Zagreb Airport to refinance debt, names new CEO


The Croatian government has given its approval to Zagreb Airport's operator to refinance some 198 million euros of debt from 2013 under more favourable terms. "Conditions have been met for the refinancing of existing debt which will enable the concessionaire to further strengthen the stability of the project, pave way for investments into the expansion of the passenger terminal and lower future business risks", the Croatian Minister for Sea, Transport and Infrastructure, Oleg Butković, said. Under the agreement between operator Zagreb Airport International Company and the Croatian government, the concession holder cannot amend or in any way alter the financing agreement before prior approval from the state.

The concession agreement stipulates that the government is entitled to 33% of any profit resulting from debt refinancing. As a result, the state anticipates receiving some seven million euros, four of which will be paid directly to the budget and the remaining three will be used to upgrade the VIP lounge and general aviation facilities used by the Croatian government and personnel at Zagreb Airport. The airport's management recently said it plans to start work on a new building that will house car rental agencies, that will be located near the terminal. Furthermore, it plans to build a new apron capable of handling wide-body aircraft. "This means we will then have to invest in new jet-bridges for larger aircraft. Following this, we intend to commence work on the overhaul of the old passenger terminal", the airport's management said in October. The operator is obligated to start expanding the main terminal building no later than the end of March in the year it anticipates handling its five-millionth passenger.

Meanwhile, the Supervisory Board of Zagreb Airport International Company has named the airport's new General Manager, who will replace Jacques Ferron after three years at the helm. Huseyin Bahadır Bedir will now lead the airport. He previously served as Zagreb's Chief Operating Officer and Board Member, as well as the Chief Executive Officer of Ground Handling. Mr Bedir was also previously the General Manager of Ground Handling at TAV Airports in Tunisia. TAV Airports holds a 15% share in Zagreb Airport's operator, along with Aeroports de Paris Management (20.77%), Bouygues Batiment International (20.77%), Fond Marguerite (20.77%), IFC (17.58%) and Viadukt (5.11%).

Comments

  1. From what I noticed at ZAG, each CEO was brought in for a different phase of development of the airport. Hopefully the new one will have the mandate to focus more on bringing some LCCs. Overall I think Ferron did a good job and I'm saying this as someone observing from the sidelines.

    ReplyDelete
    Replies
    1. TAV has done a good job attracting LCCs in Macedonia so we will see.

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    2. TAV hasn't done anything in attracting LCCs to Macedonia. They were just lucky that our government decided to subsidize Wizz Air and TAV got to enjoy all the benefits.

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    3. ZAG definitely needs more LCCs. One airline in winter and three in summer is unacceptable for an airport its size.

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    4. Also, Croatia airlines is in really bad shape, unfortunately, don't think it will change any time soon!

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    5. I think OU is in more or less the same shape it is all the time. Keeping the status quo. But it needs to be privatized next year for things to start moving.

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    6. With this govt. in power nothing will change at OU. Remember Butkovic announced a new CEO back in April. Still waiting...

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    7. We have a really lousy government, not doing anything about OU! I seriously doubt that anyone will be interested to buy OU!

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    8. Arrival of LCCs could also hurt Croatia Airlines so I don't think it would be a good move.

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    9. Then what is a good move? You can't help everyone, we need LCCS, but we also need a national carrier (so to speak).

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    10. Anon 09.11

      TAV is also supporting the LCC growth in Macedonia heavily through its incentive scheme. Its not only the Gov't who is subsidizing traffic growth.

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    11. But TAV incentive scheme in Macedonia is available to every airline flying or planning to fly to Macedonia. Government subsidies aren't.

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    12. Anon 11.29

      Yes, correct. Every airline which complies with the conditions of the TAV incentive scheme are eligible for support. Wizzair is one of the several airlines which are eligible for incentives from TAV.

      The Governement's subsidiaries are also available for every airline which complies with the conditions of the support.

      In the end, Both TAV and Government supports traffic development jointly.

      Delete
  2. Transfer to TAV seems to be complete.

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    Replies
    1. Maybe that's why OU is doing well on SKP flights :D jk

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    2. Airport is becoming more Turkish operated then French which isn't fair since TAV had a separate bid for the airport.

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    3. No such thing as transfer to TAV. There is no change in the shareholder structure. People and their positions may change but whoever manages the airport, manage it according to the concensus of the shareholders' strategy.

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    4. It is obvious that French have given effective control to the Turks. You just have to see who has filled which positions.

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    5. Giving the control of what? The CEO may change numerous times during a concession of 30 years. This doesn't mean that everytime the control of the airport is taken over by the shareholder whom the CEO is from.

