Lufthansa and Aegean in race for Croatia Airlines

Croatia Airlines expected to be privatised in the summer of 2016

Croatia Airlines' privatisation process is likely to be finalised during the summer of 2016, with the government to decide whether the carrier will be sold or recapitalised next spring. Following the decision, an international tender will be launched for interested parties to submit binding bids. In addition, the state will also determine the amount of shares it will offer to foreign investors. The International Finance Corporation (IFC), the World Bank’s investment arm, has found potential buyers which include Lufthansa, Aegean Airlines and Turkish Airlines, the daily "Večernji list" writes. Earlier this year, both Korean Air and Taiwan's EVA Air submitted letters of intent to participate in Croatia Airlines' privatisation process, but both have since withdrawn from the race.

The German and Greek carriers have been identified as the most serious candidates, with the IFC to intensify talks with both parties over the coming months. According to sources close to the process, Lufthansa is pushing for Croatia Airlines, a fellow Star Alliance member, to join the Lufthansa Group, which includes Austrian, Swiss International Air Lines, Brussels Airlines, Germanwings, Eurowings and SunExpress, along with a further 540 non-airline subsidiaries. As a result, Lufthansa would offer Croatia Airlines necessary capital in return for a stake, with the carrier to have its own member on the Lufthansa Group board while at the same time retaining its own separate brand, similar to Lufthansa's other airline acquisitions. On the other hand, Aegean is interested in purchasing an outright stake in return for effective control over the carrier. While Turkish Airlines is being courted to participate in the privatisation, the airline previously ruled out any interest in acquiring stakes in carriers in the former Yugoslavia following its experience with B&H Airlines several years ago. Furthermore, Turkish has said European Union laws and regulations forbid it from becoming a majority shareholder and, as a result, makes it unable to effectively enforce its strategy, as was the case at B&H Airlines.

The Croatian government resumed its national carrier's privatisation process in November last year following a failed attempt in 2013. Croatia Airlines' CEO, Krešimir Kučko, is in favour of the airline being recapitalised, rather than taken over by another carrier. Recapitalisation would entail changes to the airline’s capital. This may occur, for instance, when a creditor exchanges a loan for a stake in the company. Mr Kučko believes a thirty million euro investment would be appropriate for the airline. Croatia Airlines is in the final months of a four year restructuring program, which has seen the carrier return to profitability but also limit its opportunities for growth. It plans to expand operations early next year with the lease of Embraer jets and the development of its east European network.


  1. Anonymous09:23

    This reads more like fan fiction than anything else. Lufthansa is neck-deep in union disputes over salary and benefits. Spending cash on acquiring a foreign carrier would send the unionists into a frenzy. I doubt they'd risk that at this time, the size of the prize just isn't big enough.

    1. Anonymous09:38


    2. Anonymous09:53

      Unions are not relevant for acquisitions and size of the prize isn't big enough to upset them.

    3. Anonymous10:53

      Keep calm 9:23 and visit Dalmatia.

    4. Anonymous17:11

      Visit? I live in Dalmatia :) I just don't have rose-tinted glasses.

    5. Anonymous20:41

      Lufthansa > 954 million euro profit.. so it`s no biggy for them

  2. Anonymous09:24

    Sounds like fantasy.

    1. Exactly the same was said about JU/EY.

    2. Anonymous09:45

      Quite different as in JU's case the buyer is willing to acquire anything on government money while in case of Lufthansa we are speaking about sound business decisions. That's why it won't happen.

    3. Anonymous10:00

      LH can shrink OU to domestic airline using only Q400 similar to what Aegean did with Olympic.

    4. Anonymous11:22

      OU has and especially after the privatization will continue to have much lower costs than LH.
      I see it as far more likely OU planes and crews substituting the more expensive LH metal between Germany and Croatia.
      Croatian tourism will continue to increase greatly for the foreseeable future and they want some piece of that action.
      Especially Aegean too who has great experience with opening new destinations based on tourist traffic.
      For example It flies in 9 different French airports while the state owned Olympic only flew to Paris.
      TK of course can use it's massive network to bring millions of travelers to Croatia.
      This is a great development whoever wins the bid.

    5. Anonymous16:25

      OU had lower costs for a long time and didn't help them, as it didn't help Montenegro or BH Airlines. Lower cost is not enough to keep OU as is.

    6. Anonymous16:57

      No, but lower costs with competent management, being part of a much larger company and having an expanding home market changes your situation rapidly for the better.

