The Croatian government has invited LOT Polish Airlines to commence talks over the takeover of a "significant stake" in Croatia Airlines. According to Poland's “Rzeczpospolita” daily, the first meeting between the two sides will be held this summer. “Were LOT to take over another carrier, it would have to result in a rapid boost to our expansion. It is too early to comment on talks which have not started yet”, a LOT spokesperson said. He added, “We are currently focused on building an airline hub in Warsaw and a base in Budapest. Moreover, we want to extend our cooperation with Nordica”.
Last month, the President of the Croatia Airlines Supervisory Board, Zlatko Mateša, hinted at Polish interest in the carrier, noting that a European partner would be ideal as it could take over a majority stake in line with European Union regulations. LOT currently maintains double daily flights between its hub in Warsaw and Zagreb, as well as seasonal services to Dubrovnik, Split, Pula and Zadar. It also has a codeshare agreement in place with fellow Star Alliance member Croatia Airlines. The Polish carrier recently expanded its operations in the region, commencing flights from Budapest to New York and Chicago, which will be followed up by services to London City next year. In 2017, LOT carried over 6.8 million passengers, and by 2020 the company hopes to handle over ten million travellers per year.
In April, the Croatian government announced plans to privatise its national carrier after adopting a National Reform Program for 2018 aimed at boosting economic growth. It noted that following the successful completion of Croatia Airlines' restructuring process, the carrier's future would be more secure with a strategic partner. Following the completion of its restructuring process in 2015, the airline has seen its passenger numbers and profit margins grow. It has also expanded its destination network, with more routes added this summer for a third consecutive year. On January 1, the airline completed the two-year monitoring of the implemented restructuring plan.
wow this would be amazing!
ReplyDeleteI'm not such a big fan of this idea. I fear LOT would just use OU to feed their flights. They say that anyway
ReplyDelete"Were LOT to take over another carrier, it would have to result in a rapid boost to our expansion."
They can feed flights to the east but not much sense to fly to Warsaw to go to London.
DeleteAgree with Anon 10:45. Wonder what would happen with domestic flights? Improvement maybe? Smaller planes?
DeleteLOT hasn't published their financial results for 2 years. Does anyone know how they are doing financially?
ReplyDeleteTheir last known figures are for 2016 when they had 68 million euro profit.
DeleteInteresting development.
ReplyDeleteWhat sort of partnership does LOT have with Nordica. Do they have shares in the airline?
ReplyDeleteYes. LOT owns 49% of Nordica
DeleteNope!
DeleteUmm so what's correct? Do they or don't they?
DeleteNo. They have one company with Nordica in which are some planes and LOT has 49% in that company.
DeleteBetter than an investment fund.
ReplyDeleteThat's debatable. Depends on the terms.
DeleteI would still prefer 4K to LOT tbh.
DeleteI don't want any of them!
DeleteOU doesn't have much choice, unfortunately. Does anybody know how much would these potential talks last? When could they sign the deal, if they reach an agreement?
DeleteOU has choices. Situation today and few years ago is not same. Ministry knows about choices. Will they thing about it... Well...
DeleteCould you share with us some of those options?
DeleteThere would be article about this. Nothing before that. Sorry.
DeleteShow off.
DeleteIf this happens then OU would be shut down and replaced by Nordica. I doubt LO needs yet another brand.
ReplyDeleteFlying from Croatia under the name "Nordica". Don't think that would work.
DeleteWhy? Norwegian doesn't have problems so why would Nordica?
DeleteI don't think they would change the brand in a southern country into Nordica.
Deleteperhaps Southica then?
DeleteHaha could work
DeleteBravo Hrvatska!
ReplyDeleteIt is actually great news for Croatian taxpayers.
DeleteSo bravo Hrvatska indeed.
How do you know it's good news for taxpayers when we don't know what potential deal could be done?
DeleteNo airline of an EU country can be privatised using the ASL model of the state paying the buyer for years and years with tens of millions of Euros.
DeleteSo good news for Croatian citizens.
HAHAHAHAHAH yeah, look at Alitalia or even Adria which is still milking on the state tit. You make it seem as if the EU is a system without corruption.
DeleteBtw even LO's state aid was suspicious.
In what way is Adria getting any money from the government, if you don't count the business trip of government officials to BRU, etc.?
