The Croatian Minister for Sea, Transport and Infrastructure, Oleg Butković, has said that merging Croatia Airlines with a number of state-run airports into a holding could be a viable option for their privatisation. Although Mr Butković stated the process of finding a strategic partner for the Croatian flag carrier has been stalled for some time, “this matter will have to be reopened sooner or later”, the Minister told the state broadcaster HRT. He added, “This company [Croatia Airlines] is very important to us. It is a Croatian brand. We have some ideas and will look into merging the airports with Croatia Airlines and then offering them as a package for privatisation to a strategic partner. At the moment, this is not on the agenda, but I believe it will be soon”.
In late 2019, the Croatian government considered forming a holding company comprised of the national flag carrier and six state-run airports - Split, Dubrovnik, Zadar, Pula, Rijeka, and Osijek - in a bid to recapitalise Croatia Airlines. The proposal was criticised at the time by several airports including Split and Dubrovnik, which are the country's most profitable. Mr Butković revived plans for the merger during the coronavirus pandemic in 2020. At the time, the Minister stated the holding could also include several other companies, in addition to Croatia Airlines and the airports. The Minister argued that such an arrangement would enable the state to retain effective control of both the airline and airports, without elaborating further.
The Croatian government has attempted to privatise Croatia Airlines on several occasions, without success. Just prior to the outbreak of Covid-19, Greece’s Aegean Airlines 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 2020 as the global health emergency hit the aviation and tourism sectors. The Croatian government has since said it would resume the airline’s privatisation process once it is “back on its feet”. The Croatian carrier registered a loss of 9.5 million euros during the first half of the year, following a two-million-euro profit in 2023, which was achieved due to the sale of assets in the form of five aircraft.
What a stupid idea
ReplyDeleteI'm sure local governments and municipalities are trilled about this news.
DeleteTo be honest, to me this looks like a ploy, where OU wlll be privatized on paper but the government will keep running the show.
Delete^What good would that bring anyone? Why would they go through all that trouble if it would bring no benefits?
DeleteSome smarter people think otherwise. And guess what, they make executive decisions :)
DeleteThe word ”smarter” and OU apparatchiks shouldn’t go together in a single sentence.
DeleteI think Croatian government is doing amazing move, with strategic partnerships they will make Croatian airlines shine and airports full of new passengers. A lot of clever people in Croatian ministry, great idea Minister!
Delete😂😂😂
Delete@anon 23:22 - i really hope that you comment is trolling. All that they’re doing is moving profitable divisions into a bucket with a loss making division (OU). At the end of the year there will be no OU profit or loss, but ‘the group’ made X amount of profit. No one sees that OU has lost another €X million. Selling it all is the only way out of losses. Privatisation will see the airline thrive as a businessman wants to make money - government is only trying to appease the masses, unsuccessfully.
Delete@ anon 06:28- no I am not trolling! Alone as is, OU can not be profitable but with strategic partner OU will be Air Baltic of a Balkans . True success story, in the beginning airports will help OU but later, strategic move by ministry will make Croatian Airlines new motor of Croatian economy and tourism development. People from ministry and Minister know exactly how to make right moves. Plenkovic did amazing job in choosing right people!
DeleteI hope it doesn’t come to this.
ReplyDeleteIt won't
DeleteI hope it happens.A great idea!
DeleteCan you explain what is great about it?
DeleteI fail to see what good this might bring. It may just cause problems for the airports.
ReplyDeleteIt could cause problems for OU too with European Commission.
DeleteIt would probably be sold to the pension fund and that way the government would keep control of it.
ReplyDeleteWhat would be the point exactly?
DeleteWho knows. Maybe the EU is pushing for them to sell it.
DeleteIt’s not so related to this, but it would be a good idea to make a state-owned company which would run all current state owned airports in the country. Something like Swedavia, Avionor, Finnavia or Oman Airports...
ReplyDeleteHope OU is not just bungled in some holding. This way the company will progress much slower than it should
ReplyDeleteDo you really worry about OU here? The point is that they are trying to drag airports into a venture with an unprofitable airline and we are all worried for the airports, not OU.
DeleteExactly. The airports shouldn't be dragged down to help a dinosaur.
DeleteBut all those airports depend heavily on that dinosaur and will be affected if it wasn't around.
DeleteName one state-owned airport in Croatia that depends heavily on OU?
DeleteStay away from the airports. They do well on their own.
ReplyDelete+1 Destructive decision for the airports.
Delete+100.stay away from the airports. They are worht more than CTN
DeleteThe airports shouldn't be dragged down to help OU.
ReplyDeleteBut all those airports depend heavily on OU and will be affected if it wasn't around.
DeleteWhat they are looking for - capital without any decision making input - can only come from another government run business.
ReplyDeleteGood luck OU!
ReplyDeleteThey definitely need all the luck they can get.
DeleteWhat qualifications does Butkovic have to make decisions about OU's future?
ReplyDeleteHe is a member of party which is currently Croatian Government.
DeleteOh well if that's all you need...
DeleteStupid idea
ReplyDeleteThere must be some better solution than this.
ReplyDeleteDirect acquisition of OU by another airline. But this has failed so many times, it highly unlikely anyone would be interested.
DeleteThey already paid so many privatization advisors for it. I don't think anyone will be willing to take over OU. They are still highly unprofitable and now have the burden of paying off millions for A220s.
DeleteWithout SPU and DBV, the holding will have no value.
ReplyDelete...which is exactly why they will be a part of the holding. So their profit can finance parts of the business which is not profitable (RJK, OSI, OU, ...)
