Croatia Airlines recorded a net loss of 22.2 million euros during the first three quarters of the year and although some improvements were made in the second and third quarters, the company noted it still faces reduced demand and uncertainty relating the coronavirus pandemic. Overall, the airline’s financial performance is a minor improvement on last year’s loss of 23.1 million euros but significantly behind its 2019 nine-monthly result which amounted to 6.5 million euros in the red. “Despite some positive developments during the second and third quarters, the company is still facing reduced demand and ticket sales, resulting in the limited flow of income, which may reopen the question of maintaining liquidity, especially if we take into account the uncertainty surrounding the duration of the crisis”, Croatia Airlines said. It added, “The company is undertaking all measures to actively manage liquidity and optimise the business. It is continuing to apply strict cost cutting measures”.
During the first nine months of 2021, Croatia Airlines handled 556.514 passengers, representing a decrease of 4.3% on the same period last year. “Only during the third quarter did we see a more notable improvement on 2020, but this is still far from the result achieved during the pre-pandemic 2019”, the Croatian carrier said. The airline welcomed 168.518 travellers on domestic flights, up 18%, while 373.242 passengers flew on the airline’s international operations, a decrease of 3%. The remaining 14.739 travellers were carried on charter services, which accounted for just 3% of total operations. The average cabin load factor stood at 50.7%, which is the same as last year. On domestic routes, the average loads amounted to 45.4%, down 5.1 points, while the average cabin occupancy on international services improved by 1.4 points to 52.5%.
Croatia Airlines noted that the number of bookings made for the second half of the year are lower than that of 2020. “An increase in the number of bookings for Croatia Airlines flights was recorded during the second quarter, however, if we look at the following six months in comparison to the same period last year, booking figures are down 34%”, the carrier said. In a positive development, towards the end of the third quarter, the carrier saw a surge in forward booking by 68%, however it is still 64% below 2019 levels. “These oscillating booking figures show the extend of the crisis, which is impacting demand and the dynamic of incoming bookings”, the national airline noted.
I find these results worrying. I know it corona but I’m shocked that the load factor is the same as last year, that the loss is the same as last year and that the number of passengers was just marginally up. Let’s not forget that from March last year until the end of the year very few people travelled while this year there is some improvement.
ReplyDeleteBecause for years now their main source of passengers was ZAG where they have FR now. They are taking away their passengers and they are feeling it.
DeleteInteresting to compare to JU. Unfortunately JU posts only annual financial results, but on the operative side they handled 1.3 million passengers in nine months while OU 550.000. I believe the difference in fleet isn’t that great anymore.
ReplyDeleteMajor difference is that JU found a way to compete against W6 while OU can't find a way to do the same against FR. Also unlike OU, JU has transfers to rely on making it easier to fight against LCCs.
DeleteJU may have carried more pax than OU over the same period, but may have lost twice as much as OU in doing so. Therefore, these operating stats - while interesting - don't really mean much because the only thing that matters is your operating margin and the contribution you are making. With OU we see both sides of this equation while with JU, nobody really knows as we can only gauge this once a year when they publish their results.
DeleteJU operated thousands of charters in this period so I don't see the logic of them losing twice as much as OU did.
DeleteThe issue is, and I'm not going into finances or even JU, is that at least OU had relatively good operational results (although LF was never outstanding) but they had good passenger numbers. Now even that is falling and of course pandemic has to be taken into account but for your numbers to be barely better than last year when you barely flew for several months is not good.
DeleteThe situation behind JU is much more worrying that is why they act so intransparently.
DeleteYes, they are about to declare bankruptcy.
DeleteNot good.
ReplyDeleteThing that worries me is that bookings for second part of the year are lower than in 2020, which implies that harder crisis is coming
ReplyDelete+1
DeleteNo, it just means that people have switched to FR. Nothing to do with crisis.
DeleteAgree with last anon.
DeletePossibly, but I have read somewhere that FR is also performing out of Zagreb not so good, with LF something about 50%. Don't know is that true
DeleteAnon 10.07.
DeletePlease do not believe in Purgers fairytales.
Do you think it is even below 50%?
DeleteYou all need to realize that RYR load factor is completely unimportant. Why? They’re here to destroy CTN, “scorch the earth”, and rule afterwards. It’s still the “pandemic”, it’s a new operator in ZAG, and a variety of other reasons for the LF to be below RYR “standard”, but please don’t kid yourself into thinking they’re gonna “be bankrupt”, “leave ZAG”, or other reasons. Talking to CTN personnel I’m witnessing every week how deluded most of them are unfortunately, because they believe RYR is going to go away. Not a slightest chance for that to happen.
DeleteHaha really? They really think they are going to leave? Tragic.
DeleteThe best solution for everyone would be coexistence. I’m unsure whether it would be possible.
DeleteI don't think coexistence is something FR is looking for. If OU survives then it makes contract extension a tricky business since ZAG would have a plan B. If OU dies then ZAG has to give in to FR's demands and to probably provide them with unsustainable, low airport charges.