DeleteErm like when the government bought the logo from them for like 10 million?
DeleteSource? I thought the brand was sold to 4K or one of their connected companies?
DeleteNobody know whom they sold brand. One presumption is to Government (but I really don't know how on earth would Government make this not to show in their reports expense of some 8 million EUR). Second one is that it was sold to some 4K sister company to make financial report looking better for reason of near sell of company.
DeletePolish aviation website did an analysis of this potential takeover. Basically their conclusion is that they are unsure whether LOT could financially take on Croatia Airlines.
ReplyDeletehttp://www.pasazer.com/news/38980/chorwat,polak,dwa,bratanki,lot,chce,przejac,croatia,airlines.html
If the Croatian government offers OU under similar terms that Adria was offered to 4K, where they actually get given money by the government, then I don't see why LOT wouldn't do a deal.
DeleteThey also invested a lot of money into their BUD expansion not to mention all the flights they launched from other cities in Poland. If they really wanted to expand from ZAG then it would be easier to base there one or two E70 and to kill off OU. There is very little value in buying OU, especially now when they sold most of their LHR slots. Those would have been of great value to LO as Heathrow is one of their top performing route, both in terms of loads and finances.
DeleteIt is much harder to base 2 planes and set up a whole new airline that has to compete with OU and others rather than just taking over a whole network with 12 aircraft.
DeleteThe Government of Croatia first needs to buy out all the shares they do not own and re-incorporate the company with only healthy assets while liabilities will be kept. The new company will thus have 0 debt. It also is profitable in the last few years so they can hope for a good price. The government shall keep on subsidizing the domestic routes whilst some international routes will be terminated. LOT or whoever buys it would also make a charter subsidiary. This can be a joint-venture with Croatian government as this move would bolster tourism income, buy getting more good-paying travellers to expensive Croatian resorts. This charter company would acquire older aircraft, some of which could be even widebodies (Bulgaria did the same in the recent future. Even Bulgaria is implementing such a strategy with a success. And Croatia (the country as a whole system) is losing mad money by letting 90+% of all their tourists who come by air use foreign carriers.
DeleteThere is no reason LOT would have to set up an entire new airline just to base 2 aircraft in ZAG. Have a look at how LCCs do it...
DeleteHow much control/ownership does OU have with its frequent flyer program? This is where a lot of an airlines value actually is.
DeleteLCC are totally different story, different model. But still LCC buy other companies from time to time. Ryanair (Buzz, Ludamotion), easyJet (Go!, TEA), Norwegian (FlyNordic). Even today Rynair is fighting for Norwegian, easyJet for Alitalia, Wizz Air for Alitalia and Volotea.
DeleteIt is much easier to buy company:
1. You get market, passengers that are used to fly with company, system, workers, experts for local market...
2. You will not have competition. If LOT will not buy it someone else will. And than yours 2 planes are not any more "easy way".
3. You can get PSO and other support if you have flag carrier than if you are competition.
If that is not like this why should companies be in shopping like they are: Lufthansa (Austrian, Swiss, Brussels, bmi, Air Dolomiti, Air Berlin), British-Iberia (Aer Lingus, bmi, Vueling), Air France (shares in Alitalia and Virgin Atlantic), Aegean (Olympic), Travel Service (ČSA)...
If they buy Croatia Airlines I assume we will finally see flights from Zagreb to the US and it would be operated by LOT.
ReplyDeleteI agree.
DeleteVia WAW
DeleteOr via BUD lol
DeleteDoes BUD have direct flights to the US?
DeleteIt says so in the text
Delete"The Polish carrier recently expanded its operations in the region, commencing flights from Budapest to New York and Chicago"
Plus US carriers fly to BUD too.
I hope the government in the rush to sell something and get Croatia Airlines off their list of problems doesn't to a bad deal. I'm not sure how much of a good one could be made with LOT.
ReplyDelete+1
DeleteWhy do you think a good deal can be made with anyone? OU is in its death throes.
DeleteIt's a good match in my opinion. Could work for both.
ReplyDeleteThis would basically mean no expansion to the east for OU but possible TATL expansion.
ReplyDeleteWhat about Garuda? What happened during those talks? I would rather have them than almost bankrupt LO.
