Croatia Airlines expects for its passenger numbers to decline 60% in 2020 compared to last year’s record of 2.179 million, due to the coronavirus pandemic. As a result, it will likely handle under one million travellers for the first time since 1999. The carrier noted its largest drop in passenger numbers was registered in April amounting to 95% due to lockdowns across the world and it maintaining a single scheduled service. Figures were down 94% in May and 81% in June. The airline said it had minimal income during these three months. At this point, booking numbers are down 65% in August, 64% in September and 56% in October.
Croatia Airlines said it is too early to estimate the financial loss resulting from the crisis, as the pandemic is still ongoing and hindering traffic. The carrier has cancelled plans to launch new services to Podgorica and Sofia this year and has discontinued operations to Oslo, Stockholm, Helsinki and Tel Aviv. It recorded a 14.6 million euro loss during the first quarter, up from its loss of 13.3 million in Q1 2019. Croatia Airlines said, “Revenue from tourism makes up a significant share of Croatia’s GDP, while the tourism and transport sectors have been hit hardest by the coronavirus pandemic. The pre-season was lost, and the main tourist season has been impacted as well. European countries, most notably Germany, Slovenia, Italy and Austria, as the main markets for Croatian tourism, have had their economies severely affected”. The carrier added, “The company’s performance in 2020 will greatly depend on external factors, as well as the decisions and recommendations made by the Croatian Civil Protection Authority, which directly impacts on the likelihood of domestic and international travel”.
In a bid to attract more travellers and incoming tourists, Croatia Airlines has teamed up with shipping company Jadrolinija to develop a platform through which passengers will be offered a joint ferry package to one of the country’s islands upon booking their ticket. “The challenging environment in which we operate and everything that has affected the Croatian and global economy in recent months needs to be readily and strategically addressed in order for us to create competitive advantages in the future”, Croatia Airlines’ CEO, Jasmin Bajić, said. He added, “This is why we decided to join forces with Jadrolinija, whose ships complement our fleet perfectly. Croatia Airlines connects the world through the skies, and Jadronlinija by sea, and together we can create additional benefits for passengers”.
All things considered 60% is not so bad.
ReplyDeleteCould be less if they launch a base in Ljubljana.
DeleteIt should be compared to the other companies and then making the conclusions.
DeleteI agree that 60% isn't so bad considering how huge of a decrease other companies are recording.
DeleteThis certainly helps
Deletehttps://www.exyuaviation.com/2020/07/croatia-leads-post-lock-down-recovery.html
@9.58 thats for holiday season only and OU has minimum share of it
Delete"It recorded a 14.6 million euro loss during the first quarter"
ReplyDeleteQ1 wasn't so impacted by corona. This is too high.
Q2 is when it is going to get really bad unfortunately :(
DeleteFinancial figures are very poor this year but you can't blame them for it.
DeleteTheir financial results have been poor for years.
DeleteIt is true that this situation made a huge damage to all airliners, but it is also true that even without it OU was loss making company despite enormous touristic potential of their country.
DeleteThis situation is for them the perfect excuse to ask for the money and to cover with it the moves of incapable management.
Agree with last anon.
DeleteExpect a cold winter in terms of performance. It will get much worse before it gets better. I hope they use this corona situation as an excuse to fire some uhljebi.
DeleteAre there any details on how the government plans to help OU?
ReplyDeleteNone so far.
DeleteGiving free money
Delete^ Like everyone else.
DeleteI wonder if they will have to return that money together with 33 million EUR they got before the crisis
DeleteThey have to return it to the government which will probably delay the loan repayments.
DeleteWell I think OU asked for around 92 million euros.
DeleteI really hope the government will help. This is an unprecedented situation.
DeleteThe alternative is bankruptcy. People should remember that a bankruptcy would be extremely costly. Not only for Croatia's tourism industry but also for the fact that the government would then have to make payments to Zagreb Airport operator as stipulated in the concession agreement.
DeleteCroatia will get 22 billion from EU funds. I'm sure some money will be found for OU from that.
DeleteThat money will be given based on the projects.
DeleteIf the project of Croatian Government is simply to give the money to OU as a help I am afraid it won't be approved. Of course the financial loan could be given to airliners (as AF, LH, U2 got them) ,but it needs to be paid back.
Do you really believe OU would be able to pay it back together with 34 mil EUR financial injection received from the Government before the crisis?
I doubt.
Don't forget that it's €22 billion over a 7 year period so they'll be getting about €3 billion per year which isn't all that much in a country that will experience a 20% GDP drop. More bad news is that Germany retracted by close to 11% which will impact Croatia in more ways than one.
DeleteYup
Deletehttps://www.index.hr/vijesti/clanak/njemacka-recesija-dublja-od-ocekivanja-hrvatskoj-to-nosi-pad-izvoza-i-nove-otkaze/2201904.aspx
Ouch
ReplyDeleteThis year will be a disaster. The issue is that most of OU's traffic in summer depends on tourists.
ReplyDeleteIt's a disaster for everyone. No airline in the world will make money this year.
DeleteI wonder if they decreased the number of employees along with passenger numbers, revenue and profit?
ReplyDeleteOff course not.
DeleteThey said there will be no job cuts, same as at Split Airport and Dubrovnik Airport.