DeleteAnon 17.40
DeleteI want to say that he don't know what he is talking about, his data's are irelevantan in serious discussion.
The passenger numbers and LF really need to be improved.
ReplyDeleteAnd in other news: Water is wet.
DeleteShit - that is BIG news !!
DeleteHuge news, what would we do without Frishki's input
DeleteIf you are able to read, you'd realise it wasn't me that came to with the groundbreaking conclusion, but the original poster. But yeah, it takes reading.
DeleteI was referring to your water comment.
DeleteYou still don't get it, I see.
DeleteOf course I do, I'm just speaking about something different or in this case how pointless your comment was.
DeleteYou've just proven you don't.
Delete" the company is still facing reduced demand and ticket sales, resulting in the limited flow of income, which may reopen the question of maintaining liquidity"
ReplyDeletePreparation for more aid
Without doubt.
DeleteThings are only going to get worse with Ryanair in Zagreb.
ReplyDeleteEspecially in Q4.
DeleteSo what could be the financial result at the end of the year?
ReplyDeleteI expect over €40 million in the red. Q4 will be extremely brutal for them.
DeleteHow much money do they have left?
ReplyDeleteThey will definitely need a handout from the government to stay afloat
DeleteWaste of money they should Liquidate the company and give money to adria
ReplyDeleteAdria?
DeleteHahahahah good one :)))
DeleteThe only good thing in this piece is that they are open, transparent and honest with their results - unlike other airlines in ex-yu. Everything else however, makes for shameful reading - especially the line about "it is continuing to apply strict cost cutting measures”.
ReplyDeleteWhat other airline is not transparent about their results? If you are referring to JU then you are wrong. They submit their report to the APR each year and they have to be as transparent as the Serbian law requires them to be, same as with any company that is registered in Serbia.
DeleteAs for OU, I find it entertaining how they still think covid is their main threat. In reality it's FR because any improvement in the Croatian aviation market will most likely be scooped up by them. Their report for this year proves that. While the Croatian aviation market grew, OU managed either to stagnate or report worse results. Q4 might actually kill them especially with FR becoming increasingly aggressive. This year was their last chance to adapt. It seems like they failed at that mission.
Covid is a massive problem as Croatia has a very low uptake of the vaccine. Next years tourist season could be brutal as the rest of Europe will be in a much better state with regards the virus.
DeleteThat is why I said that covid is not their main threat but FR is.
DeleteRyanair is unrealistically growing in ZAG given the circumstances. In other words they are extremely aggressive in order to push OU into bankruptcy. Looking at today's text they seem to be on the right path. Let's not forget that after Q4 comes an equally challenging Q1. Can OU make it through it?
Q3 is the time when airlines make most of their cash which they then use to survive until spring. OU missed this opportunity and if they don't make a lot of money around Christmas they might be in an extremely difficult position. All this just shows that they did next to nothing to adapt to new realities, not just regarding covid but also related to FR in ZAG. Personally, OU for me is dead man walking.
@Nemjee - please show me where JU reports its quarterly financial results on a timely basis ? Timely is indeed the key word. They have to report their results by April, which then get published in Jul/Aug - assuming that there are no irregularities. If there are, this can get pushed out - as it was in the recent past - and it gets reported in Sep. This means that it can be up to 18 mths after the fact, that we the public, have any insights into Q1 from the previous year. And even then, their results in the APR are not shown by quarter - as OU reports. So if this is transparent, then we have a completely different understanding of the word.
DeleteLike I said, you can pay APR to get access to their detailed financial result. What JU publishes is very well in line with Serbian law which applies to all companies registered in the country. Extensions are the norm for all those who make a mistake or who submit an incomplete report. Quarterly reports are a must only for those companies that are listed on the Belgrade stock exchange, as is the case with BEG.
DeleteIf you have a problem with this then you should complain about Serbia's law, not Air Serbia.
But why would JU publish more (frequently) about their business than stipulated by Serbian law? For the benefit of armchair CEOs and length measurers on this site?
DeleteBut OU don't have any legal requirement to report quarterly yet they do so ?
DeleteMaybe because they have the time since they are not focused on important things like fighting competition?
Delete@12.01
DeleteNot true. They have the obligation to report quarterly results as they are listed on the Zagreb stock exchange. If you think they are doing anything voluntarily you are wrong.
Aren't they Govt owned ?
DeleteYes and listed on the stock exchange
Deletehttps://zse.hr/hr/papir/310?isin=HRCRALRA0005
So the same as BEG which is on stock exchange. Seems like someone was not very well informed.
DeleteYou'd think they might sometime soon be rolling out the BCG blue print for the post-covid recovery strategy, right ? Although I guess there's no real hurry ....
ReplyDeleteWhat BCG strategy ? Do you really expect anything to come out of that ? It will just be like other similar consultant engagements from the past, all designed to put money in someone's pocket while only serving the purpose of showing the public as though something is being done ....