DeleteGood idea if done properly. It's a state-strategic infrastructure anyway.
ReplyDeleteIt is an incredibly atavistic idea and in the best tradition of KPJ.
Deletecrazy idea, but desperate times call for desperate measures...
ReplyDeleteTerrible idea. Really terrible idea.
ReplyDelete+100
DeleteThe central government doesn't exclusively own the airports. Local authorities and countries do too and they won't necessarily side with the government if this plan is realized.
ReplyDeleteThe government will make some deal for OU in the end.
ReplyDeleteAny examples of this anywhere?
ReplyDeleteIf OU is sold, the same fate as Adria awaits.
Best solution for OU is to hold the management accountable.
HNA group in China runs some airports. it also runs Hainan Airlines and some other carriers.
Deleteso the only other example is communist China.
DeleteThere was ČSA and Airport Prague. Not a very good story.
DeleteJAT also had Tivat, no?
DeleteYes, that's correct
DeleteEvery single one of those examples proves the case that this just makes no sense. Who in their right mind would be interested in buying this? And if anyone would be, it would be for one part of the package and would quickly lead to the other part withering away. There are no known examples of companies (not under CPP control) that run airports and airlines at the same time. The business models are completely different, the incentives are completely different, the strategic goals are quite different. This makes so little sense that it's just mind boggling that they would propose this
DeleteIf it comes to this, it will be rejected.
ReplyDeleteBy who?
DeleteI hope this is not the only solution to privatization
ReplyDeleteNo, but it is Butkovic's solution and he is not letting go of it.
DeleteHe is a real genius...
DeleteI 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.
ReplyDeleteLufthansa owns ca. 8% of Fraport and no one makes an issue.
DeleteI'm more interested in seeing what Croatia Airlines is planning for next summer. Will there be any new routes with all the new A220s coming?
ReplyDeleteIt is way too early to announce new routes for next summer.
DeleteGovernment should try better
ReplyDeleteHuh?
DeleteNo thank you
ReplyDeleteThe government needs to find a way to keep OU operational.
ReplyDeleteNice way to sell SPU and DBV for peanuts... I think that's the only idea.
ReplyDeleteThen they can invest in Trebinje Aeroporto.
DeleteBeautiful A220 on the photo
ReplyDelete+1
DeleteThe end is coming. Silly company cost too much money.
ReplyDeleteYour comment is silly.
DeleteFar from it…
DeleteSilly people decide what is too much on behalf of GoC which actually owns both the OU and much of the airports.
DeleteTotally corrupt government .... only motivated by how fill pockets of the cronies there .... they have total disrepect and care about the country and its citizens ....
ReplyDeleteNonsense! The SDP and Milanovic are the fraudsters!
DeleteWhich brains came up with this scheme? I dont know of any country which has this or done this, looks more like someone pushing this to get some side kick
ReplyDeleteOleg Butkovic. He has been pushing for this for years.
DeleteHow long has this man been the minister for transport? I feel like I have been reading his name for a decade.
DeleteIt's Oleg's proposal so I'm not surprised.
ReplyDeleteThis whole holding idea is absurd in my opinion.
ReplyDeleteActually, it could be the only way to privatize the airline but avoid the Adria scenario.
DeleteI can't believe that the government would just give up control of not one, not two, not three but SIX airports just so someone would pump cash into Croatia Airlines.
ReplyDeleteHere we go again with this nightmare scenario with OU dragging down the airports too. Smh.
ReplyDeleteHow would this be allowed by EU rules? EU is on its crusade to decouple everything. Like for electricity and telephony: the infrastructure (wires) cannot be owned by the companies offering services that use that infrastructure (electricity and telephony providers).
ReplyDeleteLove the idea. This will help our company revive and spread its wings!
ReplyDeleteIt will be good counter part to JU 👌
+2
DeletePlease note that JU has no ownership stakes in any airports in Serbia, so while in a parallel universe this stupid idea may help OU spread its wings and be a good counterpart to JU, it would be despite the dissimilarities to JU's model, not because it did something the same way
DeleteWhy not merging with Jadrolinija first and then offer it? This guy should have been history long time ago.
ReplyDeleteBecause neither OU nor Jadrolinija are up for sale and will not be.
DeleteThe holding would be owed by Croatian pension funds, which are managed by profesionals.
ReplyDeleteThey would hold management of each business unit accountable of for the results.
Government with minority holding would be able to influence the strategy to provide critical infastructure to Croatia.
Just look at what happened in Slovenia.
Poland has similar model and it works.
Aren't pensions funds owned by the government?
DeleteNo, they are not. 4 pension funds are 100% private, owned by banks and insurance companies. Not a one of those banks is Croatian.
Deletepensions funds are not owned by state, they are private owned by Allianz, Rba, Co, Erste.... don't make confusion with Hzmo which is state owned and has nothing to do with privatisation
DeleteI think OU has a lot of potential. Unfortunately I don't think it will happen by being run by airports.
ReplyDeleteThis is ridiculous
ReplyDeleteNot at all actually.
DeleteHow come absolutely no other airline is interested in purchasing OU?
ReplyDeleteAegean was interested before covid hit.
DeleteIt's a pity they never revealed what A3 offered. Would have been interesting to see.
Delete" At the moment, this is not on the agenda, but I believe it will be soon”.
ReplyDeleteAny idea when? Next year? 2026?
why stopping at merger with airport? They should make a mega-infrastructural merge with railways, motorways and ports. And why stop there? Plenty of state owned companies at disposal. Mega uhljeb company on the horizon :)
ReplyDelete