Thursday, May 18, 2017

Bosnia gives up on national airline project


The government of Bosnia and Herzegovina has given up on plans to establish a new national carrier following the demise of Air Bosna and B&H Airlines. The Federation government approached both Turkish Airlines and Etihad Airways in an attempt to launch a new state-owned carrier for a third time, although, talks with both have failed. The Turkish airline, which previously owned a stake in B&H Airlines before pulling out due to disagreements with the government, was open to exploring new models of commercial cooperation with the state. However, the airline has shifted its attention to Albania and will instead assist the government there in establishing a new national carrier. Meanwhile, Etihad, which is rethinking its aggressive expansion strategy after the failure of minority-owned Alitalia underlined the big barriers to global growth, has also walked away from talks with the Bosnian government, which suggested a similar cooperation model to that employed by the Serbian government over Air Serbia.

Bosnia and Herzegovina has not allocated any funds for the launch of a new airline this year and becomes the second country in the former Yugoslavia to give up on plans to establish a new national carrier, after the Macedonian government made a similar decision late last year. The Prime Minister of the Federation of Bosnia and Herzegovina, Fadil Novalić, previously suggested that a successor to B&H Airlines would be established, with the government to invest 2.7 million euros into the new airline, which would initially operate with one leased aircraft. B&H Airlines itself was set-up on the foundations of Air Bosna, which launched in 1994 but ceased operations in 2003 due to mounting debt. Two years later, the government revived the carrier and renamed it B&H Airlines. It ceased operations in 2015 and was liquidated a year later.

Meanwhile, the privately-owned Bosnia Airlines is seeking to establish commercial flights out of Sarajevo with a foreign partner in order to end the "non-existence of any airline in Bosnia and Herzegovina, which could jeopardise the country's role in this sector". The airline, run by Muamer Kalić, will attempt to find a foreign partner at the upcoming Sarajevo Business Forum next week, where it has proposed a joint venture with an initial monthly investment of two million euros, while the total investment would stand at 100 million euros. The Sarajevo Business Forum links up institutional and private investors from all over the world with businessmen and project developers from the region. The objective of Bosnia Airlines' pitch to investors is the purchase of aircraft and the launch of commercial services. The company was set up in 2001.

112 comments:

  1. Thank goodness.

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    1. Ummm look up Air Bosna. Then look up B&H Airlines.

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    2. So instead of investing in your own airline which would hire locals, you would rather invest in a Hungarian registered airline with its head office in Geneva. Great.

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    3. Why not invest in chevap

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    4. We all remember what happened the last time Sarajevo tried to run an airline. Better to give up on this dream and to let others, more competent people, do it.

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    5. And just because Wizz Air has an office with a desk and 2 secretaries in Geneva, that gives them the right to pay all of the corporate tax in Switzerland and have all employees pay Swiss income tax.

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    6. WTF @ 9:46. LOL.

      It is actually true you can see two secretaries through the front door. I guess they never let you enter the offices.

      Just kidding. You're probably just talking out of your ass.

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    7. 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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    8. 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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    9. @9:46AM

      Pretty sure Wizz pays taxes to Jersey, not Switzerland

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  2. It's not problematic that they have given up on this national airline. What is problematic that pretty much no one, not even LCCs, has stepped in to take B&H Air's spot.

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    1. It is an impossible task with current taxes in SJJ.

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    2. @9.05. What spot? B&H Airlines' market share was something like 6%.

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  3. Next logical step should be to abolish the idiotic airport development tax.

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    Replies
    1. it would be logical. But since it is logical the exact opposite will happen.

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  4. Good. they stopped what would have been another financial disaster.

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  5. What are the chances on creating a pan-exyu airline? If Bosnia, Macedonia and Montenegro invest together with the help of a major airline, they can create a worthy Balkan airline that can compete with ASL and CTN.

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    Replies
    1. Atalsglobal from Turkey was interested in doing that with those three countries but nothing seems to have happened. For something like that to work out you do need a strong partner.

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    2. It is probably the only option for those three countries, if they want a "domestic" carrier

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    3. I don't think the governments in those three countries are smart enough to do and coordinate something like that.

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    4. It's a shame because I think it could actually work.

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    5. It won't happen. The only similar plan being made is for 4K to take Croatia Airlines at the end of the year and then eventually Montenegro Airlines. It was even published here but I don't think they named it was 4k. But it is.

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    6. Vucic once said that JU would already bought regional carriers if there weren't political obstacles :D

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    7. JAT was such company before the 1991.

