The two remaining fully state-owned national carriers in the former Yugoslavia, Montenegro Airlines and Croatia Airlines, are to be sold by 2020 at the latest, with their privatisation processes advancing. The Montenegrin government has set a deadline to sell off its shares in the flag carrier by May of next year, when it also intends on giving its two commercial airports up for concession. The Montenegrin Prime Minister, Duško Marković, held talks in early October with a "major European company" which has shown interest in buying a stake in the airline. Although the company's name is yet to be made public, it is strongly tipped to be the German investment fund 4K Invest, which also owns Slovenia's Adria Airways. "We are anticipating a letter of intent from a major company, which also owns a carrier, to purchase Montenegro Airlines. I don't know the details of the offer, but there is strong interest from this investor", the Montenegrin Minister for Transportation and Maritime Affairs, Osman Nurković, said recently.
The International Monetary Fund has urged Montenegro's government to sell its stake in the country's flag carrier, noting that its funding of the airline was unsustainable. In April it was reported that a European fund, with limited investments in the aviation sector, was considering producing a joint bid for both Croatia Airlines and Montenegro Airlines in return for shares. According to sources, the fund was pondering over the potential investments but made contacts in Croatia first, which it deemed as a higher priority market at the time due to its potential and size. Although the two airlines differ in various aspects, the investor recognised that both have a similar passenger structure due to the existing tourism industry in the two countries.
Croatia Airlines' CEO, Jasmin Bajić, has said the carrier's planned privatisation process is advancing. "In accordance with the 2018 National Reform Programme, adopted by the government, Croatia Airlines has prepared a tender call for the procurement of financial advisory services to seek out the appropriate module to recapitalise and find a strategic partner. The key goal is for this reputable partner to increase our share capital and future business operations. In other words, to find strategic partner(s) that will assist with the implementation of our fleet plans and provide synergies for the company, while also taking into consideration the wider impact of such a transaction". The government has conceded that a future partner is necessary in order to fund the airline's order for four Airbus A320neo aircraft. The airline is currently assessing ways to pay the European manufacturer for the new jets and is seeking lessors to finance part of the advanced payments necessary for the aircraft's delivery. “Negotiations are ongoing with potential lessors who will finance advanced payments from 2020 to delivery”, the airline said recently.
Not 4K -.-
ReplyDeleteIf they take over one or both there will be no more doubt in my mind that Lufthansa is behind it.
DeleteAnd why is that, is Lufthansa the only company in the world which can or would want to buy (other) airlines?
DeleteInteresting fun fact. Former Serbian finance Minister Mladjan Dinkic who was one of the main people who got Etihad to take over Jat, and Dane Kondic fromer Air Serbia CEO have been seen in Belgrade having coffee together and more recently seen in Podgorica. Dinkic has a company called MK consulting which was selected by Montenegro Airlines last year to advise them about various stuff. Interesting if there is some connection with this privatization.
ReplyDeleteDream team :D
DeleteAir Serbia is much better company than Jat Airways was.
DeleteIf Dinkic with his team manage to do the same with YM it would be great for Montenegro, but this time the circumstances are different comparing to those in 2013...
Hey anonymous @ 09:15,
DeleteGive me literary any airline in the world and >$100m and I personally guarantee you that I will make the company 'much better.'
You're welcome.
Where were you to make Jat Airways much better with all that Government money that was poured one year after another?
DeleteRidiculous
It would be interesting if Etihad was actually still interested in Montenegro Airlines.
DeleteI doubt it's EY. EY is going through restructuring and you can see that they are actually making some wise decisions at the moment, shifting capacity, discontinuing some routes while increasing frequencies on others etc. Buying into YM would mean they are going back to the Hogan model and that would be a big no no.
DeleteThumb up for Observer ! brgds
Delete@Observer
DeleteI'll give you Alotalia and personally guarantee you will not make the company much better with 100m. Making comments on the internet is much easier than turning airlines around.
Of course he couldn't. Empty phrases
Delete"Croatia Airlines has prepared a tender call for the procurement of financial advisory services"
ReplyDeletethe CEO and government have been singing this tune for almost a year. You would think they would have chosen that financial advisor by now.
