Croatia Airlines’ ongoing transition to a single-type Airbus A220 fleet is significantly increasing expenses which will be reflected in its 2024 financial results, with the carrier expected to post a net loss of several million euros. The company’s CEO, Jasmin Bajić, told IATA’s “Airlines” magazine, “Costs are going up generally and Croatia Airlines is also going through a transition phase, which increases our cost exposure. Our pilots need two months’ training for the new aircraft, for example, and there is constant monitoring of all the work we are doing and many new items and systems to buy. And structural exposure to new regulations and industry crises is always there”.
Mr Bajić believes the savings the new fleet will bring will ultimately make a difference to the carrier’s bottom line. “Our new fleet will bring us a 25% reduction in fuel and lower maintenance costs. And we hope our new product and focus on customer service will increase revenues. Reducing cost and increasing revenue is always the challenge though. That’s business”, Mr Bajić said. He added European Union regulations regarding the usage of SAF (Sustainable Aviation Fuel) will also impact the airline’s costs. “There is a problem with the 2% EU mandate for SAF and its availability. And that problem is worse for us. If bigger airlines and airports are worried about it, imagine the issue for a small airline and small airport. Where are we supposed to source the SAF and what will the cost be when we don’t have the same economies of scale? Our costs will be proportionally greater. In Croatia, we do not have SAF production, so we will have to transport SAF to Zagreb too”, the CEO noted.
Croatia Airlines is preparing to take delivery of its third Airbus A220-300 aircraft by the end of this quarter. According to Mr Bajić, the passenger feedback so far has been positive. “I was at passport control recently and listened to what our customers were saying. I was very happy with what I heard about our efforts. Our work to improve our product and services has been noticed. It’s vital that we streamline processes, and, like many airlines, we are undergoing a digital transformation to ensure we are at the cutting-edge of passenger services. But it is also about getting details right. The new aircraft will all have USB ports, better seats, larger windows and high-speed inflight Wi-Fi”, Mr Bajić concluded.
Expected. Let's see if those expected fuel and maintenance savings from A220 actually translate in improved finances.
ReplyDeleteFirst excuses started.
DeleteFor years OU blamed it's losses on "engine overhaul". Now it's going to be fleet transition till 2027. After that we will see. But one thing is certain, it's never the management to blame.
DeleteOU will be most profitable airline inside of a EU. Jasmin is doing amazing job, just wait and see PW GTF maintenance savings!
DeleteJasmin has put right a lot of problems that Kresimir Kucko created for the company.
Delete@15.42 and 16.02
DeleteIvan Mišetić SOLD OU and croatian market in whole to fill his own pockets. During Kucko, OU DID NOT have public money pumped into it. He had to do unpopular moves in order to lift up OU from the shit Mišetić digged it into. He even pressed charges against Mišetić in the court but "independent" croatian judiciary once again took the side of criminals and protected them. Kučko left OU PROFITABLE and ready for growth, but then Criminal Organization with its aparatchiks took over again. And OU will be the most profitable in EU with single type A220 fleet the same day when citizens of Croatia have 8000 euros salaries, announced by another female representative of Criminal Organization. For that one, huuuuuge LOL!
Apsolutno se slažem. Kučko je barem pokušao napraviti nešto od OU, no obzirom da nije bio blizak jednom simpatizeru Kriminalne te Kriminalne Light 365, ostao je mnogima u mislima kao katastrofalan direktor.
Delete140 milijuna € se spalilo na dugovanja stvorena za vrijeme Mišetića, a ne na Kučka
Mišetić made Croatia Airlines what it is today! Made a lot of risky moves that paid off in the end! Kučko was the worst and Jasmin is trying to get things right!
DeleteHahahahahahahahahahahahaha
DeleteActually you are right, Mišetića made OU what it is today- miniature insignificant humiliated feeder full of incompetence, nepotism, crime and corruption, entity which produces constant losses and exists on expense of poor citizens of Croatia, entity which is shame for Croatia and every single person who understands a of aviation. And Kucko is trying to get the things right and keep achievments of his boss alive. And not only trying but succeeding in it.
DeleteBajić, not Kučko, in the sentence before the last one, typo
DeleteAny idea when they will pay their financial results?
