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Croatia Airlines On The Verge Of Insolvency  
User currently offline1979AirBuzz From Germany, joined Oct 2011, 15 posts, RR: 0
Posted (11 months 3 days 4 hours ago) and read 4918 times:

Rumours spread that the board of OU is planning an orderly insolvency in case staff won't be stopping their strikes by end of this week.
Does anyone know more about this or if other Star members (primarily OS, LH, LX and JP) would start additional flights zo Croatia during summer peak in order to compensate for the shortfall in capacity?

Or is the entire former Yugoslavian aviation environment coming to an end? JP is constantly in trouble, same for JU and BH...maybe it is more a market for the likes of FR and EZY?

19 replies: All unread, jump to last
 
User currently offlineairdfw From United States of America, joined Aug 2012, 162 posts, RR: 0
Reply 1, posted (11 months 3 days 4 hours ago) and read 4851 times:

Somebody page Ethihad

User currently offlinePe@rson From United Kingdom, joined Jan 2001, 19097 posts, RR: 53
Reply 2, posted (11 months 3 days 4 hours ago) and read 4851 times:

Quoting 1979AirBuzz (Thread starter):
FR and EZY?

And Wizz of course.



"Everyone writing for the Telegraph knows that the way to grab eyeballs is with Ryanair and/or sex."
User currently offline1979AirBuzz From Germany, joined Oct 2011, 15 posts, RR: 0
Reply 3, posted (11 months 3 days 4 hours ago) and read 4716 times:

I would be pretty interested to learn where the benefits for EY in entering these markets would be...I mean real benefits...

User currently offlinelh526 From Germany, joined Aug 2000, 2326 posts, RR: 14
Reply 4, posted (11 months 3 days 3 hours ago) and read 4626 times:
AIRLINERS.NET CREW
FORUM MODERATOR

Quoting 1979AirBuzz (Reply 3):
I would be pretty interested to learn where the benefits for EY in entering these markets would be...I mean real benefits...

Slots into european hubs ....



Trittst im Morgenrot daher, seh ich dich im Strahlenmeer ...
User currently offline1979AirBuzz From Germany, joined Oct 2011, 15 posts, RR: 0
Reply 5, posted (11 months 3 days 3 hours ago) and read 4563 times:

Quoting lh526 (Reply 4):
Slots into european hubs ....

And these slots would justify taking over airlines with an accumulated debt of more than 500,000,000€?
I mean, I'm just curious...if OU and JU can't make e.g. ZAG-LHR or BEG-LHR work, where would EY come into the game and say: we can make it work...


User currently offlinejohruk From United Kingdom, joined Jan 2008, 170 posts, RR: 0
Reply 6, posted (11 months 3 days 2 hours ago) and read 4491 times:

On a very personal note I really do hope that this is just a rumour....I have 5 of us flying in August to PUY to celebrate my fathers 70th Birthday!

However, it appears that there are so many flights that have had to have been subcontracted to other airlines when you look at their FB page that it has had me wondering how on earth they can afford this.

It would be shame as I have been flying them since they started and have fond memories of flying in a Cessna (I think!) from ZAG to PUY, with just me my mum and my brother...

All these people that are on strike for what??...To possibly loose their jobs anyway....


User currently offline1979AirBuzz From Germany, joined Oct 2011, 15 posts, RR: 0
Reply 7, posted (11 months 3 days 2 hours ago) and read 4453 times:

Quoting johruk (Reply 6):
All these people that are on strike for what??...To possibly loose their jobs anyway....

From what I have been reading, they are on strike because OU senior management wants to cut their salaries by 40(!!)%. I know that 60% of something is still better than 100% of nothing - but I am not sure what I would do in such a situation

[Edited 2013-05-21 08:51:46]

User currently offlinedhr From United Kingdom, joined Jun 2007, 117 posts, RR: 0
Reply 8, posted (11 months 2 days 20 hours ago) and read 4087 times:

Management have started a restructuring phase and the pilots and cabin crew refused to provide their share of custs, so they went on a week long strike. The pilots caved in yesterday while the cabin crew today so from tommorrow they go back to flying their usual scheduling. How much damage the strike has caused should be known in a week or so when the bills start coming in for the ACMI's they used the past week. Rumor says the ACMI's were cheaper than operating their own fleet.

