to operate from ZAG ( Easyjet, Wizzair and OU ). No success. On the other hand LHR was always making loss due to too low value of transfer passengers.
    They need to do prepayment for order of new A320, overhaul of engines and cover the settlement of law case with US. No money for that expenses in 2017. If they are not making profit overall now when jet fuel prices are still low, how can they expect to make money in future ? I give them max 2 years before final termination, slow and painfull death...

    ReplyDelete
  35. OU and JU both have 18 LHR slots, with JU request for 10 slots (5 pairs) still outstanding as of Summer 2016:

    http://www.acl-uk.org/wp-content/uploads/pdf/LHR%20S16%20Start%20of%20Season.pdf

    ReplyDelete
    Replies
    1. Does that mean JU wants to increase from 9 to 14?

      Delete
    2. Ask JU, they never explained what they want to do. Actually no, ask Etihad, they own JU LHR slots according to contract.

      Delete
    3. Last Anon,

      Can you quote the exact contract article that transfers the ownership of JU's LHR slots to Etihad?

      Delete
  36. Flew today ZRH ZAG SPU. Not one single pax fm ZRH on SPU flt except for me. ZRH ZAG 72 out of 76 pax booked. Most Swiss Tourists on ZAG city trip. ZAG SPU DH8 with 65 pax
    All good. Makarska Riv awesome. Croatia is like miracle. What they ve done past 20 years, unbelievable! Not seen such a positive change elsewhere than here and in China
    Good night fm Brela

    ReplyDelete
    Replies
    1. True. I was in Makarska, Tučepi and Cavtat the last days and returned yesterday from DBV - the Makarska riviera and area south of Dubrovnik till just after the Cilipi airport have developed incredibly!

      Btw, OS DBVVIE A320 w 168 seats had 171 booked (fully booked plus 3 infants). Plane and airport were crowded.

      Delete
  37. On this route the only competition was British Airways, which usually costs $50-100 more. On Gatwick flights, they'll be competing with Monarch, which will definitely be cheaper. This is just ludicrous.
    Ultimately, it wouldn't be hard to launch a successful strategy if they found a strategic partner, all of these operating costs aren't such a big issue. Mostly, it's about $10 million of unpaid taxes in the US and covering the reservation costs for the new planes until 2022. The real issue, as I understand it, is; there isn't enough money for stategic investment, which is why the whole restructuring process must end in privatization. It is a risk, I know, but there's just no sense in a company like this remaining fully in government's hands. Especially since they aren't allowed to take credit. An investor is needed.

    ReplyDelete
    Replies
    1. Wasn't Monarch near bankruptcy recently?

      Delete

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.