DeleteAnd they expect Aegean to buy into a company like this ?
ReplyDeleteAegean made its choice and its called Animawings. That's the reality.
DeleteOh no ! Don't say that - all the OU fanboys will tear you down !
DeleteThis will either need a completely restructuring (from inside out), focusing on DBV, SPU etc. or just give up, a rebrand to SCB airlines and server LJU, ZAG, and SSJ with lower frequencies - but they don't have balls for that.
ReplyDelete+1
DeleteWell this is the only quarter where they usually make money, so this is disappointing. Some radical changes needed at OU.
ReplyDeleteYou will have one good company.
ReplyDeleteI don't see them making it to next summer unless HR gov injects millions.
ReplyDeleteLol they started leasing their A320 (CTK) to tradeair for Ljubljana chartes; what the hell
ReplyDeleteYou JU homers think JU superiorly run, but if it wasn’t for Vučić’s handouts, JU would also sink.....
ReplyDelete6+ years ago Air Serbia was JAT, and Croatia Airlines was light years ahead of JAT....things change quickly in aviation.
And yes, Croatia Airlines will NEVER go bankrupt, Croatian gvm’t will pump money in them forever, its a Croatian thing, not one gvm’t will allow OU’s demise ;-)
Yeah let's wait and see, people said the same about JP and MA yet here we are. At least JU is professionally run and has a chance.
DeleteWe will see want the EC says about pumping endless funds in OU.
DeleteEC will be OK, don’t worry....what have they “said” to Croatia in the past 4 years?
Deletein Croatia we say “ujo’ vuk magare, treslo se brdo, rodio se miš”
since all airlines are being bailed out daily, all EU governments are doing the same, Covid eased the injection of funds!
now can we kindly stop with the incessant wish for OU’s demise, we are no Slovenia, or other regional nations, I’ve been saying for 4 years, IT WON’T HAPPEN, its a Croatian thing....deal with it, we’re patriots.
so less on envy, and no, Air Serbia is not “run professionally”, it is hemorrhaging money, and bailed out just pike all other airlines!
Yet Air Serbia serves 37 destinations out of Balgrade this winter and Croatia Airlines 14 of which 4 are donestic. So it's what you do with the aid everyone is getting that matters.
Deleteyada yada yada, Air Serbia’s a giant, incredibly run, amazing growth, only airline that will remain standing after all other fail....Belgrade Airport and Serbia is a powerhouse etc....
DeleteCroatian Airports served double the passengers of all of Serbia combined pre-covid....
I am all for being proud, but I am shocked at how the same 5 persons write OU will go bankrupt at any mention of the airline, don’t you get tired of being envious? laugher, good night ladies!
Envious of what? 10 international routes sserved by national airline while getting aid year after year? No one even mentioned airports and no one said Croatian airports didn't perform well pre-covid
DeleteFirst thing first, six years ago we had Jat Airways, not JAT. There is a difference between the two.
DeleteSo what if JU only survives thanks to government handouts? What matters is that they are using that money wisely to reform themselves and build a lean(er) business model. That said, they still have a long way to go but what matters is that they are getting there.
One of the reasons why OU is a dead man walking for me is because they never used the money they got from asset sales to invest in growth which would generate more income for them. In stead they used it to pay bills and maintain a status quo. This shows that their management has no vision and no plan on how to get out of this predicament. We have also seen that they have no strategy when it comes to FR.
You see from the text above that their finances keep on getting worse and that even in a much better business climate they failed to report a profit. At some point their losses will be too much even for the Croatian government.
As for the EU, they will tolerate covid-related money pumping but only until the aviation market recovers and we've seen that this process started this summer. European aviation market will boom this November when the US opens to EU travelers. Croatian government might get one last chance to pump money into OU but that's about it.
For all of you who don't know it, and would like to know it, I will share one information :
ReplyDeleteAugust 9, 2021, whole vaccinated Europe fully opened, numbers restarting booming. Peak season, difficult to find spare ticket on flights direction Adriatic Sea. Vienna, one of the biggest and the most important tourist markets for Croatia - departure point. Split, the biggest croatian city on the Sea, number one in passenger numbers, tourist giant - arrival point. Three flights VIE - SPU on that day, Aug 9, with following number of passengers :
Wizz Air - 170 passengers.
Austrian Airlines - 160 passengers.
Croatia Airlines - 12 passengers.
I think I don't need to leave any further comment.
Wow do you know why they performed so badly? What plane did they use? Q400?
DeleteFirst because their prices are double more expensive than OS and 5 times more than Wizz, second because they don't give a s.. t about changing anything as they know their losses will be payed by others, third because they are tiny insignificant company which never made any effort to be seen and recognized on any of the markets except partially at home in Croatia, and fourth because the third is with purpose of feeding LH group for which some individuals within the cartel are financially awarded. Btw this flight is not isolated case, their LF of 50% shows it.
Delete