Croatia Airlines, which has four Airbus A320neo aircraft on order, is assessing ways to pay the European manufacturer for the new jets. The airline is currently seeking lessors to finance part of the advanced payments necessary for the aircraft's delivery. As a result, Croatia Airlines would ultimately lease the jets. “Negotiations are ongoing with potential lessors who will finance advanced payments from 2020 to delivery”, the airline said. According to its 2015 agreement with Airbus, the Croatian carrier began advanced payments for the aircraft last year. Some 780.000 euros are believed to have been deposited so far. Four A320neos at list price at the time of the order amounted to just over 366 million euros. However, Airbus has not disclosed the exact value of its deal with Croatia Airlines.
The first two A320neos are scheduled to arrive in Zagreb in 2021, while the other two are due a year later. The airline successfully converted a 2008 order for four A319s to the neos in 2015. Although the new aircraft were originally to be delivered by the end of 2013, their arrival was put on hold and the deal was renegotiated. The carrier put off the arrival of the jets due to the company's financial situation at the time. The A320neo aircraft are designed to operate quieter with lower operating costs. Croatia Airlines believes that its potential privatisation would bring fresh capital into the company and speed up its fleet renewal.
Last week, Croatia Airlines said it would soon select a financial consultant, which will determine the best privatisation model for the carrier. "Croatia Airlines' main objective is to expand its network and grow its market share, which will be implemented through a strategic partnership and fresh capital. Croatia Airlines is preparing a call for bids for financial consultancy services in order to arrange an appropriate model for a capital injection and a strategic partner", the airline said in a statement. The Croatian government recently noted, "Croatia Airlines has undergone the restructuring process and has since improved its finances and launched new routes. However, the only solution for the carrier is to seek a strategic partner. This will be one of the most important topics in our aviation industry in the coming period. The Ministry for Sea, Transport and Infrastructure, jointly with Croatia Airlines' management, will begin looking for potential investors this year".
Gib moneyz plz. Lol
ReplyDeleteI was always wondering how they would finance these planes. Now I understand why the government has suddenly decided to sell them after they said they wouldn't.
ReplyDeleteAnd now we know why the government had to give guarantees for a loan for OU earlier this year. I assume part of that money went towards these Airbus paymnts.
DeleteThat loan will have to paid back with interest.
Deletetrue
DeleteBy the time the loan has to be repaid they hope to have a strategic partner with deep pockets.
DeleteDumping more liabilities onto OU's balance sheet will make it even more unattractive to bidders.
DeleteThis order is a financial burden for OU
ReplyDeleteA320neo is well suited for Croatia Airlines and will really help during the summer in terms of capacity.
DeleteBut what will they do during the winter? Their average annual LF is currently 70%
DeleteWell, have you ever hear of leasing
Deleteplanes?
@Anonymous4 September 2018 at 09:10
DeleteCroatian Airlines LF is around 75%, not 70%. 2.25 million projected pax/3.0 million absolute max capacity with 14 planes. And durig winter times they'll need to work on cutting seasonality down to bare minimum, the way to do that is to agree some sort of codeshare with Emirates, Korean Air and other Asian carriers that plan to start Zagreb service next year.
So passengers from Korea, Japan, China, Australia,.. can use OU for transfers to the coast or elsewhere. OU could in matter of few years cut seasonality dramatically, if they had proper management in place, since they don't...
Hopefully Croatia management will base 2 in Dubrovnik and 2 in Split.
DeleteWhat happened with LOT and their interest in OU?
ReplyDeleteI think they are competing with Garuda at the moment.
DeleteHahah, with Garuda, good one! Maybe with Aegean as well
DeleteLufthansa would be a logical partner. They virtually do everything together.
DeleteLOT will turn out the same way as Garuda, Aegean, Lufthansa, Turkish interest.
DeleteI still don't think LOT is financially stable enough to take over any airline.
DeleteIf LOT Polish Airlines buys Croatia Airlines, it will definitely give up the purchase of the A320neo Airbus for the Boeing 737MAX because LOT is an unwanted Airbus aircraft in its fleet. Most probably, if LOT Polish Airlines will buy Croatia Airlines, the order for four Airbus A320neo will be converted into four Boeing 737MAX. And LOT Polish Airlines will move four Airbus A319 from Croatia Airlines to its fleet and in return will give four Embraers. And in the near future LOT Polish Airlines will move one of its 787-800 aircraft to Croatia to start long distance connections to the USA and maybe China.
DeletePostoji izreka :"Iz tvojih usta u Bozje usi", ili da bar... .