They are doing this again so some consultancy firm can just get a few extra euros in their pockets. The same as last time.
DeleteSo what happened with the money that was given to IFC to find a strategic partner for OU?
DeleteExactly. Farsa.
Delete@10.18
DeleteSomeones pockets got full for sure
How much was paid to IFC?
DeleteSeveral million euros.
DeleteSo much corruption. Crazy.
DeleteWhat about Garuda?
DeleteCan't believe anything Croatia Airlines management comes out with.
DeleteThat CRJ-1000 looks nice :) would be good to see them in full OU livery :)
ReplyDelete+1 good plane too
DeleteFlew this year with Austrians and also with Montenegros E-Jets. That would be a much nicer plane for OU.
DeleteMihael
Agreed, Embraer jets are a lot better, nicer, more comfy.
DeleteSo LOT is out of the game to buy Croatia Airlines?
ReplyDeleteSeems like it
DeleteLike I said when it was announced that LOT was interested - "In the end nothing will happen as usual".
DeleteDoes that say that in the text?
DeleteIt doesn't but if it was still interested the company wouldn't be looking for a ptivatization adviser.
DeleteEU ordered the government to sell up remaining state owned companies so they will sell it.
DeleteLOT may afford to buy OU and YM but it can absolutely not afford the running costs plus all investments necessary!
DeleteWhat will happen with the neos if Croatia Airlines doesn't find a partner?
ReplyDeleteThe government will pay for it and then OU would probably have to go through some kind of restructuring again.
DeleteOr OU would not take over the 4 jets at all.
DeleteOr a third party instead of OU buys the 4 jets for OU and OU would lease the jets from the third party.
Oh no, again OU and privatisation...
ReplyDeleteThe fact is that nobody wishes to purchase that company.
We heard here Garuda, Aegean, Turskish, Lufthansa, LOT are interested, but obviously all these information were nothing but lies.
The only possibility is to try to find some political deal as JU did. Anything else is just wasting of time and money.
I'm disappointed in the whole Croatia Airlines prioritization process. First of all I was hoping it would be much quicker, that there would be more interest because the airline certainly has potential. I think Garuda which was really keen to buy it would have been an excellent solution because it is based far away from Croatia and would not turn the airline into a feeder. Instead, Garuda would probably have fed Croatia Airlines traffic.
DeleteKoji potencijal? Da bude LH fider? Uz otvoreno nebo bas ih briga za OU.
DeleteGaruda isn't a well run airline either and has it own huge problems. Recently the cut back their european ops, they lost a lot of money.
Deletehttps://asia.nikkei.com/Business/Transportation/Garuda-Indonesia-to-cut-more-routes-after-213m-loss-last-year2
OU has potential for let me guess about 6-8 A321 jets stationed along the coastal airports during the summer (April-Oct 7 months per year) for charter ops alone. During summer OU can operate 90/100-seaters from/to ZAG and several Star Alliance feeders at the coastal airports, another 10-12 jets needed for that (or 6 100-seater jets and 6 Dash8-400s).
DeleteThe thing is, and I think we all know that, is that OU cannot sustain the Airbusses during winter. Those planes aren't cheap and (usually) cannot be left unused for 5 months.
Without these lucrative aforementioned charter operations I fear that OU cannot become sustainable in the long run, those 7 months of charters can bring a lot of money but can still not cover the whole 5 months of loss during winter. OU's potential is about making good use of that - by them - almost completely untapped SEASONAL potential along the coast!
To me it seems best, that OU gets rid of all A319/20s and operates with E175/90 or similar as a unified fleet if possible and every summer leases the necessary Airbus jets. I only reckon that it is very hard and very expensive currently to take on these kind of A321 leases during summer season, so it may as well be that it is better to simply park most of the airbus planes during winter.
Anyway, this is a topic for a long and comprehensive essay, one should go more into detail and needs a clearer understanding of actual income/costs.
