B&H left with two aircraft as it suspends Amsterdam flights
Turkish Airlines has taken back possession of its Airbus A319, which has been operated by B&H Airlines for the past two years as the crisis within the Bosnian carrier deepens. The A319 jet, which is registered in Turkey (TC-JLR) left for Istanbul on scheduled flight JA106 on February 27. Problems appear to have emerged between the minority and majority share holders of the airline - Turkish Airlines (49%) and the government of Bosnia and Herzegovina (51%). Turkish is unhappy that it has been unable to buy a majority stake in the carrier, which it has been hoping to do so since late 2010.In a further show of problems, B&H Airlines has now suspended services to Amsterdam indefinitely. The flights were to be temporarily suspended during March and resumed in April with four weekly services. In 2011 the Bosnian state auditor said in his report that B&H was better off prior to the Turkish takeover, noting that losses at the airline have increased ten times.
Turkish Airlines has delivered little on its purchasing agreement with the Bosnian government signed in 2008. It was supposed to spend five million euros for the lease of two jet engine aircraft and make a further five million euro investment. According to plans in early 2009 the airline’s fourth jet was to arrive in the summer of last year.
How did you know that "Turkish Airlines has delivered little ". As far as I know TK did spent five million euros for the lease of two jet engine aircraft and then made a further five million euro investment. On top of this, in two different capital injection agreements, added another 10M Euro, Also leased another aircraft to deliver the airline’s fourth jet as a sublease but it was not requested by the airline (lack of demand was stated). and there is not any obligation TK did not fulfill.
ReplyDeleteAnd again as far as know TK never wanted to own this airline because of legal issues as it was explained in detail by commenters in previous posts as well as commercial reasons. I really wonder is there anyone reading this blog and believes that there is any money to make in the Balkans through acquiring shares of any national airline given the economic and legal framework the Balkans are now in..
BH Airlines is as artificial as anything else in BiH. The country doesn't function properly, what makes you think the " national airline " will? I think Croatia Airlines and Jat Airways should both open hubs in Sarajevo like Adria did in Kosovo.
ReplyDeleteAnother solution is to just have two BH flights.. Sarajevo-Zagreb-Sarajevo and Sarajevo-Belgrade-Sarajevo and use these two capitals as hubs for Bosnian passengers,
E neka si ti prirodan...mamu ti j...m...But we still have 2 airplanes... and it will be more easily to have one ore two more than so called <Air Srpska company - company without planes...
DeleteEppur si mouve
DeleteHopefully you have enough clue to understand, although by your comment it is not likely that you do...
And what would they do with this extra jet? It is not like their fleet had 100% utilization. They should have rather sold one of the atrs.
ReplyDeleteNot that TK is without the blame as they did not do any know-how transfer at all.
@ second Anonymous
ReplyDeleteI think, as a Bosniak, that Jat should f*ck off...and Croatia Airlines should serve as the national carrier...we should be one country anyways. My view! :)
This sort of political reasoning instead of an economic one is pretty much what plagues both the Balkan airlines and the Balkan economy in general.
Deleteand I as a Bosniak, think that JAT should serve Sarajevo as a national carrier because JAT has much better european network than Croatia. My interest is to come to destination with 1 stop, not with 2 or 3. i
Delete@ Vladimir - completely agree with you on this one and B&H Airlines is a good example of what happens when the privatization process happens based on the nationalistic and not economic interests. Bosniaks thought that Turks were going to give them B777 for free and fly from SJJ to the US and Australia just because they are "brothers". I don't know if my fellow Bosnians are really that stupid or naive to believe that anyone will give them anything for free. I see a similar story with Jat and Russian Aeroflot and Croatia kissing Lufthansa's butt. We look like bunch of primitive tribes conquered and divided with no direction whatsoever. I am ashamed of who we have become.
Delete@ second anonymous: You wish. :) I would rather see Wizz/Ryan Air/EasyJet hubs than those of Jat and Croatia, they're nothin better than BHA.
ReplyDeleteRegards from Sarajevo :)
I think BH Airlines needs to be scrapped completely since there are heavy losses anyway. No airline would be interested to partner with BH Airlines at this point. I think Bosnia will soon be airline less just like Macedonia. There should be enough flights into Sarajevo from other airlines anyway. I think the country can survive without a national airline,
DeleteI agree. I rather have no national airline than such incompetent one as B&H Airlines. Well, the airline is just one example of how chaotic and desperate situation in Bosnia is, politically and economically. Shame on all three: Croats, Bosniaks and Serbs that even after more than 15 years after the war they still vote for the same shit. Starve and live in misery. I have no compassion for any of you.
