Greece’s Aegean Airlines is continuing to look into opportunities of aligning itself closer with Croatia Airlines, which could potentially lead to a strategic partnership between the two Star Alliance members. Just prior to the outbreak of Covid-19, Aegean confirmed it had submitted a non-binding bid for the acquisition of Croatia’s national carrier. The next phase was to include direct talks between the Greek airline and the Croatian government. However, the process was halted in March as the global health emergency hit the aviation and tourism sectors. This September, the Croatian Prime Minister noted that negotiations between the two carriers over a strategic partnership agreement would be renewed in the coming months.
Aegean Airlines participated in the previous attempt to privatise Croatia Airlines as well, back in 2015. It entered into the second round of talks with then privatisation advisor International Finance Corporation, however, a change in government in Croatia put an end to the company’s privatisation drive. As an airline registered in the European Union, Aegean can purchase a majority stake in its Croatian counterpart. The two carriers share a similar fleet structure, with both operating Airbus A320-family jets and Dash 8 turboprops. Furthermore, both navigate in similar and competitive seasonal environments.
The similarities between the two mostly end there. Aegean has been continuously profitable since 2013 up until the Covid crisis, registering a record 79.5-million-euro profit in 2019. It employed some 2.900 people that year, carried fifteen million passengers and registered an average cabin load factor of 84.8% across a fleet of 64 aircraft. On the other hand, Croatia Airlines registered a loss of over ten million euros in 2019, had 1.000 employees on the books, carried 2.1 million passengers on twelve aircraft with an average annual cabin load factor of 73.6%. Aegean has been exemplified as an airline that makes effective use of tourism growth in its home country, which the Croatian carrier is perceived to be missing. Croatia’s Minister for Sea, Transport and Infrastructure, Oleg Butković, noted, “I am certain we will find the best possible solution to stabilise Croatia Airlines and enable it to grow. Croatia, as a country dependent on tourism, needs a national carrier. We don’t want a strategic partnership where state interests and services of importance to Croatia would not be safeguarded”.
Good luck A3 dealing with the Croatian government
ReplyDeleteThe Unions will be an even bigger problem.
Delete^ good point
DeleteUnions at Croatia Airlines have often halted any kind of progress so you are right.
DeleteUnions usually halt progress, not just in aviation. OU is where it is today partly because of dinosaurs from another era who don't understand how digital the world is today.
DeleteI would be too if I were Aegean.
ReplyDeleteSo their interest in OU is there because a politician said so? Lol
ReplyDeleteGood luck with that.
Well they bid twice for it. So obviously it's more than just politician talk.
DeleteActually they bid to get access to the books, they were silent after that. I can't imagine they were too happy with what they saw and please be mindful of the fact that this was before covid and before FR moving in. Imagine what their books look like now.
DeleteIt also doesn't help that you are trying to form a strategic partnership with someone yet you cut flights to their hub this year.
They bid so they get access to the books twice?? Is OU such an important airline that only A3 bid twice in 6 years to look at their books?
DeleteThe first time the government in Croatia changed and stopped privatization (under influence of various interest groups). The second time corona literally came when talks were supposed to start.
@anon 09:25
DeleteFully agree!
There was no actual proof or any kind of confirtmation from A3 that they are at this moment interested to buy OU.
Actually there was just one confirmation by Aegean when they informed the Greek Stock Exchange that they were looking at OU. They never expressed serious interest and that happened after a political meeting between Croatia and Greece. This has Garuda written all over it.
DeleteOn both occasions Aegean filed Hellenic stock exchange report stating they are in talks over OU.
DeleteSomeone really has a problem that they expressed interest lol why?
DeleteNo.
DeleteIt just needs to be clear that at this moment no reaction at all came from A3.
All of this is only politicans bla bla.
These reports on Aegean are just grasping at straws. Nothing will become of it. Pure Croatovanje
DeleteWhats wrong with you? Aegean expresed interest, goverment expresed interest and they are going to talk now. This is not fake story.
DeleteAegean expressed interest two years ago. They have been silent since then. Stop making things up.
DeleteThey expresed interest for more talks now. Why are you making up things?
DeleteI really don't see this happening.
DeleteWhy has Aegen been interested in OU for so long? What does it have to gain?
ReplyDeleteIt would give them access to a completely new market , similar to their own with lots of potential and opportunities to make money.
DeleteThey already have access to that market.
DeleteThey need to sell it ASAP.
ReplyDeleteIf I were the Croatian government, I would give OU to A3 for free.
ReplyDeleteIn the end the government will hand over OU to someone for free and good riddance.
DeleteThey should first start flying to Zagreb.
ReplyDeleteThey did until covid.
DeleteAre there any plans for these flights to resum
Delete*resume
DeleteThey will resume Athens - Zagreb from 15 June and Thessaloniki - Dubrovnik from 1 June
DeleteThis would be the best option for Croatia Airlines' survival.
ReplyDeleteOne more attempt of politican to gain some points.
