The International Finance Corporation (IFC), the World Bank unit tasked by the Croatian government to find a suitable partner for Croatia Airlines (OU, Zagreb), has located three firms willing to invest in the airline.

According to EX-YU Aviation News, sources close to the privatization process told the Večernji list newspaper that the firms include Lufthansa (LH, Frankfurt Int'l), Turkish Airlines (TK, Istanbul New), and Aegean Airlines (A3, Athens Int'l). Though Korean Air (KE, Seoul Incheon) and EVA Air (BR, Taipei Taoyuan) submitted Letters of Intent (LOI) earlier in the year, they have since withdrawn from the race the sources added.

Of the contenders, Lufthansa and Aegean are seen as the strongest candidates with the IFC to hold further discussions with both parties in the coming months. Given that both carriers are based within the confines of the European Union, either would be able to acquire a 50+% controlling stake in the Croatian national carrier, something Turkish Airlines would not be able to do. Given its negative experience as a minority shareholder in B&H Airlines (JA, Sarajevo), Turkish Airlines has reportedly said it would demand full control of any future purchase to ensure its strategy is enforced.

All things considered, Zagreb says it will decide on the airline's privatization and the size of the stake it wishes to dispose of in summer of next year. Once a suitable path has been plotted, an international tender will be launched wherein interested parties will submit their respective proposals.

Croatia and other ex-Yugoslav states are hoping to replicate the success Serbia has had following the sale of a 49% stake in Jat Airways (JU, Belgrade) to Etihad Airways (EY, Abu Dhabi Int'l) to form Air Serbia (JU, Belgrade) in mid-2013.

In Slovenia, Ljubljana has put a 91.58% stake in Adria Airways (JP, Ljubljana) up for sale with three German firms - INTRO Aviation, 4K Invest and Callisto - among the frontrunners. As part of a wideranging privatization drive, the state-owned investment fund Slovenian Sovereign Holding (SDH) earlier this week announced it would completely dispose of the airline's MRO division, Adria Airways Tehnika (AA Tehnika), to Poland's Linetech Holding S.A. for an undisclosed sum.