Croatia Airlines has recorded a net loss of 21.8 million euros for the first half of the year, up 11% on the same period in 2021. This has resulted in the company’s capital and reserves being diminished by over three times compared to levels at the end of last year. However, in June, the carrier recorded its first positive financial monthly result since the global outbreak of the coronavirus pandemic in March 2020. Over the January - June period, revenue increased 93% on last year but is still down 23% on the pre-pandemic 2019. Costs also grew by over 70%, due in part to rising fuel prices and inflation. “Significant positive developments were achieved compared to the first half of 2021, however, it should be noted that the increase in the price of fuel significantly impacted the cost of operations. The unpredictability of the pandemic and its continuation this coming autumn and winter may have a notable impact on demand, and, consequently, income”, the airline said.
Croatia Airlines has seen some positive developments over the past six months with ticket sales up three and a half times on the same period in 2021. Existing booking over the next six months, from August 2022 until January 2023, are 1.7 times higher than last year but are still down 34% on 2019. The ongoing war in Ukraine has not had a major direct impact on the company’s sales. The airline has lost some transfer passengers on its domestic flights that were fed by Aeroflot’s Moscow - Zagreb service, however, this number amounted to just 1.000 travellers in the pre-pandemic 2019. Croatia Airlines used to run seasonal flights between Zagreb and St Petersburg before the global health emergency, but these have not been in operation since 2019. That year, the company sold a total of 5.500 tickets on the Russian market. It had no sales agents in Ukraine.
During the first half of the year, Croatia Airlines handled 558.146 passengers, up 189% on last year but still at just 58.1% of pre-Covid levels. Of those, 146.428 travellers were registered on domestic flights and 400.887 on international services. Charters accounted for 2% of total passenger numbers and amounted to 10.831. The average cabin load factor stood at 56.2%, down 15.6 points on 2019. The carrier operated a total of 10.054 flights, which is 3.145 fewer than in 2019. The carrier had 937 employees on its books by the end of June, which is down from 1.040 three years ago. It currently operates a fleet of twelve aircraft, five of which it owns, including one Airbus A320 and four A319s.
Regardless of the positive spin they are trying to put on the situation, their widening losses and meager summer performance won't be enough to keep them strong through the winter. In winter 2022/23 with FR around and their commercial epicenter (LH Group) struggling, I see a very bad financial performance.
ReplyDeleteCould 2023 be the year OU goes bust? I expect this year for another loss close to 100 million Euros.
The company will not go bust so long as the current government is in power and their people are employed by the airline.
DeleteNot true, it will be around for a little while longer because soon enough the government won't be allowed to pump more money into them because of EU regulation.
DeleteThe losses are irrelevant. National airlines should not be viewed in the traditional capitalist "profit/loss" context. If that was the number one reason then no country would invest or hold stakes in airlines. There is a national interest in having a national carrier and 21 million euros is peanuts in the bigger picture.
DeleteYes and I agree with you but you should not be telling this to me but rather to the guys in Brussels who disagree with you. Croatia is in the EU so they have to dance to the tune they are playing.
DeleteAnon 16:38 I have copied your comment "National airlines should not be viewed in the traditional capitalist profit/loss context" and will paste it back next time Air Montenegro or Air Serbia financial results article is published. Thank you!
DeleteIt's not losses which are major issue with OU. It's fact that losses are made to feed for peanuts LH while wasting opportunities and losing chances to grow and increase work productivity
DeleteYes, but LH could be protecting OU from European Commission.
Delete16:38 Croatia Ailrines has a lot of potential but has become a sad national joke. If the government thinks it is necessary to maintain a fleet of transport aircraft for it's national interest, than they should invest in military transport aircraft. A handful of C-27 Spartans that can also be retrofitted to fight forest fires would be fine and probably a cheaper option when you consider how much they sink into OU and who knows how much the steal from it.
DeleteI think they’d better ask how they dare try to ask £700+ for a normal London/Zagreb flight one way before they go any further. Tell me who will pay that and why!!!!!
