Croatia Airlines privatisation “unlikely before 2023”


Croatia Airlines is expected to remain state-owned for at least another two years, the company has said. Prior to the coronavirus pandemic the Croatian government set a deadline to privatise the carrier by June 2020. “The privatisation process was halted at the onset of the Covid-19 crisis. This has been done due to unfavourable circumstances and force majeure. Given IATA projections for the aviation industry and the uncertainty surrounding the duration of the corona crisis, it is unlikely this process will be resumed before 2023”, the company said. It added, “Croatia Airlines, as Croatia’s national carrier, represents a strategic part of Croatia’s transport infrastructure, and its importance has been amplified during the ongoing crisis because the company has contributed in maintaining the country’s connectivity. Despite the extraordinary circumstances, at the beginning of March 2020, Croatia Airlines continued to operate on a reduced scale, while most foreign carriers suspended flights to the country in mid-March”.

The Croatian Minister for Sea, Transport and Infrastructure, Oleg Butković, previously said the government would resume Croatia Airlines’ privatisation process once the coronavirus crisis stabilises. “At the start of 2020 we had two parties interested in Croatia Airlines and that process was advancing quite well. We were about the enter the second phase of negotiations, which included finalising details. However, corona came, and everything was halted because the entire industry has been hard hit”, Mr Butković said. He added, “When the situation begins to improve and normalise, we will resume the search for a strategic partner. There was interest, it’s not as if no one was looking at Croatia Airlines, but we will have to wait a bit more”.

Prior to the pandemic, Greece's Aegean Airlines and Spanish regional carrier Air Nostrum had both expressed interest in acquiring shares in Croatia Airlines. The next phase of the privatisation process was to involve the government announcing a tender for the submission of binding bids and setting out the number of shares it was willing to sell in the company. It previously noted it would offer a stake of up to 70%. Croatia Airlines registered a 47.3 million euro loss in 2020, while its passenger numbers declined over 70% to 618.000.


Comments

  1. Anonymous09:02

    But will anyone be interested? All airlines are struggling and looking for 2023/2024 to start making money again.

    ReplyDelete
    Replies
    1. Anonymous09:04

      Of course not

      Delete
    2. Anonymous09:20

      If there was an airline still being run by James Hogan they would probably express interest :D

      Delete
    3. Anonymous09:38

      Even at that time Croatia Airlines was not on James Hogan radar. What else to say?

      Delete
    4. Anonymous09:50

      In the end the government will do what it has been talking about the entire time. Form a holding of airports and pension funds and merge them all with OU.

      Delete
    5. Anonymous09:51

      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.

      Delete
    6. Anonymous09:58

      I agree with anon @9.50. I don't see a major airline buying OU. What I do see happening is a local pension fund or a local company buy OU, with the government probably standing behind it.

      Delete
    7. Anonymous21:31

      I don't see either happening. The current status quo will be maintained.

      Delete
  2. Anonymous09:03

    Such as shame they weren't sold to either Aegean or Air Nostrum before the pandemic started.

    ReplyDelete
    Replies
    1. Anonymous09:08

      I was rooting for Garuda.

      Delete
    2. Anonymous21:32

      ^ probably would have been the best solution and would have avoided OU becoming anyone's feeder.

      Delete
  3. Anonymous09:03

    Yeah OU we know.

    ReplyDelete
  4. Anonymous09:04

    How many times have they attempted to be privatized?

    ReplyDelete
    Replies
    1. Anonymous09:06

      Would have happened last year without corona.

      Delete
    2. Anonymous09:08

      There is surely no guarantee for it

      Delete
    3. Anonymous21:32

      2

      Delete
  5. Anonymous09:05

    I don't know why government or airlines think privatization is some magic solution to all your problems. Look what happened to Adria when sold to Germans, or B&H Airlines when sold to Turkish, or even Air Serbia which has now been almost fully nationalized.

    ReplyDelete
    Replies
    1. Anonymous09:06

      The idea is to offload a whale so you don't have to pay for it anymore.

      Delete
  6. Anonymous09:06

    The same story again...

    First it was Lufthansa, after it Turkish, Garuda, LOT, Aegean...And it lasts for decades!

