Croatia Airlines privatisation to resume

Croatia Airlines sale process likely to begin this autumn

The Croatian government is planning to resume the stalled privatisation process of its national carrier this autumn. According to local media reports, the push to sell Croatia Airlines will begin in several months with a consultancy firm to be selected first in order to oversee the process. It comes after the European Union urged the Croatian government to submit a privatisation strategy for 2015 within the next three months. According to initial plans, the Croatian carrier, which celebrates its 25th anniversary next month, will be sold in the first half of 2015 if a suitable strategic partner is found. Commenting on the EU’s deadline, a source close to the Croatian government said, “The European Union has requested us to prepare the privatisation document by the end of October. Brussels isn’t looking for empty promises, it’s looking for the action”.

The first attempt to sell Croatia Airline began just over a year ago and failed after nobody responded to the tender call. The Croatian Minister for Sea, Transport and Infrastructure, Siniša Hajdaš Dončić, recently outlined the government’s plan to conduct a thorough analysis of the aviation market in order to identify potential investors, adding that Croatia Airlines must expand in the region and avoid a possible purchase by “predator” carriers. According to the minister, if required, the government will adopt a special Croatia Airlines privatisation bill in order to sell the company swiftly. A minority 49% stake will be offered to potential bidders. Since the failed sales attempt late last year, Croatia Airlines has managed to post an annual profit, the first in years. However, its passenger numbers have been steadily declining throughout the year and its market share has been decreasing as it faces tougher competition.

Croatia Airlines’ CEO, Krešimir Kučko, has said the carrier should be recapitalised. This would entail changes to the airline’s capital structure (the proportion of equity to debt). This may occur, for instance, as part of a debt restructuring, when a creditor exchanges an outstanding loan for a stake in the company. It has long been tipped that Mr. Kučko and the Croatian government are at odds over Croatia Airlines’ future. Mr. Kučko is believed to be in favour of the national carrier remaining Croatian owned or recapitalised by local companies, while the government has been searching for strategic partners in Asia. It remains to be seen whether Croatia Airlines’ 25th birthday will be its last under the current ownership structure.

Comments

  1. There is no future for Croatia Airliines as long as it builds market position as Lufthansa feeder

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  2. Anonymous10:54

    How come Lufthansa doesn't want to buy it?

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    Replies
    1. Anonymous11:01

      Because they have bought up too many loss making businesses. Plus why would they need to by an airline which already feeds all of their flights?

      Delete
  3. Anonymous11:16

    The EU will now see the joy of electing the EPP party. We will have to sell our own mother as well to please the EU.

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    1. Anonymous11:34

      +1

      Mr Jucker is watching you

      Delete
  4. Anonymous11:17

    So what's happening with Kucko? Purger said a few days ago he was resigning but it doesn't seem so. If he resigns that will be one hurdle less in selling OU.

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  5. Nikola11:18

    I agree that Croatia Airlines has to expand in the region and westwards. So many lost opportunities for an airline with so much potential and strong domestic network.

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    1. Anonymous11:51

      doesn't need to expand in the region, only with in the EU, this is where the market is, region isn't that important and its tiny in comparison.

      OU must look to Europe and expand accordingly with in financial means and above all remain profitable.





      Delete
    2. It's true, but it will never happend with Star Alliance. That Market is reserverd for Lufthansa, Austrian and Swissair. Others are just feeders, so they have to kepe their head down

      Delete
  6. Anonymous11:30

    The best Croatia Airlines could do is get an owner somewhere from the east, an airline which wouldn't turn Croatia Airlines in to a feeder. I think it would be fantastic if someone like Emirates or Qatar Airways (I know this is wishful thinking) would buy Croatia Airlines. Then we would have real competition between Croatia Airlines and Air Serbia owned by two rivals in the Middle East :)

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    Replies
    1. Nikola11:31

      Is there a possibility that Air France could buy Croatia Airlines? It's not like they don't have stakes in other airlines plus a French company owns Zagreb Airport.

      Delete
    2. Anonymous12:02

      @NikolaJuly 26, 2014 at 11:31 AM

      No Nikola, AF/KLM have financial wows as we speak, they can't afford to waste money on another airline that has internal issues. Lufthansa might be the only airline in Europe that might buy OU, but they won't touch OU until they can see OU makes profits.

      If OU posts good profits for 2014 (april to april 2015) Than we could see OU being sold to major European airline Lufthansa being main candidate, but if OU posts more than 50 million kuna profits in said period OU becomes very lucrative proposition for Asian airlines as well, I think Korean Airlines might be the one to to take the bite if that scenario develops. Korean Air has firm plans for Zagreb and they plan to introduce year round service from mid 2015 twice weekly service, if that happens than OU might be very attractive proposition for them. Other alternative is Malaysian or Singapore Airlines. Malaysian had twice weekly service to Zagreb and this might happen again current management is hold talks (in the know) with Malaysians on them returning to Zagreb, the recent accident over Ukraine might have slightly impacted on talks, but by October 2014 if all goes well, Zagreb Airport management should announce the return of Malaysian airlines to Zagreb.

