Croatia Airlines anticipates handling some 2.280.000 passengers this year, which would make it its busiest on record. The carrier expects for the overall annual increase in travellers to amount to 5%. The growth will be achieved in part due to the earlier lease of two Bombardier CRJ1000 aircraft for the summer, which will bring forward the resumption of a number of seasonal routes. The first of the leased jets will be joining the fleet on April 1 and the second on April 18. Furthermore, the carrier will upgrade its seasonal flights between Zagreb and Dublin to year-round operations and is considering prolonging flights to a select number of other seasonal destinations in the lead-up to Croatia's presidency of the Council of the European Union, which will take place during the first half of next year.
The Croatian carrier will avoid possible industrial action after it inked a five-year collective agreement with trade unions representing its pilots, mechanics and cabin crew. The development comes following two years of negotiations, as well as last year's attempted strike which was banned by the country's Supreme Court. The agreement "is in line with the airline's financial capabilities", the company said. It added, "Additional wriggle room in reaching a deal was made possible by the recent amendments made to the law on income tax rules. The contract is of great importance for the next development phase of Croatia Airlines which is aiming to find a strategic partner in line with the government's National Reform Programme. By successfully reaching a deal with trade unions, it is assumed that future services will be free of disruptions. Therefore, it is expected that this agreement will positively impact on the national carrier's competitiveness and lead to a better position on the market in the future, with a constant focus on the needs and satisfaction of passengers".
Croatia Airlines previously noted that its main goal in 2019 is to ensure stability in the increasingly volatile air transport sector. "Croatia Airlines will continue to focus on managing all business risks, and on ensuring the best possible conditions for regular business operations. Jet fuel prices are expected to continue being the most significant risk, and the company will, in that regard, try to reduce its negative effects on the airline's overall business operations". It added, "The further improvement of the quality of service and network business model are also the company’s goals, as well as further investment in the fleet in order to maintain the highest level of flight safety".
"Additional wriggle room in reaching a deal was made possible by the recent amendments made to the law on income tax rules"
ReplyDeleteWhat sort of creative thinking is applied here? :)
Only fools and horses business
DeleteIt's good news that there will be no more strike threats. I feel this has really hurt them over the past few years.
ReplyDeleteIf they don't get sold this year, they never will. Good luck.
ReplyDeleteHopefully this will be their year.
DeleteIf the "new" livery doesn't attract buyers, nothing will.
DeleteThey will need more than good luck ....
DeleteThe more time that passes, the harder it will be to find an invester.
Their best bet was to do this a few years ago while they were still riding a good wave. My fear is that they have now missed the boat
When will they publish their financial results for 2018?
ReplyDeleteAt the end of this month.
DeleteDo we know is it a loss or profit?
DeleteIt will be a loss but company will spin it by saying the results are better than 2017 because Hethrhow slots were sold in 2017. Of course in 2017 they made no mention of the slot sale and how it improved their results.
DeleteIt must be getting harder as each passes to find assets to sell to achieve an "accounting" profit ..
DeleteThe plan was to record 1 million EUR profit in 2018 but I don't think this has been achieved.
DeleteI'm very interested to see their financial performance. Last year was the real test for Croatia Airlines in terms of profitability. There are no more assets other than planes. So it will be interesting to see the real financial performance last year.
Deletethe management should look to winter as a key factor. This is when profits and liquidity go down.
Delete"There are no more assets other than planes which I doubt they will sell."
DeleteYou are forgetting that they still have another 4 slots at Hethrow which will only gain in value as time passes.
And if they sell those slots they will be out of the UK market for good. I don't think that's an option for them.
Deletewhich planes to sell?
Deletethey own a single a320 and 4 a319 with a combined age of almost 100 years
Not bad considering no new routes will be introduced this year.
ReplyDeleteWhat they plan and what they achieve at the end of the year, are 2 totally different dynamics. Their prior year plans have rarely been achieved
DeleteOU can only grow in the shoulder season. In the main there is no room to grow anymore.
DeleteGood point anon at 9.19. In truth, this is the same for all ex-yu carriers - their biggest opportunities to grow are in the off season, when their LF's drop away to hover between 50 - 60%.
DeleteBut for this, they need gun sales people - which I'm afraid, is another topic altogether
There is a possibility to increase LF in off season by concentrating on transfer passangers.