ReplyDelete*post not pay
DeleteShould be early next month.
DeleteHope so
ReplyDeleteI'm surprised there’s no local production of SAF in Croatia.
ReplyDeleteIt's stupid the EU keeps pushing smaller airlines into the SAF mandate without addressing regional production. How are airlines in countries without SAF facilities supposed to remain competitive?
DeleteThey don't care.
DeleteErm couldn't they just buy SAF when they land at bigger airports?
Delete@10.58 the only airline they care about and the only airline that can jump through all regulatory and competition hurdles is Lufthansa.
DeleteThe point of the EU is to keep control, money and power in Germany and France. They force a standard on small countries they cant afford or have the ability to meet in their own country forcing them to give money to Germany and France and be reliant on them. It stops small countries from ever catching up in any industry. Just as smaller airlines like OU or JU start developing to get better the EU changes the rules.its one step forward and two steps back.
DeleteIm sure that countries like Croatia, slovenia, Bulgaria, slovakia, hungary, haven't even had time or money to look into using SAF. How to produce it. How to make it profitable and sustainable and even if they did they wouldn't be allowed to do it without EU approval. But Germany and France and ready with their research and development so then now everyone has to be left behind and punished for it.
"And we hope our new product and focus on customer service will increase revenues"
ReplyDeleteIn my case what kind of hard product OU uses was only relevant when I was able to avoid turboprops.
And OU also did not buy these planes to "focus on customer experience"-they needed to switch to a more efficient model.
On ih nije kupio, on ih je uzeo u lizing. Tako da ovo nisu u avioni u vlasništvu OU.
DeleteAs a frequent flyer, I’ve noticed the improvements Croatia Airlines has made recently. The A220 is a huge upgrade from their older planes. I just hope they can balance the costs without pricing passengers out.
ReplyDeleteI’ve also flown on their new A220, and it’s a huge improvement over their older fleet. However, the inflight service still feels very basic compared to other airlines.
Delete1029,compared to who? Which airline?
DeleteAlmost all in Europe. Only OU thinks it's acceptable to serve a box with packaged olives in business class and serve it to you in a box
Delete1504, so, you think the sweet or salty is so much better!? Give us a break bud!
Delete^ what are you talking about? Unlike you I have flown OU business several times and it is a terrible soft product below EU average.
Deletecroatia should open their eyes in united states, such as new York, Chicago and Los Angeles have huge population of croats, if they use their bran they can fill every flight from the cities I mentioned, none of tge croatian people living in united states would fly other carriers if they can fly strait into croatia from new York, Chicago or Los Angeles, wake up jasmin bajic.
Delete@18.21
DeleteDiaspora is just one small segment of potential passengers on those flights. Even bigger group are rich Americans travelling to Europe and Croatia is increasing its popularity year by year. There is the third group- transfer passengers for entire ex-yu and whole Balkans. Fourth group are croatians which are travelling more and more as tourists to the US after Croatia gained visa free travel. And the fifth group are business people, diplomats and NATO staff. However, the flights by OU are not happening because highly corruptive BCG deal which resulted in single type fleet decision cemmented OU position as LH feeder and Jasmin Bajić will not wake up because he is fully awake and like every good aparatchik obediently fulfilling orders given by his political and Mafia bosses
It’s all well and good to promise savings and customer service improvements, but if they’re posting multi-million euro losses, how long can they keep this up before government bailouts are needed?
ReplyDeleteIt is only eleven months far away.
DeleteI applaud Croatia Airlines for taking a long term view with the A220 fleet. The upfront costs are steep, but the reduced fuel and maintenance expenses will make the difference.
ReplyDeleteWhy don't they fly those two A223s like on 7 legs a day? They are really under-utilized compared to other planes of theirs. At the moment only very few of their customers get to enjoy that plane compared to Dash and the old A319/20s.
ReplyDeleteMost likely lack of pilots. They need to be retrained, and who knows if there are simulator slots which is a major problem lately. Plus they still have a sizeable Airbus/Dash fleet which needs to be flown too.
DeleteIs OU covering the cost of pilot training or do they get it in a package from Airbus.
