B&H Airlines (Sarajevo) is teetering on the brink of collapse amid reports one of the airline's two ATR72-200s, leased from Austrian banking conglomerate Hypo Group Alpe Adria (HGAA), has now been grounded in Germany for non-payment of dues.

According to Bosnian television, the carrier's account with fellow government-backed firm, Sarajevo International Airport, has also been frozen for non-payment of debt while employees have gone for months without receiving their pay.

Last week, airline unions tore into Minister of Transport and Communications, Enver Bijedić, accusing his office of destroying the carrier through indifference and incompetence. The attack came after Bijedić took the unprecedented move of ordering the airline to repay BAM1.65 million (USD1.03million) in passenger taxes granted the carrier for its development and growth.

Using a failed partnership with Turkish Airlines (TK, Istanbul Airport) as a scapegoat for the Bosnian airline's woes, Bijedić has also decried B&H Airlines' bloated workforce and "incompetent management" as being contributing factors to the decay.

EX-YU Aviation News says a EUR4million (USD4.64million) business plan involving a partnership with Air Serbia (JU, Belgrade), and the launch of charter flights to Italy and Turkey, Podgorica and Skopje, is in jeopardy thanks to the carrier's now uncertain future.

Unions also accused government of allowing foreign carriers to dominate the local market at B&H Airlines' expense - Turkish Airlines, Pegasus Airlines (PC, Istanbul Sabiha Gökcen), Wizz Air (W6, Budapest) and Ryanair (FR, Dublin International) in particular.

“You are incapable of understating that the problem is not that we have two aircraft, rather, it’s that we fly to three destinations (Belgrade, Zurich (via Banja Luka International) and Copenhagen Kastrup)," they said in a publicized letter. “You are incapable of understanding that due to your lack of interest as a Minister over the past four years, you personally oversaw us being squeezed out from one of our most profitable routes - Istanbul Atatürk. Due to your negligence you have allowed Turkish carriers to operate 25 weekly flights to Sarajevo compared to none of ours.”

Meanwhile, privately-backed virtual carrier Bosnian Wand Airlines (Tuzla International) has rescheduled its launch date for January 22 with its maiden routes to be Sarajevo to Frankfurt International followed by Malmö on January 25. Service is on-board an A321-100, F-GYAN (cn 535), chartered from Greek carrier Hermes Airlines (Athens). As it stands, its original plans to serve Stockholm Arlanda first have now been suspended indefinitely.