State eyes Croatia Airlines - airports holding
The Croatian government will consider forming a holding company comprised of the national flag carrier and six state-run airports in a bid to recapitalise Croatia Airlines. The model is expected to be officially proposed by the carrier’s privatisation advisors, which have until the end of the year to present the best possible options for the airline. Due to a lack of interest for the flag carrier from others in the aviation industry, the privatisation advisors are also expected to propose the sale of the holding company to local pension funds. Airports which would make part of the holding company would include Split, Dubrovnik, Zadar, Pula, Rijeka and Osijek. All of them have been operating with a profit over the past years, with exception to Osijek.
The formation of a holding company would result in the Croatian government maintaining effective control over both the airline and airports. The Croatian Minister for Sea, Transport and Infrastructure, Oleg Butković, said last week the government would avoid concluding a similar privatisation agreement to the one its Slovenian counterparts made with Germany’s 4K Invest over the sale of the now-bankrupt Adria Airways. “We don’t want such a strategic partnership, where state interests and services of importance to Croatia would not be safeguarded. Croatia, as a country dependent on tourism, needs a national carrier”, Mr Butković said. He added, “Consultants are currently looking into potential strategic partners and will decide on the best possible recapitalisation model by year’s end. Then we will launch a public tender. Based on the government’s decision, we will select a strategic partner by the end of June 2020. The focus is currently on finding an investor from the aviation sector, but we are not insisting on it. Different sale models foresee interest from different types of investors”.
The Director General of the European Region of the Airports Council International (ACI), Olivier Jankovec, has criticised plans to form an airline - airports holding company. “I have heard about this proposal and I must say I am rather surprised. It isn’t in line with the direction the European aviation industry has been taking in the past thirty years. In fact, it is completely the opposite of what has been happening in the aviation sector. The days when airports subsidised airlines are long gone. Therefore, combining select airports with Croatia Airlines is nothing more than a return to the past, somewhat like Aeroflot in the 1960s”. Mr Jankovec added, “Such a model would also raise questions over its compatibility with European Union regulations. I doubt the European Commission would approve for Croatian airports to be rescuing Croatia Airlines, which is in state ownership. The EU is very clear here: there is to be no financial assistance to airlines made by state-owned airports, except in specific cases and under strict rules when concerning the launch of certain routes’’.
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