Tuesday, October 17, 2017

Croatia Airlines' new CEO to decide on fleet


Croatia Airlines' five-month wet-lease arrangement with Iberia Regional (Air Nostrum) for Bombardier CRJ1000 aircraft has come to an end. The two jets, which are both under a year old, have proven popular with passengers and have allowed the airline to launch four new routes this summer season. The first of the two aircraft left Croatia Airlines' fleet this past Sunday, while the second will follow at the end of the summer season in two weeks time. The Croatian carrier has previously said it would use the two Bombardiers, which were operated by Spanish crew and a Croatia Airlines member on board, as a trial for its future fleet expansion. However, at this point, the airline has again outlined plans to wet-lease equipment next summer season, without committing to purchasing or leasing 100-seat airframes on a more permanent basis. Croatia Airlines utilised the two CRJ1000s on services from Zagreb to Brussels, Dubrovnik, Stockholm, Helsinki, Oslo, Skopje, Barcelona and Lisbon.

The airline's outgoing CEO, Krešimir Kučko, previously noted that the carrier would introduce aircraft of similar capacity to the CRJ1000 in 2018 as an addition to its existing fleet. This would bridge the difference in the capacity of its Airbus aircraft, which have 144 to 174 seats, and the Dash 8 Q400 with 76 seats. He added, that the introduction of a third type of aircraft (100-seater) would further optimise the entire fleet and allow even better adjustment to capacity on the Croatian market, which is highly seasonal. Despite plans to add up to six additional jets, this will not materialise and it will be up to the carrier's new CEO, which is yet to be appointed, to make a decision on the future make-up of the fleet. Mr Kučko previously said that an aircraft from a third manufacturer, which is neither Airbus nor Bombardier, would'nt increase costs. "Manufacturer commonality isn’t such a huge advantage when you operate turboprops but want to introduce jets. For us, it’s about cost effectiveness. The CRJ and SSJ100 can take a maximum of 100 seats while the Embraer can take more. So, if your other variables are taken care of, the Embraer’s unit cost can actually work out less than Bombardier’s CRJ. But while the Embraer E-Jet has a slightly better operational performance, its heavier weight means it is more expensive to operate given its higher handling fees and air navigation charges", Mr Kučko said. 

The future make-up of Croatia Airlines' fleet will also depend on its potential privatisation process. Mr Kučko has said the airline is in contact with financial institutions, as well as investment funds and could draft a proposal to the carrier's majority owner, the Croatian government, over plans to seek a new strategic partner by year's end. A new partner would provide much needed capital to speed-up the airline's fleet expansion process. In addition to the one CRJ1000 still flying for the carrier, Croatia Airlines boasts a fleet of twelve aircraft. Five of them are owned by the company itself (four A319s and one A320), while the rest are on lease. Next year, the airline will have to decide whether it will extend the financial lease agreement for its six Dash 8s. Furthermore, Croatia Airlines has four Airbus A320neos on order. The first two jets are scheduled to arrive in Zagreb in 2021, while the other two are due a year later. However, sources claim the carrier is considering an interim lift before the delivery of the A320neos, meaning it could lease aircraft from Airbus prior to 2021. According to its 2015 agreement with the European plane manufacturer, Croatia Airlines is to begin advanced payments for the aircraft this year, while the remainder will be payed upon their delivery.

106 comments:

  1. These planes were great for Croatia Airlines. I hope they consider them.

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    1. Agree. Very good plane and much better than the 20+ year old Fokker they gkt last year.

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    2. I am glad they leased the Bombardier this year instead of those Fokkers but still, they need a more permanent solution.

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  2. So another wet leases next summer? Shame. These 100 seaters would be ideal during the winter.

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    1. Indeed, there's a high demand for flights right now, Zagreb is surging, and what OU does, ends some of the most lucrative destinations. Silly OU. Oslo, Stockholm and Lisbon had 92% LF on average over summer months, till last night I guess flights were all booked out.

      OU has ended number of highly profitable destinations as they're returning two leased CRJ1000.

      I don't know what is going to happen in 2018, unlike Alan Suric Purger who sees doom and gloom everywhere, I think OU will do fine. However, if OU can get their hands on 4 CS100, now would be the time.

      Airbus just bought majority steak in Bombardier CS 100/300 production.

      The chances are Airbus will continue making A319, as it is larger aircraft than CS100, however they might market CS100 as one of the lineup out of Airbus range.

      If that happens, OU would be wise to make a deal for CS100. 4 A320 NEOs are on order and OU paid first installment towards the 4 NEO aircraft, a deal worth some €160 million or 1.2 billion kuna.

      From what I understood, OU will make 15 payments of 80 million for new aircraft, with first 5 payments before new aircraft arrive and 10 more during the exploration of the aircraft.

