The Croatian Minister for Sea, Transport and Infrastructure, Oleg Butković, has said the government will fight for Croatia Airlines' survival amid evolving market conditions and increased competition. Mr Butković conceded the situation at the airline was unsatisfactory prior to the pandemic but has been made worse by the global health emergency. However, he noted the state-run carrier has prospects for the future. "There are models based on which Croatia Airlines can function and the government will give its all for that to happen. We will fight for Croatia Airlines", the Minister said. He added, “Croatia Airlines, as Croatia’s national carrier, represents a strategic part of the country's transport infrastructure, and its importance has been amplified during the ongoing crisis because the company has contributed in maintaining the state's connectivity”.
Croatia Airlines is under increased pressure following the opening of Ryanair's base in Zagreb last week which will grow to a 25-destination network operated by three aircraft from early December. The Croatian carrier has been sourcing additional revenue streams and on July 23 leased out one of its aircraft, an Airbus A319 registered 9A-CTN, to German leisure airline Sundair. The jet, based in Leipzig, will operate flights for the German carrier over the remainder of the summer. Croatia Airlines also recently employed the Boston Consulting Group (BCG) to support its post-Covid-19 strategy. BCG will develop plans for how the carrier can tap into unfolding opportunities and focus on preparing Croatia Airlines for the “new normal”.
Croatia Airlines is expected to remain state-owned for at least another two years, the company recently 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. Prior to the pandemic, Greece's Aegean Airlines and Spanish regional carrier Air Nostrum had both expressed interest in acquiring shares in Croatia Airlines.
They have a lot of work ahead of them
ReplyDeleteSeverely sick runner OU trying to outrun Usain Bolt FR, looks like a comedy show.
DeleteThats what crisis are for: That the big and powerful (often anglosaxion) companies step in and take over from the small.
ReplyDeleteRyanair is pretty much the killer for OU
I simply cannot see what your comment has to do with the article above. I really can't.
DeleteIf yr eyes arent open, I cant help you
DeleteThe government is just as clueless about OU as OU management itself.
ReplyDeleteIf the government admits the situation was not great before the crisis I gave to ask why do they elect the same management every 6 months? Surely the situation is not bad because of some unknown reason. If a business is struggling the first thing you do is scrutinize the management, not award them every 6 month with an extension of their contract.
ReplyDeleteAgree completely. Adria failed because of incompetent management. The same may happen to Croatia Airlines.
DeleteThey leased out a plane in the height of summer???
ReplyDeleteLol
DeleteThat's why I thought as well... Priceless management/government skills.
BCG's idea?
DeleteI think this is ludicrous, especially at a time when there is another airline announcing new routes every other week from your base and will have a bigger destination network than your own in less than six months. Couldn't they have used that plane to launch some new routes?
DeleteAs a whole, Ryanair already has more destinations to/from Croatia in the summer than OU. So if they are not concerned about that, why do you think they would be concerned about ZAG.
DeleteThey better make it a coast-only and charter airline .
ReplyDeleteHowever, legacy airlines have an advantage of flying every day to key destinations, that is cruciql for business passengers who are key travellerd during low season.
They are spinning things. Privatisation process was NOT halted because of the pandemic but because no one was interested, that was way before the pandemic started.
ReplyDeleteSince they hired external consulting firm I did not notice a single action taken. What exactly are they doing?
Well it's not true. At the end of 2019 they started a new privatization attempt and in the first round of the process, when they were just looking if everyone was interested two airlines applied - Aegean and Air Nostrum. Both airlines confirmed it. After that they were supposed to have talks with the government and after that a tender would begin. None of that happened because of corona.
DeleteSorry, OU. Time to get out of your comfort zone and accept reality. Almost all EU countries face healthy competition and their flag carriers have adapted to LCC. Time to restructure and move on with reality. Enough of this nanny state behaviour. Take advantage of Star Alliance, get rid of turboprops, focus on busy routes, think business, look into charters, be innovative, focus on more code shares, take advantage of LJU and consider basing an aircraft - EU passporting is important. Fare restructuring and so many actions...!!
ReplyDelete+1
DeleteThey have started with the fare restructuring.
DeleteSo more state money on the horizon for OU?