      The CEO is accountable to the shareholders and is responsible to manage the company according the shareholders' decisions which are taken all together.

      Get real, how can the French give control of the concession to another party? And why would they? Why would they let another party solely manage the airport which they have invested a lot of Money in? Would you do that? They wouldn't be able to do it even if they wanted to. There are tons of agreements to prevent this.

      Every shareholder has joint control over the Airport company regardless of appointing the CEO, CFO, COO whatsoever.

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  3. "the remaining three will be used to upgrade the VIP lounge and general aviation facilities used by the Croatian government and personnel"

    hmm how about they use it for something worthwhile for all citizens?

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    Replies
    1. Not just that but the fact that the government is investing into an airport given up for concession. That should be ZAIC's job.

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    2. Exactly. Why is ZAIC doing it? After all it is also the parrt of the airport controlled by ZAIC operator and any extra services will be paid to ZAIC and not to Government.

      It is strange and suspicious that ZAG operator does not have money to pay to Government agreed amount of money and needs to "refinance" its debt.

      After all it looks like that many things do not work as they should in ZAG and that income is less than expected

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    3. Hi. This is very likely due to Croatia's presidency over the EU in the first half of 2020. This was not anticipated to take place so early on in the membership and now things are being prepared fanatically.

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  4. Any new airlines planned for ZAG soon?

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    Replies
    1. Nothing announced yet.

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    2. Air Transat increasing flights to ZAG to 3pw from June until September:

      https://avioradar.hr/index.php/hrvatska/nove-linije/1274-kanadski-air-transat-pojacava-liniju-za-zagreb?fbclid=IwAR300o2CdTpYx9Kl1XZmywtIrBqtP8nM0tlDRqI6DN4BDYiGfaIUr1nM8AQ

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    3. It's a nice addition but I was thinking more in terms of new airlines. There was talk of new China and Japan flights not so long ago.

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    4. Nothing as far as I know. But, who knows, Emirates announced their flights in January.

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    5. True. Fingers crossed.

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    6. There is always the possibility for China flights. They announce them only a month before they start.

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    7. I read this morning an article in China Daily about Hainan's network development plans. Unfortunately, no mention of ZAG. The only city in the region they mentioned was Budapest. If I remember correctly they used to fly to Budapest a while ago.

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    8. Maybe it won't be Hainan.

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    9. ZAG really needs Easyjet.

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    10. ZAG needs more than Easyjet, Scandinavian market it not covered during winter, what about Italy and direct flights to Rome and other cities? What about domestic market? So many missed opportunities!

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    11. I agree although I think domestic market is not profitable for any airline, OU included.

      I dumbfounded by the fact that there are no nonstop flights between Zagreb and Rome still.

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  5. Bravo Hrvatska!

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  6. Have the loads on Korean improved? Someone said they have declined since the triangle flights after doing really great in September and October.

    ReplyDelete
    Replies
    1. Yes, it looks like January and February will be with good booking!

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    2. Excellent, good to hear :) Thank you.

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  7. Debt refinancing is normal. I'm assuming the new CEO is Turkish?

    ReplyDelete
    Replies
    1. I don't think anyone said it was not normal ;)

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  8. Will the new CEO renegotiate concession fee?

    ReplyDelete
    Replies
    1. It's crazy if the govt. allows that. The concessionaire wants the state to subsidize the development of the airport.

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    2. Well that's the situation at SKP.

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    3. I hope the government does not agree because they have allowed the French too much comfort. They allowed them to downsize the original terminal project, to increase fees, to reduce staff so the airport can't function properly at night, for TAV to basically take over the concession... this would be too much.

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    4. The management has identified clearly what they have to do. First they attracted legacy airlines, now low cost, and I assume cargo operators will follow.

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    5. What about the old terminal? Drove past it, still looks in good shape, which is really sad since they are not using it at all. LJU has Brnik as a cargo zone, what are they waiting for in ZAG?

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    6. They said they plan to reconstruct it but it doesn't seem a priority.

      In the text it says:

      The airport's management recently said it plans to start work on a new building that will house car rental agencies, that will be located near the terminal. Furthermore, it plans to build a new apron capable of handling wide-body aircraft. "This means we will then have to invest in new jet-bridges for larger aircraft. Following this, we intend to commence work on the overhaul of the old passenger terminal",

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    7. They said over a year ago it will be turned into a cargo terminal and nothing has happened ever since.

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    8. I was hoping they would use the old terminal for LCCs not cargo :(

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    9. I completely agree that they should use the old terminal for LCC. It's perfect for it and would need minimal investment, no need for air bridges... It would really boost numbers and most importantly offer passengers affordable travel.