    ReplyDelete
    Replies
    1. Anonymous09:21

      Out of those only Aegean officially confirmed their interest in a report to the Athens stock exchange.

      Delete
    2. Anonymous09:40

      Does it mean all the others were nothing but false information? I am not that sure...

      Delete
    3. Anonymous09:48

      Obviously it was not all made up. They all had expressed interest, not everyone gave direct statements about it. Garuda's CEO at the time went on record about their interest in OU and LOT also said they were studying OU.

      Delete
  7. Anonymous09:06

    Good luck. But I also agree it will be difficult to find a partner in the post corona period.

    ReplyDelete
    Replies
    1. Anonymous21:33

      No one knows that.

      Delete
  8. I think this is the joke of the day!!!

    ReplyDelete
  9. Anonymous09:08

    "Croatia Airlines registered a 47.3 million euro loss in 2020"

    Actual loss was 138 mil EUR in 2020. Anything else is creative accounting.

    ReplyDelete
    Replies
    1. Anonymous21:34

      Creative accounting is common in aviation industry.

      Delete
  10. Anonymous09:10

    Butkovic should have sold the airline in the past 4 years.

    ReplyDelete
    Replies
    1. Anonymous21:35

      And Hajdas Doncic before him.

      Delete
  11. Anonymous09:10

    It is no doubt that the virus would have tipped anyone against buying OU.

    ReplyDelete
    Replies
    1. Anonymous09:20

      No one would have bought it anyways.

      Delete
  12. Anonymous09:11

    They didn't get privatized but do remember that OU got 50 million euros in state aid in 2019 (two tranches) precisely so it could be successfully privatized...

    ReplyDelete
    Replies
    1. Anonymous09:23

      It was 33 million, not 50.

      Delete
    2. Anonymous09:41

      That money should be paid back by new owner.

      Delete
    3. Anonymous21:36

      It will be written off most probably.

      Delete
  13. Anonymous09:12

    Everyone is experiencing a slowdown. The last thing they need is a loss making airline on their plate.

    ReplyDelete
  14. Anonymous09:19

    In 2019 CEO Bajic said company will go bankrupt if they are not sold.

    ReplyDelete
    Replies
    1. Anonymous09:22

      That's why they got aid.

      Delete
    2. Anonymous09:23

      No, he said it would go bankrupt if they didn't get 33 million, which they did.

      Delete
    3. Anonymous21:37

      And Bajic has been the acting CEO for years.

      Delete
  15. Anonymous09:22

    I'm waiting for Kresimir Kucko to somehow reappear at OU.

    ReplyDelete
    Replies
    1. Anonymous09:27

      Honestly, it wouldn't be the worst thing to happen.

      Delete
    2. Anonymous09:36

      Are you for real? Part of the reason OU had problems before corona was because of him.

      Delete
    3. Anonymous21:38

      At least the company was profitable while he was running it.

      Delete
    4. anonymous 21:38: profitable??? He sold precious slots on LHR for much less than they were worth of, he sold a lot of other things and just because of that the company was "profitable"...

      Delete
  16. Anonymous09:36

    So, what next for OU?

    ReplyDelete
    Replies
    1. Anonymous09:37

      A "restructuring plan" is on the horizon.

      Delete
    2. Anonymous09:49

      A proper restructuring of the company wouldn't be such a bad idea.

      Delete
    3. Anonymous09:58

      OU definitely needs a change.

      Delete
    4. Anonymous10:09

      It needs money.

      Delete
  17. Anonymous09:49

    If they privatize it, I hope they privatize the entire company. The worst thing to be to start selling OU piece by piece until the actual airline is worthless

    ReplyDelete
    Replies
    1. Anonymous12:30

      What you are saying is that operations side of the airline has very limited potential of being investment-worthy.

      Delete
  18. Anonymous09:50

    Let's hope OU is still around by 2023.

    ReplyDelete
    Replies
    1. Anonymous21:39

      It will be don't worry.

      Delete
  19. Anonymous09:51

    Nobody wants to buy them

    ReplyDelete
    Replies
    1. Anonymous09:52

      Nobody wants to buy anyone at the moment.