DeleteAmazing what losses a 12 aircraft airline can generate. Is there a worse performing airline on a per aircraft basis anywhere in the world ??
ReplyDeleteWizz Air reported huge losses the other day also!
DeleteYes they did - as did many other airlines. BUT, if you calculate the losses on a per aircraft basis or even on a per head of staff basis, I would think that OU has to be up there with the worst performing carriers anywhere in the world. Which is a very very hard swallow, considering that it is a hugely patronised and visited country. So destination appeal is not an issue; passenger demand is not an issue; airline appeal is not issue either - just look at the size of foreign carrier operations into Croatia. So the only issue we have is that of our own airline and how, inspite of all these positive factors, it is unable to find a pathway to operating successfully.
Delete@An.10.24, you are not supposed to speak the truth which includes any criticism, despite absolutely everything you said is true. It shouldn't be revealed and explained publicly. You are supposed to say Bravo Hrvatska instead. Otherwise, you will be called to hate everything croatian, to be boring, to be from Cacak, and so on and so on
DeleteQuick math: Croatia lost 21.8m with a fleet of 12 aircraft in 6 months, which is 1.8m per aircraft, so 0.9m per aircraft per quarter.
DeleteWizz Air's operating loss was 284.5m per quarter with a fleet of 157 aircraft, which means 1.8m per aircraft per quarter.
It is quite obvious Wizz Air is doing horribly, when it had double of losses per unit (aircraft) than Croatia Airlines, which made a huge loss to begin with.
Wizz Air and Croatia Airlines are not comparable at all. Wizz, having temporary losses, even bigger, as consequence of covid situation and huge fleet increase, cannot be compared to Croatia, with its permanent losses while stagnating or even shrinking
DeleteI think they can't be compared because one knows what it is doing, is growing and expanding while the other just sits around and cries how it is unfair that they have to compete with others.
DeleteWizz is doing really bad. However that doesn't mean Croatia Airlines is somehow doing fine. You can have two or more airlines doing really bad at the same time. So OU is still in deep trouble.
DeleteFriends, if you had one million USD to invest, what would you do? Put it in OU or W6?
DeleteI would put it in Aegean or Finnair
Delete...or Air Serbia.
DeleteGee, they really got a lot of value from their post covid BCD recovery strategy ....
ReplyDeleteAmazing. Losses are widening after they paid BCG.
DeleteCan't wait to read "Pozdrav's" comments on today's topic ....
ReplyDeleteNadam se da sam opravdao ocekivanja☺
DeleteI say let Agean buys them and end this agony... Or, keep pumping state money in there like the neighbour to the east and carry on with daily business :)
ReplyDeleteExcept the "neighbor" to the East has some real business, twice the fleet and much lower losses.
DeleteThe government has already said it will keep pumping money
DeleteCroatian government can't keep on pumping money. For example the other day EU ruled that FR has to pay back €8 million to the French government since the subsidies they got were illegal.
DeleteAs for Aegean, I don't know how interested they are since they are terminating ZAG flights earlier than initially planned.
Aegean said they are interested in buying Croatia Airlines and that doesnt have anything to do with their operations to ZAG.
DeleteRight, they are going to rush to invest in a market where they can't even make enough money to keep two weekly flights year-round. ZAG's market size is relatively small and now there is FR to take into consideration. Only reason why A3 might be interested in buying OU is to move its planes and crew to Greece.
DeleteSure. They are buying airlines to fly one route towards their hub.
DeletePlease stop wasting my (our) taxpayer money.
ReplyDeleteIt comes from the tax tourist's pay.
DeleteWell then, by all means let’s continue! All is well indeed.
DeleteOf course! Bravo Hrvatska! Zivijo Kradeze!
DeleteI've lost all hope. I don't see a solution for them any more.
ReplyDeleteA few things that stand out for me
ReplyDelete- just 10,000 passengers on charters for a country living off tourism is ridiculous.