      CS 100 lease to own doesn't need to be as expensive, estimated to cost between $3.2 and $3.5 million per aircraft per year.

      Lease of Q400 expires next year, this is when OU will need to decide whether it'll pay final price for all 6 aircraft, the cost which won't be over 1 year worth of lease, however C and D check and life cycle of Q400 is something OU needs to consider. OU still owns 3 ATR 42 it can't sell cause no one wants these old turboprops.













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  3. What is happening with the selection of the new CEO. Anyone know? Purger?

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    1. Alen Šćuric PurgerOctober 17, 2017 at 9:36 AM

      Here you have my article about this:

      https://tangosix.rs/2017/10/10/kolumna-alena-scurica-zasto-hrvatska-vlada-ceka/

      Zašto hrvatska vlada čeka?

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    2. So what will happen if they don't pick CEO by 4 November when Kucko leaves? That's in 2 weeks.

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    3. Alen Šćuric PurgerOctober 17, 2017 at 10:25 AM

      Temporary CEO (V.D. - vršitelj dužnosti), more real that they will use someone inside company, but they can take someone even out of company.

      For sure this situation is one more huge attack on CTN which will even make CTN dying faster.

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    4. But just imagine (not saying that it will happen but it is always a possibility) that the government collapses and new elections have to be held, we would be without a CEO for probably another 6 months. What it all shows that the government doesn't care about OU.

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    5. Alen Šćuric PurgerOctober 17, 2017 at 1:11 PM

      Much more than 6 months in that case. Yea Government does not care about OU. Main point in my article.

      Even more, they even don't know what they are doing in same time, and that by this way they destroy company much faster than if Kučko would stay on CEO possition.

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  4. Anyone flown with these planes? How were they?

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    1. I did, and it was waaay better than Dash! I flown with Dash ZAG-MUC, MUC-RJK and I personally didn't like it, but CRJ on ZAG-BRU was much better! Bigger cabin, not loud as Dash, I don't know, simply - more space, it is not claustrophobic like Dash, lol! that's just my opinion!

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    2. Exactly the sam as CRJ 900.

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    3. Good to hear. No doubt its more comfortable than the Dash, and I assume quicker as well. If they are sticking to the same strategy next year with leasing extra planes just during the summer, I hope they stick to the CRJ 1000.

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    4. Bigger cabin? Really? Isn't the cabin diameter of these two planes nearly the same? Flew OU300 on EC-MNR last saturday and compared to a Lufthansa CRJ the cabin looked quite dated. From a passenger point of view i would prefer an Embraer-Solution.

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    5. I said that is just my opinion, nothing else. I'd also choose Embraer, but option was CRJ1000 or Dash8q400.

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    6. They're great! But then I compare it to previously flying on a Dash from Copenhagen to Zagreb, so I might not be the most objective.

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  5. They have been talking about 100 seaters for what 5 years now. Hope the new CEO makes some definite decisions.

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    1. Well at least we won't have to listen to Kresimir Kuscko's promises anymore.

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  6. Hope something will happen

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  7. If the lease for the Dahes are expiring next year maybe they will replace them completely. They have completely changed the manufacturer in the past. They went from ATR to Bombardier.

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    1. It would be more logical just to stick with the Bombardier. The Dash 8s are good planes.

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    2. I remember reading somewhere that Kucko said the Dashes are staying past 2018.

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    3. @ 9.16
      I think the Q400 has been quite unreliable to be honest.

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    4. Yep Kucko said they were very happy with the plane in some interview and that they will stay part of the fleet.

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    5. their biggest mistake was getting Dash 8s. They should have taken ATRs instead.

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    6. Neverovatna je sudbina Q400 - od sjaja do ocaja. u pocetku hvaljen iz sve snage, a sada ga se svi zele otarasiti po svaku cenu.

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    7. @anon 10.49
      You don't want to operate ATR's in Alps or hot weather.

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    8. ATRs are seriously underpowered. Dash had quite some issues which have by now hopefully been addressed. CRJ is such a comfortable and elegant solution in comparison.

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  8. It must have been a pretty sweet deal for them to get planes just a couple of months old.

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  9. What about Mitsubishi planes? Are they still part of the picture?

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    1. The Mitsubishi is heavily delayed and hasn't been performing well during testing.

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    2. So if they get 100 seaters it would be the third type in the fleet.

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    3. ...heavily delayed... like Croatia Airlines decision on replacement planes

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  10. I remember reading here in the comments how Croatia Airlines had already ordered CS100s and that Kucko was travelling to Toronto to just sign the official deal. Whatever happened to that?

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    1. LOL someone's wet dreams. Don't truest everything you read in the comments.