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  6. Idealan tajming za početak ;)

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    Replies
    1. Početak čega?

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    2. Maybe has something to do with this?
      http://www.exyuaviation.com/2017/04/wizz-considering-new-routes-from.html

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  7. Hopefully Wizz will start more flights from Sarajevo soon and problem solved.

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    1. Why would they go to Sarajevo
      They are already at Tuzla

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    2. Bigger market? Trying to make a move before the competition? Imagine for example Ryanair started flying from Sarajevo. Their Tuzla base would be jeopardized.

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    3. Then Ryan will just go to both Tuzla and Sarajevo

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    4. And what bigger market
      It is the same market

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    5. Why does Wizz fly from both Belgrade and Nis. Or from both Skopje and Ohrid...

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    6. @9.25: Sarajevo market and catchment is bigger than Tuzla ;)

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  8. Here we go again with the flag carrier obsession. Slovakia, Hungary, Estonia don't have a national airlines and they are doing fine. What Sarajevo Airport needs is to remove its ludicrous double taxation and get an LCC to fly EUROPEAN routes and not Riyadh and Istanbul.

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    Replies
    1. Wizz is subsidised at Budapest by Hungary

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    2. And Estonia does have a flag carrier, Nordica

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    3. Estonia has Nordica. In fact the Estonian government saw it important to set up a new flag carrier straight away after Estonian Airlines went bankrupt.

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  9. This is actually good news.

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    1. I agree, with such level of corruption in the country, it isn't possible the state owns an airline.

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  10. What destinations did Sarajevo loose with the bankruptcy of B&H Airlines that are not covered by other airlines?

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    1. Frankfurt and Amsterdam but that's because the airline was so small. I'm sure there was potential for more routes.

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

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

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    4. Which is ironic really.

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  11. Good decision. Just hope they will attract an LCC to base at least one plane in SJJ and the state's job is done.

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  12. I hope the guy trying to establish this Bosnian Airlines has some success finding a partner but I think it's a stretch.

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  13. While I do think that Croatia Airlines plans to open bases across the Balkans is a stupid move I do fully support them doing that in Sarajevo. It's an underserved market with huge potential and they could make it work.

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    1. 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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    2. But how can an EU airline base a plane in a non EU country and fly from there?

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    3. What planet are you on? Wizz has bases in Tuzla, Belgrade, Skopje and has no problen flying from there. Why would it be different for Croatia Airlines?

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  14. OT: 1st time in ex-YU:
    today 2 Dreamliner at once @ DBV (TUI/Thomson):
    G-TUIC and G-TUID (ex MAN and LGW)

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    1. wow, Dubrovnik is becoming Ex-yu´s widebody heaven. BY twice with 787, OS twice a week with 767, ANA with 773 and hopefully more to come :)

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    2. Here are some pics:

      https://www.facebook.com/AvioRadar/photos/pcb.1945174499047782/1945172009048031/?type=3&theater

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    3. Is Jet2 scheduled with 330-200 on the MAN route?

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  15. Sarajevo should be connected to major European cities by a legacy carrier. At the moment, it doesn't have connections to FRA, LHR, CDG, AMS, BRU, MUC, DUS, MXP...

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    1. What does "should" mean? If there's a market for these servcies to the cities you mention, then some airline will offer those flights. If not, then no flights, simple as that. Considering SJJ is a very low yielding market and very price sensitive and at the same time extremely high cost, it makes the economics almost impossible. Until either the yield or cost environment (or both) change, there won't be flights to those markets.

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  16. We need European integration and more European carriers in SJJ!

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    Replies
    1. You will wait for the first at least 15 years.

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  17. Good news for Bosnia that this 'project' won't see the light of day. It would be just another state enterprise to accommodate politicians and their families.

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  18. Keep mulling your investments in loss making airlines EY. Virgin Australia in which EY has a stake lost AUD 69m last 3 months, bleeding almost $1m a day. Time to do the number crunching EY

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    Replies
    1. What does this have to do with anything?

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    2. This is bad news for JU.

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    3. Well, the worst that can happen now is that they write it off. The money is already gone and has been for some time. They haven't been profiting it from it, that's for sure.

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  19. Whatever happened with B&H's two ATRs? Anybody know?

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    1. I think one is still sitting in Sarajevo.

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  20. 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. No point. It would be cheaper to just lease more ATR's (and newer ones) rather than take on JA.

      JU needs more ATR's to increase SJJ to double daily. A morning/evening split rotation would be great.