ReplyDeleteWithout a doubt
DeleteWill the government be able to help them again?
DeleteI really think there is a limit. They helped last year and the year before.
DeleteAnon 09:41 You really think there can be a limit? Look at Italy :)
DeleteThat is true but Italy is Europe's 4th largest economy so to some extent I understand why they let Italy keep getting away with it.
DeleteFun fact: Alitalia is only the 3rd largest airline in Italy.
DeleteThe way things are going, I think OU will soon become the 3rd largest in Croatia.
DeleteI've lost all hope for OU.
ReplyDelete+1000
DeleteIt seems that some EU countries are "more equal than others", some of these companies have more money than our government does and getting financial backing from rich people from Western EU member States with close ties to their governments. Companies like Ryanair can get money "within the EU rules" and operate at a loss while they kill our national carrier OU. After OU is gone Ryanair will raise their prices. This has been the story ever since we joined the EU for most of our industry.
ReplyDeleteThe saddest thing about it all is that this airline actually has a lot of potential. When you put it down on paper, there are so many opportunities but things have to change from the ground up in the company in order to achieve any of them.
ReplyDeleteThe airline with the most wasted potential in the whole exYU
DeleteThey had many years to prepare for serious competition and it was bound to happen at some point. They must have been aware of that.
ReplyDeleteTrue but it could have not come at a worse time, during the pandemic.
DeleteThey should have been better prepared.
DeleteOU's response to Ryanair so far:
ReplyDelete1. Do not resume majority of routes from Zagreb
2. Launch seasonal one weekly Split - Prague (but suspend Zagreb - Prague which will be launched by another LCC in a few months).
3. Downgrade catering - previous economy class meal boxes are now business class meals.
4. Lease out a plane in peak season.
But what can Croatia Airlines really do to stay competitive against Ryanair? I just don't see a solution.
DeleteCroatia Airlines still has the advantage over Ryanair by flying to main European airports. Also they carry a lot of connecting traffic through European airports.
DeleteAnon 09:32
Delete5. Pay half a million euro to a consulting company to tell you how to run an airline in such situations.
6. Extend your cost controller's contract as CEO of the company for another 6 months.
True. I just don't understand why they don't issue a public call for CEO. Something they should have done years ago when they only temporarily appointed Bajic.
DeleteRemember that the last public call before Bajic was appointed was voided.
DeleteIt's going to be a very difficult year for OU.
ReplyDeleteMany airlines have survived strong LCC competition. Croatia Airlines will too.
DeleteI wouldn't write off OU that quickly.
ReplyDeleteThey should explore new routes.
ReplyDeleteBulgaria Air v2.0 in the making. Small but efficient well streamlined but totally unimportant national airline of country with huge seasonality. And now with FR on their home turf just like FB in SOF.
ReplyDeleteYes, but they adapted. They slowly changed their fleet. They focused on interline agreements with Virgin, AA, QR, KL, DL, Burgas and Varna charters, Winter warm charter destinations from SOF, etc.
DeleteThe Govt should sell OU to Ryanair .... get it off its hands once and for all
ReplyDeleteI'm sure FR would be very interested in that...
DeleteHahaha 😂😂
DeleteLol leasing out a plane in the peak season and maybe having to lease a plane for your own routes sounds Adria-like
ReplyDeleteHaha my thoughts too.
DeleteMaybe ex-Adria management stuff is now working for Croatia ?
DeleteWhat the hell? 9A-CTN, the plane they leased, is the plane they just got last year
ReplyDeleteYes. "Osijek" has been sitting on the ground for a better part of the year. At least this way the plane is flying and the airline is earning some moeny.
DeleteWhy did they get the plane in the first place?
DeleteThey signed the contract before corona and could not get out of it afterwards.
DeleteWouldn't it have been better for them to have based that A319 in Ljubljana and launched flights to a number of destinations.
DeleteNo, it wouldn't. This way they get money for the lease. If they based a plane in Ljubljana they would be bleeding even more money.
DeleteLJU base obssession is ridiculous
DeleteGood luck OU.
ReplyDeleteIn the end, nothing will change.
ReplyDeleteThat has been OU's problem for many years. Little innovation, just going through the motions.
DeleteI hoped FR would wake up the management but nothing happened.