DeleteYes, I know they bring less money than P2P but better something than nothing.
Transfer pax are fine as long as the ticket price they pay covers the airline's expenses.
DeleteIf not we end up subsidising foreigners travels to other countries.
Concentrating on transfer passengers would actually imply certain network expansion with more diverse destinations and/or regions, including some more unique options. If you have majority of capacity tied to Germany, Austria, Switzerland and Belgium, mostly to feed LH group, not really an option to do much in that direction, at least my opinion.
DeleteAirlines such as LOT, airBaltic, Aegean... prove an airline can make money off of transfer passengers.
DeleteOf course you can, that is not the issue, but you need to develop appropriate network to do it, which arguably OU is very, very far away from - and maybe not even aiming to be that kind of carrier. Then again, airlines that you are mentioning have such strategy and it also takes time (and investment!) to reach the desired level to be able to turn a profit off transfers.
DeleteOUs stagnation means bad news for ZAG as they won't fuel additional growth. With less than 10 additional weekly flights in 2019 ZAG might be in deep trouble. January could give us an image of things to come.
ReplyDeleteWhat's the amount of new frequencies? From what I remember:
Delete1. Aegean +1
2. Iberia +2
3. Transat +1
Any other ones?
1x Air Transat to Toronto
Delete1x Aegean on Athens
2x Iberia to Madrid
1x LOT to Warshaw
1x Vueling to Barcelona
1x Croatia to Dublin
3x Korean to Seoul (start was September last year)
= 10x per week more this year
earlier start of OU seasonal flights (in April)
Dublin during winter
But still very modest.
Purger
Isn't JU increasing ZAG for 1 more weekly flight?
DeleteThere is huge world-wide demand for travel to the Dalmatian coast BUT both OU and ZAG seem unable to benefit from it.
DeleteNo worries. JU is definitely benefiting on the coast from OU's legendary intransigency and other politically-wired brain rockwalls.
DeleteYes, and JU 1x to Belgrade, so 11 per week
DeletePurger
Wasn't LO double daily last year?
DeleteIt was, so it shouldn't be included on the list.
DeleteThere are still a lot of markets they could serve from Zagreb if only they had the planes.
ReplyDeletePlanes are not the issue, it's their mindset. Look at ATH-ZAG. They still fly via DBV even if A3 launched non-stop flights. Totally disillusioned.
DeleteThey could achieve alot more if only they put some focus on better serving the coast
Delete@ 9.15 you don't have to look at ATH-ZAG, look at ZAG-FCO which operates via DBV/SPU.
DeleteThat's a mystery for me. How can they not operate non-stop flights?! Is there really no demand?
Delete@ Anon 9:15
DeleteA3 and OU obviously serve quite different markets here. A3 has a lot of connecting traffic from ATH, which OU does not have. Then OU is after the P2P market ex GR, an that is between ATH and DBV. Surprise that OU does not have planes stationed at DBV and must fly the plane there. SO they serve the (limited) ZAG-ATH market, plus they sell seats on their strongest domestic route and then serve the market P2P between ATH and DBV.
So much about their mindset. This is the best they can do and they obviously have much more knowledge than you.
Yugoslav Airlines used to operate Zagreb-Rome via Dubrovnik or Split in the 80s. OU just continued the same thing. Why until this day, I don't know.
DeleteBecause the demand is between SPU/DBV and FCO. How would they get the plane to SPU/DBV if they are ALL stationed at ZAG????????? Is this soo difficult?
DeleteAnon@9.24am - your question is one which perplexes even the brightest of minds... if you have good sales and marketing people, they create sales and marketing initiatives that induce demand. Alas, OU, JU, YM and JP are in the 4th division when it comes to having these types of people within their organisations
DeleteWell JU is adding new 9 (7 year-round) destinations this summer and the flights are planned now by former easyJet manager.
DeleteSo I would exclude them from above list
if you know anything about how airlines function - you would be aware that schedule planners and sales/marketing people, perform 2 totally different functions.
DeleteBravo in squeezing 9 new destinations into the schedule to increase aircraft utlisation - but they should also have got a few sales/marketing people from easyjet as well !
Take a chill pill. You seem to be too nervous.