  3. Anonymous09:41

    As long as the Ceo stays the same nothing will change .

  4. Anonymous10:32

    They will change the Ceo.

  5. LH makes the most sense but I'm not too sure what they could do with OU that they can't already use Austrian or Swiss to do for them or even German Wings. But they could just buy OU to protect their position in the region.

    Turkish Doesn't make any sense to me and I'm not too sure what they could do with OU.

    Aegean is the most interesting and in my opinion could benefit the most with OU especially if they really intend to go long haul. They could even start North America flights via Zagreb for example similar to Sky Greece.

    Funny thing, OU might become one of Nemjee's favorite airlines by default. :)

  6. Anonymous10:49

    Great news!
    Bravo Hrvacka!

  7. Anonymous11:14

    If any of these three carriers buys OU it will greatly increase competition for the JU/EY partnership in BEG.
    Keep in mind that the new terminal in ZAG is nearing completion.

    1. Anonymous11:24

      fully agree, but it can force transformation of OU and JU into feeder operators for big players.

  8. Anonymous11:26

    Bolje da su CTN ponudili TDR posto su sve stekli kako sam video sami .
    LH ce verovatno kupiti ja mislim da je to najbolje za ASL posto ce biti samo samo feeder sto je dobro posto nece ulagati velike pare.

  9. Anonymous11:31

    As few days someone said: why would fraport purchased LJU. From a reason whitch is simple as "burek" . To strenghten the position in the reagion. Next step will be consolidation of airlines as much as possible in order to stop fast growing influence of arabic capital. For anyone woul be easier to accept the fact that OU, JP, JU are just midgets or figures in the games of the biggest.

    1. Anonymous11:37

      Fraport purchased LJU for the same reason that it purchased 14 Greek airports.
      It sees a good business opportunity and high future growth.

    2. Anonymous12:28

      This is nice but i do belive that here is a hiden agenda anyway

    3. Anonymous12:47

      Of course there is a global conspiracy hidden. This is the Balkans after all.
      There is a hidden agenda behind Antalya, Varna, Lima Peru, New Delhi, Saint Petersburg, Greece and Xi'an Xianyang in China!
      I believe it is all aimed at JU or OU. Which exactly has not been revealed yet by those conspirators but the truth is out there!

  10. Danijel12:02

    And what about recapitalisation? Pension funds (not sure if that is writen correct) having big amount of money readdy to invest. So if they invest 30M euros, OU can develop alone. Or not?

    1. Anonymous12:03

      According to CEO Kucko - yes they can

    2. Anonymous12:15

      Pension funds will just waste tens of millions of Euros in a black hole.

      As long as the incompetent management stays in place,
      as long as the government owns the airline
      and as long as it's employees fell and behave like employees of the state that nobody can touch OU will continue to be a disaster.

      Privatize it fully!

    3. Danijel12:22

      Well, if funds take place in ownership, then they will ask to change managment if its incompetent. I am not so much in all that, so thats only my opinion.

    4. Anonymous12:26

      If the funds are owned by the state of Croatia nothing will change.
      OU will continue to be a state owned enterprise and by managed like one.

    5. Anonymous12:55

      I assume Lufthansa will buy OU if it decides so, neither Kucko, nor pension funds will stop it. It could be a great thing for passengers, JU and OU as only Ex-Yu carriers left (maybe Adria as well), but we'll see soon!

  11. Anonymous14:02

    IFC must justify the money they get so they must present some results showing which companies are potentially interested in OU. We have here the situation that LH suddenly rose as potential investor, but where were they all the time in the past? No decision in OU has been brought without approval or knowledge of LH... It would probably mean that LH slept over earlier privatization attempts, but now when IFC has been involved, they become suddenly interested. Quite interesting.
    Turkish had to deny 2 years ago any interest in OU after they were mentioned in Croatian press like possible investors. They already have bad experience from Balkans. Shall we see the similar situation now? Quite possible.
    Aegean? Hmm... Not (yet) big enough to take over company like OU. Quite exotic.

    1. Anonymous14:07

      If it makes you feel better, let's say it's all a big lie from IFC, shall we? No one will ever be interested in OU sounds much better!

    2. Anonymous14:39

      @Anonymous November 22, 2015 at 2:02 PM

      IFC is NOT a private company. It is part of the World Bank, do you know what this is?
      It means among other things that it is not trying to make a quick profit but to help Croatia privatize it's airline.

