Wednesday, July 30, 2014

Controversial Jat CEO makes a comeback

Former Jat CEO tipped for Belgrade Airport top job

The former CEO of Jat Airways, Saša Vlaisavljević, is the frontrunner in becoming Belgrade Nikola Tesla Airport’s CEO after its former head, Velimir Radosavljević was arrested earlier this month, accused of signing a damaging deal with low cost airline Wizz Air. The Serbian Minister for Construction, Transport and Infrastructure, Zorana Mihajlović, said the government will likely propose for the airport’s board to name Mr. Vlaisavljević as its new CEO in the coming period. Mr. Vlaisavljević is a former member of the Democratic Party which ran the country from 2008 to 2012.

Saša Vlaisavljević managed Jat Airways from October 2007 to March 2009, rising from the position of Jat's Ground Operations Director to CEO over night. He started off at the company in 1995. During his time as CEO, the bulk of the management was replaced with those from the airline’s handling division at Belgrade Airport. Mr. Vlaisavljević heavily reduced the airline’s network of destinations and closed several key representative offices across Europe where ticket sales reportedly decreased significantly afterwards. He is also held accountable for signing a damaging agreement with Montenegro Airlines from which Jat never recovered. Furthermore, the former Jat CEO made several announcements during his reign indicating the carrier will go bankrupt, causing extensive damage to the company’s business. After being declared incompetent to lead the airline, the government awarded him with a job as Belgrade’s City Manager but it lasted for three weeks before he got into a dispute with the city mayor. He later served as one of the many Vice Presidents of Serbia’s Chamber of Commerce and has since been promoted as the Chamber’s director. In late 2012, Mr. Vlaisavljević was also a candidate to lead Belgrade’s Red Star football club. Incidentally, during his reign, Jat Airways signed numerous damaging sponsorship deals with the club, all of which have been terminated since the launch of Air Serbia. During his only full year in office in 2008, Jat recorded a loss of 28 million euros, following a small profit in 2007.

This year marks an important one for Belgrade Airport as it prepares to be put up for concession and is likely to be managed by a company from the United Arab Emirates. The airport has seen record passenger growth so far this year. In late March, Mr. Vlaisavljević said, “Given the number of available gates at the airport and a demanding schedule, with the largest amount of air operations ever recorded, its capacity will be stretched to the limit during the summer season. Immediate investment in the airport’s infrastructure is needed”. He added, “With Etihad’s strategic partnership with Air Serbia, we have a major opportunity that we cannot let slip”. On Monday the Serbian government dismissed Velimir Radosavljević, who is currently facing trial, as CEO of Belgrade Airport. Saša Vlaisavljević was born in Bihać in 1968. He graduated from Belgrade University’s Faculty of Transportation.

Tuesday, July 29, 2014

Croatia Airlines handles millionth passenger

Croatia Airlines hits a million as Split Airport sees record growth

Croatia Airlines yesterday handled its millionth passenger for the year, three days behind 2013. Jelena Ninčević was the lucky millionth passenger, travelling from Paris to Split. To mark the occasion, Ms. Ninčević (pictured above) was awarded two return tickets to any destination in Croatia Airlines’ international network and received a gift voucher from Split Airport Duty Free. With the arrival of its millionth passenger, Croatia Airlines has caught up to last year’s results following a slow start to 2014. However, it should be noted that the carrier experienced a ten day strike by staff in May last year, grounding a majority of its flights, which wasn't the case this year around. The airline is expected to report its second quarterly results this week which should reinforce a halt to the passenger decline experienced earlier this year.

During the first quarter, Croatia Airlines welcomed 292.524 travellers on board its aircraft, a decrease of 6.5% on 2013. It is the first time in over a decade the airline has lost its position as the busiest carrier in the former Yugoslavia. Croatia Airlines recorded 83.077 passengers on domestic flights (down 7%) while it handled 203.286 travellers on scheduled international services (down 8%) and a further 6.161 on international charter flights (up 117%). During Q1, the carrier saw healthier loads on its flights to Macedonia (+1.4%), Germany (+2.4%), Austria (+3), the Netherlands (+3.9%) and Belgium (+43.9) when compared to last year. On the other hand, flights to Bosnia and Herzegovina (-0.7%), Italy (-16.1), Switzerland (-10%), the United Kingdom (-19.8%) and France (-24.9%), saw their numbers contract.

