Croatia Airlines plans to renew its fleet by acquiring between twelve to fifteen aircraft, based on its post-Covid strategy drafted in cooperation with the Boston Consulting Group, the “Jutarnji” daily reports. The carrier intends on acquiring the jets through a financial lease, similar to the Dash 8 turboprops in its fleet, with the process expected to take five years to complete. The Croatian government is yet to discuss and approve the post-Covid strategy, which has not been made public. The strategy itself will take three years to implement and includes plans to expand the airline’s network in order for it to better compete against other carriers.
Croatia Airlines has renewed talks with Airbus over the cancellation of its order for four A320neo aircraft, which were to be delivered during 2022 and 2023. The European plane manufacturer could offer the Croatian carrier the A220 jet instead. It will demonstrate the aircraft, an A220-300 in Air Baltic’s livery, as well its features, in Zagreb tomorrow, which will be attended by representatives of Croatia Airlines, as well as Airbus’ Head of Single-Aisle Market Development, Claude Debaquenne, and members of the press. Other Croatian-based airlines, including Trade Air and newcomer ETF Airways, are also expected to be in attendance.
Last week, Croatia Airlines said its post-Covid strategy outlines the need to improve the company’s efficiency and competitiveness in the face of key operational and structural challenges that include fleet renewal and the optimisation of its year-round route network. "Taking into account visible trends on the highly competitive Croatian aviation market, fuel prices and CO2 emissions, as well as the goals set through 'green' EU policies, the defined strategic initiatives have no alternative, and their implementation will utilise the opportunities which will be available over the next two years as air traffic recovers", Croatia Airlines said in a statement. It added, “We will inform the public of all the upcoming steps in due course”.
Sounding more and more like Adria and Sukhoi
ReplyDeleteNext steps are:
Delete1. Start linking flights
2. Announce a major expansion
3. Declare bankruptcy
OU is far from Adria scenario.
DeleteThey are on JP way...just it will take some more time fo finish like JP as they will be getting money from Government and it was not the case with Adria.
DeleteHowever due to EU policy money can't be given all the time and OU needs it very much.
Even if the government were unable to provide support, whicb won't happen, they have many assets to sell.
Delete*which
DeleteJust to survive year or two more.
DeleteWith having Ryanair heavily involved in ZAG operations it could be even sooner.
And what assets can they realistically sell? LHR slots right now aren't as valuable as they were in the past. Maybe a few engines and so on. However if your survival depends on selling your assets then you are just delaying the inevitable.
DeleteUntil they start generating cash things won't improve. These Boston guys are crooks. They are like: so we are going to make a plan for after covid, tell you very obvious things which will be implemented if you survive the crisis. Thank you, now pay us €1.000.000.
They own aircraft which are still in good flying state which they plan to retire within 5 years.
DeleteAnd what models exactly? Q400 that was ditched by almost every airline out there? airBaltic, SAS, Austrian Airlines ... have all retired it.
DeleteNo, they own A319s and A320s. They don't own the Q400s yet but will eventually.
DeleteAnd why would someone buy their A319s and A320s when they are really old and younger models can be found on the market for little money.
DeleteI would really like to see where you can find younger models for little money.
DeleteCroatia Airlines needs A220 urgently, Q400 advantage 15 years ago is today disadvantage and 319 too much thirsty in comparison to NEO. A220-100 in mix with 300 would fit like a glove. Single type, unbeatable efficiency, state of the art technology best in class machine by far. Not taking it would be biggest ever made.
Delete@Anonymous02:54
DeleteI agree, OU has a great chance of getting new fleet in order, 8 A220 300 would fit perfectly or mix 8 A220 100 and 4 A220 300 with 6 Q400, 4 A 319 and 1 A 320 are owned by OU so they should be utilized for summer season when airline needs more aircraft, in fact return 4 A319 to Airbus for exchange of one A220 100 + €10 million that would be a great deal for OU, however before that can happen, entire management of the company must go, fire every single one of these vampires and parasites, get a new team on board and get things rolling, experienced, educated and proven team is needed.
Before making a post-covid strategy they first need to survive covid. Demand seems to be falling. Austrian Airlines has further reduced ZAG in October to just 4 weekly, FZ has halved their flights from 4 to 2, Lufthansa isn't planning a larger plane than a CRJ and so on.
ReplyDeleteAll airlines seem to be experiencing reduced demand out of ZAG.
Maybe Boston Group could first make a plan how they think OU can survive this crisis before making fairytale plans for a world after all this.
Even LJU will have more flights to DXB than ZAG.
Delete@Anonymous09:02
Deleteperhaps you've heard of it, Covid is still a global pandemic, Croatia is on the red list now, of course there'll be reduction in flights and travel, the fact there are flights to start with is massive suprise.
There are no lists for Dubai. Same rules apply for everyone.
