NEWS FLASH
The European Commission has told EX-YU Aviation News it is in “close contact with Croatian authorities” after the government approved a 33.7 million euro cash injection into the carrier last month. The Croatian Prime Minister, Andrej Plenković, has said he anticipates no difficulties with the European Union. “We explained the situation”, Mr Plenković noted. The Croatian government has said it will strictly monitor spending at the carrier as part of the capital injection, which will be used to overhaul two aircraft engines, pay off debt to suppliers and finance other investments.
As always, everything is political in the EU. Since Croatia is behaving there will be no punishment.
ReplyDeleteI won't be that sure
Delete@Anonymous22 October 2019 at 10:37
DeleteActually, State can re-finance or pay debts of state companies through injection of funds under EU law, as long as this is either repaid back or used as re-capitalization and State takes share of the company in tune on money given. Problem isn't the state aid, problem is the company itself, under EU law, the subsidies aren't allowed, however under same provisions if company is given market dominance or advantage through financial support, money has to be returned back. However, as Croatian Airlines doesn't really enjoy market dominance with in Croatian air market, as evident, it handles only 2.2 million passengers out of 11 million, State can help out as long as the financial support is to be used as indicated by current Government. Similar situation was with Thomas Cook, but UK Government didn't inject money in to struggling company.
The Croatian minister has read political moment in the EU impeccably.
ReplyDeleteI’ve been saying all along to all the OU haters, EU won’t sanction Croatia over this....Croatian government will inject another amount in a few years and EU once again will say nothing...all is good, OU is etched in the DNA of Croatian statehood, and will be here for a loooooong time A+
ReplyDeleteWhy is the state keeping a company on life support a good thing that you are cheering? Wouldn't OU be better off being a successful and well managed company with proper strategy, fleet, and routes rather than allowing money to be wasted year after year?
Deleteall is good, OU is etched in the DNA of Croatian statehood, and will be here for a loooooong time
DeleteJust keep drinking that Kool Aid, surprise will be far more shocking once reality hits.
Answer is quite simple, in the Balkans you cannot operate a profitable airline, period. Look at all the private airlines, they are all GONE, Adrian beeing the latest. Airlines in this region are a transport service such as a city bus. The economies of all the Republics are not strong enough to sustain a profitable year round national airline, so the subsidies Croatia gives OU and Serbia YU serve as an indirect to connect their citizens and potential investiors to their cities year round. In my opinion, only a SAS type business model may be viable over here....
ReplyDelete