Croatia Airlines on the lookout for partner


Croatia Airlines is on the lookout for a strategic partner after the carrier continued to show improved operational and financial performance in 2017, which should result in a fifth consecutive year of profit, making the company more appealing to potential investors. Croatia Airlines' CEO, Krešimir Kučko, said, "We have worked together with consultancy firms and drafted a proposal for the privatisation process. Several airlines across the world have been contacted and we will see how the process advances. One thing is for sure, we want to find a strategic partner". He added, "We are not interested in someone taking over the management. We have shown that we can respond to both past and future challenges, but now we need a strategic partner to grow faster". Mr Kučko noted that following its restructuring, Croatia Airlines is now a "stable and prospective company with a clear direction for future development".

Croatia Airlines' CEO previously said that the carrier could be of interest to financial institutions, which are not linked to the aviation sector. "We are a regional company that does business globally and a large amount of our revenue is made on offline markets. This could make it appealing to investors that are outside of the aviation industry. That would include any financial institution that wants to generate profits on investment". The Croatian Minister for Sea, Transport and Infrastructure, Oleg Butković, said a strategic partner should be found for Croatia Airlines with "extensive experience in the commercial aviation sector, which would ensure network expansion and market share growth".

The former Croatian Transport Minister, Siniša Hajdaš Dončić, recently said that a total of six companies had previously expressed interest in buying a stake in the national carrier and has urged the country's Prime Minister to resume Croatia Airlines' privatisation process. "A total of six parties had expressed interest. Among them were Lufthansa, as well as a company from Cyprus and from Greece. We also held talks with an Indonesian (Garuda) and Chinese (Hainan) airline and there was initial interest from both. Usually, the sale of a company and the search for a strategic partner lasts four to five years". The government is expected to resume Croatia Airlines' privatisation process at the end of 2017 or in early 2018 in a bid to complete the sale of a number of state-owned companies by 2020. However, it will first decide on the future leadership of the airline and whether it will endorse the incumbent management for another term or bring in a new executive team. A decision is expected soon.

Comments

  1. Anonymous09:03

    They are in a much better position to be sold now then 3 years ago.

    ReplyDelete
    Replies
    1. Anonymous09:05

      Agree. Network wise they are but in the end it's all about the finances.

      Delete
    2. Anonymous09:23

      I disagree. If anything, their sale of assets left and right makes them less attractive to investors.

      Delete
    3. Anonymous09:23

      Yes they are in profit but they are not making money. That's why they should sell.

      Delete
    4. Anonymous09:56

      @9.03 Are they?

      Delete
    5. Anonymous10:17

      Yes they are. Just compare their financial reports and you will see.

      Delete
    6. Anonymous12:27

      If the only way to make your company profitable is by selling assets then it is not a healthy company. Same way if you get the government to cover all your losses like Air Serbia.

      Delete
    7. Anonymous09:54

      by the european law, Croatia (unlike Serbia) is not allowed to cover losses of it's national carrier - it would be considered a messing with an open market regulation of EU.

      Delete
  2. Anonymous09:06

    Am I right in saying that they are looking for someone to pour in cash while the same people continue to make the decisions in the company?

    ReplyDelete
    Replies
    1. Anonymous09:20

      Pretty much

      Delete
    2. Anonymous09:24

      That part is pretty clear - and quite laughable. "I want someone to give me money, but let me stay and manage the company."

      Delete
  3. Anonymous09:08

    It will be Lufthansa/Eurowings

    ReplyDelete
  4. Anonymous09:08

    Who it will be? Adria 4K or Eurowings?

    ReplyDelete
    Replies
    1. Anonymous09:09

      Eurowings through 4K

      Delete
    2. Anonymous10:21

      And after OU they will go for YM.

      Delete
    3. Anonymous15:15

      Unlike Adria, OU is a company of strategic importance for Croatia. It won't be sold, part of it might be sold, but what OU most likely is looking for someone like Korean air or Singapore to invest in to the airline.

      Croatia brand is very valuable and highly sought these days, it is one of the most popular countries in the world, and Croatia brand ranks really high up.

      Question is, can Croatian Airlines utilize this popularity to benefit its future and present operations.