Delete@Anonymous12:35
DeleteYou make no sense, Croatia is in the EU, has to apply EU rules, Croatia is on red list, covid rate is out of control, of course there'll be reduction in noumber of available flights, this is just fact of life. Simpleton mind doesn’t work with covid, if EU imposes restrictions due to covid, they apply to all member states, Spain, France and now Italy is going red, all of these places will impose restrictions and noumber of flights in and out. This is what happens when you have a global pandemic out of control. Or are you just trolling.
Would be nice but I think it's far fetched.
ReplyDeleteWhy such a focus on fleet? I think it's fine. I would rather see them first focus on new markets and deal with Ryanair.
ReplyDelete+1
DeleteThey are focusing on fleet because it's old and unsuitable for OU's needs. The idea is to make the airline profitable.
DeleteI would be more concerned with the fact that Ryanait will have almost 40 routes from Zagreb next summer.
DeleteThe fleet is not too old, especially not comparing to 30+ years old Boeing 737s JU was flying until recently. What OU must do is get New equipment that would cut the expenditures, and impose a 30% stafging cuts, together with appointing a new management so that the stop making losses. Profit can be 0 with all the added value they bring to the Croatian society, industry and tourism.
DeleteA220 would be ideal for OU.
ReplyDeleteAirbus coming to Zagreb is a good sign.
ReplyDeleteThree rotations per day and hopefully long haul aircraft to fly Toronto, New York City and Seul.
DeleteSo the entire existing Airbus fleet will be retired within 5 years?
ReplyDeleteMakes sense. The Airbuses are over 20 years old.
DeleteAnd they are becoming expensive to operate.
DeleteNope! And nope!
DeleteWish list
ReplyDeleteWho is going to finance all these new planes?
ReplyDeleteIt says through a financial lease.
Delete^what does it mean?
DeleteYou still need to pay monthly installments which are not cheap for new planes. For them the best way forward would be to focus on Embraer. They are cheaper and a lot of second hand aircraft can be found out there.
DeleteYou pay monthly instalments. The lessee undertakes most or all of the risks and benefits of ownership but the lessor retains the legal title until the entire value is paid off.
DeleteWhy should they focus on Embraer? An aircraft type they never had in the fleet with need to train crew, get maintenance certification and loose your deposit with Airbus. Makes no sense.
DeleteMakes sense when you look at costs. A second hand Embraer is cheap while newer planes are more expensive. Also Embraer would be more than happy to cover the cost of training if it means getting a new customer.
DeleteYou won't get free crew training from the manufacturer for second hand aircraft.
DeleteAnd even if you do get free training, you're still somehow paying for it through aircraft price. Manufacturers are not charities.
Banks will. Sigurno ne uprava vodovoda.
DeleteDeposit for 4 A320neos won't get them 15 A220s.
ReplyDeleteNo one said they would get 15 A220s.
DeleteOr A220s at all for that matter. It's just a type they are looking at.
DeleteThis will end up like their plans to get 100 seater plane or open bases in ex-Yu cities.
ReplyDeleteHope it happens.
ReplyDeleteThe A220 would look great in OU's livery.
ReplyDeleteWould be nice if they considered a new livery after so many years.
DeleteSuddenly they found the money???!!!!
ReplyDeleteThey will probably get a loan with the state as the guarantor.
DeleteThey will do a financial lease - same as for the Q400s.
DeleteWould the crew have to have extensive training to move from the A320 to A220 or are they similar?
ReplyDeleteI mean pilots
DeleteTransition training lasts a few weeks.
DeleteA220 was designed by Bombardier, A320 by Airbus.
DeleteThey are completely different aircraft in all aspects.
They are finally waking up!
ReplyDeleteNo chance
ReplyDeleteHow much would this cost?
ReplyDeleteI hope they go AirBaltic way, only A220s and a great destination list/connectivity through Zagreb business
ReplyDeleteImagine in the end they chose Sukhoi :D
ReplyDeleteThe good thing about the A220 is its range. Meaning that they may even fly to DXB if they wish. Plus, Airbus will probably give them a discount. Bravo Hrvatska!
ReplyDeleteIt is a great aircraft
DeleteThey easily do DXB with A319 or A320 as well.
DeleteWhat about CRJ1000? They used to wet lease it during summer.
ReplyDeleteThey are dead. No more development of that aircraft, production is also ending soon
Deleteif they are not joking they are eating some funky mushrooms
ReplyDeleteOU doesn't have the market or cash flow to withstand these kind of obligations
any ex-yu company thinking it should fly anything less than 70% of 10+ year old aircrafts on lease has a homer simpson for CFO and CEO
but these will be great new for JU. back to 80's & JAT as the only single ex yu provider, i guess
Even JU which is in a much better state didn't go for new aircraft but got cheap/affordable second hand A319s.
Delete^and are even flying 30 year turboprops
Delete30 year old turboprops? How come?