      Of course for you and many others there must be a global conspiracy hidden.
      This is the Balkans after all....
      You probably believe it is all aimed at JU or JP or whoever else.
      Why exactly has not yet been revealed by the conspirators but the truth is out there!

    3. Anonymous17:32

      Wow, big expert taking about World Bank but talking empty words...No argument, no fact.

    4. Anonymous17:34

      taking = talking*

    5. Anonymous18:28

      Anonymous November 22, 2015 at 2:39 PM
      The cosnpiracy theorists will have us believe that the World bank, the IMF, the EU, the United Nations and probably NATO too are somehow conspiring to either help or destroy OU, depending on how they get off their be this morning.

  12. Anonymous14:53

    EY sent its A320 this morning, it's becoming more and more regular. How are the loads on that route for both JU and EY?

    We don't see Turkish A320/A321 anymore on the route at all.

    1. Anonymous15:28

      Speaking about AUH-BEG route it the second time EY has sent A320 to Belgrade in November, so far from being regular. TK almost exclusively flies 73H to Belgrade.

    2. JATBEGMEL16:36

      EY71 AUH-BEG 3 weeks ago had a few empty seats in Y and around 9 pax in business. Last week it had 41 empty seats in Y and a couple of people in business. EY is usually with great loads. JU800 3 weeks ago had maybe 30 empty seats, at the moment it is empty (~40 pax in evonomy)

    3. Anonymous17:00

      The Summer season is over and demand from BEG to Middle East and Asia/Australia is decreasing now.
      The question is, is this winter's loadfactor better or worse than last year's?

    4. Anonymous19:10

      JATBEGMEL do you have any info on QR loads in the last 3 months? I thought they were supposed to start direct flights to BEG in March next year so that is why I am curious. They also have from time to time good promotions in both Y and C

    5. JATBEGMEL02:21


      from what i experienced, it was about 40-50 pax ex BEG and full from SOF (maybe 2 spare seats in Y). JU and EY in that time were overbooked. I think it was august I last travelled QR.

      btw, JU has once again reduced luggage limit to one piece of 23kg per Y class pax to AUH. It was 30kg until recently. Ofcourse JU being JU, they havnt put any notice on any of the sites and social media pages.

    6. Anonymous03:44

      ^ ok, thanks! Keep us informed on those individual LF whenever you can.

  13. Purger15:03

    Moj odabir:

    1. Aegean bi se najviše trudio. Vjerovatno bi povečali sadašnju flotu A320 i Q400 koja je kompatibilna sa njima, povezao bi Zagreb sa Atenom, Thessaloniki i Larnacom, preko tih luka vukao na jug i istok, a Thessaloniki i Larnacu bi preko Zagreba (u kombinaciji sa konekcijama preko Atene) konektirao na sjever i zapad. Da se razumijemo Zagreb bi uvijek bio u sjeni Atene, ali ne bi bio toliko kao u slučaju Turkisha i sjene Istanbula, te Frankfurta gdje bi bio u sjeni (MUC, FRA, VIE, ZRH, BRU)

    2. Turkish. Iako bi nas oni tretirali kao feeder ipak većinu toga ne bi mogli obaviti preko IST. Poglvito konekcije prema sjeveru i zapadu koje bi razvijali direktne linije iz Zagreba. Za očekivati bi bilo da ZAG (4 puta dnevno), SPU i DBV povežu sa IST, te ZAG sa Ankarom, Izmirom i Antalyom.

    3. Lufthansa, Q400 se prodaje i umjesto njih CRJ900 Croatia CityLine iz PUY, RJK, ZAD, SPU, DBV, ZAG, OSI za MUC, te još poneke linije (ZAG-VIE, SPU-VIE...). A319 i A320 3-4 ostaju u ZAG i jedan u SPU te rade pod brendom Eurowings LCC linije za treće gradove. Lufthansa leti iz FRA za ZAG, SPU, DBV.

    I dobit će Lufthansa. Rekao sam da će biti tako!

    1. Anonymous15:11

      U članku piše da će ime Croatia Airlines ostati, misliš da će baš biti toliko loše?

    2. Anonymous15:15

      Good analysis.
      I believe A did not announce ZAG for next summer as it was expected but instead went for Split because it wanted to live that route to OU as a gesture of good will.
      LH and A3 have a very good relationship, maybe they could co-operate and buy OU together?
      Also the code-share agreements between JU and A3 would end in such a case.
      Fascinating developments.