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    10. Would it make sense to make the old terminal into a domestic and VIP terminal and use the new one just for international flights? They would free up spce that way.

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    11. That would be a logistical nightmare for OU.

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    12. Croatia Airlines should lease the building and open a dedicated terminal :)

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    13. An. 11.17
      The plans of the Govt of Cro are to fully join Schengen space within one year. All tecnical conditions have been met, and only formal political decision has to be made by EU, similar case as with BG and RO. It means that some 80%of existing traffic is becoming "domestic", not to mention possible development with LCC which are almost or entirely "domestic=Schengen". Your suggestion would result in overcrowded old terminal, as before, and the new one being empty almost all of the time. In my opinion, old terminal is ideal for LCC operations, the new one for legacies, and the space between the two, for cargo, with some construction/modification to be done

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  9. Does anyone know when will they start building this building for rent a car?? They announced it months ago.

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  10. This is like the fourth ceo they have changed since the concession started.

    ReplyDelete
    Replies
    1. What year of the concession are we in now?

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    2. Fifth year started this month.

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  11. I still think that terminal looks stunning from the outside whenever I see a pic of it.

    ReplyDelete
    Replies
    1. Agree, it is impressive from the outside, but too "cold" on the inside.

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    2. I agree with you. But I think the airport just needs some greenery like it was envisaged in the project renders and it would solve that problem.

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    3. Agree, thought about greenery which would make the space much warmer, also, new stores and services could do a great job!

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    4. The airport terminal will look even better once the extension of the pier is completed :)

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    5. What's with the new baggage belt (number 4), is it done?

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    6. No, they didn't even start working on it.

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    7. They started making it, since I was at the ZAG airport on November the 30th and saw it, Anon 11:52.

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  12. A good lesson for Montenegro not to give its airport up to TAV.

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  13. We need new momentum at ZAG in terms of new routes. Hopefully new CEO manages to secure this.

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    Replies
    1. It really isn't up to the CEO to chase up new airlines. This is done by a team of people who, I assume, have not been replaced and are the same ones who served under the previous CEO as well.

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    2. But, then again, we had new route announcements in the beginning, what made them stop? So many tourists, increasing every year, unserved routes operated seasonally, what's the problem? Fees, management, all together?

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    3. Money made them stop. They need to consolidate their finances. If they keep growing they would have to start expanding the terminal in 2 years. That costs a lot of money. According to their projections ZAG will hit 5 million in 2025. And I think that is not a "conservative" prediction, that is exactly what they plan. To slow down growth so they don't have to spend a bucket loads of money any time soon.

      Delete
  14. I don't get it - government has some profit as a result of debt refinancing, and then, government is doing additional investment in airport facilities no matter because airport is under concession agreement?

    ReplyDelete
    Replies
    1. It's the investment into facilities under the government's resposibility like automated passport control.

      Delete
  15. Needless to say, Zagreb still has a very prestigious image worldwide.
    The terminal is modern, the airlines are mainly 4-5 stars. The niche of passengers also has more style.
    Ask anyone who has travelled. This makes it really unique and I am not exaggerating.

    ReplyDelete
    Replies
    1. Yes, but the management is not doing a good job, they are improvising, new announcements simply stopped, they should attract at least one or two LCCS who would base their planes there.

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    2. The whole post by Anon 10:16 is hilarious, but this part got me:

      "The niche of passengers also has more style."

      Yes, ZAG is world-renowned for its stylish passengers, and airlines are flocking there in hope of capturing some of that pedigree.

      Christ…

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    3. "Needless to say, Zagreb still has a very prestigious image worldwide."

      Are you joking? Most people "worldwide" don't even know WHAT Zagreb is, let alone where it is. Superiority complex much?

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    4. The only city in Ex-Yu region with prestigious image is Dubrovnik. And probably will stay that way.

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    5. Hordes of tourists are usually not a prestigious image.

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    6. So, Venice is not prestigious, Anon 14:10?

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    7. Not really, same problems as Dubrovnik.

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    8. Christ almighty, stop embarrassing yourself already. What prestigious image? To who? You? Most of people never heard of Zagreb, let alone think of it that way.
      Cut down on bunika.

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    9. Fully agreed frishki. Some people here really "jedu bunike", very often, and in plenty of posts, not only this guy

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    10. Come on people, how naive are we. The initial poster was clearly either being sarcastic or was looking for for some easy targets to get triggered over a kindergarten standard comment. And he obviously found some. Joj!