      Delete
    4. Anonymous15:26

      Wow talk about dreamers.

      Delete
    5. Anonymous15:37

      Croatia one of the most popular countries in the world? It's doesn't even make the top 20 when it comes to tourists!

      Delete
    6. Alen Šćuric Purger17:24

      By UNWTO (UN World Tourist Organization) in 2015 Croatia was

      5th by number of tourists in Mediterranean Europe (1. Spain, 2. Italy, 3. Turky, 4. Greece, 5. Croatia, 6. Portugal) and 13th in all Europe.

      And Croatia was 24th in World (including huge countries like China, USA, Russia, Brasil, India, Australia...). In 196 countries in World that is more than good result. Especially that Croatia is tinny country with just 4 million inhabitants.

      In 2005 Lonely Planes made Croatia no. 1 pick destination

      In 2006 National Geographic named Croatia Destination of the Year in World

      There was 15,6 million tourists in Croatia last year and 78,1 million tourist nights.

      Really poor result, isn't it?

      Delete
    7. Anonymous23:42

      ^^

      Add Cruise ship visitors, and nautical travelers, which aren't recorded as they come with their yachts, you come to 16.3 million, https://www.croatiaweek.com/record-2016-16-3-million-visitors-to-croatia/

      This year, 17.5 million visions expected, 18.7 million if you include nautical/cruise visitors. 17.5 million visitors, 92 million nights expected this year, or overall 18.7 million and 105 million nights, and €12.5 billion revenue.

      2018, Croatia might brake 20 million mark in visitors and 110 million nights. Revenue in excess of €14 billion.

      I'd say these figures speak for themselves.
      By 2020 or in 2020, Croatia will be in top 20 top destinations in the world, top 10 in Europe, behind France, Spain, Italy, Germany, UK, Austria, Greece, Turkey, Russia and Netherlands.

      Although Russia, Ukraine visitor figures are most likely made up, or Ukraine and Russia count every border crossing as a visitor, I base my assumption on low overnight stays. Ukraine has only 22.5 million overnights. Russia, 29 million.

      Poland also had good numbers but again they have very low overnight stays, around 21 million, supposedly based on 13.5 million visitors.

      Example, Croatia had 15.6 million visitors and 78.6 million nights, (excluding nautical/cruise ship tourists). France for example had 87.5 million visitors, and 592 million nights, which generated around €72 billion in revenue.

      Delete
  5. Anonymous09:08

    Bravo Hrvatska!

    ReplyDelete
  6. Anonymous09:09

    In the long run I do think OU needs a partner. The management is pushing for investment companies because they just want capital while the decision making will stay as is.

    ReplyDelete
    Replies
    1. Anonymous09:10

      That's difficult to find.

      Delete
    2. Anonymous09:12

      Not really. LH didn't even buy OU and for years the CEO of OU sat on the Board of Directors at Lufthansa. And no one even knew!

      Delete
    3. Anonymous09:17

      @ 9.10 Qatar Airways is actually looking for that kind of acquisition.

      Delete
    4. Anonymous09:25

      And OU paid for the above by being turned into a feeder airline.

      Delete
    5. Anonymous09:55

      Why would OU be a feeder to Qatar Airways? It's not like Air Serbia became a feeder to Etihad.

      Delete
    6. Anonymous10:51

      I was referring to the 9:12 comment.

      Delete
    7. Alen Šćuric Purger17:26

      Mišetić was not in Lufthansa board, but Lufthansa CityLine board. That is "little" difference.

      Delete
  7. Anonymous09:14

    Hope OU is going to be sold, just so we don't have to listen to Kucko anymore haha but seriously, without partner company will progress much slower than it should

    ReplyDelete
  8. Anonymous09:15

    Jatovanje all the way.

    ReplyDelete
  9. Anonymous09:15

    I see Lufthansa Group eventually buying Croatia Airlines and integrating it into Eurowings but retaining its own brand. Same as they did with Brussels Airlines

    ReplyDelete
    Replies
    1. Anonymous09:29

      Brussels Airlines brand will be shut down and turned into Eurowings.

      Delete
    2. Anonymous09:32

      Oh I missed that. Wow that's a bit of a shame.