    3. Anonymous15:20

      Purger, what do you think will happen with domestic routes, especially Zagreb-Dubrovnik and Zagreb-Split? Will OU get any new Airbus planes? What's the LH strategy behind all this?

    4. Anonymous17:19

      Dobra analiza, ja se zaista plašim trećeg scenarija sa LH. Jako dobro i bojim se tačno predviđanje da će aerodromi na obali dobiti po nekoliko novih linija do hubova *A (pre svega MUC i FRA), i tu će doći do preuzimanja jednog ozbiljnog procenta putnika leti koji sada uzimaju strane kompanije.

      Ali, ZAG gubi ulogu čvorišta i postaje praktično samo O&D aerodrom, jer se obala sada razvija samostalno i ako feeduje putnike, to radi direktno ka MUC/FRA.

      Finansijski je to dobra solucija, ali samo u odnosu na sadašnji establišment u OU. Potencijal za razvoj, nažalost, nije ogroman. Opcija sa A3 zvuči najzanimljivije, jako me zanima šta bi oni uradili sa Croatijom, u sličnoj zemlji su postigli čudo... Da li ima prostora da se to ponovi?

  14. Nemjee15:40

    Talking of Aegean, a friend of mine flew with them from ATH to BEG like two days ago and the A320 was around 90% full!

    Well, as far as this news goes, it could also be an easy way for A3 to get the Q400s and the Airbus birds. However, I doubt they will get involved with OU.

    1. Anonymous16:33

      So Aegean applied and passed to 2nd round because...?

    2. Nemjee17:00

      So just because they are in the second round, does it mean that they are obliged to go ahead? I don't think so.

      Even if they go ahead and purchase OU, their presence in ZAG will be similar to that one in LCA.

      That said, the situation on the coast might turn out to be quite different.

    3. Anonymous17:19

      Nemjee, you didn't answer the question, why would they apply for the 2nd round?

    4. Nemjee17:24

      Who knows... I can only assume. There is one thing that has crossed my mind. Aegean is planning a major expansion in summer but they don't have the necessary aircraft for it. Buying OU could be one way of solving this problem, especially since their fleet is identical (Airbus + Bombardier). Not to mention that they could also reallocate some of the crews.

      However, I am not buying the whole story that they would be buying OU so as to create a hub in ZAG.

    5. Anonymous17:55

      Thank you, Nemjee! What if LH buys it, how do you think it will affect the Ex-Yu region, do you think OU will exist anymore?

    6. Anonymous18:22

      Aegean is going to receive 4 Airbuses next year so they are covered for their route expansion.
      IF they are interested in Croatia Air. it is probably because they want to diversify from Greece and use some of their big capital reserves they have.
      Plus OU is just 1/5 the size of A3.

      Croatia Air. will be sold very cheaply , is in *A, costs are probably lower than Greece, new terminal opening up in ZAG and most importantly Dalmatia.

      With the type of management strategy that they showed in Greece they can quickly turn around OU and make it into a profitable asset.

    7. Nemjee19:23

      Things are not as simple for Aegean. They are themselves being attacked from all sides. One of their primary 'nuisances' is actually Blue Air. Just the other day they've announced that they will be launching flights from Larnaca to both Iran and Iraq. In addition to that they have also announced new frequencies to Athens and the launch of flights to Constanta. They are dangerous because they are well experienced when it comes to the Hellenic market. They've said that they want to use LCA so as to offer connections and so on.

      Then there is Volotea which also announced some domestic routes and it's also worth noting that Ryanair keeps on growing there.
      What I am saying is that Aegean can't afford to only grow in Athens, they also have to do it in the Greek islands, Thessaloniki and Larnaca.

      They've already added some second-hand A320s and I am sure more will come. After all they did double their A321 fleet from 4 to 8 aircraft in just a year.

      If Cobalt takes off in Cyprus then it will be another big headache for Aegean.

      When it comes to LH and OU, I have the impression that it would be the end of Croatia Airlines as we know it.
      ZAG is just too close to VIE. But in the end who knows. The current setup can't last much longer, things need to change. I already wrote once before that in my opinion the best thing for Croatia would be to sell OU to LH which would replace it with Eurowings. I know many will not like it but I think it's the only way to remain competitive.
      I don't think LH will want yet another hub in that region, that is 'right next to' Vienna, Munich and even Zurich.