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    2. yes someone said that OU and Bombardier have signed a letter of intent for the C series planes :D

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    3. Alen Šćuric PurgerOctober 17, 2017 at 9:41 AM

      He was in Toronto for serious negotiations. That is 100% sure. And of course we could read his unreal promises after that about 6+ planes and bases over region (PRN, TIA, SJJ, SKP)

      But what happens with it? Just 3 men in Croatia airlines can say.

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    4. Shame. Now that would have been a great addition to the fleet.

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  11. Ne kužim ova 4 A320neo, koji će nam Bog to? I sad imamo dva A320 koji su u pogonu najviše u ljetnim mjesecima, a zimi obave operaciju-dvije na jakim linijama (FRA, AMS), šta će tek 4 A320neo raditi tijekom zime? Okej, biti će oni super za ljetni red letenja, ali ništa više od toga :/

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    1. kompanija koja u milijunskom gradu ne može upogoniti 4 A320 year round ne treba ni postojati

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    2. ajde ne baljezgaj sad, tržište je sezonalno u cijeloj Europi, a osobito ovdje na našim prostorima. Na obali je to još izraženije, ali je isto i u unutrašnjosti. Dakle svaka aviokompanija koja ima A320 i ne može ga napuniti ne smije postojati? Kakva ti je to teorija? Ako ima A319 i to puni onda mora postojati, ili ima neki tvoj određeni tip zrakoplova? Svašta...

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    3. They could possibly use a greater focus on charters during the winter and use the aircraft there. Also they can venture into the ACMI business. If Adria and Trade Air can find customers during the winter, I don't see why Croatia Airlines couldn't.

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    4. Completely agree with the idea of ACMI wetleases. This is something they could have been doing for years.

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    5. Alen Šćuric PurgerOctober 17, 2017 at 10:30 AM

      But even Trade Air (whose prime business is ACMI) does not succeed in rent planes during winter and most of planes are parked in Zagreb.

      Adria is not so successful also and they have some "LH strategic leasing to Swiss and Austrian" after taking Darwin as a compensation for this takeover.

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    6. ovi naši dok ne počnu praviti ozbiljan novac sa 10+milionskim profitima (a da nisu od subvencija ili od prodaje asseta) nemaju ni kako da naruče nove avione.
      žalosno je samo što ni ovaj deo "zašto ih naručivati uopšte" nisu razradili.

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  12. They can always lease out planes from Adria which seems to be making wetleasing one of its main areas of business.

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  13. What I don't get about Croatia Airlines and Air Serbia too is that they constantly say how seasonality is an issue and that they have to deal with that. And then they both go and launch seasonal only routes, lease equipment only during the summer etc. If they want to deal with seasonality they have to actually do something during the winter.

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    1. I don't think seasonality is such a big issue for Air Serbia, as it is for OU.

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  14. Just pick the CRJ1000. Good plane, good economics and passenger friendly.

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    1. It's pretty expensive too.

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  15. If they plan to extend more of their seasonal routes next year like they are doing this winter with Barcelona and Lisbon, they will definitely have to take on more planes.

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    1. They have spare A319s during the winter. That's how they will keep Barcelona and Lisbon.

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  16. Looking forward to see what next year brings. This one has been very good so far for Croatia Airlines.

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  17. I think they should also consider the CS100 as an option in the 100 seat range.

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    1. It would make most sense in my opinion.

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  18. "However, sources claim the carrier is considering an interim lift before the delivery of the A320neos, meaning it could lease aircraft from Airbus prior to 2021".

    This would be great. The neo deliveries are a long way away and by the time they do arrive the A319s will be over 20 years old.

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  19. They should get a E-190 or E-195.

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    1. It fills the gap on the market between regional and mainline aircraft.They are efficient and have improved aerodynamics. Also they are capable of achieving similar costs per seat of larger narrowbody aircraft, with significantly lower costs per trip. So this creates new opportunities for lower risk development of new markets, which is important for OU.

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    2. Some older generation Embraers from Montenegro might be freed up soon ;)

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    3. They should have chosen Embraer from the very beginning.

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  20. That CRJ 1000 would have looked great in the full OU livery.

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    1. Yes. Croatia Airlines (for me) has the best livery in Ex-Yu!

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    2. It's getting a bit dated. I hope the new management refreshes up the livery.

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    3. Are you serious? They don't have money to burn on superficial things like that. They are selling assets to remain liquid. Livery is the last thing on their minds.

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  21. Hope something will happen, Kucko talked a lot, but did absolutely nothing! Better luck with the next CEO.

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  22. Nema nista od ovoga

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  23. I think introducing more Bombardiers would make sense. Keep fleet at 2 aircraft manufacturers and don't increase costs.

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    1. Not according to Kucko.

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    2. Adria is currently operating 4 aircraft types. ATR, Saab, Airbus, Bombardier :D

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    3. That's why they have to sell their brand name to turn a profit.