- Before the war and Covid they had just 5,500 tickets sold in Russia. When you check how many Russian tourists there were in Croatia this is a disaster
- The average LF is very low considering half of the fleet is made up of Dash planes
Just to add 2 million visitors annually from distant overseas long haul markets, who are funnelled to LH or companies flying directly to Croatia from North Am and Asia, and overall market share of 15 %, and continuing to decrease
DeleteAnon 10:03
DeleteCharters are not so popular as type of transportation for Croatian tourists.
Charters are for foreign tourists visiting Croatia, and they are plenty, and like in everything else , OU is almost non existent in charter market share.
Delete"This has resulted in the company’s capital and reserves being diminished by over three times compared to levels at the end of last year.:
ReplyDeleteThis is concerning
It's not. Bravo Hrvatska!
Delete3rd quarter result will be crucial based off which we will know how big the loss will be this year.
ReplyDeleteIt's sad that it is already a given that they can't cover their losses with summer operations.
DeleteHigher than expected
ReplyDeleteSo much wasted potential
ReplyDeleteWhat's the prediction for the end of year result?
ReplyDeleteHiring new external consultants - like McKinsey or Bain - to come in and do another post covid recovery strategy - Ver.2.0
DeleteDoesn't anyone find it strange that their CEO is never ever seen making public announcements/comments about the company ? At a time like this, he should be front and centre telling us - those who fund his airline - how he is going to fix this and what are his strategies to turn things around.
DeleteHe is not CEO. He is a puppet who enables crime and corruption for real Bosses. BCG fraud is just small part. Other "consultants", Dash double leases, sponsorships.... You name it
DeleteOnce again POZDRAV if you have any proof just go to an attorney or to the police , otherwise you are just a graphic boring figure !
DeleteOnce again, if you are bored by what I am writing, just skip it, scroll over
DeleteBut it might be you are not bored but scared...
DeleteRijeka, you are not the full ticket, are you!?
DeleteNo, I don't pay full ticket, not even ID90, my company pays for my commuting
DeleteHahaha, ignorance is bliss indeed, Rijeka - the ‘full ticket’ English phrase means you are not all there... as in ‘not clinically sane’!
DeleteMy English is decent. And I am not stupid. You got the answer you deserved. And you are the one who didn't understand my answer, it was not me who didn't understand your question. And of course you want to describe me as "not clinically sane", because how the hell one who speaks about the theft by your Party and in your beloved OU could be sane
DeleteAnd they will knock on the doors, and soon, and Zlocinacka will pay for all harm it did to OU and to entire country
ReplyDeleteThe sad thing is, the opposition is just as corrupt as those in power. For example, the old SDP government is responsible for the very bad konsession contract for ZAG. Also on local level where HDZ does not govern, for example in Istria, Rijeka, they have corruption at all levels. In healthcare/doctors etc. "Every country has the government it deserves"
DeleteOld SDP gvt was not perfect and did lot of bad things, including ZAG concession. Crime and corruption is something that exists everywhere, it is just the question whether government generally is making steps to decrease it to the lowest possible and acceptable level. SDP gvt was doing it. Kradeze cannot do it because they are unreformed wing of SKHSKJ, with mindset stuck in 1950. In addition to that, they have all characteristics of Mafia, Drangheta, Camora and similar organizations. Crime and corruption on local level is consequence of Kradeze modus operandi because of the mindset which set us back for decades, which is copypasted on local level from the state level, and completely centralised money flow which enable them to control it. Not to mention their creation of 500 communes and 20 absolutely unnecesary counties which are main source of crime and corruption. SDP is far away from being good, but in its essence it is not criminal organization. Kradeze is. With full verdict, even from legal system which they try to control as much as possible as well. And people who say SDP and Kradeze are both the same, are either very very wrong, or saying it on purpose.