Delete@Anonymous4 September 2018 at 12:54
DeleteLOT can't afford to buy OU or any other airline, they've got their own financial worries to worry about. Only hope for Croatian airlines is Lufthansa Group, or some Asian airline with loads of cash to waste. Qatar perhaps ?lol.
@Anonymous4 September 2018 at 15:35
DeleteLOT Polish Airlines has said many times that it is interested in consolidation of the aviation market in Eastern Europe. That the current passengers will not be transferred to Lufthansa, Turkish Airlines or Air France. For this reason, LOT Polish Airlines is building a base on the World War II and who knows, maybe later, a new national carrier MALOT. LOT Polish Airlines announced the interest in buying Adria and Niki from Austria. Recently, Romanian TAROM has announced that it is interested even to unite with the Polish carrier, note that TAROM orders for aircraft similar to those of Polish operas carrier like Boeing 737MAX. LOT is interested in buying Croatia Airlines but it all depends on the price.
@Anonymous4 September 2018 at 17:18
DeleteI have no idea how to respond to your childish agrument, other than ignore it. You write like an 14 year old.
Didn't Purger even write about the benefits of Garuda's takeover of OU? lol
DeleteHope they will be able to find someone. I don't know how else they will finance them otherwise. Banks don't want to issue OU loans that easily anymore.
ReplyDeleteBravo Hrvatska!
ReplyDeleteOU will be the first airline from the Balkans to operate the NEO!
ReplyDeleteGood work to everyone involved.
Last time I checked Turkey was in the Balkans and they already have neos in their fleet.
DeleteOnly 3% of Turkey is in the Balkans.
DeleteIn reality they are an Asian country.
When does Aegean get their neos?
DeleteAfter OU.
Delete@Keep Calm and visit Dalmatia
DeleteAnd yet TK is based on that 3% of Turkey.
Oh give us a break!
DeleteTurkey is not European/Balkan country.
Sale and leaseback is the only thing that makes sense.
ReplyDeleteZar nije lakse samo lizovati? Ko ih je uopste navukao na kupovinu?
DeleteSanader
Delete"Smatra se da je taj ugovor zapravo bio politički deal između bivšeg premijera Ive Sanadera i bivšeg francuskog predsjednika Nicolasa Sarkozyja.
U kuloarima se govorilo da je Sanader na taj način želio pridobiti naklonost Francuske, koja je tada predsjedala EU, i osigurati brži završetak pregovora s EU. Čak se tvrdilo da je tim ugovorom sebi osigurao ulaznicu za Elizejsku palaču, odnosno službeni prijem kod Sarkozyja."
To meni nikad nece biti jasno...
DeleteKao kupis nesto, prodas pa potom to isto unajmis.....
Na taj nacin smanjis troskove. Stari JAT je to radio sa desetkama.
DeleteSounds like they can't afford these new aircraft!
ReplyDeleteThey can't even afford their old aircraft!
Delete@
Deleteanonymous!4 September 2018 at 09:12
Sounds like they can't afford these new aircraft!
Lets see, each aircraft likely to cost around €45 million, OU profits less than $1.5 million. Errr, don't think they can afford them without a loan. Lease or state jumps in with the loan in 2022.
Anyone know which engines they chose? Hopefully not P&W since Indigo has had to ground most of its neos because of engine trouble.
ReplyDeletePrivatization consultant AGAIN?? Why?? Didn't IFC already consult them? They got paid and did nothing. Same will happen again. Wouldn't be surprised if they choose IFC again.
ReplyDeleteMinister announced this tender around 6 months ago and now they announce it again a week ago. Same minister announced new CEO 8 months ago and still the same CEO.
DeleteOva vlada nema nikakvu strategiju ni za sto.
DeleteIma ima itekako, za pljacku i cerupanje gradjana Hrvatske tj. jos i ono malo sirotinje sto im je preostalo
DeleteWhat about regional jets? They can't wet lease CRJ1000s forever.
ReplyDeleteIt is obvious that they don't have the money and that they can only afford short term wet leases at the moment.
Delete@Anonymous4 September 2018 at 09:22
DeleteErrr. such a stupid comment, OU is wetleasing right now two Spanish CRJ1000. Seriously man, plz don't talk before you re-think your response.
Well it's no surprise then that they fought tooth and nail to block the strike.
ReplyDeleteYou have to be crazy to buy new aircraft knowing the financial status of the company. Better to lease out older planes.
ReplyDeleteExactly. New aircraft are the least necessary thing that OU needs at the moment. These planes are too expensive.
DeleteAnd fly with what, by that time 25 year old planes?
DeleteThat's why they won't be buying them but instead leasing them.
DeleteDoes anyone know what will be the capacity of these neo jets?