DeleteHope for the best.
ReplyDeleteButkovic should have sold the airline in the past 4 years.
ReplyDeleteLet's hope OU is still around by 2023, since they expect to be privatized then.
DeleteMain difference between Adria and Croatia Airlines is that the government supports Croatia Airlines and won't let it go bankrupt under any circumstances.
ReplyDeleteWaiting for 4k invest...
Deleteanon 11:43 the government said they would avoid making any business with 4k
DeleteThe best solution for Croatia Airlines at this point would be for the Lufthansa Group to take it over and integrate it into Eurowings but retaining its own brand. Same as they did with Brussels Airlines.
ReplyDeleteNot happening ... Why would they this? Do they need their fleet? No. Do they their management? No.
DeleteThe saga continues.
ReplyDeleteWaste of money croatia doesn't have
ReplyDeleteTime to revisit plans to open a base in LJU.
ReplyDeleteThat actually wouldn't be such a bad idea at all. Especially with Ryanair base in Zagreb.
DeleteBurglar comes to your home and you decide to run to your neighbor
DeleteI wonder at what cost
ReplyDeleteThis model will lead them nowhere. Something needs to change.
ReplyDeleteWhat do you suggest they do?
DeleteThey should ask JU
DeleteIs it really true what some person was writing here in the comments that they will get 2 A330s and will open a base in Mostar?
ReplyDeleteDoes it sound realistic to you?
DeleteThey had 30 years to do it. They had much better conditions to do it than now. They faced almost no competition. They had all possible support from the state. They had experienced people in operations. They had everything. Did they do it? The answer to your question is pretty obvious.
DeleteI don't like this at all
ReplyDelete"There are models based on which Croatia Airlines can function and the government will give its all for that to happen."
ReplyDeleteAnyone know what he is talking about?
Yes. The model is feeding Mutti. All possible gvt will do is pumping in more money in order to feed Mutti. That's it.
DeleteWho is Mutti? Germany, Lufthansa, Angela?
DeleteMutti is Angela Merkels nickname.
DeleteIt is also expression of a master- servant relationship, Mutti is the master role.
Serving Mutti is expression for masochism.
Croatia Airlines will continue to do what it has been doing for the past 20 years and the govt will continue to provide them with funds from time to time to cover their losses. Nothing will change like nothing ever changes with them. They will simply move along as they have done so far.
ReplyDelete^ At some point that strategy will become too unsustainable.
DeleteThey have no one to blame but themselves.
ReplyDeleteI like the government's attitude. They should protect the national airline.
ReplyDeleteYou don't "fight for your airline" when you are against the ropes being pounded and practically down for the count. The time for that was during good times and better days .... this is too little too late .... moreover, not easy to do from within EU with State Aid rules as they are, while also having a predator airline now swimming in the same waters who will not let you come up for air
ReplyDeleteGuys, guys,
ReplyDeleteI will try again. I understand that there is emotions involved and getting identified with certain national airlines but the problem is way above. It is debt deflation that is happening on global scale. So basically ALL these airlines are in the same boat: Croatia, Ryanair, Air Serbia, Lufthansa are all in debt deflation spiral; Just on different scale, different degrees.
Pandemics is very good and convenient excuse for the financial market and governments.
But I can't understand that you do not see it behind the smoke and screen of pandemics.
So after announcing zillion routes few days ago, Ryanair quietly started to cancel routes. 3 routes from Zadar, 2 here, 2 there ...you guys and media and public are being played
ReplyDeleteThat's exactly why Ryanair can never be a sole solution to air traffic, as some see it here.
DeleteIf they were serious in sorting out this utter mess they'd cut the workforce and rid themselves of the parasites who are the cousins of cousins who have an uncle in government. OU has an utterly over bloated workforce.
Delete+1 last anon
DeleteHad a first hand experience with BCG. All I am going to say is good luck to OU…
ReplyDeleteCompared to McKinsey or Deloitte I would guess it is least expensive.
DeleteIt is interesting that a Boston management group can find more market opportunities than OU people who live and work there.
It shows that firm is focused on its internal problems and not being customer centric.
This type of firms Ryanair eats for breakfast.
Interesting
DeleteI hope things improve
ReplyDelete