Croatia Airlines And A Quagmire Of Issues

Lauren Simmonds

Unions are disappointed that even after a month since Prime Minister Plenković’s promises, nothing has been done with regard to the consolidation of the already burdened company…

As Darko Bicak/Poslovni Dnevnik writes on the 5th of August, 2018, after a month of apparent peace within Croatia Airlines, the crisis could escalate in the middle of next week, as Croatia’s national carrier has announced the strike and grounding of the aircraft. ORCA (Croatia Airlines’ union of workers) said that Prime Minister Andrej Plenković had promised them at the beginning of July that the company’s problems would be solved urgently, but that nothing has actually been done since those promises were made approximately one month ago.

The union seeks the signing of a new collective agreement as well as the adoption of a clear business strategy in the forthcoming period, which is a prerequisite for the appointment of a permanent executive instead of the existing temporary one. On the other hand, Croatia Airlines’ management has warned that the planned strike will lead to big problems of a most serious nature because the summer is the only time when the company actually operates profitably. They have pointed out that every strike day will cost the company a massive 800,000 euro, and would have a dire impact on nearly 7,000 passengers per day.

Other unions within Croatia Airlines, the first of them being SHSZUZ, publicly moved themselves away from talks of striking and warned of its harmfulness and possible hugely detrimental impact on the company. They stated that the strike could lead to further complications in the already less than favourable situation within the air company. Oleg Butković also said on Friday that Croatia Airlines as a company would hardly manage to endure any possible strike. 

Otherwise, Croatia Airlines has been looking for a strategic partner for a decade, and at the end of the mandate of former Prime Minister Zoran Milanović (SDP), as many as four companies were targetted.

Over the past two years, the process of seeking a strategic partner stagnated and eventually halted, and Minister Oleg Butković decisively said that this spring that the only exit from Croatia Airlines’ problems was for them to find a strategic partner.

Strategic partners, at least so far, haven’t been in any great rush to enter into anything with Croatia Airlines, primarily because of their fears about Lufthansa. Lufthansa and Croatia Airlines are otherwise already connected through the Star Alliance group and Croatia Airlines engineers are currently continuing to service Lufthansa’s aircraft.

A number of experts believe that Croatia Airlines will profit more from some other alliance, the Sky Team or One World, because Lufthansa and its Eurowings (Germanwings) have major roles within Star Alliance, which have significant operations on the Croatian and regional markets.

Croatia Airlines has stated that meeting 150 union demands would cost an additional 53 million kuna each year, they also pointed out that their existing employees’ salaries are also relatively high and are growing steadily.


Click here for the original article by Darko Bicak for Poslovni Dnevnik


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