ReplyDeleteI don't trust him at all.
I think government has realised current status quo can't be maintained for much longer at OU and something needs to be done.
ReplyDeleteGovernment is becoming desperate because they can see the FR impact on OU. Croatia Airlines management has probably indicated that soon they will need another bailout. So more money from the government at this time when the government is struggling and debt is exploding.
ReplyDeleteNow they will try to find someone who is willing to offload them. My bet is that there won't be any takers unless some vulture like 4K shows up at their door.
Looking at the currently aviation landscape in ex-YU I see Air Serbia, Wizz Air, Ryanair and to a lesser extent Eurowings remaining as the airlines in our region. We saw how much YM is struggling and OU has missed so many chances, now it's too late. Having FR in your hub is like swimming in a pool with a great white.
So true!
DeleteThe comments are very similar to when Etihad expressed interest in Jat Airways. People were laughing, saying it would never happen, saying that Etihad doesn't fly to BEG (which they didn't at the time) and so on.
ReplyDeleteAt that time we had seen that EY was interested in Jat and they clearly confirmed it.
DeleteNow we nothing but a statement from ruling CRO politican who actually advocates OU to be sold and hopes it might start some discussions.
Huge difference.
Aegean said they are interested in OU.
Delete...two years ago.
DeleteI don't know what's the source but here in Greece there is no confirmation or announcement from Aegean airlines to the press or any other kind of media until now as we talk. And of course politicians have nothing to do with that. It's Aegean airlines money and decision and not the government's
ReplyDeleteOU is dead after FR created its ZAG base.
ReplyDeleteAegean would only hurt themselves if they got involved.
Just my2cents
+1
DeleteI don't see why any EU airline would be interested in buying OU.
Ask Aegean that. They are interested.
DeleteThey were, two years ago.
Delete... and now for more talks.
DeleteHow did you make this conclusion anon@16:26? The article does not refer to any A3 statement.
DeleteI think it was probably something like this:
ReplyDeleteHR.gov: hey Mitsotakis, can you please see with Aeagean if they are still interested in OU.
Mitsotakis: Ok, we will ask them to see what's going on.
HR.gov: AEGEAN IS STILL INTERESTED IN OU!
I'm afraid that is EXACTLY what happened!
Deletehahhaah
DeleteI f i had to invest in a Croatian airline i would only do it with Trade Air ...
ReplyDeleteIs Trade Air ever going to settle down and become a legacy airline or do they intend to forever lease planes to other airlines. I would love to see them better connecting Zagreb with Europe, Africa and Asia.
DeleteWhy would they change their business model, if it works for them?
DeleteThey could do what they do, just expand it to new markets.
DeleteIf Aegean buys OU they should buy a new fleet of 20 planes and open up new routes such as Abu Dhabi, Cairo or Tel Aviv. Something that's new and might attract new passengers.
ReplyDeleteI don't think airlines open new routes on the assumption they 'might' attract new passengers. They do extensive research to see which routes should work out. We ain't talk'in 'bout bus routes here. ;-)
DeleteI know what you mean, but some unserved routes could really work, but OU doesn't take the chance and lets the route fall in the hands of other airlines such as Ryanair. For example Sofia is a must, Doha and Abu Dhabi could also work as both Qatar and Etihad either downgraded services to Zagreb, or just don't have any service in general. These cities are the biggest transfer hubs for Africa, Asia and Oceania.
DeleteThis suspense is killing me, who will it be in the end, Aegean or Garuda?
ReplyDeleteAegean Airlines are a tight run ship driven by profit not emotions. Their decision to not launch long haul is just one example.
ReplyDeleteWhy would they need to get into this mess? Croatia Airlines is just a burden without clear benefits. Aegean would have to take of OU's debts, to deal with bloated workforce, to pay for A220 or Embraer fleet replacement, to fight Ryanair in Zagreb and fight almost everyone for coastal airports market share.
If OU starts to be profitable it could be one of the best airlines in the region as it location is great for seasonal and year round flights
ReplyDeleteSo it is great for seasonal and year round flights, how so? What has changed?
DeleteSo, for seasonal fllights Croatia is becoming a hotspot in Europe and it expects even more tourists next year because this year many new tourists came to Croatia as other countries were in the red zone. For the year-round part, many Croatias live abroad and visit their families during the holidays. Also Zagreb is slowly attracting more and more tourists from the far east who tend to come to Europe all year round and not depending if its summertime or not.
DeleteYeah, IF it starts to be profitable... IF.
DeleteMaybe OU will more atractive when Goverment pumps more money in next year.
ReplyDeleteAttractive to whom?
DeleteAegean is most likely interested in the Croatian coast. They know that it's a sweet market especially in Star Alliance.
ReplyDeleteYeah but can they compete against the many LCC and national airlines that already fly to the coast from many points in Europe?
DeleteOf course Aegean can compete as they ranks as one of the best airlines.
ReplyDeletehttps://en.about.aegeanair.com/company/history/awards/