State revives plans for Croatia Airlines - airport merger
Croatia’s newly elected government has revived plans for the potential merger of Croatia Airlines and a number of state-owned airports into a holding after the coronavirus pandemic halted the carrier’s privatisation process. The Minister for Sea, Transport and Infrastructure, Oleg Butković, said a “solution” for Croatia Airlines would be outlined by the end of the year. “What is most important and what is giving us the biggest headache at this moment is Croatia Airlines and how to stabilise the company which was already struggling and is now worse off because of corona. We are preparing a wide-ranging and comprehensive process together with the Ministry of Finance”.
Mr Butković noted that Croatia Airlines cannot survive in its current form in the long-term. “This was clear even before corona, so we started our search for a strategic partner. This process has been halted due to the pandemic. It is obvious now that we will have to restructure the entire aviation sector in the country, not just Croatia Airlines but also the airports. We have to come up with a model that will be sustainable and in line with European Commission guidelines. I believe that in September or October we will propose concrete solutions which will aim to safeguard both Croatia Airlines and the entire aviation industry which has been hard hit. The state has to offer a final solution. We are thinking about perhaps merging some airports and entities with Croatia Airlines, but we will see which ones”.
The Minister noted the state would not abandon Croatia Airlines. “We will not give up on our national carrier. We are seeking the best possible solution to stabilise it”, Mr Butković said. Croatia will receive 22 billion euros from the European Union’s Covid recovery fund, which will be made available nest year. In late 2019, the Croatian government considered forming a holding company comprised of the national flag carrier and six state-run airports in a bid to recapitalise Croatia Airlines. The formation of a holding company would have resulted in the Croatian government maintaining effective control over both the airline and airports. The proposal was criticised at the time by several airports including Split and Dubrovnik, which are the country's most profitable.
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