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  24. 5 A319/A320
    10 CRJ1000
    6 Q400

    Would be the best fleet for Croatia Airlines.

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  25. They have made so many statements about fleet expansion that their fleet should have been double the size it is now.

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  26. We are talking about new aircrafts and new equipment but does anybody see that OU doesn't have anything else to sell to turn the profit?!

    Aircrafts are getting older,Q400's are everything but reliable and worst experience a PAX could have in "modern" aircraft,Technical services are falling aparat, people leaving everyday,...This year Lufthansa will send only 2 (!!!!) aicrafts on maintenance,Thomas Cook will send 10+ aircrafts but only because the price is 50% lower than anywhere else...Charter agents are a shame to a profession as they can't fill 1/3 of an A320 in Xmas time...Ticket prices are not high, but seriously overpriced.
    OU?Yes.In this form and shape and with this board?Absolutely f***ng no!

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    1. Interesting to read another perspective here too.

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    2. Pravo stanje stvari

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    3. Alen Šćuric PurgerOctober 17, 2017 at 1:20 PM

      Not true. They can sell:
      1. Rest of LHR slots

      2. 5 more planes (one A320 and 4 A319)

      3. 5 more engines

      4. 3 hangars and other real estate.

      5. Some rights like Amadeus.

      6. Croatia Technik which is great value.

      Enough for 5-6 years more on this tempo. And after that Croatia can "invest" one more time (they can do it every 10 years) and give them more planes, engines etc. to sell for another period of "profitability".

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    4. Which planes?Kilo,Golf?Most of those planes are getting very close to the end of their life expectancy.
      Engines?Double check,might be true.

      Hangars,or better to say Technical Services are excellent value but OU didn't want to sell them apart,and at this rate they don't have to worry as the best mechanics will leave(some in days) and they will be left with bunch of inexpirienced kids,not to mention pay-to-fly programme which is ridiculous...To my eyes they are playing to be big airline but dropping every year,significantly

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  27. I hope privatization will happen under new CEO. CEO Kucko didn't want to privatise the company under the motto it is not needed.

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  28. Did OU have Bae 146-200 plane in its fleet for a few years?

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    1. Yes
      https://upload.wikimedia.org/wikipedia/commons/thumb/f/f3/Croatia_Airlines_BAe_146-200%3B_G-FLTA_DBX_%284709096154%29.jpg/800px-Croatia_Airlines_BAe_146-200%3B_G-FLTA_DBX_%284709096154%29.jpg

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  29. Probable end to this saga is that OU is going to change contract with Airbus grup. Since CS100 is now a part of Airbus Group, OU is likley to change contract about purchasing A320neo for purchase of CS100. In that way OU is going to postpone delivery of, at the moment for OU too expensive A320 neos for cheaper, and much more needed 100 seater aircraft.

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    1. I highly doubt Airbus would give up on this sale without some serious compensation regardless of their agreement with Bombardier

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  30. I'm not impressed. All this talk about wet leases each year. They need some new planes NOW with more frequency. I travel to DBV a lot and it's always complicated (and usually expensive), especially in winter!

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    1. How come these PSO routes in Croatia are expensive? They are subsidized to enable and facilitate travel.

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    2. Expensive? Are you serious? I flew several times from RJK to OSI and DBV for little bit over 200 kuna, that's less than 30 euro and cheaper than bus ticket. What you think it should cost, 3 euro?

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  31. All the exyu airlines should be flying more regional jets.

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  32. Are CRJs cheaper then Embraer and why are CRJs better for Croatia Airlines?

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  33. People are overlooking the SJJ here. It is efficient, capable, and inexpensive. CTN should at least take it into consideration.

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    1. OU moze za relativno mali novac dobiti SSJ i zameniti nekoliko svojih Q400.

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    2. It will never happen because of politics and the aircraft is less than reliable.

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    3. Less than the CS100 or the Dreamliner?

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  34. Airbus just bought Bombardier

    https://www.ft.com/content/03796d60-b2c9-11e7-a398-73d59db9e399

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    1. Just the CSeries JV.

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  35. I wasn't aware that Croatia Airlines actually owned a couple of planes. So when people say "they have nothing more to sell", they certainly do. Now I'm not saying they should or will have to but they don't have to worry about their immediate future until they have those.

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  36. I hope we will finally know who will become the new CEO and that they will finally tackle the regional fleet. Kucko and his team have been talking about it since they settled into their positions and have never actually done anything.

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  37. If OU increases capacity, will there be a second runway in ZAG similar to BEG's plans?

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  38. I think there are several milestones to reach before getting to that point. Ex :
    - reach BEG numbers : for the most part BEG are happy with single runway operations
    - reach DUB numbers : for the most part DUB operates as a single runway apt. (except during morning rush with westward departures and simultaneous use of RWYS 28 & 34)

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