The Croatian Prime Minister, Andrej Plenković, has said negotiations between Croatia Airlines and Greece’s Aegean Airlines over a strategic partnership agreement would be renewed in the coming months. The comments were made following talks with Greece’s Prime Minister, Kyriakos Mitsotakis, in Athens over the weekend. Prior to the coronavirus pandemic, the Croatian government set a deadline to privatise or recapitalise its national carrier by June 2020, however, the target was scrapped at the onset of the global health emergency. Greece's Aegean Airlines and Spanish regional carrier Air Nostrum had both expressed interest in acquiring shares in Croatia Airlines at the time.
Last January, Aegean said, "Any significant decision on whether or not the company is likely to participate in the next phase of [Croatia Airlines’] 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%. Since the onset of the coronavirus pandemic, the Croatian government has provided financial support to its national airline, while Aegean Airlines has terminated its service between Athens and Zagreb. However, the Croatian carrier faces growing pressure at its main base with low cost carrier Ryanair expanding at a fast pace.
Late last year, the Croatian Minister for Sea, Transport and Infrastructure, Oleg Butković, said the government would resume Croatia Airlines’ privatisation process once the coronavirus crisis stabilises. “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”, Mr Butković said at the time. The Croatian carrier recently employed the services of the Boston Consulting Group to draft its post-Covid strategy, which calls for fleet renewal and network optimisation. Croatia Airlines previously said the two would only be possible to achieve jointly with a strategic partner.
Why are politicians from Greece and Croatia making statements about aviation business? Especially Aegean which is a private business.
ReplyDeleteBecause both Greek and Croatian polititions are corrupt!
DeleteThe same with Air Serbia, especially when it comes to long-haul. Always politicians. Just gives you a hint.....
DeleteThe Greek politician was not making a statement. The Croatian politician said that talks would be renewed. Considering it is 100% state owned I don't see such a big problem.
DeleteThe government of Serbia has an 82% stake in JU - Greek government has 0% stake in A3.
DeleteWell have you read the article? Greek PM said nothing.
DeleteAnon@10.59 - and that says everything ! Wishful thinking on the Croatian PM's part ... until and unless someone from Aegean says something, this is a nothing news story
DeleteYou were saying exactly the same thing last time and 2 weeks later Aegean confirmed it was interested in OU. The Croatian PM didn't just randomly remember Aegean after a year and a half and there is obviously contact between them and Aegean.
DeleteYou're forgetting that big businesses and politics DO go together in any country, even in likes of Germany and especially in Croatia and Greece. Also, Greek companies are already involved on the big projects in Croatia, such as the Peljesac bridge. And finally, although we all know OU management is worthless and the Croatian government proved incompetent regarding OU, there's absolutely no chance of OU going bust under the current Croatian administration since Andrej Plenkovic is a big favourite of Brussels.
DeleteFirst the "fleet renewal", and now the "continuation of partnership talks", made by politicians no less (even though Aegean is a private company). The PR campaign is in full swing at OU HQ. But your problem is not PR, it's FR.
ReplyDelete+1
DeleteIt would be the ideal airline to invest in OU and turn it around into something successful.
ReplyDeleteIt sure would be .... BUT, they are very shrewd operators. Why on God's earth would they invest in a company losing so much money; with aging fleet and labour/industrial issues, when they could base a number of their own aircraft in ZAG (just like FR) and hit the market themselves for little to no investment and without all of the associated headaches of taking on OU with all of its problems ?
DeleteMakes zero sense at all ... sorry to say, but ain't gonna happen
Why?
DeleteBecause they can make it succesful company which would make them more profitabile airline.
Exactly. If Aegean was interested them in the first place, they obviously saw they could turn things around. Aegean and OU are run in very similar operating environments. One airline is successful the other isn't.
DeleteWhat do you people think Aegean will do with OU if it becomes majority owner?
ReplyDeleteFirst they would probably halve the workforce at OU.
DeleteGet rid of current management.
DeleteWell one thing A3 knows, which OU management doesn't seem to know is how to fight for your own market and make the most of it.
DeleteThey would be mad to keep current management in place.
DeleteFrom a passenger's perspective, there would be nothing better than a complete takeover and integration of OU into all Aegean practices, including its loyalty scheme.
DeleteBefore corona, A3 was running charter flights from the Croatian coast during the winter to German destinations. OU couldn't make even that work and instead was parking its aircraft. So I would guess A3 would greatly expand flying from the coast which OU currently has surrendered.
DeleteMaybe get OU to actually fly to Athens nonstop, year-round.
DeleteLight at the end of the tunnel for OU?
ReplyDeleteAndrej Planekovic :))) modifying the name to be more fit for this site :))
ReplyDeleteWhat is make OU interesting for them?
ReplyDeleteMaybe they see as an opportunity to make money. They operate in a similar, competitive and seasonal environment just like Croatia Airlines.
