Last week we analysed why Aegean Airlines expressed an interest in purchasing Croatia Airlines. Air Nostrum, the regional franchise of Iberia, also expressed an interest. Let's take a look at why.

Air Nostrum

Air Nostrum calls itself one of Europe's most important regional airlines. It flies 75,000 flights annually and carries almost five million passengers. This means it is just under 50% larger than Croatia Airlines.

Air Nostrum has found its niche in operating PSO flights in Europe and supporting Iberia on high-density routes during flight slots with low passenger demand.

At the same time, it is an ACMI service provider for various major European airlines. It operates flights for Lufthansa, Brussels Airlines, and SAS. For the past three years, it has leased its CRJ-1000 aircraft to Croatia Airlines. It will do so again this summer.

What would Air Nostrum do with Croatia Airlines?

The most likely reason why Air Nostrum might be interested in acquiring Croatia Airlines is to turn the Croatian airline into an IAG feeder. This would mean that Air Nostrum and Croatia Airlines function as one: two regional airlines operating feeder flights for the major IAG players and their partners.

This would likely mean that Croatia Airlines diverts capacity away from Star Alliance hubs like Frankfurt, Vienna and Zurich. To each of these destinations, Croatia Airlines flies multiple daily flights year-round at the moment.

Instead, Croatia Airlines as part of an Air Nostrum regional outfit could feed the extensive networks of British Airways, Aer Lingus and Iberia in London, Dublin and Madrid.

At the same time, it would maintain some capacity to Star Alliance hubs and establish code-share agreements with American Airlines, Qatar, Finnair and Qantas. Together with Croatia Airlines, these oneworld airlines could offer one-stop transcontinental connections to all of Croatia's six coastal airports and the capital, Zagreb.

This is not an unlikely scenario. Simple Flying recently analyzed the increasing presence of IAG in Croatia. Through British Airways and Iberia, but also Aer Lingus and Vueling together with its oneworld partners, IAG has been battling for Croatia since 2017.

What problems would Air Nostrum have?

However, there are far more questions surrounding Air Nostrum's interest in Croatia Airlines than there are obvious reasons for this interest.

For example, Croatia Airlines operates a fleet of Airbus and Dash 8 aircraft. Air Nostrum operates neither of these. Instead, as listed by Iberia, it operates the CRJ-200, CRJ-900, CRJ-1000 and ATR 72.

The fleets of Croatia Airlines and Air Nostrum are thus entirely incompatible. So Air Nostrum's interest is not motivated by purchasing economies of scale.

At the same time, with the purchase of Croatia Airlines, Air Nostrum would have to take on existing debts, which are presently high: a €34m ($36m) government grant was recently converted into a loan, and most rounds of payments for an A320neo order are due this year.

All in all, the expression of interest makes little sense - unless viewed in the context of Air Nostrum being an IAG player.

Do you think Air Nostrum will actually follow through and buy Croatia Airlines? Let us know what you think in the comments below.