DeleteWhy don't we give them at least 12 months to see how new destinations will be working?
And then let's talk about easyJet sales managers.
@An. 09.25
DeleteAs far as I remember, Yugoslav Airlines NEVER operated flights from ZAG to Rome via SPU and DBV. JAT did have daily flights to FCO via SPU or DBV but they were originating in BEG. Passengers from ZAG to FCO flew domestic flights between ZAG and SPU or DBV and there connecting to FCO flights. What OU did inherit and did not change is PATTERN of operations which clearly shows their state of mind which is still in long gone era and that's the reason why they are not progressing. Flight ZAG-SPU-FCO-SPU-ZAG should have long ago become ZAG-FCO-SPU-FCO-ZAG ; almost the same time frame, almost the same costs, same number of legs/cycles, and uncomparably more options for both transit and P2P passengers in both directions on all sectors, without the complete disaster for ZAG passengers of intermediate border/customs control
Anon 09.44
DeleteNot only that but they are also increasing regional network from March in stead of June.
BEY from 31.03, 3 to 4 weekly.
LJU from 31.03, 11 to 12 weekly.
TIA from 31.03, 7 to 9 weekly.
OTP from 31.03, 6 to 8 weekly.
ATH from 14.04, 7 to 10 weekly.
These are just some of them. Obviously JU has understood that it can no longer operate like it did in the past. Also notice that most of the increases are NOT in the traditional ex-YU area.
So OU has no excuse really. Sure they are extending the season by a little bit but why not try to make some destinations work year-round? Why not try to keep OTP the whole time? They can offer some connections. Why aren't they launching non-stop flights to Athens and offer connections as well? There is so much room for expansion but they are ignoring it all.
Time and time I have to post it. Such a shame they did not open two summer bases and place 2 A320 in each Dubrovnik and Split.
ReplyDeleteBRAVO ! This is the comment of THE day !!
Deleteif you consider airport pax numbers, it would be logically to base a plane in both - spu, dbv, especially from April to November.
Deleteit would be in best interest of OU.
To base a plane out of main base is OK for big companies, but not for small company like OU. Even some biggest legacy companies does not do that any more (for example Iberia which had Barcelona base before, British, Lufthansa concentrate just in FRA and MUC not any more in Berlin, Dusseldorf etc.). Austrian just decide to close all bases exempt Vienna. There are some examples (Swiss, SAS, LOT, Alitalia, Aegean...) but Croatia for sure can not compare to those much bigger companies.
DeleteIt is not just about dislocation planes, but in that case you must have pilots, cabin crew, maintenance, spare parts, operation staff etc. there. Even that can be done if Split and Dubrovnik can support all year traffic, but with 20-30.000 passenger in winter months that can not be done. EasyJet has 33 routes with more than 100 weekly flights from Split and Dubrovnik, but can not open not one all-year route from those two airports.
And seasonal base is even harder to organize than all year. Even LCC, who open bases much easier concerning their business model, can not do that easily. Just look at Ryanair example which close Zadar seasonal base and will support huge amount of routes and flights to Zadar from other bases. And even Ryanair was not successful in their goal to open all year routes from Zadar.
@Unknown
DeleteIt would certainly not be easy but it was and still is a right thing to do. It does require a lot of work but would significantly boost revenue and profits. People working in these two basis could basically even live in these two cities and use 5 winter months for holidays and required training in Zagreb and elsewhere.
Have there been cancellations this year like last year because of a lack of mechanics or not?
ReplyDeleteGood to here that they will have passenger growth.
ReplyDeleteCroatia Airlines should improve connectivity in ZAG, provide reasonable prices. They should also have two different strategies for summer and winter due to high seasonality of their market and they must take good care of the costs.
ReplyDeleteWhat do you suggest be their winter strategy?
DeleteThey could focus on ACMI wet leases, maybe try and get subsidies and launch flights from other countries during the winter, like Adria did from Poland. Operate more charters, look at possibility of long haul flying (which will eventually be taken care of successfully by foreign airlines)
DeleteACMI is not an easy business, especially during European winter.
