Croatia Airlines expects to continue generating losses in the short-term as a result of its transition to an all-Airbus A220 fleet, which has seen its expenses balloon last year. However, the carrier is confident the shift will produce overall savings in the long run. It posted a net loss of nearly twenty million euros last year. The carrier has detailed how the arrival of its first two A220s in 2024, as well as the delay in their delivery, has financially impacted the company. “The investment cycle period for fleet replacement is marked by the operational and financial challenges of transition. Consequently, the company has forecasted negative financial outcomes for this period”, it said.
Outlining the challenges the company has faced, Croatia Airlines noted, “The arrival dates for the two new A220 aircraft, which were supposed to be delivered before the start of the 2024 summer season were repeatedly pushed back. This required adjustments to activities related to their handover. The first A220 aircraft began commercial flights on August 6, 2024, while the second commenced on December 27, 2024.. These delays necessitated the engagement of additional and significantly more expensive aircraft on a short-term wet-lease basis in order to maintain the planned flight schedule, preserve airport slots and retain passenger trust”. It added, “Pilots training for the new type of aircraft had to be out of duty for two months. The first twenty pilots, including five instructors, faced even longer downtime due to repeated postponements. Training depended on pre-scheduled simulator slots and the availability of instructors at Airbus. Pilots had to repeat their simulator training because the delays in aircraft delivery prevented them from starting to fly within 21 days of completing their initial training, as regulations require”.
Croatia Airlines further added, “In 2024, significant increases were seen in hotel accommodation and daily allowances due to intense training. In 2024, more pilots were employed than operations required to ensure a larger number of pilots in anticipation of more aircraft arrivals in 2025. Due to the training of instructors, the new aircraft could not operate at full capacity as there were no available crews. Furthermore, there were costs associated with aircraft acquisition teams and other administrative expenses involved with the registration of the two aircraft”. Croatia Airlines also incurred costs from training two groups of mechanics for the new aircraft type, adapting various operational IT systems for the A220s, as well as expenses for acquiring spare parts and the first spare engine for the new jets.
Last year, the airline spent 10.9 million euros on the short-term wet-lease of two Airbus A320-family aircraft and 28.9 million euros for the spare A220 engine and parts. “In September and October 2023, the company received funds from the sale of its own Airbus aircraft that were nearing the end of their life cycle. These funds were specifically used in 2024 to finance the acquisition of a spare engine and spare parts for the new A220 aircraft. In 2024, the company made an advance payment for the purchase of a second spare engine for the A220 fleet amounting to 961.000 euros, security deposits before the arrival of two new aircraft in the fleet amounting to 559.000 euros, and a deposit for access to the parts pool for the new A220 amounting to 185.000 euros”, Croatia Airlines said.
I'm all for them having new planes BUT they should have gotten their business in order first before getting them. Now they have all these expenses on top of an unprofitable business. And they still haven't reached pre Covid passenger numbers even though they have the same number of aircraft in the fleet.
ReplyDelete+1
DeleteFor a small airline of their size with barely 30 destinations not reaching 2019 passenger levels in 2024 is a disaster to say the least. And they are not even close.
DeleteI’m not worried for aircraft as much as i am worried about GTF engines. But i believe deliveries after 2023 should be care free. Anyway good luck OU, you will make it work! Transition is expensive but OU is strong 💪🏻!
DeleteIf they can just get past these growing pains and streamline their ops, they will have a good chance. Fingers crossed they turn those losses around sooner rather than later!
DeleteAgree with anon 09.03. This A220 business is a big gamble for a small and unprofitable airline with all these upfront costs.
Delete^ but maybe it’s what's needed to stay competitive in today's market.
DeleteCroatia collects this money from VAT in one morning during the summer. One morning a year!
DeleteThat's not how it works.
DeleteIt's exactly how it works! The cost of not having a national carrier far exceedes this peanuts we pay!
Delete^ it would be wiser if you tried to advocate for the replacement of this incompetent management rather than find excuses for them day in day out. That would be actual patriotism.
DeleteWho could have predcited....
ReplyDeleteOU said all problems would be solved with A220.
DeleteAlso… ai never saw that coming
DeleteEvery step forward with the new A220s comes with a hefty price tag.
Delete30 million just for 1 spare engine and parts
ReplyDeleteMedium-sized engines cost around 10-15 mil per pop. Considering you need 2, it's definitely within reasonable range
DeleteThey will certainly get some compensation...
ReplyDeleteI think they would have mentioned if they were.
