The Croatian government has reversed a 2016 order to remove the national carrier from a list of strategically important companies, which paved the way for its privatisation. Instead, Croatia Airlines has again been listed as being of state value and not for sale, thus putting a potential privatisation on the back burner for the time being. The Minister for State Property, Goran Marić, noted that the carrier is of vital importance to the country's infrastructure network and that "the Republic of Croatia must continue to be its owner". Croatia Airlines was put up for sale in 2014, however, no interest was expressed during an international tender. Last year, the carrier's CEO noted that an investor would be required in order for the company to grow faster. By mid-2017, a proposal was drafted for the privatisation process and several airlines across the world had been contacted.
Since completing its restructuring process in 2015, Croatia Airlines has seen its passenger numbers and profit margins grow. It has also expanded its destination network, with more routes to be added in 2018 for a third consecutive year. On January 1, the airline completed the two-year monitoring of the implemented restructuring plan and the company is soon expected to announce to have handled over two million passengers last year, as well as post positive financial results. Croatia's Centre for Enterprise Restructuring and Privatisation (CERP) recently conducted an open call in order to select the carrier's new CEO, the second such attempt in the past six months. The previous effort was declared void after the Croatian government named Jasmin Bajić as the carrier's new head in November 2017. The terms of the second open call were slightly modified compared to the one before as interested applicants were no longer required to have a background in the aviation industry. The new CEO will be selected for a five-year term with a decision expected in May.
The former Minister for Sea, Transport and Infrastructure in the Croatian government, Siniša Hajdaš Dončić, previously said that a total of six companies had expressed interest in buying a stake in the national carrier and has urged the country's current Prime Minister to resume Croatia Airlines' privatisation process. "A total of six parties had expressed interest. Among them was Lufthansa, as well as a company from Cyprus and Greece each. We also held talks with an Indonesian (Garuda) and Chinese (Hainan) airline and there was initial interest from both. It was up to Croatia Airlines to decide which path they would take. Usually, the sale of a company and the search for a strategic partner lasts four to five years. This is not a priority for the government", Mr Hajdaš Dončić said.
Comments
This is from their annual report
"While in 2014 an Airbus 320 CTJ and three CFM56-5B engines were sold, in 2015 only an CFM56-5B engine was sold, for the purpose of reaching the
required own contribution amount. "
"...in December 2015 its business premises at Zagreb Bus Terminal and its share in the associated company Pleso prijevoz were sold"
in order to capture more share of that increase croatia would need to lease/buy new metal
what to do with that added capacity during winter season?
however, i don't think its financial can support this a320neo orders they placed
our ex-yu companie can only sustain 10-20 year old aircrafts that are up for lease
You are forgetting that they still have another 4 slots at Hethrow which will only gain in value as time passes.
there is too much excess capacity in entire northern hemisphere during winter to catch that market
here are some examples of what companies do
http://www.anna.aero/2012/07/04/grounding-planes-in-winter-improves-profitability-the-new-network-planning-reality-explored-among-europes-airlines/
operating revenue: 1.561 mil HRK
total revenue: 1.610 mil HRK
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meaning additional revenue is ~50 mil HRK
their EBITDA is 100 mil HRK
so even with out this additional income they are still having cash generating business
and some part of that additional revenue is most likely happening each year (leasing business space to others etc...), so they should be okay
http://objektivno.hr/croatia-airlines-je-li-ministar-butkovic-ponistavanjem-natjecaja-pomogao-interesnoj-skupini-oko-misetica-i-bajica-92699
“The Indonesian market is developing rapidly and Indonesians are travelling more and more which is why we are looking to expand our business into Central Europe, in a country which has solid connections to the rest of the European Union. This is why Croatia and Croatia Airlines are a logical choice for us”, Garuda’s President and CEO Emirsyah Satar said.
and they are happy that it is not up for sale right now, as there are much more important things to get right at the moment (Italy, Austria, PMI, DUS)
This decision gives them at least two additional years to set up a local and lean structure (RJK?) and it does not look like that they get ready this year.
If they do not have a local efficient structure on the day that OU is for sale, they will pay real money for it, otherwise they will take selected parts for a symbolic kuna.
If our government expects to get any LH money, they should sell it soon.
if "we" can not make it neither profitable nor prosperous for decades, shouldn't we try to get some help before it is to late?
they own a single a320 and 4 a319 with a combined age of almost 100 years;
Running costs are around 1.1 billion kuna, pays are 220 million kuna with
72 million - cost of amortization - cost of maintaining planes not likely to be included in this figure
85 million for old loans,
120 million for new a320 neos.
Total cost 1.592 billion kuna,
Total revenue 1.61 billion kuna.
And this is after selling slots and what not.
This is shambolic way to run the business.
Yes, in 2018, the total loan repayments will be halved, down to 40 million, but even if these go down, OU will need to increase revenue to cover any increases in other costs.
OU already paid deposit of €20 million for 4 A320 Neo, and by the time 4 aircraft arrive in 2021/2, OU would have paid additional 1.1 billion kuna, for total of 1.23 billion kuna.
The final payment in 2023, of 120 million kuna for A320 NEO should reduce costs of beyond that by 120 million kuna. No idea if there are future plans to purchase more aircraft, but OU simply can't afford to buy brand new aircraft, it is no longer supported by Croatian state and must rely on market forces.
Clearly airline is run by morons or incompetent people, for airline managed to reduce it revenue from 2012 to 2017.
In 2012 airline had 1.76 billion kuna revenue.
U kompaniji nema promjena, ona tone, zaostaje za konkurencijom i kopni na sve načine. Odavno je prijeđen rub održivosti, a rukovodeća garnitura se 20 godina ne mijenja. Vlada se mora početi voditi poslovnim, a ne političkim načelima u biranju nove uprave CA', poručuju piloti premijeru.
And that's what the company's pilots said today.
I recommend you read what they wrote.
https://direktno.hr/razvoj/sindikat-pilota-plenkovicu-croatia-airlines-propada-zbog-nebrige-vlasti-111289/
for example JU has pre-delivery payment of 20+ mil€ from their order made back in the day
Was it LOT Polish Airlines you were talking about?
Taxpayer from Croatia
Well plan does exist to lease 4 hundred seat jets, ideally CS100, but when this will happen, your guess is good as any. OU needs a fleet of 20 aircraft in summer, 8 in winters. Seasonality is so bad.
What ideal future is, I mean in say 4-5 years time, for OU to fly to say all summer destinations it flew in 2017, add Dublin, Milan and Budapest, and fly all these, i guess 42 destinations in winter months as well, but at reduced number of frequencies, from 5 down to 3 or 2 per week.
That would keep lets say 12-16 aircraft in the fleet quite busy even in winters. Ideally OU should be flying to 50 destinations to keep fleet constantly in the air.