    8. Дечко Тзар21:13

      One for the books: I agree with Nemjee on LH/OU outlook.

  15. Дечко Тзар18:35

    ot: Takes a while to recover from slava, so I almost forgot to mention: delegation from Serbia is going to China for a big railroad deal. Not the top priority, but it presents great opportunity to advance aviation agenda as well. Are we in for a surprise announcement?

    1. Anonymous18:45

      Hahahaha, you are funny!

    2. Anonymous19:32

      Anon @6:45 PM

      And you're jealous ;)

    3. Anonymous07:26

      Jealous of what exactly?

  16. Anonymous23:13

    What happened this morning @BEG, why there were so many delays?

    1. Anonymous00:14

      De-icing was required due to snow and cold temperatures. There are simply a lot of aircraft departing in the morning and a limited number of de-icing vehicles.

    2. Anonymous00:18

      What was happening with the new de-icing platform and equipment? Wizz Air seems to be the only one to have left in time. Are their aircraft somehow immune to frost?

    3. Anonymous00:31

      The tender for the construction of the deicing platform is under way and the tender for the purchase of another deicing vehicle has been completed. From what I see Wizz was also delayed.

    4. JATBEGMEL02:26

      Just goes to show how poorly run BEG is. I dont see it improving drastically as needed any time soon...unfortunately.

    5. Nemjee08:12

      It's not that Wizz Air gets special treatment but it's that it's usually the first one to leave the gate.

  17. Anonymous00:11

    In relation to Purger's comments a few days ago, Zagreb is these days being frequently upgraded to the 737 which is presumably due to excellent loads.

    1. JATBEGMEL02:27

      could be that an ATR is AOG and in maintenance, with the B737 being the only replacement.

    2. Anonymous09:12


  18. Anonymous11:18

    As a greek who monitors A3 and its board moves for quite some time, I suggest OU should join A3 group for several reasons with eyes wide shut.

    A3 have proven themselves in very hard times and their collected expertise in hard conditions be it economical asphyxiation, hard competition even with state owned airlines etc. guarantees they will do their uttermost to deliver what they promise.

    What would I expect from OU joining A3? Well first of all, you can all rest assured that there's a plan; A3 didn't, isn't and won't ever spend money just to burn excess cash or satisfy personal ambitions. What we all now see, a formal interest, could be a result of 1 or 2 years hard work behind curtains where everything (and everyone) were assessed.

    Secondly, A3 major advantages are easily and simply transferred to OU. Cost control rules but not against growth, its actually what brings growth in the current european aviation market. A3 were forced to understand this reality -and not trend- the hard way and were superb in achieving it pretty fast and almost painless.

    Thirdly, A3 will stick to their plan but not in blind; their reflexes have proven them very adaptive and responsive. This derives from knowing in depth pretty well who are they, what their market is and how they can max profits in each case scenario. Hub and spoke, p2p, tourism milking, charters, hybrids, PSOs, buy outs, filling holes, they have done all these and I m pretty curious what their intitial preferred business model for OU will be.

    Finally, what we all know is that the airline market in Europe will continue to shrink due to mergers, acquisitions etc so at some point Aegean is also expected to be part of something broader. Could be LH group, so OU will eventually join LH restructured and hopefully in growth, could be IAG, could be a MEB3+Euro legacy+USA legacy group that O' Leary suggested as the future of the industry. Bottomline is that OU will be in a good position when broader changes arrive and won't be forced out of business.

    Concluding, yes, A3 will be a superb opportunity for OU's future but what about LH and TK? Well, for sure they have much bigger wallets, status and scale but all these come at a price. I really can't see how both can milk Croatia's inbound tourism or respond appropriately to future locos inevitable expansion in the balkans or even to strategically plan, monitor and respond to varying market conditions, needs and trends when OU will just represent a tiny fraction of their business and not even a core one.

    Thank you for your time :)

    1. Anonymous12:00

      Great analysis.
      Keep updating us, someone who knows the Greek market is a very welcome contributor to our discussions.

      Efxaristo file!

    2. Anonymous15:32

      Parakalo file!

      Just for the record, Mr Vasilakis during Aegean's last presentation for 2016 business plan implied this move as he stated that Aegean will look for growth opportunities outside Greece, in a 2 hours radial from Athens provided that they see some potential. Well, seems like OU fits in...


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