Croatia Airlines in debt

Croatia Airlines Airbus A319
It has been revealed that Croatia Airlines’ true 2009 closing balance is a loss of 22.6 million Euros. The result will officially be made public in April. The airline also owes millions of Euros to airports across Croatia. The national carrier failed to pay handling fees to airports across the country in 2008 and 2009 and its total debt to the airports is estimated at 11 million Euros. The management of Zagreb Airport claims that the airline owes its hub 2.7 million Euros.

Croatia Airlines nearly had one of its Airbus A319s revoked in December when it failed to make a payment for the aircraft. The Government of Croatia signed documentation and guarantees stating that the aircraft’s leasing fees would be payed in full. The Government payed the bill for the aircraft in December. The next payment is to be made on June 1.

On a more optimistic note, the airline’s management has struck a deal with 3 out of 5 unions for pay cuts to be implemented. A strike by the airline’s unions, announced to ground the airline on February 26, could be avoided if the union of pilots and the union of cabin crew agree to the new terms.

Comments

  1. frequentflyer10:10

    Oh dear.

    Methinks we haven't heard the end of this - but how much the airline is actually in debt will never be revealed...

    Is it unfair to draw a link between the cashflow problems of the airline and its lack of direction, all whilst the period its CEO was too busy 'hosting' the AEA? Sure there was the GFC, but there's more to it than that.

    Who's asleep at the wheel??

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  2. I can not understand how, an airline like Croatia Airlines, with its small fleet and low pay structure for it employee’s can have so much debt in such a short time.

    If you read between the lines, Misetic suggested that the only way the airline can be saved is through privatisation. Maybe Croatia Airlines revenue is being used by Zagreb to pay for other government debts or spending?

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  3. fly JU DC1015:15

    The only way to make EX Yugoslavia to a prosperous region is to move all citizens to Africa and move Swiss, Dutch, Scandinavians and Japanese there. 20 years and you would be in heaven :-)

    @Q400: still same shit, just different times

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  4. Adria15:22

    Of course it can build so much debt when all the government bureaucrats and their relatives fly for free. The same happened with Olympic Air from Greece. Another reason for such poor performnace is the overlap with Adria's coverage of the region, not to mention that both airlines are members of the Star Alliance. Croatia, Bosnia and Slovenia should put their resources together and create one airline that would serve all three countries. The same would be good for Serbia, Montenegro and Macedonia.

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  5. BA08815:29

    Just problem after problem...And pride of a "flag carrier".

    Why not scandinavian model of joint airline and all the old glory?

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  6. fultioniLast week, I met with Continental's and Delta's (ex Northwest) reps in Detroit for a dinner. It was interesting to learn about the DL-NW merger process and Continental's new role in the Star Alliance. Continental is the 3rd US based airline that has joined this alliance and although they seem to be very cooperative with UA and LH (they launched joint Cross-Atlantic operations), their relationship with US Airways is anything but friendly. I really wouldn't be surprised if either Continental or US Airways soon decides to leave the alliance.
    On the other hand I kept pushing both airlines with my questions about establishing the service between the US and ex-Yugoslavia. Delta has the most extensive coverage in Europe of all US based airlines. They fly non-stop from JFK and ATL to places like Malaga, Valencia, Lyon, Nice, Prague, etc. Both CO and DL have specially configured B757s for cross-Atlantic flights, which they could deploy on JFK-LJU or JFK-ZAG route as well. Not sure if this will happen any soon but they both promised that they will look into this and do some market research. DL is investing a lot of money in expanding it’s hub at JFK and would be so nice to see again flights from JFK to ex YUG. I believe that if anyone decides to fly to ex YUG, then it’s most likely to be Delta. Let’s hope something positive comes out of this.

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  7. JU520 BEGLAX19:38

    Does anyone wants to get into the discussion or guessings, where Yugoslavian Aviation would stand today if Yugoslavia would still exist? (all republics)
    Yugoslavia EU member since year 2000:

    What's the guess?