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    11. Q400
      If I'm not mistaken, you reside in Australia, and don't spend too much time in Croatia. The poster was unfortunatelly not sarcastic. You can't even imagine how many of those there are in Croatia, whose most distant destination ever was Graz, and who really think that because of finally and 20 years too late having new and not so big and not so functional terminal, is something prestigious and extraordinary


      Delete
    12. I understand where you are coming from Poz but it reads like nothing but someone trying to cause some trouble within the blog or just trying to make themselves laugh at others expense. This particular Anonymous style of writing is easily recognisable and they have made similar comments recently and all to the same effect.
      Notice how they never come back to defend the original comment?

      Best to ignore them and they will eventually get bored and stop.

      Delete
  16. I see new CEO was head of ground operatons. ZAG's ground operations still need to improve a lot.

    ReplyDelete
    Replies
    1. Because they are still experiencing a lot of problems and airlines are complaining.

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  17. So what passenger increase can we expect in 2019 at Zagreb?

    ReplyDelete
    Replies
    1. My prediction is around +5%.

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  18. Good work Zagreb!

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  19. until when does the concession run?

    ReplyDelete
  20. Development until 2020 will be key. That's when Ljubljana gets its new terminal and there will be a lot more competition between these two.

    ReplyDelete
    Replies
    1. I highly doubt LJU will pose any competition to ZAG, with or without new terminal.

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    2. Agree with Anon 11:17. Let's not forget that 2020 is also the year of Croatian presidency of the Council of the EU for 6 months, so plenty of job to be done, hope for some new routes to be established.

      Delete
    3. It will be interesting to see if the development of Banja Luka Airport will have some impact on ZAG?

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    4. For starters, all those from Srpska no longer have to go to Zagreb to fly to those destinations served by FR.

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    5. Let's see what happens with ZAG-ARN next summer.

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  21. The biggest issue with ZAG is that there are almost no announcements for next summer. Only addition is the one weekly Transat and Korean which started last September, so late summer season. On top of that Eurowings isn't coming back from Berlin which is a major blow to the airport. If Berlin can't make it then how can we expect routes such as GOT, ARN... to survive?

    Overall a new approach is needed as like this the airport won't grow.

    ReplyDelete
    Replies
    1. +1

      They need to do what BEG does, constantly get new airlines to launch flights and increase frequencies. This winter was especially bad. When airlines started to cut flights in January and February the airport and the tourist board should have worked to keep them flying by promoting Zagreb as winter wonderland destination.

      Delete
    2. BEG will have at least 39 additional weekly rotations next summer. Amazing!

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    3. Zagreb-Berlin is back again apparently

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  22. VINCI is so much better deal for BEG than all this parties included in ZAG concession. A lot more money for a 5 year shorter concession. They can appoint one manager for many years since they are sole investors, which means more stable leadership. There were no downgrades to a development plan. No shady small print clauses except for INI.

    ReplyDelete
    Replies
    1. We have not seen the concession agreement yet to make those sort of conclusions.

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    2. The number of new airlines and frequencies is enough proof. They are going to bring an additional 40 weekly flights! That's around six daily flights!!!!!

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    3. Yeah and ZAG got EK and KE so what.

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    4. Only problem with Vinci is they have a limited expansion plan for Belgrade (no new terminal) and this would most probably not change soon. They seem to try to squeeze every cent out of the infrastructure they currently have. Look at the problems facing Lisbon. The Airport is crying for expansion and Vinci are doing nothing about it.

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    5. Those 39 new flights are a good indicator of expected growth in 2019. Unless ZAG gets a lot of new flights announced in the coming weeks and months, BEG will likely pull ahead again in 2019.

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    6. Dublin will become year round destination from ZAG, 2pw during winter and 3pw during summer (Croatia airlines, A319).

      https://avioradar.hr/index.php/hrvatska/nove-linije/1275-croatia-airlines-projacava-promet-prema-dublinu

      Delete
    7. Venice is not prestigious? Hahahahaha, bravo!

      Delete
    8. Anonymous28 December 2018 at 13:58

      What Vinci seems to be doing is reducing the quiet period by encouraging airlines to fly during that time (ASL, Aeroflot..). Also, I think they are planning on expanding the current terminal facilities without building a whole new, separate terminal buildng.

      Delete
    9. How about you wait for few years to see how Vinci will actually do what they promised. Everyone was extatic when the new concessionaire was introduced for ZAG and look at it now.

      Delete
  23. Alitalia to FCO would be a valuable addition to ZAG. They have a respectable network offering many connections from their hub.

    ReplyDelete
    Replies
    1. FCO was tried in the past but it failed, even OU can't make it nonstop with Q400 and their onward connections.