DeleteThis would be a very positive development for Croatia Airlines. I hope for the best.
ReplyDeleteIt would be nice to reshape OU into something successful.
ReplyDeleteEvery attempt to sell and reform OU is positive, however the past shows that reforming this carrier is very hard.
DeleteThis could be the start of something good :) hope it works out.
ReplyDeleteWell finally some exciting and positive development for OU. I just hope it doesn't end in tears.
DeleteDon't get me wrong but I don't see what Aegean would stand to gain from this.
ReplyDeleteI think this would have been a great combo. Aegean + Croatia Airlines. Could be a strong airline.
DeleteMarket of eleven million, double bigger than Serbian, with even bigger potentials, which is at the moment used with only 18 percent and can grow to 30, 35 percent, maybe even more, making profit btw, unlike till now, if the company is rearranged, reset, and gets rid of crime, corruption, nepotism and political influence
DeleteAegean is looking for growth opportunities outside Greece, in a 2 hour radius from Athens provided that they see some potential. That's what they said years ago. It seems like OU fits in.
DeleteBut what's stopping Aegean from simply opening a subsidiary in Croatia? Why would they buy OU which has a not-very-recognisable brand, a bloated workforce and tens of millions of debt?
Delete"if the company is rearranged, reset, and gets rid of crime, corruption, nepotism and political influence"
DeleteSending OU to bankruptcy and starting fresh would be way easier...
It seems Serbian market is infinitely bigger to Aegean than the Croatian as A3 maintains flights to Serbia and is even increasing its share in those flights compared to JU.
DeleteVlad,
DeleteWho says Aegean will take OUs debt?
Who says it will become completly Aegeans airline with no state ownership?
Well even if it's a 51/49 deal (I don't see why Aegean would want any less than a controlling stake), what's the advantage for them? OK, let's say the state covers all the debt (hugely questionable from EU complicate POV but let's say). Aegean then still has to take care of the fleet, the workforce and a myriad other transitional issues. On the other hand, OU has virtually no assets, very little brand recognition or in-house expertise that's unique to the market. So again - why bother buying OU when you can just base your own planes wherever you like?
DeleteCompliance*, not complicate, my autocorrect is going nuts.
DeleteAegean is really succesful airline and they definitly know better whats good for them than we know.
DeleteBeing purchased by any carrier from the east, be it Greece, Middle East, Asia would be a win because OU would no longer be a feeder for western European airlines. It would be fed passengers from the east and this would give it a much bigger chance to go long haul to the US
ReplyDeleteSounds like a fantasy.
ReplyDeleteDon't see this working out. No point in buying OU when it's easier to let them die.
ReplyDeleteA3 have proven themselves in very hard times and their expertise in difficult conditions such as economical collapse, corona and a lot of competition against LCCs shows they will do their uttermost to deliver what they promise.
ReplyDelete+1
DeleteI imagine they would use Croatian to feed their network, well, the focus would shift from Germany to Greece now, which is not too bad.
ReplyDeleteOU would be allowed to develop it's European network from ZAG instead of feeding LH hubs.
Deleteaha, so the flights would be like ZAG-ATH-FRA .... yeah, makes sense .... not.
DeleteLufthansa would give its blessing to Aegean to tie itself up with OU. Aegean and Lufti are close.
ReplyDeleteNot really. When Lufthansa tried to expand on the Greek market, Aegean entered into an agreement with Emirates and Emirates launched Athens-New York flights.
DeleteWell this is much more exciting than pension funds.
ReplyDeleteOr German turnaround experts if you ask me.
DeleteA3 would be a superb opportunity for OU's future.
ReplyDeletealmost sounds too good to be true
DeleteFingers crossed it actually happens.
ReplyDeleteAegean would be an excellent choice. They have Q400s and Airbuses in their fleet, are very well versed at opening new markets, battling low cost competition and know how to organise leisure and seasonal travel.
ReplyDeleteSo the saga continues
ReplyDeleteIn 2019 Bajic said company will go bankrupt if they are not sold.
DeleteNo, he said it would go bankrupt if they didn't get 33 million in aid, which they did.
DeleteCan OU survive a few months until talks are renewed?
ReplyDeleteCroatia Airlines should have been dealt with prior to the country's accession to the European Union together with the concession of Zagreb Airport.
ReplyDeleteI really hope something comes out of this.
ReplyDeleteIt's now or never. Let's see...
ReplyDeleteWhat could be the sale price?
ReplyDeleteI doubt much, if any.
DeleteIt is more likely that the government would have to pay them, or take care of any outstanding debt.
Delete1 EUR
DeleteI don't think there would be any fee involved, rather the government would probably ask for an investment guarantee. OU is in a worse state than at the start of 2020. Fleet is getting older, Ryanair competition is becoming bigger and bigger, Covid has devastated their finances (even more), they have more and more loans to pay off, they now have millions tied up with Airbus...