In related news, Split Airport, which handled Croatia Airlines’ millionth passenger this year, saw record numbers over the weekend. On Saturday some 26.000 travellers passed through the airport, which represents a 24-hour record. In addition, the airport is estimated to register an impressive 17% increase in passenger numbers this June when compared to the same month last year. The encouraging results have put Split on course to take over the position of the former Yugoslavia’s third busiest airport. Furthermore, on Saturday, a record 2.520 aircraft flew over Croatian airspace. The increase in traffic comes as a result of the recent reopening of Kosovo’s airspace, as well as airlines rerouting their flights towards south-eastern Europe in order to bypass Ukraine in the wake of the Malaysia Airlines disaster.

Monday, July 28, 2014

Wizz Air considering seven new routes from Tuzla

Wizz Air mulling Tuzla Airport base plans

Wizz Air is considering launching up to seven new routes from Tuzla Airport as it contemplates opening up a base in Bosnia and Herzegovina’s third largest city. The additional flights could bring a further 100.000 passengers to Tuzla Airport on an annual basis. Wizz Air currently operates services from Malmo, Basel, Dortmund, Gothenburg, and Eindhoven to the Bosnian city. It inaugurated flights to Tuzla only last year. Last week officials from the airline met with the Federation Minister for Transport and Communication Enver Bijedić and representatives from both the Tuzla canton government and the airport to discuss the possibility of Wizz Air opening up a base in the city as well as payment options.

However, Wizz Air’s plans could be derailed by backroom politics. The head of Tuzla Airport, Esed Mujačić, was dismissed by the local government last week with a new CEO, Rifet Karasalihović, taking up the position. Mr. Karasalihović, a former part owner of cargo airline ICAR Air, has been accused of violating a United Nations arms embargo imposed on the Democratic Republic of Congo. In 2007, ICAR Air leased an Ilyushin Il-76 from Serbian cargo airline Air Tomisko, and smuggled arms into the Congo despite a United Nations ban on the export of arms and weapons to the country. For his part, the former CEO, Mr. Mujačić, said, “Interests of certain groups of people, who do not wish to see Tuzla Airport develop, such as the land transport lobby, are now being put in charge”.

Local media suggest that wrangling over the airport’s CEO could put off Wizz Air from plans to develop its network out of Tuzla. Furthermore, the possibility of increasing taxes at the airport fivefold could negatively impact on the budget carrier’s plans. Wizz Air is the only airline operating scheduled flights out of Tuzla and has brought the airport, which has struggled to attract any customers for years, back to life. In the first half of the year, Tuzla Airport handled 53.053 passengers, up 691% on the same period last year.

Saturday, July 26, 2014

Croatia Airlines privatisation to resume

Croatia Airlines sale process likely to begin this autumn

The Croatian government is planning to resume the stalled privatisation process of its national carrier this autumn. According to local media reports, the push to sell Croatia Airlines will begin in several months with a consultancy firm to be selected first in order to oversee the process. It comes after the European Union urged the Croatian government to submit a privatisation strategy for 2015 within the next three months. According to initial plans, the Croatian carrier, which celebrates its 25th anniversary next month, will be sold in the first half of 2015 if a suitable strategic partner is found. Commenting on the EU’s deadline, a source close to the Croatian government said, “The European Union has requested us to prepare the privatisation document by the end of October. Brussels isn’t looking for empty promises, it’s looking for the action”.

The first attempt to sell Croatia Airline began just over a year ago and failed after nobody responded to the tender call. The Croatian Minister for Sea, Transport and Infrastructure, Siniša Hajdaš Dončić, recently outlined the government’s plan to conduct a thorough analysis of the aviation market in order to identify potential investors, adding that Croatia Airlines must expand in the region and avoid a possible purchase by “predator” carriers. According to the minister, if required, the government will adopt a special Croatia Airlines privatisation bill in order to sell the company swiftly. A minority 49% stake will be offered to potential bidders. Since the failed sales attempt late last year, Croatia Airlines has managed to post an annual profit, the first in years. However, its passenger numbers have been steadily declining throughout the year and its market share has been decreasing as it faces tougher competition.

Croatia Airlines’ CEO, Krešimir Kučko, has said the carrier should be recapitalised. This would entail changes to the airline’s capital structure (the proportion of equity to debt). This may occur, for instance, as part of a debt restructuring, when a creditor exchanges an outstanding loan for a stake in the company. It has long been tipped that Mr. Kučko and the Croatian government are at odds over Croatia Airlines’ future. Mr. Kučko is believed to be in favour of the national carrier remaining Croatian owned or recapitalised by local companies, while the government has been searching for strategic partners in Asia. It remains to be seen whether Croatia Airlines’ 25th birthday will be its last under the current ownership structure.