User currently offlinelightsaber From United States of America, joined Jan 2005, 12420 posts, RR: 100
Reply 9, posted (11 months 2 days 4 hours ago) and read 3660 times:
Support Airliners.net - become a First Class Member!

I would appreciate any links to news articles or analysis gonig into detail on this airline.

Quoting airdfw (Reply 1):
Somebody page Ethihad

EY has a strategy. Could that be applied here?

Quoting 1979AirBuzz (Reply 3):

I would be pretty interested to learn where the benefits for EY in entering these markets would be...I mean real benefits...

I question if there is any benefit... But I'd like to be proven wrong.

Lightsaber



I've posted how many times?!?
User currently offlinedhr From United Kingdom, joined Jun 2007, 117 posts, RR: 0
Reply 10, posted (11 months 2 days 2 hours ago) and read 3507 times:

The only analysis I could find is located at http://centreforaviation.com/analysi...leet-and-network-adjustments-65399 from 2011-12

User currently offlineTripleDelta From Croatia, joined Jul 2004, 1096 posts, RR: 6
Reply 11, posted (11 months 1 day 19 hours ago) and read 3304 times:
AIRLINERS.NET CREW
PHOTO SCREENER

The strike by both cabin and flight crews had ended yesterday (after a seven day run). Losses are said to be around the EUR 1.5 million mark, most having gone into replacement aircraft. As far as I've seen, carriers from Bulgaria, Romania, Slovenia, Slovakia, Germany, Switzerland and Spain have leased OU their aircraft to fill the gap... including 737s, MD-82s, Avro 146s and so on...


No plane, no gain.
User currently offlineflyguy89 From United States of America, joined Feb 2009, 1850 posts, RR: 10
Reply 12, posted (11 months 1 day 17 hours ago) and read 3165 times:

I hope it all works out for them. I flew CDG-ZAG-ZAD-CDG with them last year and found them to be a great little carrier. I can't imagine their intra-Croatia flights are very profitable though, would it be against EU regulations for Croatia to some type of subsidy for domestic services a la the EAS program here in the US?

User currently offlinemig21umd From Australia, joined Feb 2005, 262 posts, RR: 1
Reply 13, posted (11 months 1 day 15 hours ago) and read 3068 times:

To me (and yes I will admit I am an arm chair CEO), it looks as though the airline along with other carriers in the region has a business model not suited for the market they are in.

I think it is necessary they make drastic changes to the product they offer. Wages is not the issue here as OU staff are already paid probably less than half, maybe even as low as a quarter of their European counterparts. The number of people they employ could be an issue but then again, because the wages are already low I don't think employee wages is the reason for the huge losses of the airline.

In my opinion, even if the government pays off the airlines debt, it will be very difficult for the airline to find a buyer because it simply makes no money so the only option is to bring in people, from outside Croatia if needed, who can make the changes the airline needs to become profitable and list the carrier on the Croatian or European stock exchange, this way people will be held properly accountable by stock holder if they are doing a lousy job.

The airlines strategy the past few years has been to concentrate on feeding Star hubs. That would be fine if it worked well for OU but clearly this has not been the case and the airline has good reason to shift slightly away from this by opening lines to places like Moscow and Dubai.

Smaller regional aircraft need to be introduced into the region. An aircraft such as EMB-120 Brasilia would be perfect for some of OU domestic routes, and could used to assist in expanding the airlines network. Belgrade and Venice from Zagreb will be well served by this aircraft type.

In saying that, it looks as if the employees were out played this time. Having 5 different unions not united with each other was easy picking for the management. A pay freeze is one thing but a reduction when the wages are already so low compared to the EU is something that all the unions if they were worth the fees there members paid should have never have agreed to. It's a real joke that they could not stick together especially now when it is clear that the airline due to all its assets was never really so close to being bankrupt as they lead us all to believe.



Once you have tasted flight, you will forever walk the earth with your eyes turned skyward, for there you long to return
User currently offlinedhr From United Kingdom, joined Jun 2007, 117 posts, RR: 0
Reply 14, posted (10 months 4 weeks 19 hours ago) and read 2741 times:

Quoting airdfw (Reply 1):
Somebody page Ethihad

Don't laugh but it seems that Etihad is in discussions with the Croatian government to purchase 49% of the airline. What I can't work out is why would they be talking to both the Croatian and Serbian governments to buy these derelict airlines.


