Split Airport rejects Croatia Airlines holding


One of Croatia’s busiest airports, Split, has rejected potential plans to create a holding made up of six of the country’s airports and Croatia Airlines in a bid to recapitalise the national carrier. “Investing in an airline would be too risky. It is not in line with aviation trends in the past forty years and it is questionable whether such action is consistent with European Union regulations”, the General Manager of Split Airport, Lukša Novak, said. He added, “We believe we have given our contribution to the state by self-financing our expansion project and by giving 60% of our profits to our owners”.

Mr Novak said the proposal to form an airport- airline holding has not been made official but that there have been unofficial discussions surrounding the idea. “We discussed it with the Director General of the European Region of the Airports Council International (ACI), Olivier Jankovec. We are already assisting Croatia Airlines the best way we can, through the development of certain routes, particularly during the winter months”, Mr Novak said. Mr Jankovec previously noted that the days when airports subsidised airlines were “long gone”. He added, “I doubt the European Commission would approve for Croatian airports to be rescuing Croatia Airlines, which is in state ownership”.

The airport- airline holding model is expected to be officially proposed by the carrier’s privatisation advisors, which have until the end of the year to present the best possible options for Croatia Airlines. The government has tied the recent 33.7 million euros in state aid it is providing the company with the completion of the privatisation process by June 2020. It previously said various models were being considered and that it would be prepared to sell up to a 70% stake in the company. However, it warned that the state would safeguard its interests in the case of changes to the airline's ownership structure.




Comments

  1. Surprise surprise

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  2. I don't understand how Dubrovnik Airport could participate. Since they have built up the airport with EU funds which stipulates there must be no changes in the ownership structure.

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  3. This idea is dead before it saw the light of day.

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    Replies
    1. Let's wait and see. It's the government that owns all these airports and the government has the last word.

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    2. Poor airports if the government decide to kill them to support a dead body.

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    3. The central government doesn't exclusively own the airports. Local authorities and countries do too and they won't necessarily side with the government.

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  4. Excellent news.

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  5. The question is what does Croatia Airlines do now? If airports are not going to be part of a holding?

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    Replies
    1. Options are running out. I still think the best they can do is offer it to someone from the aviation industry.

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    2. That's what the government thinks is best too but the issue is there are no takers.

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  6. To me it looks like this will be another failed privatization. I fear afterwards the EU will probably request those 33 million euros to be returned.

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  7. " We are already assisting Croatia Airlines the best way we can, through the development of certain routes, particularly during the winter months”

    Which routes does Croatia Airlines maintain from Split in winter which are receiving assistance from the airport?

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    Replies
    1. In winter they fly from Split to Frankfurt, Rome, Munich and Zagreb.

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    2. ZAG is part of PSO. So it's one of the other three.

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    3. Route can be supported in addition to PSO. Like Zagreb-Dubrovnik.

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    4. They are helping by closing the airport at 23:00 LT. Remember diverted A/C to Rome? LOL, it seams like there is different owner of the both companies.

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  8. "The government has tied the recent 33.7 million euros in state aid it is providing the company with the completion of the privatisation process by June 2020"

    And if the privatisation process is not done until June 2020?

    Bye, bye?

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    1. It was probably the way the government could give OU 33 million without the EU making an issue out of it. They probably said they would give them money now and have the airline sold by June 2020.

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    2. I am sure EU will check the situation in June 2020.

      If not privatised OU will have to pay back 33 million EUR and it practially means end of all their operations

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    3. It was stupid of the government to link the two.

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    4. They will probably manage to sell the company to someone by June but the thing is, as time passes by desperation will kick in and they will sell it to anyone, like Adria was sold to 4k Invest.

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    5. It was not stupid, anonymous 9:12, it was the only way they could do it.

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    6. I think its very improbable that anyone will buy OU by June. It's turning out to be a bigger and bigger mess with each passing month. This whole airport financing story is one of the most desperate moves I've heard of. A collation of the unwilling. In the end, OU will go down directly due to regulatory breaches and indirectly due to its life support being cut off.

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  9. Smart thinking. The airport shouldn't be dragged down to help a dinosaur.

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    1. But all those airports depend heavily on that dinosaur and will be affected if it wasn't around.

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    2. SPU won't be as affected by OU's death, the airport has moved on.

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    3. They depend heavily on OU? Split? Dubrovnik? What's OU share there in summer? If they decide to waste their money in OU, they would be dead.