Takve eseje ovde pise Purger bez da je procitao ijednu knjigu o upravljanju i finansiranju avio kompanija. Zaludni ga citaju. OU ne moze da vozi turiste na Jadran ne moze ni Alitalija u mnogo vecu turisticku meku. Ne umeju da rade aviobiznis i samo trose novac poreskih obaveznika kao i AS i YM i Adria. Kad budu hteli da plate dobrog CFO onda mozda neko i izadje iz crvenog to nije Sinisa Mali.
DeleteNaravno da ja nisam pisao gornji komentar. Ja se potpišem pod svoje.
DeleteJa nisam pročito ni jednu knjigu o upravljanju i financiranju avion kompanija? Nazdravlje. To ste sanjali ili ste pričali sa Vidovitim Milanom? Još jednom čestitke.
U životu ćete stvarno puno postići kada izbacujete teze i argumente o ljudima koje ni najmanje ne poznajete, ne znate njima baš ništa, ali zato bez ikakvih spoznaja izbacujete informacije kao da su činjenice. Bez obzira što su čiste neistine.
Moja biografija je poznata i javno objavljena. Ljudi mogu vidjeti moja postignuća i uspjehe. Dragi anonimče.
So we might have a little pan ex-Yu airline if 4K gets its hands on both OU and YM. Finally what was proposed around 6 years ago with the merging of JP, OU and YM will happen.
ReplyDeleteAnd all we needed was for the Germans to come...
DeleteI think such an airline would make sense. And it works with both JP and OU in star Alliance.
Delete4K cannot make JP profitable and it is still far from YM and OU
DeleteAnd then 4K sells the package to Lufthansa and all three are merged with Eurowings ;)
DeleteThis idea has been going on for a few years. Obviously some foreigner had to come in to make it happen.
Delete4K has done a relatively poor job with Adria and they are such a liability as a company. I hope they are not involved with either airline.
DeleteI would prefer if a non European airline or company bought them. But then they would not be able to get over 49%.
ReplyDeleteLet's be honest. Big majority of Croatians would be the happiest if LH showed the interest to buy OU.
DeleteBut, it did not happen and probably won't happen at all.
Why exactly? Only because they are Germans? Not this time, mama.
DeleteYes, because they are Germans, because they are powerful and rich.
DeleteAs it was the case in the past.
The majority of Croatians would be happy if those who ran the airline were held accountable for their actions, replaced when performance was not up to scratch and replaced by others who have an interesting in seeing the airline grow and show some initiative.
DeleteQ400, applause!
DeleteThe current government cares very little about OU. Unless they are pressured to sell it, like Montenegrin government is with Montenegro Airlines, then I doubt we will see any changes in OU's ownership structure any time soon.
ReplyDelete+1
DeleteIf they keep dragging their feet, potential investors will already invest in airlines around them. Time to get their act together.
DeleteWhich airlines around them are getting privatised?
DeleteAlitalia for one.
DeleteAlitalia won't be privatised. This time the new populist government has a plan to make Alitalia a state company. Again.
DeleteThere is a lot of interest in investing in Croatia in general and then they come to Croatia see how bad all the red tape is and quickly give up. Huge problem in Croatia in general. From ship building to the airline to other sectors. Sadly the people of Croatia as a result suffer the most.
DeleteApplause 2 Q400. All true. Na dnu EUa.
DeleteI don't see what a potential investor has to gain from buying either one of these airlines.
ReplyDeleteAgree. Buying such a loss-making airlines, with a couple of planes is totally insane.
DeleteHow many planes do each of them own?
DeleteLH/4K makes sense for Montenegro and Croatia.
ReplyDeleteMakes sense maybe for OU and YM but not for LH and 4K
DeleteSome form of consolidation in the ex-Yu among airlines is necessary.
DeleteGood luck.
ReplyDeleteI hope both get privatized.
ReplyDeleteIf Milo and company get a good commission ;-)
DeleteIf 4K is really interested, then those rumors that LH is behind it may be somewhat true. They'll use 4K to clean all of the airlines and then buy them/join them or something.
ReplyDeleteI wish the best of luck to Montenegro Airlines and Croatia Airlines and who knows maybe an exciting future is ahead of them.
ReplyDeleteBoth have tried to get privatized on numerous occasions and 4K could be a solution for them. Would make things interesting in the region.
DeleteInterestingly both airlines are the only ones in the region left operating more or less as legacy carriers.