      Delete
    3. Anonymous09:43

      SN brand is staying, at least for know.

      Delete
    4. Anonymous10:06

      Yes, it is staying for now but judging by the CEO's words, I think they will change it eventually.

      http://atwonline.com/airlines/ceo-brussels-airlines-brand-stay-now

      Delete
  10. Anonymous09:18

    Da li iko veruje da ne znaju poslovni ljudi za pomoc drzave AS, rasprodaju slotova OU sve pored propale Adrie sa Darvinom na grbaci i sinjih sokolova Montenegro A. Balkanska kaljuga.

    ReplyDelete
    Replies
    1. Anonymous09:29

      Jedina razlika je što Air Serbia već ima strateškog investitora.

      Delete
    2. Anonymous10:16

      ... koji se bori za goli život. Nikom u exYU ne cveta cveće ovih dana niti će u skorije vreme početi da cveta.

      Delete
    3. Anonymous21:42

      Samo za razliku od svih nabrojanih OU jedina ima trziste. Sto ze tice JU da postuju EU propise (zajedno sa MZLZ) ne bi imali ovo malo putnika iz HR sto imaju (transfer iz EU u EU kroz non EU).

      Delete
    4. Anonymous08:36

      Koja je korist od tržišta ako ne umeš da ga iskoristiš? Činjenica da JU ima više putnika godišnje od OU je užasno poražavajuća u zemlji koja ima 15 miliona turista godišnje.

      Delete
    5. Anonymous09:09

      Pa sada, gore je netko napisao da je MIsetic usao u nadzorni odbor LH City Line-a. Negdje upravo u to vrijeme je OU sve njemacke destinacije prepustila 4U. Do tada sve letove iz SPU za HAJ, HAM, DRS, LEJ, TXL, SXF, DUS... je letila OU. Subotom iz SPU, nedjeljom iz DBV. Letio se MAN, LHR, LGW iz DBV. Letio se LHR, LGW, MAN cak i STN iz SPU. MAN i LGW iz PUY. Dakle, trziste postoji, ali se vise nema kapaciteta. Dodatno za razliku od JU, drzava je naredila downsizing kompanije, a ne da je pumpala novce u nju. Cijena ulaska HR u EU je skupa... Jako skupa.

      Delete
    6. This comment has been removed by the author.

      Delete
    7. Anon@8:36AM
      A s čim da lete i nadoknade manjak? Ionako moraju iznajmljivati letjelice da bi koliko-toliko popunili sezonsku potražnju. A i da Srbija ima ovoliku navalu turista, misliš da bi bio ovoliki omjer JU - strane kompanije. Vraga bi.

      Delete
    8. Anonymous16:17

      Pa poanta je da sa strateskim partnerom bi se dogodilo i prosirenje flote. Zar to nije smisao cijelog clanka? Nije mi jasno zasto svaki puta kada se spomene OU, krene komparacija sa JU. Srbija ima duplo vise stanovnika, ima vecu dijesporu i Air Serbia ima vecu flotu, manje troskove jer ne mora servisirati 7 domacih aerodroma. Zalosno je da to nije znala kapitalizirati bolje. Naravno da ne bi bilo zabune, sva ova trzista su vrlo mala u usporedbi sa jednim talijanskim, spanjolskim, turskim...

      Delete
  11. Anonymous09:20

    I think it the right time (and probably the last minute) to sell Croatia Airlines now before OU sells all its valuable assets. They sold some LHR slots and all will be sold probably by the end of the year. A lot of mechanics have left OU and I just hope they don't get the idea to sell this segment of their business as it is profitable. The competition in ZAG is also becoming bigger.

    ReplyDelete
  12. Anonymous09:22

    A right investor with a vision could do wonders with the company. I think OU has a lot of potential.

    ReplyDelete
  13. Anonymous09:24

    "That would include any financial institution that wants to generate profits on investment."....

    Any sane financial or investment house would never invest in the aviation sector - period.

    As much as I love this industry, if you wanna make money, stay way clear of the airline sector, or as Sir R Branson put it "to become a millionaire in the airline business, start off as a billionaire ".