User currently offlineBHMNONREV From Australia, joined Aug 2003, 1360 posts, RR: 4
Reply 15, posted (10 months 4 weeks 10 hours ago) and read 2576 times:

Quoting dhr (Reply 14):
Don't laugh but it seems that Etihad is in discussions with the Croatian government to purchase 49% of the airline. What I can't work out is why would they be talking to both the Croatian and Serbian governments to buy these derelict airlines.

Etihad Balkan perhaps??  

But I would have the same question. Better to let them fail and come in and establish some sort of operation in most of the ex-Yugoslav cities which are pretty much ruled by Star Alliance right now, particularly Turkish. But any way you slice it, sounds like a losing proposition..


User currently offlinemig21umd From Australia, joined Feb 2005, 262 posts, RR: 1
Reply 16, posted (10 months 4 weeks 7 hours ago) and read 2368 times:

Just throwing in a curve ball,

Could it be that Etihad were completely thrown back at the state of Jat and may have shifted their focus to Croatia Airlines. Even though OU is a mess financially and a Star member, it does look to be a better, lets just say organised airline compared to Jat.

If the government sells the airlines debt free, with OU better placed to service Croatia's growing tourism potential and the fact that 100,000 Australians, this number is increasing yearly, visit Croatia annually compared to about 25,000 which visit Serbia, could it be that Croatia Airlines might be better suited to what they are looking for in the region.

It will be very interesting scenario if 49% of OU was sought by Etihad as Lufthansa might than be interested in OU too and if Lufthansa was not, than Adria could benefit by being the Germans giant only darling in the region.



Once you have tasted flight, you will forever walk the earth with your eyes turned skyward, for there you long to return
User currently offlineTupolev160 From , joined Dec 1969, posts, RR:
Reply 17, posted (10 months 4 weeks 3 hours ago) and read 2122 times:

Hardly so. Jat deal is part of a much larger political package that includes industry and agriculture + Serbia being out of EU is a bonus for Etihad.

"Etihad has recognized Jat as the only potential player in the area between Istanbul and Munich, since OS is part of Lufthansa. In all the other countries, the airlines are in a very poor shape or nearing insolvency, while some countries simply lack a national air carrier -Macedonia for instance".


User currently offlinemig21umd From Australia, joined Feb 2005, 262 posts, RR: 1
Reply 18, posted (10 months 3 weeks 6 days 7 hours ago) and read 1744 times:

Quoting Tupolev160 (Reply 17):
"Etihad has recognized Jat as the only potential player in the area between Istanbul and Munich, since OS is part of Lufthansa. In all the other countries, the airlines are in a very poor shape or nearing insolvency, while some countries simply lack a national air carrier -Macedonia for instance".

Is this quote from you or is it from an Etihad source? I cannot agree with it at all and cannot see Jat as any potential player in the region. Historically is deserves some degree of respect but today it is a complete joke of an airline.

Reportedly down to only 5 operational aircraft but still trying to operate its full summer schedule based on 12 aircraft, has seen Jat cancel and delay flight on a daily bases this month. A 'committee' was set up by the airline last year to address this issue of aircraft shortage and a press release stated that 6 new planes would join the airline's fleet in March 2013 and absolutely nothing was done at all until the management decided to try to lease 2 Adria A319s plus train their own pilots and crew last month. Clearly this has not worked for them.


James Hogan may have been a little too much influenced by his previous life as a Jat employee in Melbourne and maybe nostalgic in his decision when deciding to help Jat out. For some reason I don't think this one will work out too well for him.

I would like to say for Jat's sake I hope I'm wrong but the truth is that the Serbian government is planning to spend the bulk of the aid money it received from Russia to prevent the country going bankrupt on Jat so it will be taken over by Etihad debt free and with a workforce of only 600. The other 600 employee's redundancies will be paid for by the Serbian Government. I really have no idea what financial gain Serbia will have from this deal so maybe it is just time to shut down Jat completely and just invite Etihad to start a new airline based in Belgrade but this just seems too sensible to do.



Once you have tasted flight, you will forever walk the earth with your eyes turned skyward, for there you long to return
User currently offlineTupolev160 From , joined Dec 1969, posts, RR:
Reply 19, posted (10 months 3 weeks 6 days 6 hours ago) and read 1625 times:

Quoting mig21umd (Reply 18):
Is this quote from you or is it from an Etihad source?

The source is from Etihad obviously, from a member of the group that was participating in Jat's screening process.


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