DeleteI think they said last year that Airbus is covering the training costs and it is part of the aircraft order deal.
DeleteŠteta što nema Pozdrava iz Rijeke.
ReplyDeletePozdrav is here. And I already said all about it. Single type fleet is not appropriate choice for Croatia. It is the result of the highly corruptive deal with BCG which had clear instruction to "consult" how to remain LH feeder. Croatia is the biggest market in all ex-yu, with entire Balkans "behind", it always had long-haul carriers operating on its market and OU should have had long-haul aircraft and services for long time already. It has huge tourists traffic on the coast over summer season, where A220 is too small to be competitive. It has domestic services and some regional services where A220 is too big, even with the PSO. "Management" of OU consists of politically appointed aparatchiks and totally incompetent people who don't care and don't do anything. OU did not take a single opportunity of its diaspora, booming tourism, especially from distant markets, geographical position, visa free regimes and EU membership with its legislative and numerous open skies agreements. OU missed the chance to build proper hub in sinergy with ZAG, they don't have proper "waves", they don't have marketing at all, their codeshares are minimal and almost non-existent. OU should have had by now fleet of minimum 30 aircraft : 5 Embraer 175, 10 Embraer 195, 4 Airbus A319, 4 Airbus A320, 2 Airbus A321, and 5 Airbus A330 or Dreamliners. Unfortunatelly Croatia as a country has no strategy for its its air market and air carrier. Its PSO is ridiculous and useless and waste of money, and OU is deliberately being destroyed because Ivan Mišetić long time ago, surrendered entire croatian market to LH, for his own benefits and interest, and as he is member of Mafia which took over every segment of life in Croatia, nothing is changing and status quo has been kept. Single type fleet with the most expensive aircraft on the market is just the continuation of the sad saga of missed opportunities and disappointed professionals who either left OU or even the country.
DeleteA220 should be competitive in comparison to other aircraft operating summer routes in Croatia. It's costs are proportional to A320neo and are smaller than of many other aircraft like A320ceo family and 737 NG family.
DeleteYeah right
DeleteCheck it's performances .
DeleteYou check lease rates
DeleteI did. They are low
Delete🙂
DeleteThe known corrosion & engine problems will not reduce any maintenance costs
ReplyDeleteWhat a surprise
ReplyDeleteCroatia Airlines is biting off more than it can chew. A transition of this scale is tough for major airlines, let alone a smaller one like this. Fingers crossed it works out.
ReplyDeleteIt's barely 15 planes. It's nothing.
DeleteIt’s a big investment when done all at once. Croatia Airlines should have phased this transition over a longer period to spread out the costs.
ReplyDeleteWell deliver is spread out over 3 years.
DeleteI hope they don’t pass all these rising costs onto passengers. OU is already more expensive than smost European airlines, and this could drive even more customers to competitors.
ReplyDeleteThey'll either pass it on the passangers or taxpayers; most probably both
DeleteNice to see Jasmin give more interviews and statement lately.
ReplyDeleteLove it
ReplyDeleteSo smaller losses each year, but never a profit to be had for OU.
ReplyDelete1410, we'll see.
DeleteBlind people said
Delete1020, it's not Sukhoi buddy, it's A220!
ReplyDeleteIm working on the C-Series, so I know the problematics this aircraft has!
ReplyDeleteJust wait and see
Sure you do.
ReplyDeleteThere aren't any longer corrosion problems. That was on the earlier model of the engines. It has been corrected for the newer P&W engines.
ReplyDeleteIf the transition to A220 fleet is significantly increasing expenses and causing net loss of several million euros after just two A220s entered the fleet, we can only wonder the kind of loss airline will have by the time all 15 A220s enter the fleet. Turbulent years ahead for OU.
ReplyDeleteI don’t believe OU has long term vision of the company, A220 won’t solve anything they need to open new routes where they can sustain a positive load factor and profitability instead of being a LH feeder. They said they don’t plan any long haul flights which I think is bad their onboard product is basic they are facing a lot of pressure from Many sides and I don’t think this management is up to the job. There needs to be a change in vision and strategy fast If they want to survive in this Market
ReplyDelete