Autumn of change

EX-YU carriers gear up for long hot autumn

In exactly a month’s time, autumn begins in the Northern Hemisphere and could signal major changes within the EX-YU aviation industry. All of the former Yugoslav carriers are facing problems of their own and important developments are set to take place over the next month.

On September 1, Croatia Airlines’ CEO in waiting, Krešimir Kučko, will take over at the helm of the company. The new CEO will first have to get employees on side, which are less than impressed with his questionable conduct in the past, which has been well documented by the media. However, Kučko will also have to face the airline’s financial advisors, which have, in leaked documents, recommended for the carrier to significantly cut down on its destination network and retire two Airbus A320s. Croatia Airlines has managed to cut down on its costs over the year but further cuts are necessary. It remains to be seen how the new management team will execute them.

On September 10, Adria Airways’ privatisation tender will come to a close. So far there has been no news whether anyone has shown interest in the 75% share package. However, the airline has planned its steps in the case the tender fails. Adria CEO, Klemen Boštjančič, has said the airline will retire its Aiburs fleet. “Our fleet is our biggest challenge. It is not ideal for our market”, Boštjančič notes. Furthermore, Adria plans to take out a nine million euro loan next month. The loan will be granted by the banks if they are satisfied that Adria has made enough progress in its restructuring process.

During September, talks on B&H Airlines’ future are set to begin. The government has announced that it is negotiating with two potential partners which are keen on taking over a 49% stake in the airline. Speaking of potential investors, the Bosnian Minister for Transport and Communication, Enver Bijedić, recently said, “At this point I can only reveal that one of the airlines is European while the other isn’t. Furthermore, one of them is well known around the world while the other is prepared to financially back the entire project”. The talks come only several months after Turkish Airlines relinquished its minority stake in the Bosnian carrier.

After a change in government, changes are also expected at Jat Airways during September, starting with the management. However, the carrier is not high on the government’s priority list. Meanwhile, Montenegro is gearing up for parliamentary elections on October 14. If the governing Democratic Party of Socialists of Montenegro, which has been running the country since 1991, fails to form a government it could rock the entire establishment, including Montenegro Airlines. The Montenegrin government has vehemently supported the carrier through cash injections, loans and protection from low cost competition.