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Wednesday, February 6, 2013

Croatia Airlines to shed its fleet

Croatia Airlines becomes latest EX-YU carrier with fleet problems

The Croatian Minister for Sea, Transport and Infrastructure, Siniša Hajdaš Dončić, announced yesterday that Croatia Airline will have to shed its fleet in order to return to profitability and avoid bankruptcy. The news comes just over a month before the carrier’s busy summer season begins. “We have two possibilities. Either sell one or two aircraft, as well as property owned by the company, or find a strategic partner willing to buy a 25% to 30% stake in the carrier. If we fail to do so the airline will go into bankruptcy. That is something we would certainly want to avoid as it would have unforeseeable consequences on the Croatian economy”, Mr. Hajdaš Dončić said.

It is believed Croatia Airlines has already earmarked the sale of one of its Airbus A320s this summer, leaving the carrier with twelve aircraft. The exit of the jet is also expected to have an impact on the carrier’s summer season network with some routes to be cut. Croatia Airlines is yet to finalise its 2013 summer timetable. Furthermore, the carrier plans to further delay the arrival of four Airbus A319s. Media reports suggest the airline was pressured into ordering the aircraft so the then prime minister of the country, Ivo Sanader, now serving a ten year jail sentence for corruption, could meet then French president Nicholas Sarkozy, who himself is being investigated for several corruption scandals.

Last summer, three consultancy firms advised the airline to retire one of its A320s in order to return to profitability. In contrast to the advised, Croatia Airlines went on to lease a Fokker F100 from Trade Air during the summer months and even used one of Adria’s Airbus jets for some of its weekend flights. At the time, the advisers also shortlisted flights to London Gatwick, Paris, Istanbul, Podgorica, Priština and Copenhagen for suspension unless the routes do not start making money in the foreseeable future.

25 comments:

  1. Ne mogu da vjerujem da kompanija koja ima takve potencijale, rast broja putnika itd itd uopste razmislja o bankrotu. Ja nemam neku cvrstu vezu sa OU ali ih pratim od samog pocetka i ZAGAL-a. Jedino sto mi smeta je lopovluk koji je bio od strane Misetica i pojedinaca, kao i dovodjenje ovakvih kao sto je ovasj sadasnji direktor. Mislim da bi kao clanica STAR-a cak trebali dovesti nakog svabu za direktora. Cak je i Simunovic bio dobar prema ovom novom ali nije pasao politicki. Jebi ga , ako i ovu kompaniju sjebu - onda treba i portal ugasiti jer ko ce ostati. JP ne valja, OU ne valja, JA ne valja, JU nme valja, YM ne valja, ovi drugi i nemaju kompanije. I sta cemo onda. Low costi samo lopatom uzimaju pare i odnesose vani, nisu poreski obveznici, ne uposljavaju domacu radnu snagu, lete uglavnom sezonalno , ma sve u finu materinu !!!

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  2. Ha ha ha. Except for the way it is written it isn't funny but...
    The above post pretty much sums it all up.
    Lets all hope something good comes out of all this mess.

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  3. I too can't believe that this company can not be profitable. I mean if every carrier went into financial trouble for buying new aircraft than there is something wrong with the airline industry. This is clearly not the case so the question remains how and when did things go terribly wrong with OU?

    From what I can recall OU returned a profit every year up until a few years back so where has all this capital gone?

    One of two possibilities come to mind here, either OU was or has been subsidising the Croatian government or Corruption. Unfortunately the later is the mostly likely and I can't wait until the law catches up to these fools!

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  4. Also, wouldn't it make more sense to sell the A320 after the summer season?!

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    Replies
    1. It is not their A320, it is on lease. So they will not sell it, but just stop lease. And yes, it will make much more sense. But as goal is not "what makes sense", but to discipline workers...

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  5. It is very simple: CEO Misetic (who holds the french medal of honor) signs a really bad deal for 4 new A319 when the company does not need the new aircraft at all.
    But ,of course, the company can not afford to pay for those aircraft he signed for. So the government pays for the loan payments for a few years. Now the company is not loosing any money (around brake even)and is even able to pay for the loan itself. BUT the government now wants all the loan payments back PLUS the interest of 13 percent and they want it now.

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    Replies
    1. Mr. Misetic ordered the Q400's and was criticised, but it turned out to be one of the best decisions ever made! He was an excellent CEO, after all Lufthansa Cityline gave him a senior position! He made Croatia Airlines succesful, and they were profitable for while under his management!

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    2. Profitable? With sell and leaseback. Even new CEO Kučko mentioned on HSPP General Assembly that it was probably done to make artificial profitability and to take huge bonus.

      Q400 is a good deal? 1st they were overpaid, 2nd those planes are disaster for maintenance (just ask mechanics and pilots), A319 were ordered by him on principle "you have to pay 5 and get 4", 4th he did nothing till 2007 to arrange restructuration without any consequences as it is today, etc, etc...

