Following on from last week’s post about Czech air, the ex European bloc airlines have not fared well since the dissolution of the former Soviet states.
- In Slovakia, Slovak Airlines closed in 2007, SkyEurope 2009 and Air Slovakia in 2010
- Last year, Malev, the airline of nearby Hungary collapsed and WizzAir has made continuous losses since launching in 2003
- Poland’s LOT is in financial difficulties
- Bosnia and Herzegovina B&H Airlines was grounded briefly last month
- Romanian government owned TAROM has had five years of losses
- Croatia Airlines has lost money almost every year since commencement in 1989 and was unable to pay for four A319s last October when it faced bankruptcy
- Slovenia’s Adria airlines has operated at a loss in 2005 and every year since 2008. The government tried to sell the airline in 2012 but no one wanted it
- A month ago, the Serbian government took over their carrier JAT ‘s accumulated debt of $170million Euro, ahead of a tie up between JAT and Etihad which many hope will lead to an eventual Etihad takeover of the Serbian carrier
- Not quite Eastern Europe but over in Austria, Lauda airlines disappeared into Austrian in 2005 and Niki was taken over by Air Berlin in 2011 although unlike its new owner, it was profitable. Lufthansa took over Austrian Airlines in 2009 but were unable to stem years of losses. Last year, all of Austrian’s operations were handed over to its subsidiary Tyrolean Airways
Willie Walsh, CEO of IAG (British airways/Iberia) says there are too many airlines and favors widespread consolidation:
Will we have 1,057 airlines in five years’ time? I think the industry would be a hell of a lot better if there was half that number.
Who would take on East Europe’s airlines? Could we see Turkish or Lufthansa or IAG get the appetite for LOT? Ryanair or Easyjet or Air Berlin look at Wizz? JAT go to Etihad?
Whoever gets involved, I cannot see in five years time, the same number of Eastern European carriers. Maybe two or three big carriers (Lufthansa? Etihad?), a large regional and a smaller low cost carrier? Walsh will get his wish in this region at least!
Just like the US, all of eastern europe will consolidate into the big 3 : LH/LX, BA/IB, AF/KL. Etihad can buy stakes all they want, but so far, I really don’t see any coherence or even meaningful roadmap.
If only they’re willing to let go on their national ego, we’ll have healthy carriers in the future like “LH Poland” instead of LOT.
On the other hand, South America has WAY too much consolidation. Between Avianca-Taca and LAN-TAM, they control a big chunk of the the regional capacity (and most of the long-haul capacity).
They where not propped up for years by their governments. They have so many more challenges to deal with then airlines of the west. Its not even close to being a level playing field.
LH&co already do 1/3 of LOT volume from Poland. They don’t really need LOT, unless you’d want to block AF/KLM or IAG.
TK was supposedly interested in LO, but they backed down not being able to purchase over 50% stake due to EU laws. LO keeps on blocking them from entering the market via bilatteral agreements.
I didn’t know that. Thanks for the history info. I’m actually planning to go to eastern europe in August but now am afraid to buy tickets on Adria and Jat (will stick to Tyrolean/Turkish/Lufthansa methinks.)
Many hard times in former East block countries. Great historic profile of failures. OS will dominate Slovakia citizens from Wien and CZ with KE and LO with LH. Interesting times ahead.