ReplyDeleteTheir layout is all economy so I assume 189.
DeleteNo, not 189 your assumptions are wrong. 174 sets, 12 Business class and 162 in the economy. 189 is too much for Zagreb and Croatian market atm.
DeleteSource?
DeleteFor all the people saying they don't need these neos, I will just remind you that the current Airbuses are getting old and will need to be replaced.
ReplyDeleteI'm interested to see how their fleet will develop in the next few years. The neos will be a great addition.
DeleteAgree. Happy that new aircraft are coming.
DeleteThey need new planes.According Eurostat Croatia officially has the EU's oldest aircraft registered under its country code.
DeleteBut these 4 neos can't replace the entire Airbus fleet. Croatia Airlines has 6 Airbuses.
DeleteIdeally they should get these 4 neos and 2 100-seaters.
Delete2 A220s would be perfect.
DeleteAgain with what money? As you can see they don't have the cash for these Airbuses let alone extra planes.
DeleteThey need is more CRJ planes if you ask me. Lower capacity plus cheaper.
ReplyDelete+1
DeleteWe need LOT!
ReplyDeleteBut does LOT need you is the main question?
DeleteMaybe 4K is interested
DeleteI would love for 4K to take over. They have done a relatively good job with Adria and some sort of consolidation in this area is necessary.
DeleteThey have done good with Adria? Wait for this winter to see how well they have done.
DeleteLOT Polish Airlines has said many times that it is interested in consolidation of the aviation market in Eastern Europe. That the current passengers will not be transferred to Lufthansa, Turkish Airlines or Air France. For this reason, LOT Polish Airlines is building a base on the World War II and who knows, maybe later, a new national carrier MALOT. LOT Polish Airlines announced the interest in buying Adria and Niki from Austria. Recently, Romanian TAROM has announced that it is interested even to unite with the Polish carrier, note that TAROM orders for aircraft similar to those of Polish operas carrier like Boeing 737MAX. LOT is interested in buying Croatia Airlines but it all depends on the price.
DeleteWill they manage to find someone?
ReplyDeleteIt will be interesting to see their Q3 financial report and if they managed to turn that minus into a plus.
ReplyDeleteThe real test for Croatia Airlines is 2018 in terms of profitability. There are no more assets other than planes which I doubt they will sell. So yes, it will be interesting to see the real financial performance this year.
DeleteSo in that case, OU will be faster than JU and will be the first to have those sexy neos. Congrats OU and kudos for the hard efforts.
ReplyDeleteWe don't actually know when or what Air Serbia will be doing with the neos so we will have to wait and see. There are over two more years until 2021 and when Croatia Airlines plans to get these aircraft.
DeleteBest of luck OU
ReplyDeleteA320 NEO is a good fit for Croatia Airlines. Good capacity for summer operations.
ReplyDeleteBut what about winter?
DeleteACMI leases. Just look at Adria.
DeleteI agree with the idea of ACMI wetleases. This is something they could have been doing for years. A good idea in my opinion.
DeleteEurope needs smaller planes in winter, who will wet lease them? Global market? Yeah sure
DeleteFor the last time, there is next to zero chance of leasing out metal in winter unless you get really lucky and u can strike a deal with a Caribbean operating airline from the Americas or maybe an Oceanian company that has more need of planes in our European winter than in summer. Theoretically one can still make lease deals in Winter even in Europe but since demand is minimal and offer very big, the lease rates will most likely not even cover the costs.
DeleteWhat about ASL neo order? They should start arriving at the end of the year. Seems like mrka kapa
ReplyDeleteYou could have discussed that here
Deletehttps://www.exyuaviation.com/2018/08/air-serbia-to-take-former-rossiya-jet.html
Last month, the European Aviation Safety Agency had sounded a safety alert for new NEO variants 251 and 271 engines,possible engine inflight shutdown.Engine trouble on the neo. However, this newer technology has seen some teething troubles, as it often happens with new technology.
ReplyDeleteOne of the reasons why Wizz Air decide to order older generation of engines for its new Airbus320 aircraft(very durable and reliable 232 engines-most of engine parts for 232 engines are made in Japan,America and Italy).They are planning to introduce Airbus320NEO with 251 and 271 engines after 2026 year(hopefully engine manufacturer should resolve quality issues for 251 and 271 engines)
Croatia Airlines are unsure about engine choice probably they should order reliable American made engines for their Airbus320.
The wet leased Fokker100(registration 9A-BTD) in Croatia Airlines fleet uses Rolls-Royce engines.
the airbus320NEO has very unreliable 251 and 271 type of engines.The best engine for Airbus320 is older generation and very reliable 232 engine choice(made in Japan/America and Italy).The gear turbo fan engine put on Airbus 320 (neos) are facing problems leading to engine failures.