DeleteI really wouldn't use JU as an example of good fleet management others should strive towards.
Deletewhy? it was mostly good
Deletelot more a319 than 320's not to cause problems with overcapacity
keeping old 737 for charters was smart move
for a330 there wasn't much choice
maybe the could do more hundred seater jets, but they tested the ones from adria i think so they probably didn't like the math on them
Any wide bodies planned?
ReplyDeleteYes that's really what they need right now...
DeleteWhy not? They could fly to markets which are biggest source of tourism in HR and feed short haul network.
DeleteDo you have any idea how much it costs to impelement a widebody let alone the flight itself? For the current situation at OU widebodies are the last thing they need.
DeleteAnd what would those widebodies do the other 7-8 months of the year?
DeleteUp to 15 new A220 through long term lease, I couldn't agree more. But existing 320 order should be converted to A321 XLR. Only the combination of the two can make results. Just switch 320F to 220 will change nothing, or little. Not enough growth to survive. No real hub in ZAG. Only going that way can keep them alive
DeleteThere is a possibility A220 will have extended range so it could fly ZAG-JFK.
DeleteNo matter how it ends, at least something is finally happening at OU.
ReplyDeletei think the "finally" will turn to "finale" very soon.
DeletePosting opinions on the net without explanations, proof or any thing else to support your claim is simply silly, don't you think?
DeleteAny transformational proposal will look good if you make wild assumptions. For example, assuming that Croatia Airlines will grow at 50% per year as a result of A220, cuts and a new network.
DeleteInstead of being mesmerized by tomorrow's dog and pony show, decision makers should look at assumptions and see how the numbers stack up when pessimistic scenarios are involved. Will OU survive in that case?
What about merger with airBaltic? Maybe that is good opportunity for them. They get few planes from airBaltic order, know how, maintenance and crew training. And especially know how how to fight Ryanair.
ReplyDeleteAnd what would airBaltic gain from this merger?
DeleteDebts.
DeleteThe denial for some on here is through the roof.
ReplyDeleteKeyboard patriotism at its best
DeleteLH doesn't want strong OU. They would not allow strong hub airline when all they need is a feeder to FRA and MUC.
ReplyDeleteOU could use new A220 aircraft to expand regional coverage and fly from TIA, SKP, SJJ etc via ZAG to destinations such as London, Paris or Amsterdam. This is not what Lufthansa wants.
DeleteLH would rather see Croatia Airlines as Air Dolomiti of the Balkans. If OU wants to fly directly from TIA, SKP, SJJ and other places to Frankfurt or Munich then Lufthansa would be happy.
LH is not the owner of OU.
ReplyDeleteYou are right. Not the owner. Just the Master and the Commander. As the owner you have responsability and debts. As the Master and the Commander you have free feed and fat profits.
DeleteNot true. Is this you, C i n i k?
DeleteIf they survive the winter and have enough financials in the tank for expansion go for it.
ReplyDeleteOU already hinted how will they have enough money: "Taking into account ... fuel prices and CO2 emissions, as well as the goals set through 'green' EU policies, the defined strategic initiatives have no alternative"
DeleteThat could be interpreted as: government will provide EU approved incentives in the form of carbon reduction tax breaks and other green subsidies for new, eco-friendly A220 aircraft. That's how OU will get legal government subsidies to pay for new planes.
It they manage to pull this of it will serve as a case study for other EU airlines on how they can finance fleet renewal without destroying their balance sheets
Delete(Negative interest EU loans for xx years).
Maybe they did find the trick that Italy used for Alitalia to ITA and applied it to for their needs.
Hope that they pull this off.
If you need to hire consulting firm to tell you how to survive then you have the wrong management in place to begin with.
ReplyDeleteThey didn't have to hire anyone, they just had to read this forum.
DeleteNext step is to change managment and then some changes are sure to come.
ReplyDeleteIt seems like OU is just saying this trying to show off to Ryanair like "You see, you didn't hurt us, we are still strong, looking for new jets" but honestly they can not compete against Ryanair
ReplyDeleteI'm trying to think all the routes that could be added with so many aircraft.
ReplyDeleteIt's nothing hard to think, Munich, Frankfurt, Zurich, Bruxelles and Vienna from every Balkan village airport.
DeleteThe trend from the Balkana village to the German and Swedish village is crazy. I mean look at Vaxjo, man....who ever heard of it before? Suddenly SKP and BEG are connected. And not to mention Karlsruhe/Baden-Baden Airport.
DeleteFrom today's Airbus A220 presentation at ZAG:
ReplyDeleteIstaknuto je kako A220 može povezati Hrvatsku s Europom, Afrikom, Bliskim istokom te istočnom obalom SAD-a.
US East coast? That's what's bothering OU, Airbus extending A220 range to 4000nm so they too could fly to NYC? OMG their house is on fire but instead they think about JFK!