DeleteYeah
DeleteI don't see much of a difference at the local level. And you also hold the HDZ responsible for this, interesting. The local government in Zagreb and Split alone clearly shows how widespread corruption is in society. Milanovic has had the opportunity to change g
Deletethat. But he said at the time the system of Županjie itd did Tudjan very well and left everything as it is. Što južnije to tužnije, to je naš balkan
All that in the EU member state?! Noooo way!
DeleteThis is relatively common and normal across southern Europe, no matter which party is in power. It just has something to do with history, culture and mentality. And yes, there are big differences, for example between north and south Italy, Andalusia and the Basque Country or north and south France. and Croatia is very bad at corruption but compared to its southern neighbors it is a star student. In northern Germany they say the Balkans begin at Vienna
Delete@An.16.31
DeleteHalf of the attempts to change something significantly during Milanovic PM time were obstructed and some of them eventually prevented by "branitelji" orchestrated by Kradeze sitting on the gas cylinders/bombs in the center of Zagreb, with intention of SDP gvt to fail in its attempts and to get back money flow to Zlocinacka control. And if you don't understand that crime and corruption starts with "zetoncici" and Pupovac in Sabor, who keep Kradeze in power, then any further discussion is pointless
"any further discussion is pointless" naravno jer jedino Vi sve znate 100% I svi drugi koji imaju malo drugačije mišljenje su u krivu. Ko je ono vladao u gradu zagrebu hdz ili Bandić? Od regionalnoj korupciji gdje ne vlada hdz ni riječ. A o bolnicama i doktorima da ne govorimo. O crnoj bespravnoj gradnji u Istri i Dalmaciji, koji su tu glavni komunalci?
DeleteAnd what did Milanovic PM with Croatia Airlines? Any reform? Any change?
DeleteWhat good decisions have been made by the SDP government for the Croatian aviation industry? help me remember
DeleteU gradu Zagrebu vladali su Bandic i Kradeze zajedno i upravo su Bandicevi zetoncici oni o kojima govorim.. Razdoblje Bandica i Kradezea u Zagrebu je razdoblje najveceg kriminala i korupcije u Hrvatskoj pri cemu sav ostatak Hrvatske u kojima je lokalno oporba na vlasti predstavlja djecju igru.,ukljucivo bespravnu gradnju u Dalmaciji koja je cijela takodjer Kradezeovska. Vas stav da je plava kuverta doktoru, koju je omogucio Kradeze unistavanjem zdravstvenog sustava, bitnija od politicke korupcije na najvecoj razini, pokazuje da sam bio u pravu kad kazem da je s osobama koje Kradezeove lazi i propagandu drze istinom, pace dogmom, razgovor suvisan
DeleteFully agree SDP did nothing related to OU while leading government. If they did, they would have been accused of revanchism and getting rid of management appointed by former gvt. In addition to that, Croatia was in such a disastrous shape after Sanader 's and Kradeze' s theft, that they had much more important fires to extinguish around then one burning in OU
DeleteMilanovic made his next door neighbor, a Croatia Airlines baggage handler the CEO. Mr Kucko. So doubt we can claim any moral high ground from Milanovic.
DeleteWow, Milanovic must be a very strong player. Forget OU, but being able to make your neighbour and baggage handler CEO of Gulf Air 😃
DeleteAegean is the only way to save OU ....
ReplyDeleteThere is no rational reason for a profitable airline like Aegean to buy loss making airline like Croatia Airlines. They have no equity of significance and offer no advantage to Aegean. If they really wanted to buy them they would have already done it between 2015 and now. Main reason Aegean would have been "interested" in the process is to get insider access to OU info and validate airline's bad shape.
DeleteThey just need establish a vision and goal and work towards it. Replace management when they don't achieve results , which they clearly do not do.
DeleteRegional leader ...
ReplyDeletein loss making !
Charters 10.000 in HALF of year? Thats amount of JU charter pax on "good weekend" (Friday-Sunday). Jesus. I mean, I knew that Croats dont charter, but 10.000 in 6 months with OU is just pure disaster
ReplyDeleteBravo Hrvatska!
ReplyDelete