ReplyDeleteOU definitely needs a change so this is a good development.
ReplyDeleteThey should get rid of Dash 8 planes. Hasn't proved the best of performers.
ReplyDeleteThey just extended their lease this year.
DeleteCanadians were never good at making aircraft anyway. Nothing compares to Brazil.
DeleteEmbraer forevaaa! Yeah!
OU needs a A330 for winter, exotic charters and deploying in the summer on busy routes> Moscow, UK and bringing Canadians to the Croation coast to compete with Rouge.
DeleteCompletely agree. It was a mistake for OU not to get a long haul plane and fly to to several markets which sees a lot of tourists to Croatia like US, Canada, Asian countries. They could have done really well and feed their domestic flights as well.
DeleteAn. 11.14
DeleteBack in 1994, Lufthansa was changing DC-10 fleet for A340. As continuation of cooperation, after 737 already bought by OU from LH, DC-10 was supposed to arrive. In summer timetable 1994, 3 weekly JFK, 2 weekly YYZ and weekly ORD were PUBLISHED from ZAG. About 30 employees, pilots, cabin crew and mechanics who had licences for DC-10 and had worked for JAT before, waited for the exact date when they would be sent to FRA to LH for refresher training to start operating announced North America DC-10 flights. Then literally overnight ATR42 was announced joining the fleet and all DC-10 plans cancelled. At that time already I saw direction OU was heading. I left 2 years later. Just not to be mistaken :still actively flying, foreign airline, of course. Brgd !
Very interesting Pozdrav iz Rijeke. Thanks for the info. That would have been very excited had they taken the DC10.
DeleteMutti Lufti probably understood that it was much more profitable to have OU feed its German network than to create a mini hub in Croatia. Not much has changed since 1994.
DeleteHow many planes does Croatia Airlines own?
ReplyDeleteFleet Size 14 Aircraft
DeleteAverage Fleet Age * 13.4 Years
Aircraft Type Current Future Historic Avg. Age Total
Airbus A319 4 1 19.6 Years 5
Airbus A320 2 2 18.9 Years 4
De Havilland Canada DHC-8 Dash 8 6 9.5 Years 6
Thanks but I was asking how many of those planes do they own. They don't own the Dashes as far as I'm aware.
DeleteQ400s are owned by a leasing company. I think Croatia Airlines owns its Airbuses.
DeleteMinimum 1xA320 and 3 engines were sold and leased back
Deletesuch a strange deal, especially with these advance payments
ReplyDeleteHappy that new aircraft are coming. Will be interesting to see what their fleet will look like in 5 years.
ReplyDeleteSo now they probably won't name a new CEO because they plan to sell the company anyway.
ReplyDeleteThey must act on doing something with their fleet. It is becoming older and older. The Airbus fleet is now almost 20 yrs. Yes, the neos are coming but that's only 4 of them. A strategic partner would definitely help here. They don't have the funds to finance a fleet modernization on their own.
ReplyDeleteold story - no company on balkans can afford new planes
ReplyDeletei hope JU will be able to duck their order with help of etihad, but who will hel UO i have no idea
Airbus320 very reliable 232 engines are almost identical with awesome engines of the McDonnell Douglas MD-90-30.
ReplyDeletedash 8 Q400 is a very good and powerful aircraft, but maintenance costs are high.
Dumping 363m EUR onto your balance sheet while looking for a "strategic partner" is the single most terrible thing you can do.
ReplyDeleteI have the feeling that ex YU carriers seem to be stucked not knowing where to head. I know that they are constantly adapting to the markets and such but feel no sense of real regional strategy.
ReplyDeleteOU wants the Neos but forgets increasing its regional influence in the rest of the neighor countries.
JU became a low cost carrier but also drops important routes like Hamburg? Seriously?
Okay good move to immediately cover Larnaca in winter but only 1 weekly flight?
Why not collaborate with Aviolet like Emirates did with Flydubai??? Fuse everything and make JU a big airlin again.
JP did increase its regional influence but still more planes are needed. The time to get those Skywork planes immediately. Focus on key cities with no competition like INI or SJJ hungry for Europe flights. Base an aircraft there like you did with PAD. Consider long-haul after BX failure and check Japan or China flights.
YM has very good primary destinations but needs secondary airports as well such as Luton, Beauvais or NYO next to Stockholm. Also collaboration with Virgin Atlantic.
I hope all ex YU airlines wake up from this hibernation soon and start acting fast!