    JU 6 x weekly Australia via KUL,SIN
    JU daily to Canada
    JU daily to New York
    JU daily ORD-LAX
    JU 4 x weekly to GRU-EZE?
    JU 4 x weekly to GRU-SCL?
    probably doing exceptionally ZAG-SCL
    all the rest would be hubbed in BEG

    JU daily to SIN
    JU daily to BKK
    JU 4 x to ICN
    JU daily to NRT
    JU daily to PEK-PVG
    JU daily to HKG
    JU daily to India

    JAT having 20-25 Mio Passengers and fleet of Boeing 777-300, Boeing 737-800, Boeing 737-700, Boeing 767-300, plus Regionals

    BEG Airport having 15 Mio Pax
    ZAG Airport having 06 Mio Pax
    DBV Airport having 04 Mio Pax
    SPU Airport having 05 Mio Pax
    LJU Airport having 04 Mio Pax
    SKP Airport having 03 Mio Pax
    PRN Airport having 02 Mio Pax

    any other long hauls? other fleet?

    UA,SQ,EK,TG,DL,CA,AC in BEG?
    UA in ZAG, DBV like PA in the 80s?

    is that too much of a dream?

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  8. @ JU520 BEGLAX

    At least it's not prohibited to dream :) I was always impressed by JAT's long-haul network. They covered every continent except S. America. If it wasn't for the war they would start the flights to Caracas, adding S. America to their portfolio as well. Would be interesting to see what would have happened if there was no war. You have MSN messenger or e-mail address to keep in touch?

    Cheers

    Sam

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  9. JU520 BEGLAX20:54

    @SAM

    CCS is correct. Together with Seoul they were the first plans for the 90s. And MD11 would have replaced the DC10s. I think with the big YU diaspora in Brasil, Argentina and Chile, flights ex BEG could have make sense.

    Never understood CCS as there is not much of a diaspora (as far as I know only about 1000-2000)

    An other option for a light version of JAT and a probably more realistic scenario would be:

    JU operating A319/A320/A332/A343 and A345.

    3 weekly 345 BEG-GRU-EZE
    3 weekly 345 BEG-GRU-SCL
    5 weekly 345 BEG-LAX
    3 weekly 345 BEG-KUL-MEL
    4 weekly 345 BEG-SIN-SYD
    5 weekly 343 BEG-BKK
    5 weekly 343 BEG-ICN-NRT
    7 weekly 343 BEG-JFK
    6 weekly 332 BEG-ORD
    6 weekly 332 BEG-YUL-YYZ
    would they still fly DTW,PIT,CLE??
    5 weekly 332 BEG-BOM
    6 weekly 343 BEG-PEK-PVG

    this def would be a nice airline in todays time
    JU520 is alexanderstare@yahoo.de

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  10. @ JU520 BEGLAX

    I was wondering why Caracas as well. Maybe the BEG-GRU route was out of the DC10's range capability, but still...maybe they could make a stop at SID and still do it. If they could do SYD and MEL, don't see any reason why they couldn't do GRU.

    On the fleet selection: I personally prefer Airbus but with the Boeing’s Dreamliner coming out soon, I am kind of undecided :) I think if old JAT still existed, they would be better off with smaller long-haul aircraft such as A330-200/300 and few A340-500s for SYD / SCL.

    I think with A340-500 JAT could easily fly non-stop to Australia on BEG-PER-SYD and that way become the first European airline that flies non-stop to Australia. I am sure that with the right marketing strategy they could build on a lot on this route and attract even more passengers than just the EX YU Diaspora.

    Another market that they should focus on is the Middle East and North and East Africa connecting passengers from those regions to its flight to N. America. Ex Yugoslavia has always had a good reputation in countries such as Iraq, Syria, Egypt, Libya, Zambia and Tanzania countries that have been mostly "forgotten" by others. Maybe that's something we could call JAT's "Botique" destinations that BEG Long Haul was referring to in one of his previous comments :)

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  11. Anonymous22:02

    Another potential market for JAT would be neighbouring countries such as Bulgaria, Romania, Albania (potentially Greece and Hungary) who have limited connections with North and South America.

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  12. Geronimo22:42

    Horse and carriage is well enough to be Jat or Croatia-cheap, no losses,thinking about the environment and we all will be happy to be the first region in the world transporting people from Zag and Beg to Istanbul,Peking,Copenhagen etc multiple starts every day and a lot of possibilities for a stop over or two.