DeleteBlame politics Sam, don't blame the people :)
ReplyDeleteI blame the people. At the end, they are the ones who elect year after year the same crap on the political stage. Kakvi politicari, takav i narod.
DeleteWell,are Croatia Airlines or Jat really better than B&H Airlines?
ReplyDeleteIn the moment they are a little better but far from pefect.
Jat is behind Croatia A. because it has older aircraft.
But older aircraft is better than no ac.
Jat or Croatian should NEVER become national airline in Bosnia!
It is right,there is need for LCC.
To where will they fly with their two ATR?
ReplyDeleteHavent they terminated all destinbations?
B and H airlines are not bankrupt ...BUT they have ceased operations...same result.
I think that was it for them ...or not?
Confusion total.
Bosnia is such undeveloped market in all senses. I see from my business.
ReplyDeleteThey have NOT ceased operations. 1 ATR is out for scheduled maintenance C or D Check (whatever)
ReplyDeleteso currently there is 1 aircraft available which still operates services to IST and 1x week ZRH
It is always interesting to see eagerness of some of our eastern neighbors in pointing out that any link between Bosnia (and its companies) and Turkey (and its companies) has to do with covert politic games, nationalism or (preferably Islamic) extremism.
ReplyDeleteIn reality trade volume between Bosnia and Turkey is dwarfed by the trade volume between Serbia and Turkey. When Turkish company (TK) invests in Bosnian company (JA) it is nationalism. At the same time when various Serbian ministers travel to Istanbul and try to sell their own national airline (JU) to TK it is - eh well not nationalism.
@Sam
You seem to be very sure that TK/JA deal was politically motivated. Would you please mind sharing with the rest of us what you base this on?
This might be the case but I have not seen any evidence that would support this opinion although it appears that some of the commentators seem to think so. Just because acquisition has been bungled it does not have to mean that this was political deal.
On the question of hub, I do not understand that anybody even in their wildest dreams can think that BEG will ever again act as hub for SJJ (or any other ex-yu city). And before you jump to wrong conclusions - this does not have anything to do with BEG being in Serbia.
BEG is fairly small airport (related to size of the country/city) with no-intercontinental connections, poor intra-European connections, wrong location (you have to backtrack when flying to Europe). It is an airport that has stagnated for 30 years - it already had 3m pax in 1979. Main airline (JAT) has old fleet (20+ years), bad reputation and average service. So why the hell would anybody choose BEG/JAT over VIE/OS?
In 20 years BEG will still be the biggest airport in ex-YU - it is likely that it always be. Serbia is the largest country, Belgrade is the largest city and Serbian political environment favors centralization of the country (hence favoring capital city over provincial cities). However if you look at the numbers of second tier airports in Ex-Yu (SJJ, PRN, SKP, TGD) you will see tremendous growth. SJJ topped at around 200k in 80-ies. Now it is at 600k. As I understand PRN was hovering around 100k - now over 1m. I am guessing that SKP is also showing similar growth.
So yes BEG is still the biggest airport but it has definitively lost its position as regional hub. Proportionally it is getting smaller and smaller when compared to other regional airports. VIE is new western hub and IST is eastern hub. Everything in between can continue dreaming on.
I agree with most of things you wrote Zrak.
DeleteBelgrade should not run after being "hub"
because its plain nonsense!
What do we need a hub when there is more and more direct flights inside Europe?
Look what happens to a real hub like Budapest or Ljubljana when MALEV goes bancrupt or Adria looses its transfer passengers?
Better to concentrate on O&D...there is the future!
The only thing Zagreb or Belgrade could be interesting for pax from Bosnia or other countries is ...if airlines like Qatar or Emirates would offer nonstop flights to/from there.
BTW Vienna as the western hub for Ex Yu:
OS is in deep deep red and gets pushed by LH to restructure.
OS will cease long haul totally the next years
so there will be huge cuts in feeder flights from Ex Yu destinations.
Four times daily to Belgrade nowadays with OS...that will have to reduce significantly!
The real winner by this will be airlines like NIKI...because they concentrate on O&D!
