Croatia eyes post-corona privatisation for national carrier

The Croatian Minister for Sea, Transport and Infrastructure, Oleg Butković, has said the government will resume Croatia Airlines’ privatisation process once the coronavirus crisis stabilises, but noted the state would first financially assist the carrier. “At the start of the year we had two parties interested in Croatia Airlines and that process was advancing quite well. We were about the enter the second phase of negotiations, which included finalising details. However, corona came, and everything was halted because the entire industry has been hard hit”, Mr Butković said. He added, “When the situation begins to improve and normalise, we will resume the search for a strategic partner. There was interest, it’s not as if no one was looking at Croatia Airlines, but we will have to wait a bit more”.

The Croatian government previously set a deadline to privatise or recapitalise the airline by June 2020. Greece's Aegean Airlines and Spanish regional carrier Air Nostrum had both expressed interest in acquiring shares in Croatia Airlines. In January, Aegean said, "Any significant decision on whether or not the company is likely to participate in the next phase of the privatisation process will be taken in the coming months, following the provision of information and discussions, in accordance with the procedure set by the Republic of Croatia". The next phase of the process was to involve the government announcing a tender for the submission of binding bids and setting out the number of shares it was willing to sell in the company. It previously noted it would offer a stake of up to 70%.

Mr Butković reiterated the state would provide aid for the flag carrier. “We share the same faith as all other countries, where governments are saving their airlines. We will, jointly with the European Union and Commission, certainly provide assistance for Croatia Airlines, which will be in line with EU aid rules”, the minister said. Croatia Airlines registered a net loss of 23.1 million euros during the first half of the year. The company has drafted three different scenarios as to how the ongoing pandemic may affect its business, with estimates ranging between a loss of thirty million to 73 million euros by year’s end. The airline has denied recent reports that it has leased an additional Dash 8 turboprop, which arrived in Zagreb last week, noting that the aircraft was just undergoing maintenance at its technical division before being returned to its owner.