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    3. Oh yes, Cityline gave him senior position! Enough to say! He was in same time senior there and works as Croatia Airlines CEO?!?!?! Isn't that conflict in interest by the book?

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  6. I am not going to write on aviokarta's website because they will change it and not publish my comment.

    In today's article they have just proven what we were talking about the other day, that is their unprofessionalism. Someone should inform them that JU does not currently operate any Atr 72-500s but the 200 series.

    http://www.aviokarta.net/vesti/1669-jat-airways-sa-samo-sest-aviona-obavlja-saobracaj/

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    Replies
    1. Hahahah I can't see it but I guess they must have changed it. Good, maybe they also read what we wrote the other day.

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    2. Well, this site has proven to be just the same as Aviokarta, with bastard hypocrit methods of deleting user's comments.

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  7. This a perfect example of why all of the ex-YU airlines need to work together. OU needs to get rid of planes, while JU needs more planes... problem solved. Working alone, they will all fail (ie. Malev)

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  8. It does not make sense! Ou need to shed fleet,yet last uear they were leasing jets from trade air and Adria, pplus this year Croatia is expecting big increases in tourism! Also why didn't Ou get rid of the A320 last autumn. Why wait until the summer which is the busiest time of the year? I hope Lufthansa will buy OU
    and run it properly!

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  9. First of all downsizing does not have "profitability" as goal. It is tool for "discipline" workers, and perfect excuse for everything they want to do. Most of those lines will stay as Adria will probably fly on them. Second, as I mentioned on this blog several weeks ago "situation is probably even more serious than in Jat" and that you will see in several weeks. So, situation is serious, but solution is even worst. Because they use Croatian Agency as excuse for something they plan to do at least 2,5 years ago.
    Third, this management task is to prepare company for sale, not make it profitable.

    So let me remind you what I wrote here several days ago:
    U svojoj analizi otvoreno sam rekao upravi "da smatram da je downsizing babaroga sa kojom se prijeti još od 2010. i onog poznatog Tatalovićevog dokumenta pred restrukturaciju, te da sada postoji netko drugi tko to traži od uprave koja si ne može pomoći". Dio pilota smatra da se radi o zastrašivanju prije pregovora o kolektivnim ugovorima, no kako god bilo naglašavam još jednom da se radi o Hrvatskoj Agenciji, ne Europskoj, po Hrvatskim pravilima, ne Europskim i da će naša Agencija tražiti ovako nešto (ako je to uopće istina) za našu Hrvatsku kompaniju kojoj isti vlasnik, Hrvatska država, otpisuje vlastite dugove dokapitalizacijom. Čudno samo meni ili....????

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    Replies
    1. Purger! Please could you translate into English! I've been dying to read your comment but unfortunately can't speak Croatian!

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    2. In my analysis I directly address board members: “downsizing is bogeyman with which you threat since 2010 and famous Tatalovic document which introduce restructuring. Now, you find someone else who orders downsizing to management and you are helpless”. Part of pilots thinks it is just intimidation before the collective agreement. Whatever let me just point that we are talking about Croatian Agency, not European, by Croatian rules, not European, and that means Croatian Agency asks something like this (if that is even true) for our Croatian company which owner is Republic of Croatia, who write off its debts with recapitalization. Is this looks strange only to me?

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  10. I bet you mama Lufthansa is again manipulating this companys management. OU needs more routes and aircraft not fleet cuts and downsizing. OU needs to take advantage of croatia entering EU and expand not downsize.

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    Replies
    1. LH wants to capitalize on Croatia's EU entrance anticipated traffic grow, why to allow OU to take the piece of the cake?

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  11. "...it would have unforeseeable consequences on the Croatian economy."

    - Would it, really?

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  12. What happened with Easyjet's coming to Belgrade ? Any info ? We shall wait till when ?

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    Replies
    1. Easyjet flights from Milan Malpensa to Belgrade will
      begin 15 April .

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  13. PLEASE RECTIFY:
    IVO SANADER = PRIME MINISTER, NOT PRESIDENT!!!

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  14. "Our recent figures found that the most popular places in Croatia for car hire to date are Dubrovnik, Pula, Zagreb and Split airports respectively, and we are preparing for an even higher demand in these areas this summer."
    With more than 1,000 islands dotted around its coast, Croatia has reportedly seen a 43% increase in bookings for 2013.

    So I'm not to sure if this means a 43% increase in tourist booking already in Croatia or car hire has increase by 43%, either way = huge increase in potential customers and Croatia will lose out big time!

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  15. LOLOLOLOLLL Looks like Jat wont be the first to declare backrupcy ....... Typical slander of jat "Jats planes are 30 yrs old" Todays arguement which contradicts "CEO XXXX is a cock because he ordered new planes and now were suffering" Next arguement against jat in previous threads "We(OU) have links with LH and alliance" today "Oh this is LH doing and making us bankrupt" ........ Eat your heart out cant wait to see Wizz Air as your only carrier or maybe a new LH subsidary

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