      Delete
    2. Anonymous09:53

      Not necessarily. Bain Capital purchased Virgin Australia at the height of the corona crisis last year and has relaunched it. And Virgin Australia has over 60 aircraft in its fleet, so it's not a small acquisition.

      Delete
    3. Anonymous10:00

      Interesting. Didn't know that

      Delete
    4. Anonymous21:39

      That's the only example.

      Delete
    5. Anonymous23:49

      @21:39
      Iberia bought Air Europa
      Air Canada bought Air Transat
      And there are probably more examples

      Delete
  20. Anonymous09:52

    I think it will be very difficult for them to find a partner but good luck to them anyway.

    ReplyDelete
    Replies
    1. Anonymous09:54

      Agree! Good luck, anyway!

      Delete
  21. Anonymous09:55

    Problems I see for any investor when looking at OU - coast was has been lost to the competition, Zagreb is not such a huge market to be sustained without the coast, plus it is an expensive base to operate out of, difficult relationship with unions, mounting debt and ageing fleet

    ReplyDelete
  22. Anonymous09:56

    This is being drawn out a lot. Hope they manage to sell it to someone.

    ReplyDelete
    Replies
    1. Anonymous21:40

      Well now it goes on hiatus for 2 years.

      Delete
  23. Anonymous09:58

    What will happen if this privatisation attempt also fails?

    ReplyDelete
    Replies
    1. Anonymous21:41

      2023 is a long way away.

      Delete
  24. Anonymous10:14

    In the end nothing will happen as usual.

    ReplyDelete
  25. Anonymous10:19

    It is no doubt that it will be difficult to attract interest.

    ReplyDelete
    Replies
    1. Anonymous21:41

      It was difficult before, it will be even more difficult in the future.

      Delete
  26. Anonymous10:20

    Same old story. They are repeating the same thing and nothing comes out of it.

    ReplyDelete
  27. Anonymous10:20

    I see Lufthansa Group eventually buying Croatia Airlines and integrating it into Eurowings but retaining its own brand. Same as they did with Brussels Airlines.

    ReplyDelete
    Replies
    1. Anonymous10:25

      LH is interested in OU to use it only as a feeder. Nothing more.

      And they would let OU to go belly up the same they let Adria.

      Delete
    2. Anonymous15:44

      Does Lufthansa need them?

      Delete
    3. Anonymous15:53

      Yes.

      It is much cheaper for LH to pay peantus to OU to bring them passengers to FRA/MUC for connecting flights than to fly their own metal to CRO.

      Delete
    4. Anonymous21:42

      But that in large part already happens. They don't need to waste money to buy them.

      Delete
    5. It's not even peanuts. What they get paid for 45 min sectors of 10 hours journeys is paid back to Mutti and Star for membership.

      Delete
  28. Anonymous10:26

    A right investor with a vision could do wonders with the company. I think OU has a lot of potential.

    ReplyDelete
    Replies
    1. Anonymous10:30

      Croatia had and has the potential for a good national carrier, but unfortunately the government did nothing to develop the airline.

      Delete
    2. You both obviously share my view about OU and wrote it. But you were not attacked here by an "expert" who attacked me few days ago when I basically said the same, with the post in which the first sentence was that I am overestimating the potentials of OU and croatian market, and the last sentence was that ZAG is the main ex-yu airport. In my opinion, these are totally contradictory, even bit schizophrenic, but hey, who am I to judge

      Delete
    3. Anonymous00:31

      If that is contradictory, then it is equally contradictory to see a lot of potential in OU while seeing ZAG as a minor airport. The thing is that ZAG's position in the Balkans is OU's only advantage and the only element generating potential for OU at the moment. That potential can grow if Croatia's economy gets stronger and the people get richer. Then you have additional elements that generate potential. But that's not the case right now. That's why you were overestimating the potential. That is not an attack. That's what you call nuance. We all dream that ex-Yu will produce a major airline like JAT used to be, but reality is just that it would take decades. The simple reason for a lack of potential is the population of the ex-Yu countries, combined with lower incomes/economy still in development. Population-wise, Serbia has quite some future potential, but economically, Serbia is behind Croatia and Slovenia, meaning that airlines from Croatia and Slovenia have the favourable odds to claim the ex-Yu market before a Serbian airline can do that. But even with that advantage, regardless the pandemic, now is not a realistic time to think about that.