    ReplyDelete
    Replies
    1. Anonymous09:26

      But 4K invested in Adria and they seem to be doing ok.

      Love the quote though.

      Delete
    2. Anonymous09:51

      I'm not big on investment funds and institutions buying airlines. It hasn't worked for most. But then again airlines aren't all that interested in purchasing other airlines at the moment.

      Delete
    3. Trust me 4K will sell Adria or launch an over inflated IPO in which they will quickly sell all their stock sooner than later. This is what investment funds do and they are nortorious for creating accounting to make something look investable. What happens after is not their concern but it's unfortunately common for companies to eventually fail and collapse.

      Delete
    4. BTW, for the first time Warren Buffett has started to buy US airline shares.

      Delete
  14. Anonymous09:32

    The smartest thing that could have been done was to merge Adria and Croatia Airlines. Both could have kept separate brands and similar networks to the one they have now.

    ReplyDelete
    Replies
    1. Anonymous09:38

      Some form of consolidation in the ex-Yu among airlines would be an interesting concept and new angle. Let's wait and see.

      Delete
    2. Anonymous10:04

      Adria and Croatia Airlines seem like a natural fit since both are Star *, both under Lufthansa's influence, both countries part of the EU.

      Delete
    3. Anonymous10:07

      It would be a stronger and more competitive company.

      Delete
    4. Anonymous10:11

      Ex-YU consolidation already happened when JA and MAT went bankrtupt, next one should be YM and then three local airlines should be enough.

      Delete
    5. Anonymous10:14

      ^ haha true :D

      Delete
    6. Anonymous10:25

      This idea was already suggested by the management of both companies five years ago. It was blocked by Croatian politicians.

      Delete
  15. Anonymous09:35

    Asian carrier would be best for OU. The government should do more to secure a sale to them.

    ReplyDelete
    Replies
    1. Anonymous09:59

      Anything other than a European airline would be good for OU because it eliminates the possibility of them being a feeder.

      Delete
  16. Anonymous09:41

    What is happening with the regional fleet expansion? They said they would look for a permanent solution rather than wetlease planes every summer.

    ReplyDelete
    Replies
    1. Anonymous09:54

      Same as what happened with OU opening bases across the Balkans.

      Delete
  17. Anonymous09:41

    So what happened with the money that was given to IFC to find a strategic partner for OU?

    ReplyDelete
    Replies
    1. Anonymous09:51

      It ended up in IFC's pockets.

      Delete
    2. Anonymous10:03

      They did only part of the job but got paid in full. Con job.

      Delete
    3. Anonymous14:04

      How much money did the IFC get for their services?

      Delete
  18. Anonymous09:47

    Good luck OU!

    ReplyDelete
  19. Anonymous09:51

    Who knows what will happen with a change in management at OU.

    ReplyDelete
    Replies
    1. Anonymous10:00

      Do you know who is the other candidate for the CEO position?

      Delete
    2. Anonymous10:10

      I think it's between Matkovic, ex Zagreb CEO and Kucko.

      Delete
    3. Anonymous14:08

      To me it seems like the current management will be selected again.

      Delete
  20. Anonymous10:00

    I think the Croatian government should organise an international tender and see who is interested in Croatia Airlines.

    ReplyDelete
    Replies
    1. Anonymous10:07

      They already did that two years ago and no one applied.

      Delete
    2. Anonymous10:15

      Circumstances have changed. Back then OU was still in restructuring.

      Delete
    3. Anonymous10:24

      Actually I think it is much smarter to go into direct talks with companies. Especially in Asia where many don't take part in tenders but try to make a deal through direct talks.

      Delete
    4. Anonymous21:46

      With unions announcing strike every 6 months... I think the the possible investors are waiting in the qeue.

      Delete
  21. Anonymous10:16

    They should have started the first year after restructuring ready with a new owner and fresh capital. Instead they just prologued the "business as usual" policy which I don't think they can afford anymore with so much competition. Time to get things moving and fast.

    ReplyDelete
    Replies
    1. Anonymous10:43

      Kind of difficult to find an interested investor while you are restructuring and trying to avoid bankruptcy. You can do it after you have successfully restructured, which is what they are doing now.