ReplyDeleteThe lines between legacy and hybrid are very blurred in today's world.
DeleteSo we could finally see Croatia Airlines privatization completed in 2019?
ReplyDeleteNo.
DeleteMGX could really use some of those Dashes and OU could really use some of those Embraers.
ReplyDeleteOU desparately needs year round 100 seaters. The only way out of seasonality for them. During winter Airbuses are sitting on the apron and dashes are too small to earn profit with winter fares.
DeleteOvo je proces koji traje decenijama bukvalno od osnivanja CTN. LH želi Balkan pod svojim krilom i dobiće ga, a sa druge strane nešto joj se previše i ne žuri jer ima tržišta na kojima se može mnogo više zaraditi nego u siromašnim (spram izvorne EU) ex yu državicama. ADR I CTN su im završavale posao dok nisu postale tipične rasklimatane ex yu kompanije zbog korupcije i ostalih ex yu boljki i sada je vreme sve to pokupiti pospremiti i napraviti neki Eurowings Adria. To će još potrajati jer LH ima i svojih problema ali koliko god ex yu bio siromašan LH ga želi pod kontrolom da im ovaj mali kolačić zvani ex yu ne bi pokupili drugi.
ReplyDelete+100
DeleteOno sto 4K/LH ne zele da priznaju je da je BEG/Air Serbia najbolje mesto i nacin za konsolidaciju avijacije na ex yu prostoru. Sporo kapiraju ali ce to biti jasno za 5-10 godina.
DeleteI think the Croatian government should organise an international tender and see who is interested in Croatia Airlines.
ReplyDeleteAgain?
DeleteCroatian government don't want to sell, they launder and steal a lot of money trough it
DeleteI can see the reaseoning a company would have to acquire both. I actually think that would be Montenegro Airlines's only chance
ReplyDeleteAs it stand now, YM is actually in a better position since talks betweent he government and potential future owner have already taken place. Also Montenegrin government is prepared to write off all debt.
DeleteAny real chance of OU getting sold?
ReplyDeleteI onky see 4K as a potential buyer. Or some other investment fund at best.
Delete*** only
DeleteLufthansa would be the most logical partner for both.
ReplyDeleteHaha but LH must first be interested.
DeleteI would say Eurowings is more likely. Similar to the way they purchased Brussels Airlines.
DeleteHow much do both governments plan to sell? 49% or 100%
ReplyDeleteif it's someone from outside EU they can sell 49% if it's inside EU they can sell up to 100% but I think they would sell around 50%
DeletePrivatisation consultant? Tender for a privatisation consultant? Is this me or this seems to be an elegant way to pay somebody AGAIN and postpone everything?
ReplyDeleteYes! Same old story from the government. They are repeating the same thing and nothing comes out of it.
DeleteAnd nobody seems to be accountable. Ever. Opozicija i novinari spavaju.
DeleteSame story from Croatian government each year. DO SOMETHING!!
ReplyDeleteI think the government as an owner is not a good thing. YM and OU definitely need a change so this is a good development.
ReplyDeleteFor those advocating closer ties with LH Group, this is their philosophy. This is what Lufthansa CEO said in an interview published recently:
ReplyDelete“The Lufthansa Group has 15 airlines. Whoever brings down costs and generates more income can fully count on our support. A good example is SWISS, which will soon have new and additional aircraft. At Austrian Airlines and Brussels Airlines, less good results were achieved, these companies do not have to expect additional investments, let me put it this way: their fate is in their own hands.”
What about Turkish taking over either of the two?
ReplyDeleteThey said they were not interested in OU.
DeleteThe only airline that makes sense is KE, the same they did with OK. This way ZAG can immediately be integrated with the rest of the Korean cities such as CJU and the second Seoul airport, GMP.
ReplyDeleteAlso red and blue national flag colours unite both Croatia and South Korea.
Yes the colour of the flags is a decisive factor.
Deleteahaha
DeleteKE last year sold its share in OK to Travel Service. So, the similarity in colours between Czech and South Korean national flag din't help.
DeleteLatest news from Montenegro:Airports goes to Arabs :-(
ReplyDelete