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  13. JU520 BEGLAX22:44

    Just did some kind of daily flight planning out of BEG

    FRA,MUC,VIE 5 daily
    ZRH,BRU 4 daily
    FCO,SOF,BUH,BUD 3 daily
    CDG,LHR,IST,ATH 3 daily
    WAW,PRG,DUS,AMS,STR 2 daily
    CPH,ARN,MXP,BCN,DME 2 daily
    TRS,VCE,SKG,TXL 2 daily
    Middle East incl TLV 1 daily
    CAI,TIP,MAD,MAN,HAM 1 daily

    plus all the YU domestic flights and the long hauls to S&N America, Australia, Asia and India.

    BEG-PER-SYD would be the flight of the flights....but could only survive with high yields... ultra long haul flights are quit expensive (see TG which stopped BKK-JFK and tries to sell its 345)

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  14. Anonymous22:58

    BEG-PER-SYD could be operated by A340-600 or B777-300ER as well

    ReplyDelete
  15. Anonymous12:11

    People,

    what about INI in ex YU?

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  16. If there was no war in the former Yugo after the fall of communism, then I'm sure Yugoslavia would still not exist today. The majority of Croatians and Slovenians never wanted to be part of Yugoslavia so there would have been a peaceful separation. Yugoslavia as we new it was doomed from the start.

    I actually sometimes wonder where the republics would have been if there was no war and better still if the region fell under the democratic spell rather the communist spell after the 2nd world war.

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  17. Tarantino10:56

    No one forced these 2 republics in a Yugoslavian federation 90 years ago, they wanted to belong to an Southslavic state/federation but Dominance of the Serbs slowly took over and thats the main problem for them. Montenegro was in a way forced to join and the king vanished in 1919. All of the republics would survive without each other, the war was soooo unnecessary.

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  18. Tarantino, very well said.

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  19. How is it possible? Stupid criminal politics, nothing more, nothing less...

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  20. Torantino,

    Croatia and Slovenia wanted to join a democratic Yugoslavia. These 2 republics waisted no time in trying to leave when it was evident that the Serbian monarchy was to hold all the power.

    Yugoslavia would still exist today if it was a fair democratic country when the federation was formed and Jat would have had 777's!

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  21. 777's right now, I ment to say.

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  22. JU520 BEGLAX10:48

    @Q400

    Fully agree with you. And the difference between serbs and croats is not black and white. If Switzerland can live well with different cultures and about 22%foreigners from all over the world, Yugoslavia could have done the same. The war was like every war completely unnecessary and in many aspects, the people from the former Yugoslavia have lost more than they gained from the secessions.
    And just to blame the politics is obscuring the facts.
    All the airlines in the former YU are in troubles. With a healtly economy and a democratic Yugoslavia we would have one big hub in Belgrade, we could have a strong JAT still connecting Yugoslavia with intercontinental destinations and we could have some charter companies. Instead of Belgrade and JAT, people fly today TK to IST, OS to VIE, AF to CDG and LH to FRA and MUC. Good for them, they all make good money with us.
    Today BA is the only European carrier to connect Australia. What an opportunity this could have been for JAT. A good product and daily flights BEG-Australia with plenty of Transfer passengers from all around Europe...

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  23. taratino18:40

    Big powers did not want Yugoslavia to exist any longer and the result was unfortunately.....it was never ment to become a democratic federation. In Switzerland almost all are Catholic eventhough the speak at least 4 languages they feel that they belong to the same country. It was never the case in Yu.

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  24. frequentflyer05:17

    @ JU520

    That assumes that JAT would have continued to grow and remain strong, and doesn't take into account world economic situations/airline downturns etc. Look how many 'legacy' European airlines are either basketcases or have gone bankrupt (AZ, OA, OS, MA, EI, NE to name a few): JAT may have ended up down that path too - just look at the current airline operators in the exYU.

    @ Tarantino (#1)

    Not true. Read your history books! After WW1 and the break-up of Austria-Hungary, Croatia and Slovenia had the choice of facist Italy or monarchist Serbia as they couldn't survive independently at the time. They made their choice, and we all know what has happened since.

    ReplyDelete

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