      Delete
  22. Anonymous10:20

    There was talk that Aegean was interested. I think that would have been a great combo. Aegean + Croatia Airlines. Could have been a strong airline.

    ReplyDelete
    Replies
    1. Anonymous10:24

      I assume that's the Greek company the ex minister is referring to?

      Delete
    2. Anonymous10:27

      I would be very interested to see what their plans would have been and how it would work.

      Delete
    3. Anonymous10:37

      Aegean would have been an excellent choice. They have Q400s and Airbuses in their fleet. They are also good at entering new markets. Pity that nothing came of it.

      Delete
  23. Anonymous10:28

    Company should have been sold prior to EU membership.

    ReplyDelete
  24. Anonymous10:35

    OU will eventually join Lufthansa. No doubt about it. But I bet LH will not pay a cent for it just like Etihad didn't for Air Serbia. But unlike Etihad, Lufthansa has proved to be a good manager and Cro government won't have to throw money at it.

    ReplyDelete
    Replies
    1. Anonymous10:59

      Etihad invested millions in Air Serbia, don't spread lies. Also, since you're already drawing comparisons with JU, if you think Lufthansa will help OU go up to 40 or so routes from Zagreb, you are delusional.

      Delete
    2. Danijel14:51

      Isnt that investment from Etihad a loan wich Air Serbia recieved from Etihad? And if its a loan, you have to pay it back. Dont you?

      Delete
    3. Anonymous08:38

      No, it is not. Etihad invested around 40 mil EUR directly.

      Delete
  25. Anonymous10:41

    I don't understand that it is that hard to get interest for OU. Fleet is relatively modern, new ordered jets coming in the next decade, you have a nice domestic network which is partially supported by the government and a huge market during the summer. The biggest issue to overcome is seasonality. But still, OU isn't a bad investment. I don't understand that they haven't managed to find anyone.

    ReplyDelete
    Replies
    1. Anonymous10:44

      +1

      Delete
    2. Anonymous10:46

      That would suggest that something is not ok with their finances.

      Delete
    3. I would assume that any businessman with half a brain sees that the OU management - both current and the one before was no better, is chaotic, without vision, or long term strategy and that nepotism abounds. Investing in such a corporation, which is still bound by political influence, is not a particularly smart move, to say the least, if you don't want to lose money.
      I highly doubt this will happen. The only solution, imo, is to sell at least 51%. Full privatization. Then the new owner can choose management on their own terms, work out strategies...etc. I know I would not invest my money in a company run by Kucko and owned by the state. In fact they should give OU away if nothing else works, sell it for 1 euro. Because the potential is amazing and the returns could be amazing! As well as benefits for everyone. Few national carriers and countries in Europe have such incredible potential as Croatia.
      Wonders could be done if you finally choose free market.
      Just an example - Venice, a small city, not much bigger than Dubrovnik - population: 55,000, had 28 million tourist visitors last year. That's 12 million more than entire Croatia. Now, Croatia (the country) is a totally hot destination, getting hotter and more popular every year, with rapid growth of the tourism sector and with enormous, as of yet untapped potential. That means that there's more than enough opportunity for every mode of transport to grow immensely for a long time to come. There's such diversity between different regions, island hopping opportunities, clear water, beautiful nature, culture, history, adventure tourism...People are flocking to Croatia, roads are constantly congested during the peak season, which btw, lasts longer and longer each year. Air traffic comes in here as the alternative, since I am sorry, but your railway network is quite pitiful. And there's plenty of opportunities for OU in the right, PRIVATE hands, despite the competition. Matter of fact, bring on the competition. More LCCs should be attracted, as many young Europeans,who tend to ttavel a lot, mostly fly low cost.

      Delete
  26. Anonymous10:56

    "stable and prospective company with a clear direction for future development".

    if so why sell at all?

    ReplyDelete
    Replies
    1. Anonymous12:21

      So they can fund their future plans.

      Delete
  27. Anonymous11:20

    The saga continues.

    ReplyDelete
  28. Anonymous11:33

    What they are looking for - capital without any decision making imput - is highly unrealistic

    ReplyDelete
    Replies
    1. Anonymous11:53

      An investment fund maybe?