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    4. Croatia Airlines is still Split's number 1 customer. So I don't know how they moved on?

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    5. @9.18
      Yes they do depend on OU. OU's share might decline in summer (not too much because they have substantial networks out of both in summer) but in winter they significantly help the airports. Seasonality would be even worse without them. Look at easy jet with the dozens of routes they have from DBV and SPU yet they don't want to fly during winter at all.

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    6. Anonymous 9:18, do you think this move is good for the airports? I don't.

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    7. I don't think it's the best move for the airports but the alternative would be bad for them and the airports.

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    8. Airports such as Dubrovnik, Split, Pula and Rijeka are already effecting Croatia Airlines' fleet utilization negatively, but this is not their problem. Croatia Airlines must be managed by people who are aware of the business models in aviation (i.e. hub&spoke) and who can resist the political influence (who can refuse the request to operate from every airport directly to the major hubs out of the country).

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    9. I think the alternative would be bad for OU. Airports like Split and Dubrovnik would recover quickly. The negative thing for them would be winter. Oh yeah, and I see another big potential loser here, Zagreb.

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  10. Split Airport will do what it's told by its owner which is - the Croatian government.

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    1. Suicidal behavior. If they do so.

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  11. “We discussed it with the Director General of the European Region of the Airports Council International (ACI), Olivier Jankovec. We are already assisting Croatia Airlines the best way we can, through the development of certain routes, particularly during the winter months”, Mr Novak said.

    How they help during during winter months? There is something in addition to PSO ?

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    1. There are probably incentives for winter flying from Split. Like there are incentives from many airports.

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    2. And this incentives are open to all airlines flying during winter or they are exclusive to OU?

      I don't remember public bid for this but I wasn't tracking it really...

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    3. No they are not exclusive they are offered to everyone. They don't have to bid for it. They get it automatically by flying in winter.

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    4. Until few years ago coastal airports were offering all services free of charge during winter (despite their official tariff), some were even offering additional money (joint marketing campaign) via their tourist boards.

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    5. Interesting. I'm surprised more airlines didn't use that opportunity to launch flights in winter.

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    6. Anon 9:31 I believe you are also not aware that many of those flights are cancelled due to no booked pax at all

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  12. Televisa presenta ...

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    1. top 3 of useless comments on this blog:
      1: Bravo Hrvatska
      2: Bad news for airport x y
      3: Televisa presenta

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    2. It is funny though :D

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  13. The government will make some deal for OU in the end. Remember that if OU collapses the government will have to make big payouts to the concessionaire of Zagreb Airport. That's part of the deal.

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    1. Smart thinking by the French.

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    2. If OU dies the airport will be forced to make a deal with a new airlines because the government won't be willing to pay the French fines because of mistakes their party members made.

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    3. Who cares if they are not willing? They have to, if the contract says so. Im surprised how the rules are (not) followed in this part of the world.

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  14. It will be rejected by DBV too.

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    1. DBV is run by HDZ so they will do it if they can (not sure if they allowed to because of European bank loan rules).

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    2. OSI will reject it as well.

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    3. Why would OSI reject it? OSI is the only one that would benefit from it. As a loss maker they would not be forced to invest anything while other members of the holding would probably have to invest in OSI.

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  15. So they would like that the coastal airport sacrifice themselves to save (?) OU. In return, OU will kill them all.

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    1. Yes. Stupid plan.

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    2. Who is flying to coastal airports during the winter? PUY, ZAD and RJK can become BWK during winter period. Seasonal airports. RJK benefits from Butkovic. He wants this airport open during winter. And they are paying to airlines to fly to RJK.

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  16. I hope this is not the only solution the privatization advisers will give. They are being paid good money.

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    1. They won't get paid unless Croatia Airlines is privatized or recapitalized. That's part of the deal.

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    2. Well at least that's one good thing.

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    3. It seems they will be left without their fee.

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  17. Honestly I don't see any airports being interested in this except maybe Osijek which doesn't know what to do with itself.

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  18. Is their a current example anywhere in the world of airports running an airline?

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    Replies
    1. HNA group in China runs some airports. it also runs Hainan Airlines and some other carriers.

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    2. Great so the only other example is communist China.

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    3. There was ČSA and Airport Prague. Not a very good story.

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  19. There must be some better solution than this.

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  20. I also don't see how this would work since it's against the EU rules. Airports shouldn't own an airline. it's against competition rules.