DeleteDoes Aegean airlines know about this?
ReplyDeleteSome talks must have taken place because I doubt the PM would just randomly make this up of nowhere.
DeleteYou would be surprised... Mitsotaki is now prepared to say/do anything as he is losing the next election.
DeleteMaybe a first step would be to have year-round flights from ATH to ZAG?
ReplyDeleteDon't worry, Ryanair will do that. Probably announce it tomorrow.
DeleteIt would be great for OU to find some good strategic partner - Aegean could be the one.
ReplyDeleteNeither the politicians, the government bureaucrats of the various ministries and especially the OU employees want the airline privatized. They just want to continue exactly as is with the tax payers covering its losses for ever.
ReplyDeleteThey can't have it their way forever. Eventually the EU will step in.
DeleteTell that to the Italian government.
DeleteThis government has done a terrible job at managing Croatia Airlines. Annulled tenders to select the airline's CEO, failed privatization, failed to launch PSO tender...
DeleteOnce upon a time there was Jatovanje, now it is Croatovanje.
ReplyDeleteThere was adriavanje in between.
DeleteThe big question will be what are the conditions for sale.
ReplyDeleteAnd I assume privatisation advisors will be paid again?
ReplyDeleteOf course
DeleteWell, the press here in Greece or any other kind of media, has written nothing about that! And I really don't understand what the prime Minister Mr Mitsotakis has to do with Aegean airlines money??!!!
ReplyDeleteThey didn't write anything when it first appeared Aegean was interested only to confirm it 3 weeks later in a filing to Athens stock exchange.
DeleteWell then, we will have just wait and see what's gonna happen!
DeleteIt is curious to see that an article like this one generates 60 comments in less than 3h.
ReplyDeleteWe all know OU will not survive. Noone will buy it. Game over.
Exactly. If A3 is interested in Croatian market, they don't need rotten OU for that. OU fleet is now 2 years older than the last time, airplanes are cheaper than ever (still) and slots are not so valuable as they were before so only extremelly stupid or overpatriotic person would fall on this pathetic political PR.
DeleteWell Aegean was interested right before Covid when many people were saying the same thing as you. Obviously they seem some value in it.
DeleteWhatever value OU had is 0 now - Ryanair expansion crushing them, fleet will soon be up for scrap, market share decreasing at coastal airports. It's over.
DeleteAegean found itself in a similar situation when Ryanair showed up and opened bases in Greece. But they managed to find a way to compete with them successfully.
DeleteIf someone is really interested in croatian market, they will do it without OU - like someone else already commented, OU has nothing to offer,but at the same time OU´s burden is not light . Those others who are "interested" as well, but not in croatian market, but in malversation, malpractice and corruption, will not bring anything good.
DeleteIt would be even better if someone from Aegean confirmed this as being true !
ReplyDeleteThis ship has long already sailed ... if they didn't or weren't able to sell it pre-covid, then they definitely will not be able to do it in the current/future environment
ReplyDeleteThey never really tried to sell it pre-covid, except in late 2019/2020 but the process was stopped because of Covid.
DeleteThey confirmed it last time after a few weeks, they will do the same again.
ReplyDeleteThere are definitely some synergies between these two companies. Let's see what happens.
ReplyDeleteName one, please?
Deletestar alliance membership. One and only.
DeleteNobody mentions Star Alliance regional airlines membership?? Hello???
ReplyDeletePeople just seem to simply forget very quickly or not check. Both Aegean and Croatian are important leading regional airlines especially with the extensive Greek and Croat coast. Jesus Christ, it is not hard to see.
What are you on about? OU has a 15% share on the Croatian coast, there's nothing leading about that.
DeleteBut you do (inadvertently) make one good point - OU shares LH's FFP, while Aegean has its own that's much more competitive, so LH would probably be very much against this deal.
I don't get it. To start with there is very little demand both ways between Greece & Croatia. How will this function logistically? Flights from ATH to western/northern Europe would what, make a stop in ZAG? I just don't see the synergies.
ReplyDeleteCroatia and Greece are such similar aviation markets, with tourism being the primary economic activity and air traffic being so seasonal, Aegean is perhaps intending to deploy its own management strategy to Croatia Airlines to turn it into a success story as well.
DeleteThe fleet of these two airlines is almost identical, with the only difference being that Aegean has the A321. This aircraft would be of use to Croatia Airlines on some of its most frequent routes, especially in the summer months from the Adriatic coast, so Aegean could lend Croatia its A321 for this purpose.
Most importantly, Aegean would make use of significant economies of scale that it would obtain if the two airlines became one. Much of Croatia Airlines’ administrative staff and management would no longer be needed, though Aegean might consider keeping services like maintenance and customer support in Croatia to benefit from lower average wages there.
Wait some days for Ryanair announcing Zagreb-Athens flights.
ReplyDeleteTomorrow will be the big day, dear. Let us see what happens....
Delete