True Zrak, for any airport to become a hub, first thing it needs is a strong airline and plenty connection options. There are no ex-YU airports which provide that - sure, from BEG you can fly to almost any major city in Europe, but you can do that as well from MUC, FRA, AMS, etc. So, why would anyone chose BEG over other options, except if they are offered a better deal, price and connections times wise? And, somehow I don't think LH will allow BEG or any airline which is operating and which could operate from there to do that. Period.
DeleteHaving that in mind, I think BEG would actually profit more from buying buses and operating lines to Osijek, Subotica, or even Tuzla and Sarajevo, rather than doing anything else. I am not saying it should, that is ridiculous, but the other option is even more unrealistic.
So, BEG should not even try. They should try and do something about very underdeveloped cargo sector, try to attract some major airlines, preferably some of the ME3, and that by itself would do a lot for pax numbers, much more than direct to USA route everyone is hoping for. If BEG is to actually become a hub for anyone, it would have to be based on flights to Asia and Africa, and not Europe and USA - as Zrak said, position is just wrong, plus these markets are already saturated.
Bosnia and Macedonia could establish an airline together, like SAS. 50% held by TK and 25% by Bosnia and 25% by Macedonia. Flights could operate easily: SKP/SJJ/DUS, SKP/SJJ/CPH, SKP/SJJ/ZRH, SKP/SJJ/BRU and so on.
ReplyDeleteMake luv not war! CTN this, JAT that, ADR, BON... blah, blah... c'mon.
ReplyDeleteLet me be the first:
Gojkovicu, u r so cuuute! :) isn't he? :)
xxx
Not completely unexpected, but a few home truths need to be realised.
ReplyDelete1. Political interference isn't welcome in airline operations. Especially when the country is completely and utterly dysfunctional from a political point of view.
2. Airlines need to be 'profitable' (or at least cost-neutral), but live within their means. So the 'right' fleet to serve the chosen destinations, at frequencies which match demand whilst allowing for growth. Delusions of grandeur have no place, and JA couldn't organise a beer in a brewery let alone operate a small network of destinations/fleet.
3. National airlines represent their country abroad. For business, inter-governmental and touristic purposes. So serving markets which actually mean something to the local economy makes sense (incidentally, BiHs two biggest business partners were not served by the airline despite substantial demand: its neighbours Croatia and Serbia).
4. Relationships need to be professional. Whether internally, externally or to its customers, JA never cut it.
I think this whole situation is sad, but the reality is simple: a dysfunctional airline operating in an even more dysfunctional country has just gone under. And it puts the entire nation's (whole BiH, not just one entity or the other) economic interests at jeopardy.
Can the FBIH 'buy back' TKs share, or sue for losses?
'Turkish takes back the Airbus because they couldn't convince BiH a buyout'.
ReplyDeleteThis is the theme of the news which is way more than funny.
I never heard from anywhere that Turkish is willing a takeover.
Those who are making analysis, leaving out the political ties, are not seeing the big picture here. Turkish did come here for political reasons although as a commercial company, would expect good business. B&H Airlines was the worst choice from all ex-yu, pax number at the airport is so low and the fragmentation of the market is so huge that there is almost now single destination that would have enough pax for PP traffic. Check the number! OS is the second largest carrier at Butmir but more than 80% of the pax are transit. Check Turkish or LH or Adria. Same goes for all carriers operating from Butmir. Therefore, B&H Airlines; not a good choice for a buyout. And Turkish is not that stupid to oversee this.
B&H Airlines is doomed to make losses. Wake up people.
600.000 pax is nothing for hub of a flag carrier. 600.000 means basically 5 flights daily from SJJ with a narrow-body jet, where the average Block Hour of the flights is around 2 hours. This means 2 jets working from Butmir, with an average utilization of 10hours. Thats it! Nothing more! Acknowledge these basic facts and you don't have to swear at the BiH politicians or B&H Airlines or Turkish.
How many airlines are operating to SJJ? Around 10 in summer, 8-9 in winter.
So 10 airlines are sharing the operation of 5 jets. And you expect the airline to survive with the support of the partners.
(Another common mistake here is that, everybody is saying that Government is supporting but forgetting to add that Turkish is supporting as well. Turkish has dumped millions of euros to this company from the very start)
If you push your airline to have more destinations in such a small market so that you can reach diaspora, This is what happens.