      Things start to look more interesting now.



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    3. JATBEGMEL14:08

      EK doesnt buy into airlines, and QR is in a different alliance to OU.

      I think an interesting buyer could be A3, as they have the same fleet as OU, and operations are similar. A3 serves its tourist demands as well as the demands of regular traffic, which OU is doing. Both are members of star alliance, and both airlines come from the EU.

      Delete
    4. Anonymous15:04

      I doubt you will see MH expanding, especially in Europe. More likely it will shrink its global network and keep only key and vital higher yielding destinatons. I dont expect to see any far east long haul to ex yu except on seasonal basis, as demand ex yu is very limited to warrant winter traffic. Middle East is a bit different due to their cost base and geo position as they can sell much wider variety of destinatons. KE and MH are a bit limited in that respect and P2P Korea traffic is strong enough only from JUN to OCT; doing charters seems more likely. MH doesnt even have that - only solid base is AU and they will face tough competition so they cannot count on big share. Needless to say, MH will first have to save itself financially and image wise, they are not standing good, and it might take a while to recover (regardless of cause of their two planes crashing).

      Delete
  7. Anonymous12:16

    its a pitty jat, croatia and adria didnt unite few years ago.. i think by now it would be one great and very strong company, but politics make its own business..

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  8. Anonymous13:27

    OT: what about posting the news about Adriatic Skyways launching charter flts from Pristina to Basel?

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  9. 9A-CRO13:31

    OU future is on far east, only there is a buyer that could use OU slots and new Zagreb Airport to expand their east operation to the Europe.

    Plus one interesting news: Croatia Airlines Technical Services has started to build a new maintenance hangar. Yesterday Lufthansa Technik came to the facilty to extend maintenance contract on Lufthansa Airbuses.

    Pozdrav svim ljudima dobre volje!

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  10. Anonymous14:09

    DLH ko da je gazda CTN-A nazalost sve odredjuju. :(
    INN

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    Replies
    1. Anonymous18:07

      Slažem se, šteta jer Croatia Airlines bi mogla biti profitabilna aviokompanija, s obzirom na količinu turista i domaćih putnika koji je koriste!

      Delete
    2. Anonymous18:43

      Koliko putnika koristi usluge OU u okviru hrvatske? Mislim siguran sam da ima mnogo onih koji presedaju preko Zagreba, ali me interesuje koliko se godišnje preveze putnika koji koriste linije tipa Dubrovnik Zagreb bez da presedaju na neki drugi let?

      Delete
    3. Anonymous20:23

      S obzirom da sam iz Dubrovnika, često letim za Zagreb i dalje. Iz iskustva, avioni su stalno gotovo u potpunosti popunjeni, u Dubrovniku za svaku povratnu kartu dobiješ povrat od Grada Dubrovnika (neka vrsta subvencije) u iznosu od 250 kn (oko 30 eura).

      Delete
  11. Sorry for the OT.
    There are some service increase. Nice additions.
    http://airlineroute.net/2014/07/25/ju-w14update1/

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    1. AirCEO17:04

      Mostly expanding frequencies to enable better connectivity for transit passengers and establish winter dominance on routes. Nice increase to 11 weekly for Ljubljana and 3 daily to Podgorica, additional pressure against Montenegro Airlines. They should consider doing what Adria did, stop flying to BEG with their metal and instead start codesharing with Air Serbia.

      Delete
    2. Anonymous23:22

      BNX is also incresed. Double daily at Saturday

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  12. It will be close to impossible to sell 49% stack. This attempt will fail again because any would be investor will not have effective control.

    I don not understand why the don't float the company on either the Croatian or European stock market??
    This should be an option unless too many people have too much to hide.

    Floating the company would force the airline to have decent management with a focus on growth so the value of the stock increases annually.

    ReplyDelete
    Replies
    1. You asked the question in the second paragraph and than gave the answer in the third :)

      Delete
  13. OT but about time!!
    http://www.croatiaweek.com/first-seaplane-set-to-fly-to-croatian-islands-next-month/

    and this is why the situation in Croatia is so shit economically!! It states they have been trying to get this going for 5 years but I know this has been in the pipeline for over 10 years!! Stramota!

    10 year long approval to create more jobs for Croatians!!

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    Replies
    1. Anonymous21:43

      This is indeed great news. 5 years of red tape ?!
      I wish them well. I see major potential in the summer season.

      Delete
  14. Anonymous17:15

    Jatovanje, Croatian style !

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    Replies
    1. Anonymous18:41

      Jatovanje is not a thing anymore... Jat became something

      Delete
  15. Anonymous19:56

    When will Croatia start flying ZAG-BEG?

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  16. Anonymous21:41

    Croatia Airlines Fail

    ReplyDelete

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