ReplyDeleteNo one knows. They would have been perfect. I remember they suggested for Garuda to start flights to Zagreb and then for Croatia Airlines basically to transfer their passengers all over Europe.
DeleteThis would have only made sense if Garuda didn't have landing rights to EU airports, but since it does, it does not make any sense whatsoever:
DeleteYou fly on a wide-body for like 10 hrs... and just before you reach your destination, you would land in ZAG, change your plane and fly for another 50 min to 2 hours on a turbo prop, or an a319?
why would you like to do that??
Because you don't have 300 "passengers daily to Vienna, Prague, Milan, Munich and Zurich, but you have 50. And you take them all to one place with wide body from Jakarta, and than distribute them to turboprops and 319 That's how it usually works.
Deletethis would make sense... but makes still less sense than to directly land e.g. at VIE or ZRH and distribute these passengers on turboprops or A319 from there, since the frequencies from these airports to other airports are (much) higher than from ZAG
DeleteAbsolutely true. But neither Austrian nor Swiss considered possible Garuda investment and possible closer cooperation, which was the case with Croatia. On the other hand, it's hard to believe Garuda would have more than one daily frequency to Europe in addition to Amsterdam/London, so in that case, if the scheduled is arranged with minimum connecting times for most important destinations, it's less important if overall airport connectivity is better or worse - we can see the similar case in BEG with JFK and AUH flights. However, I firmly believe that Garuda deal is not happening in Croatia, so this was mere theory :)
DeleteI would prefer if a non European airline or company bought them. But then they would not be able to get over 49%.
ReplyDelete"The Croatian government has invited LOT Polish Airlines to commence talks over the takeover of a "significant stake" in Croatia Airlines. "
ReplyDeleteWhat would constitute a significant stake? Over 50%?
Hopefully it would be 100%
DeleteBoth Croatia and Poland are EU members, so probably more than 50%.
Delete49% max or did Croatia finish the EU negotiations?
DeleteUmm Croatia is an EU member for 5 years now.
Delete@An.9:59
DeleteYour village Papua New Guinea still no electricity?
With all the issues Croatia Airlines has been having this year and the 150+ flights cancelled, I would be jumping at the chance to sell the company to LOT. They are a good airline. They seem to have done well wit Nordica so far.
ReplyDeleteHope they reach a deal. Would be an interesting combination.
ReplyDeleteAnd in the end nothing will happen as usual.
ReplyDeleteI expect so too.
DeleteBut I do hope OU finds a partner.
DeleteHave they chosen a privatization advisor?
ReplyDeleteNo. You don't need one. Especially if someone is already interested in buying a stake.
DeleteThis could be an interesting partnership. But let's wait and see if anything comes from these talks.
ReplyDeleteWe might see LOT launch additional routes in Croatia.
ReplyDeleteThey already fly to many cities in Croatia.
DeleteRijeka would be a nice addition.
DeleteMentioning Rijeka, it's interesting to say that LOT operated scheduled summer season twice weekly TU134 Warsaw - Rijeka flights during ex-yu times, as well as Malev did from BUD
DeleteThat is very interesting. Do you know which other cities LOT flew to during yugo times?
DeleteBEG year - round, SPU and DBV seasonally
DeleteThanks. They didn't serve Zagreb back then? Odd.
DeleteAs far as I remember they did not fly to ZAG during ex-yu times. But SAS, KLM, Air France , British, Swissair, Austrian, Lufthansa Interflug, CSA, Aeroflot Adria, ELAL, Pan American and Air Canada did
DeleteAnd JAT of course :) :) :)
DeleteThey could also consider Brac sometime in the future with their Dashes.
DeleteGreat news! Go Croatia
ReplyDeleteI think LOT would be a great solution for Zagreb and flights to the US.
ReplyDeleteThe B787 would be the perfect aircraft to operate ZAG-JFK route.
DeleteCouldn't agree more. Dreamliner to EWR and ORD like from BUD, with fewer frequencies and some southern hemisphere and Carribbean charters in winter, and feeding Asian flights through WAW, it could work
DeleteGosh, this is wishful thinking indeed. LO itself is not out of the woods financially and to take on OU with all its union problems and refleeting issues, would be too much for LO. Why pay for the privilege of more headaches ?