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    1. Lufthansa owns ca. 15% of Fraport. Fair? Dont think so.

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    2. It isn't fair but the EU doesn't care since it's Germany.

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    3. Fraport Shareholder Structure*

      State of Hesse 31.31 %
      Stadtwerke Frankfurt am Main Holding GmbH 20.16 %
      Deutsche Lufthansa AG 8.44 %
      Lazard Asset Management LLC 5.02 %
      Unkown 35.07 %
      * The relative ownership interests were adjusted to the current total number of shares and therefore may differ from the figures given at the time of reporting or from the respective shareholders' own disclosures. Shares below 3% are classified under "Free Float".

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  21. This was obviously an idea and they purposely made it public to see what the reaction would be from various stakeholders. Now that they have seen its mostly negative, I do hope they give up on the idea.

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  22. If this actually happened it would also mean none of the state owned airport could be put up for concession at any point in time.

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    1. I don't think there is any plan to put any of the airports up for concession.

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  23. Without SPU and DBV, the holding has no value.

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  24. Just sell the airline for one euro to any other airline. I'm sure someone would be interested. It's better than this holding thing.

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    Replies
    1. I'm not so sure. Why would someone want to take on a loss making carrier with a very limited market size.

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    2. and seasonal as well.

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    3. But it's tourist country, solid domestic travel, diaspora... it's not bad at all.

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  25. There is no future for Croatia Airlines as long as it builds market position as Lufthansa feeder.

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    1. Why doesn't Lufthansa show any interest?

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    2. and why should it?

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    3. who should they be feeding?

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    4. Well Lufthansa does feeds Croatia. Many pax from Asia and USA on OU flights. Las time I saw a group from Dallas and Hong Kong.

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    5. Before posting, please be so kind to check terminology of the topic in order not to write stupid stuff here. Otherwise people laugh at your posts. FEEDER is company which is operating shorter flights with smaller planes, usually in co-operation or under code-share agreements, within alliances, or outside of the alliances, in order to fill bigger planes, and longer routes, of the bigger partners, or "partners". Therefore, no matter whether we talk about outbound or incoming flights (and you obviously fail to make difference here and equalise the second flight of the entire route with the one being feeded, which is simply not the case). So in 99%of the cases, and particularly the one you talk about, DFW and HKG, OU is feeder and LH the one who is feeded, no matter of the emitive market and origin/destination of the passenger or the group of passengers.

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  26. I just don't see this ending well for OU...

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  27. If there were interested parties Croatia Airlines would have been sold by now. Unless the government is waiting for some grand announcement before the elections next December. They don't even know what they want. It started off as a privatization now they are thinking of recapitalization.

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  28. I'm more interested in seeing what Croatia Airlines is planning for next summer. Will there be any new routes? Will they again lease the CRJ1000s?

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    1. If they make it until next summer

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    2. Slazem se!Ovdje je,na Balkanu,trebalo prvo spojiti JP,OU,YM...ali zbog politike to se nikad nije desilo(a bilo je ideja 2012-te),ali....:-(

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    3. E ja se bas ne slazem. Ovdje gdje je sada "Balkan", "Zapadni Balkan" i ostali pezorativni i posprdni pojmovi koji simboliziraju ovo podrucje, bila je jedna velika, uspjesna i sretna zemlja JUGOSLAVIJA koja je imala JUGOSLAVENSKI AEROTRANSPORT, kompaniju koja je bila veca, jaca i bolja od Turkisha i Austriana i u rangu Finnaira, Olympica i Sabene. Nije trebalo nista spajati i krpati. A onda su dosli nacionalisti, sovinisti, fasisti, mafiozi i kriminalci, i danas imamo ovo sto imamo, od Triglava do Gevgelije.

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  29. I don't think that this will go well, government should shut it down, they've done everything possible to ruin it, too late to regret now.

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  30. And what happens if no solution is found by June of next year?

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    1. Nothing. Things will continue the way they are.

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    2. They won't continue the way they are because the government won't be able to provide any more money. My guess is they will then try to sell the company bit by bit - maintenance division, other subsidiaries etc.

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    3. Not only will they be unable to provide more money, but OU will have to repay the 33 mil already received as it's state aid and against EU rules.

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    4. Yes, like Anon 12:07 said. That's why they put themselves into very risky situation. It's clear that they have to be sold whatever it costs.

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    5. They can still sell assets such as remaining slots e.g in LHR. This will already give them the 33 million and more.

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