Bring Richard Bronson as CEO and the result won't change.
Still - if they would have developed local market - in the same way they are making their SJJ-BNX-ZRH very profitable they would be able to make the same with flights from Mostar to Zagreb and SJJ-OMO-FCO. Add on that lucrative Istanbul flights. If they would manage to code share AMS flight and FRA, they would easily be profitable...Only problem is the continuity and reliability, build the destination and stick to it for some tim
DeleteTo last anonymous, very good analysis,
ReplyDeletebut are you sure government is supporting? to my knowledge, the government did not fulfill their obligations (while HTY did) and that is the reason why the airline is in a cash problem. Maybe a group of Bosnians do not want this partnership and try to kill it slowly. But as you said, even if both parties die to make it profitable and work in harmony, chances are dim.
i understand Bh governmente not supporting bh airlines, not fulfill its liabilities to this airline, leave the airline to destiny of destruction despite al effort and helps of turkish. Why is this so? Friends, why is our bh government acting like this? Who to blame in this case? As bosniaks we are again the victims of the bad politicians again. İ am angry to them, i am hate politics!
ReplyDelete"As mentioned in the report of 2011 prepared by the Bosnian State Auditor, company was losing less before TK and this was because of Jet."
ReplyDeleteBosnia has great aviators especially in the State offices.
We need a national airline not to feed our “national” identity nor for profit.
Transport is the generator or the fuel for an economy. Is this country is located over a cross-country/continent main stream land transport? Do we have a harbour? Or do we highways covering all around the country? Do you know after BHA stopped VIE, what is the average price of Austrian, Adria or Croatia? Always more than any European or over Atlantic destination!
Home carrier, especially for developing countries, serves as a access provider not as a profit centre, to bring tourists, small entrepreneurs and diaspora who brings and spends money in the country. This was what Emirates and TK did; Croatia, Jat and Adria are trying to do.
In addition to this, collapse of partnership with TK&BiH will be a super example for future privatization or joint ventures.
Coming to the BHA, there is a critical mess issue on aviation. 2 under performing ATRs are definitely far under this c. mass. BHA cannot get any code share or interline with any European Airline without Jet operation. Did BHA use that jet efficiently? I doubt it but letting it go is just announcing the end of airline.
When it comes to TK, it is obvious that they are not involved with BHA for profit. I mean they have enough capacity to put in to service to anywhere in Europe, they hold a German AOC in joint venture with LH. I see no reason for TK to have an interest other than political circumstance. If they want to buy BHA, the only reason can be that, to get rid of an unstable partner. You do not ruin an airline if you are a partner already. Well.. only if they don’t employ our "genius" people. They can also ruin BHA to get rid of itself but they should be "genius" for this too, as they do need to do so while FBiH is doing it. Why to get their hands dirty.
Finally according to my insider friend, last summer TK & FBiH agreed to inject capital to BHA and TK fully paid as agreed but FBiH after some write-offs stopped capital injection. It seems TK had enough with these irregularities and stopped funding the company. In accordance with genius discovery of state auditor BHA was seeking to get rid of Jet, seemingly they found solution for that.
All these could be result of another genius project; our Government needs a jet for their private travels as our “neighbour”. We can use Airport dividends for this jet instead of BHA, BHA dies and we get rid of it. Airport runs this Jet (Cessna Citation) when out of use of Government, if necessary together with ATRs. Thus we can have 1 profit centre instead of 2 loss making company. Thus airport can also grab the field of BHA allocated in the airport.
Whether this conspiracy true or not, the fact is BHA dying due to insufficient cash flow resulting from government's decision of not fulfilling their obligations. Thanks to our government, Austrian and Croatia will boost their profits on the route to SJJ by controlling the capacity. And we will pay them through ticket prices to promote their countries or cover their losses.
İt obvious that bh government deliberately killing bh airlines. They are playing a game and thaey have a hidden agenda to stop bh airlines, but who pays the bills? İt is us people living in this country. Please stop deep analysis, this is clear that government is knowingly cheating us. Private jet is a stupid idea, these people are playing for their own confortability, i am hate politics.
DeleteA very good analysis from the last anonymous. One of the biggest significance of home carriers is that they control the price level in the market. Unfortunately, the government is soo short sighted that they cannot see the strategic importance of having a national airline.
ReplyDelete