B&H Airlines faces its biggest crisis since launching operations





The Federation government of Bosnia and Herzegovina has said B&H Airlines is facing bankruptcy following another round of unsuccessful talks with the asset management company HETA, which owns the carrier’s two aircraft. The Prime Minister of the Federation, Fadil Novalić, said the two sides have been unable to reach an agreement over the repayment of some eight million euros worth of debt owed to HETA for the financial lease of the ATR 72s. The airline’s bank accounts have been blocked for months as a result. “It is up to the lender to decide whether B&H Airlines will go bankrupt”, Mr Novalić said, adding that the government will no longer provide subsidies to the carrier. While B&H is eligible for state subsidies through passenger taxes, the government has not made payments to the airline in two years. HETA has responded to the Prime Minister’s remarks, stating, “B&H Airlines is majority owned by the Federation government, and as such, it is the government that decides on future steps in order to settle contractual obligations which are designed to avoid a possible bankruptcy. If the government is unable to commit to any of the several solutions offered, and can’t take responsibility for the contractual obligations, we expect to be formally informed about it”.





B&H Airlines’ employees have spoken out about the situation at the carrier. Elvis Žiga, the head of B&H Airlines’ employee union, says, “We have had falls in the past, but this is the biggest crisis in B&H Airlines’ history”. On the airline’s official Facebook page, the carrier wrote, “We are aware of the situation we are in and that we could be shut down yesterday, today or tomorrow. There are many problems which have been building up over the years. As a result of the government’s neglect, we will be forced to stop working. We have been silent, despite four late monthly wages, years of unpaid benefits, a management which is not functioning and a number of educated and trained staff leaving. Tomorrow we will have nothing to do, but at least we will go to work. The government wants us grounded, shut down and moved out of the way so we can become dust”. Over the past few days, another two pilots left the airline, signalling a major loss for such a small carrier.





B&H, which now operates flights only to Zurich via Banja Luka and charter services from Mostar to Italy with a single ATR 72 aircraft, handled 3.604 travellers during the first quarter, down 41.8% compared to the same period last year. Its passenger share at Sarajevo Airport now stands at only 4%. Earlier this year, the airline suspended flights to Belgrade and Copenhagen. Italian tour operators have offered to extend their service agreement with B&H Airlines until the end of 2016 for an additional 250 flights between Mostar and Italy, however, under the current circumstances, the airline is unable to conclude any business arrangements. B&H Airlines recorded a net loss of 6.5 million euros in 2014 and has outstanding debt amounting to 17.5 million euros.





In stark contrast to the woeful state at B&H Airlines, Wizz Air will today open its nineteenth base in Tuzla, by launching flights to Frankfurt-Hahn, Sandefjord, Memmingen, Stockholm-Skavsta and stationing an Airbus A320 in Bosnia and Herzegovina’s third largest city. Previously, B&H Airlines accused the government of lobbying in favour of competitors such as Wizz Air and Turkish Airlines.