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    2. OU's connecting network is uncomparably lower and smaller than AZ's. Alitalia used to fly twice daily between ZAG and MXP, operated by Air Alps. It was always full but stopped when AZ changed its MXP hub strategy and Air Alps went bust. In my opinion, AZ should try daily Embraer FCO-ZAG-MXP-ZAG-FCO, for the beginning

      Delete
    3. Why would they fly to MXP when OU flies it seasonally? OU has a more loyal base and a much better onboard catering.

      Delete
    4. Because Italy is Croatia 's trade partner no 1 or 2. Because Italian business is mostly concentrated in and around Milano. Because Milano hub is getting back lot of its previously lost connections. Because there are no daily flights. Because there are no year-round flights. Because Zagreb is getting more and more city break tourists, including Italian, who at the moment arrive mostly by car and by bus. Because there were two daily flights before which were not cut because of bad LF or low yield but other reasons. Because even JAT 30 years ago operated daily DC-9 Belgrade-Zagreb-Milano. Because people don't travel by plane on one hour flights for catering. Enough, or you need more?

      Delete
  24. Not with AZ though.

    ReplyDelete
  25. KE is super successful and so is EK. Maybe it's time to bring Singapore to offer connections to Australia and New Zealand?

    ReplyDelete
    Replies
    1. Sorry to say but KE in November and December in ZAG is disaster.
      If EK is so super successful why do they leave during the winter?
      Get real.

      Delete
    2. Get real? You should get real information. Where did you see the bad numbers for KE? They increased the plane in winter.

      Delete
    3. +1000% agree with SIN.

      Scoot could fit nicely to Zagreb

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    4. Insider's information about KE in ZAG in November and December.

      Nemjee, do you maybe have official numers to confirm or deny it?

      Delete
    5. Last Anon,

      Sorry, Croatia published their numbers up to July, so no KE numbers at this point.

      Delete
    6. @Anonymous28 December 2018 at 13:51

      KE Numbers are ok in November and really good in December. November was bit down, 57% lF on the route, and December so far is around 75%.

      Delete
  26. I think BNX must quickly take advantage of the current temporarily stagnated situation where no new destinations are being launched from ZAG.
    Eindhoven
    Gerona (Girona)
    Bratislava
    Moscow VKO or ZIA

    Ironically enough, BNX might soon reach the levels acheived by INI. There will be 7 destinations in summer.

    ReplyDelete
    Replies
    1. I think BNX is doing it, I mean they have a year round flight to Stockholm and Brussels which are directly served from ZAG. We will have to see what happens there.

      I think someone posted ZAG-AMS numbers falling when Transavia launch LJU-AMS.

      Delete
    2. Also remember the new BNX-ATH charter. Apparently Aviolet will do fine. I won't be surprised if FR suddenly decides to send 2 planes weekly from their ATH base.
      Should BNX become a LCC base, it will be very difficult for ZAG afterwards.

      Delete
    3. That's what was said here many times but simply they do not want to hear it.
      BNX might become quite dangerous for ZAG not because people from Zagreb would fly from BNX but due to the fact that people from Banja Luka and surrounding will not go to Zagreb anymore

      Delete
    4. In BNX, the handling fee is 20,00 BAM per pax, which is quite competitive:

      https://www.banjaluka-airport.com/OSTALA%20DOKUMENTA/c2016.pdf

      ZAG should follow the same example and lower the fees, too.

      Delete
  27. We heard some time ago that ZAG is in negotiations with Ryanair and now we see that ZAG operator has a problem to pay their debt on time.

    It must be quite difficult financial situation in ZAG especially as almost no new airlines announced new flights for 2019

    ReplyDelete
    Replies
    1. It's not a debt like insolvency debt, it's the loan for the construction of the new terminal from couple of years ago which is now refinanced. Back then the interest rates were more than double than today, so they will actualy pay less now, hence the 7 mil. for the Governmet.

      Delete
  28. check it out guys! :)

    https://blog.dnevnik.hr/aviozag

    ReplyDelete
    Replies
    1. Good read man and I hope you don't lose your job but instead get a promotion.
      I'll tell you what, I'm not sure how old you are or what your experience is but you're a perfect example of whats wrong with Croatia. They need to look no further than home to find energetic people to run the country properly but the ugly head of nepotism if slowly killing the country.

      Regarding some of your infrastructure comments. I wrote in this from when we had first seen the final design plans that the amount they reduced the ramp space was going to cause a big problem.

      Delete
    2. Bravo, Anon 15:44, keep up the good work! Hope for some inside info as well!

      Delete

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