      Delete
  29. Anonymous10:42

    They should have started the first year after restructuring ready with a new owner and fresh capital. Instead they just prologued the "business as usual" policy.

    ReplyDelete
    Replies
    1. Anonymous10:58

      Kind of difficult to find an interested investor when all companies are restructuring and trying to avoid bankruptcy.

      Delete
  30. Anonymous10:58

    The saga continues.

    ReplyDelete
  31. Anonymous11:14

    Wow, what a huge difference there is in the Croatia Airlines' comment section! A pleasure to read different, healthy, mature and realistic stuff. Well done, very proud of you! OU will be fine.

    ReplyDelete
  32. Anonymous11:35

    OU being sold to anyone would definitely increase competition in the region.

    ReplyDelete
    Replies
    1. Anonymous13:01

      I do hope OU gets bought by a strong investor as it will increase competition.

      Delete
  33. Anonymous12:17

    Yes of course let Aegan airlines buy out Croatian airlines. What could go wrong?
    Greeks can bankrupt OU and get more tourists to Greece 🙄

    ReplyDelete
    Replies
    1. Anonymous12:32

      Yeah, there would be not a single tourist on the Croatian coast if it weren't for OU.

      Delete
    2. Anonymous14:55

      Many who defend the loss making national carriers argument it is good for tourism. And you can see on the first page on this blog who launches new routes to the coast and the vast majority are foreign carriers, and those are the ones who bring tourists, not OU with its turbo props.

      Delete
  34. Anonymous13:02

    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. Now there is no point anymore.

    ReplyDelete
  35. Anonymous13:12

    Waiting for 4k invest...

    ReplyDelete
  36. i think its due time for self-proclaimed analyst to write a 5,000 word article full of speculations how it was suppose to be done, how the government is incapable of handling these complex business issues and if they had only listened to him....

    i am just joking ofc. if CRO is serious they should listen to me and appoint krešimir the magic AKA krešo mađija

    ReplyDelete
    Replies
    1. To sell more engines and slots? To shrink network further? To announce new bases around the Balkans? To leave once again when restructuring without results is over? Or all of the above?

      Delete
    2. Actually you are right. Your proposal was conditional - if they are serious. And they proved not to be serious by simple fact they didn't bother to make decent airline in 30 years. Not even tried. KM included.

      Delete
  37. Anonymous15:32

    I think bankruptcy is more likely than finding a new owner.

    ReplyDelete
    Replies
    1. Anonymous15:33

      The government had shown time and again it will not let OU go bankrupt.

      Delete
    2. Anonymous15:40

      I don't think they want to or ever had any intention to sell the airline.

      Delete
  38. Anonymous15:32

    Good luck to the Croatian government , but I don't think they will find at least an airline to buy them . And that's because I believe a smart airline will just wait for Croatia airlines to go bankrupt and then take over , mostly because of the coast cities fillet .

    ReplyDelete
  39. Anonymous15:47

    Zašto CTN treba prodati?

    ReplyDelete
    Replies
    1. Zato sto novi vlasnik treba postaviti management po strucnosti a ne partijskoj knjizici, sto stotine milijuna eura koje sada godisnje guta CTN trebaju biti iskoristene za zdravstvo, obrazovanje, znanost, kulturu, zato sto se treba barem pokusati donekle iskoristiti turisticki, geografski, ex-yu i iseljenicki potencijal HR, i na kraju, jer se treba rijesiti uhljebnickog hadezejskog toksicnog otpada

      Delete
    2. Sto se naravno nece desiti jer nece sami sebi pucati u usta

      Delete
  40. Anonymous19:31

    There is no other solution now than wait.

    ReplyDelete
  41. Anonymous19:31

    I think some Chinese airline could potentially be a possible partner.

    ReplyDelete
    Replies
    1. Anonymous19:42

      If they were not interested in the best of times, why would they be interested now?

      Delete
    2. Anonymous13:48

      We don't need any more chinese up in our business, no thanks.

      Delete
  42. Anonymous19:31

    Agony continues.

    ReplyDelete
  43. Anonymous19:43

    Same old story. They are repeating the same thing and nothing comes out of it.

    ReplyDelete

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