DeleteActually they laid off some contract pilots
Deleteit could be even bigger decline, since in winter season is highly likely to have another flu/covid wave, let’s see what happens ...
ReplyDelete2020 will be a disaster for everyone.
ReplyDeleteIt will be a disaster for everyone but not to the same extent.
DeleteThere are way too many airlines in both Europe and ex-YU. Consolidation is long overdue.
DeleteDon't expect consolidation in ex-Yu.
DeleteI actually think YM will not survive this. MNE is without money and there is no sign of tourism recovering. I doubt the government will have those €155 million it planned for them. YM became a very expensive toy. FR aggressively expanding there also doesn't help. Unfortunately the government's decision to ban Serbs from entering the country was probably the shot that finished them off.
DeleteJoke company should pass it to other who know how to run a business.... Lots of corrupt politicians have their fingers in bad deals in Croatia and Croatia Airlines are no different... Glad to see them go
DeleteUnder a million passengers in what was supposed to be a record year :((
ReplyDelete:(
DeleteLet's hope this is the last year with such numbers.
DeleteThey are not competitive at all 5 times more expensive than other airlines and their prices clearly put off tourists using them it's national scandal... Zagreb a great capital but why would somebody pay so much to come here when all the other capitals of the EU are so much cheaper to visit... Welcome to market forces you have to compete to be in the market as lots of other airlines do and They have never competed... Sooner they go under the better let others who know how to run a business don't as they can not, the deal they struck at Zagreb airport with the French was commercial suicide.... Stuffed Zagreb as a tourist destination... I can fly to New from London cheaper than I can go Zagreb London.. Only last week was 2800 kuna one way... Decided to go BA for 70 Euros
DeleteGood luck OU and I hope the management does the right thing and finances improve.
ReplyDeleteHow? Unless they have a magic wand, I don't see it happening.
DeleteCompletely expected
ReplyDeleteAt least OU for sure maintains social distancing 😂
ReplyDeleteI think their FRA flights are quite full.
DeleteTBH if their FRA flights were full LH would be back.
DeleteIt's full because all LH passengers have been transferred to them. They now fly more to FRA than before corona.
DeleteSo we know how much passenger numbers declined at other ex-Yu companies - JU and YM? For comparisons sake.
ReplyDeleteHopefully ex-Yu airline weather the crisis.
DeleteNo, but at least we know Adria's passenger results compared to last year.
DeleteI am not optimistic about their future.
ReplyDeleteWhile I agree 60% passenger reduction is not the worse, their financiers will be terrible because of it. The problem is, OU is an airline that only makes money for three months a year and thos three month are gone. What will they do in winter when they traditionally make huge losses which will now be even bigger?
ReplyDeleteI have a feeling the losses this year will be over €30 million. Corona messed up the most profitable and busiest part of the year.
ReplyDeleteIt think it will range much more than 30 million EUR.
DeleteJust last month they said the loss would be around 20 million euros which I think it's completely unachievable.
DeleteLearn how to compete in business many good examples around EU... Get rid of Croatia Airlines and things wil improve... Can't get any worse it's a dead donkey
DeleteLook at BUD after they got rid of the parasite known as Malev.
DeleteWhat's their fleet size at the moment?
ReplyDelete13 as far as I'm aware.
DeleteI'm really interested as to what happens with OU in the future. Will that holding idea work? Is it the solution?
ReplyDeleteIt's unfortunate OU didn't get privatized on time.
DeleteWhat is happening with the Ljubljana base idea?
ReplyDeleteProbably nothing especially as SLO Government plans to establish their own airline.
DeleteThe same happened like their planned bases in Sarajevo, Tirana and Pristina.
DeleteI just don't see Croatia Airlines setting up a base in Ljubljana.
Delete@anon 10:41
DeleteIt's all quite now so I doubt they are planning to do that.
Corona will be misused to get hidden government subsidies.
ReplyDeleteGood luck.
ReplyDeleteThe deal with Jadrolinija is smart and creative. Should have done it years ago.
ReplyDeleteThere are rumors that the holding the government is planning to create which will include airports and Croatia Airlines may in fact include Jadrolinija too!
DeleteThat would be a very interesting combination.
DeleteWhy not throw in the railways too.
Deleteall is GOOD, typical national air carrier, serving a bigger purpose than making money unfortunately, OU carries Croatians through Europe year round and is a VITAL link for Croatians (and now Slovenians)....look what happened to Slovenian travel after Adria failure, this is why Croatian Airlines will never fail A+
Delete^ true
DeleteThe most worrying thing OU must be those A320neo orders. Can they do anything about deferring or cancelling them?
ReplyDeleteNo. One of the past CEOs of OU said that canceling "new Airbus order" will have bad financial efect on them because they will need to pay for canceling. This order was originaly made in 2008. when OU ordered 4 A319. In 2013. they deferred order and replace A319s with A320neos and from than they are deferring it every year. So when A320neos come in OUs fleet, it will be 10 years since deferring "new Airbus order" and 15 years since ordering it.
DeleteLooks like a lot more subsidies will be needed for the airline to survive.
ReplyDeleteIs a decrease of 60 % really good under these circumstances ?
ReplyDeleteDont forget that Croatian citizens are not banned from entering another countries like for example Serbians or Macedonians who practically are only welcome in Turkey ..
With travel ban it would be 90 percent !
ReplyDelete:0