DeleteAvion Express, Lithuania : EXCLUSIVELY ACMI ; 2017 : 15 units A319/320/321, 2018 : 18 units A319/320/321, 2019 : 20 units A320/321 + 2 units A330 in new Maltese daughter company ALH. Net profits + 20 mil. euro 2018 compared to 2017. Winter 2018/19 planes leased and operating in the UK, Germany, Turkey, Jordan, Cambodia and Chile. Pametnom dosta. Hvala!
Delete@pozdrav iz Rijeke
DeleteAs you pointed - exclusively ACMI.
So in your opinion it's easier to lease 20 planes because you do exclusive ACMI, than to lease 2 or 3 planes because you do ACMI partly or temporarily. Interesting logic, but maybe I am just too stupid to understand how OU is so succesful because it's difficult to do ACMI in winter. OK. :) And if it's too far for you to look all the way to Lithuania, take a look at Adria or Trade Air.
DeleteI am still puzzled with the evident lack of strategy in Croatia Airlines when they see what is going on around them.
ReplyDeleteWhat was OU result for 2018?
ReplyDelete2.168.863 passengers
DeleteMore detailed results
Deletehttps://www.exyuaviation.com/2019/01/croatia-airlines-brings-forward-crj.html
Croatia Airlines welcomed 2.168.863 passengers on board its aircraft in 2018, representing an increase of 2% on the year before. The figure represents the secpnd tme the company carried over two million travellers in a single year. Of those, 1.642.285 passengers were handled on international flights, up 3% on 2017, while 526.578 travelled on domestic services, which is on par with figures achieved the year before. "Despite the negative impact of the price of jet fuel, increased competition and the traditional seasonality of the Croatian market, Croatia Airlines' business achievements in 2018 were at a satisfactory level", the company concluded.
Quite a lot of passengers on domestic flights.
Delete10 million international passengers out of which they carried 1 million 6 hundred, or less than 20 percent. Business achievements at satisfactory level! Bravo majstori, ako Bog da bit ce dogodine i 15 % trzisnog udjela :) Nego samo lagano naprijed, bez zurbe, odnija vrag i prisu :)
Deleteif they cannot compete with the easyjets and package tourism on the coast they should focus on markets where they can be monopolists: opening seasonal services from ZAG to all of SOF, OTP, OHD, TGD is at minimal risk knowing the numbers of peeps traveling between Croatia and those countries and vice versa (add some transfer pax to it) especially if they deploy smaller aircrafts which they have
ReplyDeletetotally agree. It is just crazy how they let opportunities slip.
DeleteAt least they fly to SKP but have they ever flown to any city in Bulgarian?
look at how many years it took them to upgrade their SKP flights to double daily. OU are so conservative when it comes to their network plans. even JP suceeded with SOF
DeleteI've just post this as reply to somebody on Aegean news, but I'll copy it here because I curious about explanation :) Admins, please, do forgive me this :)
ReplyDeleteSeveral times I've read statements on this blog that OU shouldn't care about incoming tourists traffic but to focus on Croatian citizen needs and I'm still struggling to understand point.
Wouldn't be better if OU is engaged in this "tourist" routes which are highly profitable and then to reinvest that profit in routes that are necessity for Croatian citizens?
In currently used model in OU they are having negative numbers so government needs to provide additional money, one way or another (PSO, mkt, tax law improvements, etc.)
OU has limited resources which need to be put to use to serve Croatian citizens. At the same time the state is not able to fund for large expansion which would enable what you write above. In the given circumstances OU's destiny is to be a small public serving company focused on the internal market needs.
DeleteSell the airline ASAP!
ReplyDeleteBut is anyone interested?
Delete4K Invest.
DeleteIt couldn't be a worse moment to sell.
DeleteIt will be Lufthansa/Eurowings
DeleteIf OU were to be taken over by LH I think we would see it develop its eastern network, especially the region. To the west I don't think we would see any major development except maybe in Germany.
DeleteLH could buy OU long time ago.
DeleteIt won't happen
Nadam se da ce se Adria, Croatia i Montenegro jednoga dana ujediniti pod okriljem Lufthanse - Eurowings.
DeleteDa dodam, ovako bi samo od letnje sezone mogli lepe pare da navuku na celoj obali Jadrana, a mnogo je lakse prezimiti kao deo velike grupacije.
DeleteThose OU birds in the photo look nice lined up at the terminal.