      Delete
    2. Anonymous12:06

      When 4k bought Adria they took over the entire managment.

      Delete
  29. Anonymous12:17

    Last year Kucko was saying how the company should not be sold. Now he is for a strategic partner?

    ReplyDelete
  30. Anonymous12:51

    If OU is bought by another airline it would definitely increase competition in the region and could reduce fares.

    ReplyDelete
  31. Anonymous12:52

    Could a similar model that was used for Adria's sale be used for OU?

    ReplyDelete
    Replies
    1. Anonymous12:58

      Of course, and I think it is most likely.

      Delete
    2. Anonymous13:42

      4K might buy it, especially since LH is most likely behind it all.

      Delete
  32. Anonymous13:56

    Breaking news!: AIR BERLIN files for insolvency!

    ReplyDelete
    Replies
    1. Anonymous14:18

      Etihad's empire is collapsing...

      Delete
    2. Anonymous14:22

      All the better for Air Serbia!

      Delete
    3. i thought that those partnership approach will collapse sometime in the future, but not this fast.

      this is how EY partnership stand so far:

      Alitalia - bankruptcy, to be sold

      AirBerlin - Insolvent, falling apart

      Nikki - failed to merge with TUI, god knows what happens next

      Darwin - sold to 4K

      Virgin Australia - posted 180+mil$ loss

      AirSeychells - doing ok, i guess

      Jet airways - apparently the only one making money

      AirSerbia - showing 1mil€ profit with 41mil subsidies, meaning it is 40mil in red, or losing about 15€ for every ticket it sells

      unbelievable.

      Delete
    4. Anonymous14:48

      @AnonymousAugust 15, 2017 at 1:56 PM

      What does that mean, insolvency, I mean I know what it means, what I am asking, what does that mean for Air Berlin, are they kaput ?

      Didn't Lufthansa try to do some sort of a deal for Air Berlin to stay afloat ?

      I know it is owned partially by Etihad, but, without money can they operate for much longer?


      BTW this is general question to all here.

      Delete
    5. Anonymous14:56

      It means that they do not have any equity to finance their operations. The German Government will provide them with 150 Million Euros to stay afloat over the next few weeks whereafter the company will be taken over by Lufthansa. Air Berlin Technik etc will go bust and fire all people.

      Delete
    6. Alen Šćuric Purger17:35

      Lufthansa will take part of it. Rest will R.I.P.

      Delete
    7. Anonymous17:38

      .... and Easyjet will take the rest that LH doesn't

      Delete
    8. maybe hogan will get hired again and buy some of the mentioned companies?

      75,464% chance of happening

      Delete
  33. Anonymous13:58

    Had there been so much interest why didn't anyone apply for the tender when OU was being sold the first time around. Or why didn't the minister complete the sale if there was so much interest?

    ReplyDelete
    Replies
    1. Anonymous14:02

      +1
      gdje je bio kad je trebalo nešto napraviti.

      Delete
  34. Anonymous14:09

    This is reminding me more and more of Jat's 5 year privatization.

    ReplyDelete
    Replies
    1. Anonymous14:14

      I hope the outcome won't be the same!

      Delete
  35. Anonymous14:26

    All ex-yu airlines are a mess. It's just that they learned that they should hire PR companies to make it look as if they are booming while in actual fact they are selling slots, engines, leasing out planes, getting massive government subsidies and even selling their brand names.

    ReplyDelete
    Replies
    1. Anonymous14:38

      Potpisujem

      Delete
    2. Danijel14:39

      I absolutley agree with you.

      Delete
  36. Anonymous15:00

    So we could finally see Croatia Airlines privatization completed in 2018?

    ReplyDelete
  37. Anonymous15:03

    What a sad story of illusion.
    If anybody in this forum or any politician could read financial statements (available free online), they would find out that Croatia Airlines didn't make a penny of profit from its core business - passenger and cargo air transport - in the last decade.
    It's just "other profits" (being sale/leaseback of assets in the last years) that simulate earnings.
    While Croatia is full of tourist...


    A textbook example of illusion and incompetence.
    And the Croatian taxpayer will pay for it.

    ReplyDelete

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