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    2. The ATR´s weren´t B&H´s to take...Both owned by a leasing company.

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  21. You keep moaning about SJJ not serving European destinations but this is already done by TZL. I'm confident it'll beat SJJ and even INI.

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    1. TZL is already ahead of INI.

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    2. It is creeping up to Sarajevo actually.

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

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    Replies
    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.

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    3. Costs at Sarajevo Airport are too high and that's the main problem. Wizz Air was supposed to announce flights to Sarajevo in November 2015, 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 unexplained reasons and the whole thing was cancelled.

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  23. I don't understand that Transavia didn't start flights from Amsterdam this year when they started Belgrade, Ljubljana, Sofia and Tirana. There is a market and I'm sure they would have performed well.

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    1. Same as I said above. Even if there is potential the cost of flying to SJJ is too high because of taxes.

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  24. 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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    Replies
    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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    2. I agree. Something like Ukraine Int. Airlines. But please with newer and better Aircrafts

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    3. Ukraine Int. Airline has been receiving one brand new 738 from the factory every two months for the past two years, 6 planes due to arrive this year.

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    4. That helps you big time if you are lucky enough to fly one of their 28 years old B733s. The average age of their fleet is over 12 years.

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    5. They have 3 B733 and 20 738. 12 years, that's a lot? What are you on?

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    6. Plus they have a couple of 25 years old B-737-500s and B-767s. Even some of the B-737-800s are 16-17 years old. That's not something to be proud of.

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  25. Thank god that they saw sense and didn't go for this ludicrous plan.

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  26. Would love to see a Bosnian carrier in the sky again! Hire locals and help the local economy.

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  27. For a smart investor, Air Bosna could still work with significant investment. Couple of ATR and Embraers Connecting Sarajevo and Mostar with Italy, Poland, France etc for sure would be lucrative. Add couple of flights through Banjaluka and you might have some interesting times at Sarajevo Airport

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  28. Maybe Croatia could set a base in Sarajevo and become a regional leader in Bosnia. That would be great.

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    Replies
    1. Sell the rest of the LHR slots and job done !

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  29. Bosnian Airlines is searching for a foreign partner at the Sarajevo Business Forum - Al Maktoum is a participant of this Business Forum. Any relations?

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  30. There is a lot of potential and Bosnia is a very underserved market.

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  31. Aviation is a very expensive and difficult business. Local politicians have realized that now so I support this decision.

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  32. The biggest revolution in Bosnian aviation would be if Banja Luka follows the Nis example : lower the fee to 3 euro per passenger and attract Wizz Air as well Ryanair

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    Replies
    1. Bigger revolution would be if Wizz supporters stop trolling

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    2. Even though BNX lost chilled meat business at the end of 2014, and will not get it back for sure, the managing board decided to buy a brand new high-loader and build a new warehouse as well.

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  33. So this guy has Bosnia Airlines? Soon they will run out of names. We have already had Air Bosna and B&H Airlines.

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  34. OT: looks like EasyJet and Norwegian have piled massive losses in 2017 so far. Hundreds of millions. Does Purger have any details he could share?

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    1. Nemoj te nebitne detalje.

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    2. Irrelevant even if it's true. It would have mattered if it were for the rolling 12m. High season is still ahead of us.

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    3. True
      EasyJet ended 2016. with a net profit of about 450 million euros
      Norwegian in 2016. net profit of 120 million euros

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  35. I'm constantly reading how Sarajevo should be focusing on Europe and not Middle East destinations. But why? There is huge demand for these flights and as long as there is there will be more and more flights to that region.

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    Replies
    1. The ME flights (DXB) mostly serve for Khaleeji tourists visiting BiH, very small amount for the Bosnians in the region (diaspora) and further, and the odd group of Bosnians visiting the UAE.

      Euro destinations would benefit Bosnians in BiH, Bosnians in the diaspora, business links to Bosnia (investment) as well as open doors for tourism.

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  36. OT

    T1 reconstruction is almost complete and after a decade we can finally see the apron and runway once again. :)

    Thanks to Uros Mitrovic for the photo.

    Looks quite nice

    https://scontent.fbeg2-1.fna.fbcdn.net/v/t31.0-8/18489741_10155390139278826_2291134569264027774_o.jpg?oh=54a40b3ce89a14493152157891551c96&oe=59AEFC8A

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  37. Svakako bi JA nebi otisao u Bankrot samo da je imao malo drugaciju flotu i mrezu linija .
    INN-NS

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    Replies
    1. A da su babi m.da bila bi djed.

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