ReplyDeleteHopefully they put a greater focus on charters this year. It's an area they haven't paid much attention to.
ReplyDeleteIt is sad that a National carrier of the country that has 15 million international tourist arrivals a year operates handles just 2.2 million.
ReplyDeleteOf which most are Germans, Slovenes, Austrians, Swiss, Italians, Slovaks, Czechs arriving by CAR!!!!!!!!!
DeleteHey, all those people also go to Greece and their Islands by car and still Agean carries more passenges than OU.
DeleteIt's called seasonality.
DeleteGreece last year had 63-64 million passengers through its airports. A3 carried less than one in four of that traffic.
DeleteThey are focusing only on profitable segments of the market and so should OU.
A lot more people use planes to get to greece than to croatia. Croatia is too close to their traditional tourist countries. Just recently british, irish and scandinavian joined the party. And greece has more tourists, of which many are from central europe, which are rich enough to buy airplane ticket than to drive to greece through balkans. Add to that much bigger LCC presence in greece and you get to numbers which are present
DeleteWhy dont they fly to more german destinations?
ReplyDeleteBecause the German market is covered by Lufthansa/Eurowings although I still think there is room to expand.
DeleteGood to see DUB extended. Anyone know which other routes they might extend because of the EU presidency?
ReplyDeleteBucharest, Barcelona and Lisbon in my opinion.
DeleteDo they have the equipment for it? Wouldn't they have to lease an extra plane?
Deletegood question re equipment. or are they cutting other freq?
DeleteThere would be no need for extra equipment in winter. Croatia Airlines parks some its aircraft during winter time.
DeleteThey should also extend Stockholm.
DeleteBasically all EU cities they fly to seasonally (especially capital cities).
DeletePrague, Milan...
DeleteMaybe Helsinki? Since Finland is running EU presidency just before Croatia
DeleteI really hope OU consider leasing a 321LR and launch long-haul to America and Canada.
ReplyDeleteAnyway, congratulations to the amazing new livery. Legacy style.
Interestingly Aegean recently said they are considering the A321LR, an option it is able to exercise as per its agreement with Airbus for long hauls.
DeleteWith what money can they lease A321LR and where can they find one for leasing?
DeleteI hope Aegean is not going to make mistake and decide for A321LR. Biggest long-haul market for Greece has always been and still is North America. A321LR does not have range to fly nonstop even to the East Coast without restrictions, forget anything "deeper inside" the US or Canada. Eastwards, they have MEB3, extremely difficult to compete with, especially if offering narrow-body compared to their wide-body products, let alone their dumping prices, and again problematic range for all important Eastern market except India. In my opinion, Aegean should go for A350, not A321LR. On the other hand, the perfect choice for Croatia for starting long-haul operations, if ever, and after eventual privatitazion, is B767-300, 4 to 5 units for daily flights to Newark and Bangkok and code shares from there to about 20 most important North American and Far East/Australia destinations on United and Thai (Star) plus 3 weekly to Vancouver, Mumbai and Beijing and similar code shares on AI/AC/CA (Star) to further destinations in California/Indian subcont. /Korea, Japan, China. Actually long long long time ago, when Croatia Airlines plans to start the company were being prepared, they were supposed to fly long-haul and initial type was supposed to be B767. Later on, 1994, they almost started long-haul with ex-Lufthansa DC-10's. Everything was prepared, flights published and introduced to system, employees were waiting for the refresher training in FRA, and then literally overnight, those flights disappeared, and ATR42 arrived few months later. That's the time when potentially big airline was betrayed and turned into a feeder, not because LH insisted on it, which is the opinion of the people who follow this blog, but because of private interests of individuals who were "managing" and "controlling" Croatia Airlines, and that tragic situation is unfortunatelly still ongoing today
DeleteOU couldn't use the A321LR for North American routes. It can not fly full of passengers transatlantically 12 months a year from ZAG without major weight restrictions. So that would make all the proposed NA routes unprofitable.
DeleteI believe that if the Greeks get the A321LR it will be to fly to Indian and African destinations. In Africa the prime markets from ATH that are currently unserved are Ethiopia, Kenya, Nigeria. South Africa is too far for the A321LR.
