Minister: Turkish Airlines destroyed B&H

Worsening state in B&H Airlines blamed on Turkish

Bosnia and Herzegovina's Federal Minister for Transport and Communication, Enver Bijedić, has blamed Turkish Airlines for the current state of its national carrier B&H Airlines which has fewer aircraft, routes and passengers than two years ago when the Turks relinquished their 49% stake, citing problems with the government. Speaking recently in an interview to Federal Television, Minister Bijedić said, “B&H was used a gunnie pig by Turkish to test the market. In early 2012 the Turkish management ceased payments on loans for the financial lease of two ATR72 aircraft”. Subsequently, the outstanding loans would see B&H grounded for several months last year and its bank accounts blocked.

Mr. Bijedić also notes that Turkish Airlines’ intentions were not all that noble when it came to B&H. “They launched the wrong routes. A total of ten new services were launched and ten were cancelled. As a result, B&H incurred a loss of some half a million euros. The Turks lied to us”. Under Turkish Airlines’ control, B&H Airlines was subleased a jet engine aircraft, first a Boeing 737-400, which was later replaced with an Airbus A319. However, the Turks did not deliver on their promise of providing two jet engine aircraft which would simultaneously operate on behalf of B&H by the end of 2010, as outlined in the takeover agreement.

Following its acquisition by Turkish Airlines, the Bosnian carrier launched a handful of new routes and became the busiest carrier operating out of Sarajevo with a market share of 26%. Today, that share has dwindled to only 4%. In 2012, B&H Airlines ended the year with a profit of almost half a million euros. Last year, the airline recorded a loss of two million euros. Furthermore, the carrier faces significant problems. Minister Bijedić explains the previous government administration signed a damaging deal for the financial lease of two ATR72 aircraft which will likely be returned to its owner, the Hypo Group, in 2016. In addition, over the past year, seven pilots have left the carrier, creating a major operational headache for the small airline which counts only 104 employees. Turkish Airlines has refused to respond to the criticism.

Late last year B&H Airlines, which almost exclusively relied on its service to Istanbul, refocused its attention to nearby Belgrade and closer ties with Air Serbia. Acting CEO Amir Jažić says B&H cannot compete against the likes of Turkish Airlines on their route to Istanbul. However, the CEO notes that bilateral aviation agreements between Bosnia and Turkey, drafted more than a decade ago, give Turkey an unfair advantage in commercial operations. Turkish Airlines will run up to four daily flights between Istanbul and Sarajevo on selected days this summer season. On the other hand, B&H operates only four weekly flights between the two cities. The Bosnian carrier has had a bumpy start to its new service to Belgrade which now operates on a daily basis, however, passenger numbers have significantly improved over the past few months. In March, B&H carried 785 passengers on its flights to and from the Serbian capital. Minister Bijedić remains optimistic that B&H Airlines will find a new part owner which will provide better treatment and conditions than its previous partner Turkish Airlines. However, the airline’s CEO recently warned the situation in the company was “alarming” and that each day was more “distressing”.