DeleteAs someone already said in an earlier post, this makes no sense at all. LO can simply base 2, 3,4 or however many aircraft they want to in ZAG (or elsewhere in Croatia) and build their own business which they can do, without the burden of taking on OU's many problems.
They can employ ex-OU staff who would probably jump at the chance of joining a new company with growth plans.
Whatever they might pay for OU if they were to think about going down this path, would be too much, when there is absolutely no need to do so.
Zasto bi iko pocinjao kompaniju, bazu u Zagrebu. Putnici nisu tamo vec u inostranstvu.
Delete@Matija Kondic
DeleteLOT has 68 milion euro profit in 2016. Probably even more in 2017. OU does not have union problems, it has management problems. Refleeting is normal process anywhere, planes need to be changed for newer, more efficient and easier to maintain, which at the end is not expense but cost cut factor. At the other hand, we could have synergy between the two same alliance members with LOT management and development model applied to OU is much more important than the huge investment, and just not to forget significant number of Dreamliners and Embraers, ideal for ZAG market, which LOT has on order and which need to be deployed
@An.12:27
DeletePa ko tu prica o pocinjanju kompanije i baze u Zagrebu. Tamo kompanija i baza postoje, radi se o Croatia Airlinesu. Dalje, donekle se slazem da je vecina putnika u inostranstvu. Treba ih dovesti do Hrvatske i vratiti nazad. U tome do sada OU bas i nije bila najuspjesnija. I mozda bi LOT, bilo kroz znanje ili kroz financije, mogao pomoci da se to dogodi, na obostranu korist naravno, o cemu ce se voditi pregovori
O cemu pricas? O kompaniji koja prodaje slotove i nema novca za remont motora. Ne vredi ona nista. Aman vise sa tim drzavnim tvrtkama. U Srbiji se raspadaju velike firme u poljoprivredi, a nece u avio saobracaju. Privatne. U AS je ulozeno par stotina miliona evra da bi se drzale ribe na sluzbi. Slicno je sa LCC kompanijam moras da im dajes pare da bi se urbani shtakori setali okolo. Nema LOT interesa da baca pare na Zagreb i Budimpesta im je veliki zalogaj.
DeleteO tome vrijedi li ili ne kompanija "koja prodaje slotove i nema novca za remont motora", odlucit ce potencijalni ulagaci, a ne anonimusi sa blogova. Civilnu avijaciju cini jos jako mnogo stvari osim nekoliko pari slotova i remonta nekoliko motora. O poljoprivredi u Srbiji ne znam nista pa u taj dio ne bih ulazio
DeleteЧињеница остаје да су многи разматрали преузимање ОУ али су на крају сви одустали. Само погледај низ чланака овде о свим потенцијалним улагачима. Нажалост, сви су одустали ... вероватно из истог разлога.
DeleteAnon 7:04, bivši JAT je imao više "odbijenica" od Croatie airlines.
DeleteПа шта то онда говори о ОУ и хрватској Влади? Исто, надам се да си мислио Јат, не ЈАТ.
DeleteThey already have the most flights to Croatia on the ex-Yu market so no surprise that they have their eye on OU.
ReplyDeleteThis will be great if happens! They can easily move one of their Deamliners to be be based at ZAG!
ReplyDeleteThey don't have a spare Dreamliner.
DeleteThey have 4 Drramliners on order arriving 2019-2020
DeleteIf this ever happens, I see 2 787 Dreamliners being based in ZAG, with OU livery and intercontinental flights to JFK, YYZ, PHL, BOS, LAX and MIA.
ReplyDeleteGood God, maybe in 20 years.
DeleteLOL @An. 4:06
DeleteTheir alliance partner is at EWR, not JFK. YYZ is already served by 2 airlines, PHL and BOS are to close to NYC and are not traditional markets with almost no people of cro and ex-yu origin which make good part of market share, same as MIA, and LAX makes sense but is much longer and more difficult to fit in "waves". As the guy after you said, in 20 years maybe, at the moment and with this circumstances, only EWR and ORD, no matter what would we all like to see
Što volim ovo balkansko pretjerivanje. Nema ni Beč toliko linija prema SAD a ZAG će imat. Svi samo nas čekaju
Delete+1 Athos_cro
DeleteI am quite sure Lufthansa won't allow it.
ReplyDeleteI say better LOT than Lufthansa., but if something like this happens we have to keep croatia airlines brend