Just my2cents
Wrong. No restrictions. A321LR can make it ZAG-East Coast, all seasons, full weight (of course not 250 passengers but up to 200 with Premium class and good pitch in economy but still profitable with healthy loads)
DeleteA ZAG-JFK flight with 200 passengers and their luggage is impossible to be flown year round with the A321LR. It is just too far.
DeleteNow from the UK, most of France, Belgium, Holland, Ireland, Spain and of course Portugal it certainly is.
Airbus : "A321LR transports 206 passengers in a two class layout with increased range to 4000 nm, or 7.400 km, by using 3 additional fuel tanks...."
DeleteDistance km Zagreb-Toronto 7.092 km
Distance km Zagreb-NewYork 6.924 km
I strongly oppose the idea of OU going for A321, I would much rather see A330 or B767 0r B787, if it ever happens, but no matter of my preference A321 CAN MAKE it.
A321LR or neoLR to be precise, just forgot to add LR, regular 321 of course cannot do it
DeletePAX growth estimate seems realistic.
ReplyDeleteThe most sensible thing would be to shut down the company and get rid of the public money hog. Publish a tender for year-long PSO lines to be given to some EU-based company and let everything else to be handled by the market. Simple as that.
ReplyDelete@An.15.06
DeleteAbsolutely not. What OU needs is something similar to what happened with Jat Airways/Air Serbia, just with different kind of investor, more transparency, and less political influence. What OU needs is fresh capital, and the owner(s) of the capital to make company be led by PROFESSIONAL INDEPENDENT MANAGEMENT, which OU didn't have all these years of its existence. It had politically appointed "managements" instead, which didn't care at all about the company, it's development and market, but only how to employ loyal party people, relatives and friends, and put as much money as possible in their own pockets and those of their sponsors. It's nonsense to shut down company which operates in country with biggest potential. Instead of having 20% of Croatian market share,the goal of new, revived OU should be to bring this percentage to 30,40 or 50 percent, which action brings along new jobs, more tourism, more taxes for the state, more possibilities for the passengers and profits for owners. If that cannot be achieved, I agree then it should be shut down. But not before giving a try to OU becoming normal business and normal airline.
It's one thing what OU needs and what OU will get in the end. OU would be extremely lucky to get a deal like Jat Airways got. JU might not be perfect but at least it got a much more competitive business model structure, soemthing OU lacks.
Delete...just with different kind of investor...
Deletebeggars can't be choosers
I agree Air Serbia not only has much more competitive business model structure now, but is generally way better than Croatia Airlines, especially taking into account it started some 20 years later. 20 lost years for OU. What I don't agree is that OU would be extremely lucky to get good investment deal. Only predators and mafia need to take their hands off OU, let it be privatized and led by professionals, and it would develop fast and significant.
DeleteYes but do you honestly think that will happen?
DeleteYes, I think it's the only way OU stays alive. Because like it is now, with +300 people administration employees surplus, doing nothing, lack of pilots and engineers, ageing fleet, year-by-year reduced market share, no more assets to sell, and EU laws and regulations which must be implemented and followed, politicians must decide to take their hands off OU and in that way keep it alive (growth coming as a result) or to keep "controlling" it, which will kill it, and no matter of all, I think they will not going to kill "national pride" or "flag carrier", whatever, and the moment they decide to leave it alone, there would be parts interested in privatization, because potential of the market is there, which we see in +80 airlines operating from/to Croatia, and numbers which grow constantly
DeleteBest thing for OU and Croatia is to allow a second airline to establish itself. Stop protecting OU and let the market decide! I hope SmileAir are a serious company if for any reason that they seem to have some decent financial backing, as well as industry connections and will provide home grown competition to OU as apposed to external. This should force OU to pickup its game and in the long run be more beneficial.
Delete@pozdrav iz Rijeke: those things you suggest will never happen in Croatia. Thus as I said, the most sensible thing to do would be to shut OU down. Unfortunately given the political influence over the company it will not happen and they will continue to waste tax payers money.
ReplyDeleteok, please explain me your logic : why would politicians, who you say, and I agree, have influence over OU, because of their own interests, shut down the company which brings them benefits? On the other hand, EU rules and environment are preventing them more and more to continue to do what they did all these times. So, some change must happen. Which one solution would it be than, "yours" or "mine", up to you to think about once again.
Delete