DeleteWill Airbus cover the losses they had due to late aircraft arrival?
ReplyDeleteOf course but that will not be made public.
DeleteWhy? All airlines say if they are compensated.
DeleteAirbus is not going to compensate the high costs of spare engines, parts and training.
DeleteBut these aircraft are not owned by Croatia Airlines. Why should it compensate them? If they need to compensate someone, it is the lessor no?
DeleteSo what is the total depth of OU?
ReplyDelete78.8 million
Deletehttps://www.exyuaviation.com/2025/02/croatia-airlines-posts-196-million-loss.html
Someone pointed out that this is mostly government loans so that makes the situation somewhat better.
DeleteSo the reason the A220s are underutilized is crew shortage.
ReplyDeleteYes it says in the text
Delete"Due to the training of instructors, the new aircraft could not operate at full capacity as there were no available crews."
And we read here so much about Air Serbia crew shortages
DeleteBut they knew what they will be getting years and years in advance... couldn't they prepare the crew ahead of time?
DeleteHow?
DeleteTrain them beforehand during slow winter seasons when the demand for the crew is smaller maybe
DeleteIt says in the article they need to fly the plane within 21 days of completing training.
DeleteAnon 09:16
DeleteOh yes, there is never any problem in JU! All problems are actually faked by haters, retards or ever worse, Croats!
Hope it works out.
ReplyDeleteWhen is the third one coming?
ReplyDeleteIt was announced for this month. But who knows if it will come on time. They originally planned to launch two of their 5 new routes in June but moved it to July. I'm guessing because they were informed one of the planes would arrive late. But that's most probably number 4.
DeleteThanks
DeleteImagine the trouble they would be in if they didn't have such great leadership.
ReplyDelete:D
DeleteThey're taking a hit now but it's all about the long game, right? Hopefully, these newer and more efficient planes pay off in the end and cut down on those maintenance and fuel costs.
ReplyDeleteLet's hope they can survive until that long-term comes.
DeleteOf course they will survive, its a government play thing.
Delete11 million for wet lease of two planes. I think they operated them for 2 months. It's not as much as some people claimed here and remember they literally wet leased last minute so these are the most expensive rates.
ReplyDeleteDon't spread misinformation. The wetlease from Trade-Air was for most of the summer season, approx 5 months.
DeleteThey had two wet lease. One was wet leased from March until October. The other from 15.4. to 15.7.2024.
DeleteCould be easier if they purchased a simulator but I imagine it's very expensive. Does Croatia Airlines have a simulator for A320?
ReplyDeleteThey better hope these new A220s start paying for themselves with all that cash going out.
ReplyDeleteAnd quickly as well.
DeleteDon't hold your breath.
DeleteHang in there OU!
ReplyDeleteFret not the taxpayer will keep bailing you out
DeleteOnce all the new aircraft are finally in service we'll see smoother skies for Croatia Airlines and better results.
ReplyDeleteThat won't be for another two years at least. A220 deliveries are expected to be completed in 2027 but with the delays it's probably going to be 2028.
DeleteWhere will they fly all these new planes. Bet the LF will still be low 60%
DeleteAnyone know where they train their pilots for the A220?
ReplyDeleteI think Switzerland but not 100% sure.
DeleteSpending millions on wet leasing and training seems like a necessary evil, but I wonder how all these costs were not anticipated?
ReplyDeleteThat would be poor management
DeleteOnly time will tell if this was a wise investment or just a costly misstep.
ReplyDeleteI wrote below. it's a misstep to take such a huge financial obligation when you are a poorly run company creating losses.
DeleteEvery delay adds layers of costs and complications. It’s a domino effect.
ReplyDeleteTheir finances were bad before A220s and delays. It would be no different if they hadn't gotten these costly leases.
DeleteIt's a long term investment. Of course it costs money.
ReplyDeleteThe problem is, the airline is in absolutely in no position to be wasting more money considering their finances are a disaster. If this aircraft acquisition was so necessary (should note they don't even own the aircraft), then they should have created a functioning business model first. In 2012 a 100 million euros was given to them as a present by the state to restructure and become profitable. 14 years later, they are producing losses. So that was 100 million euros thrown in the trash.
DeleteLong term investment? Hahahahaha, you mi edan up something bro, it's long term LEASE. And changing the fleet you OWN for the fleet you LEASE is certainly not investment. It's long term MONEY WASTE, especially with Buzin uhljebs and aparatchiks
Deletemixed something up, autocorrect
DeleteIt is long term investment you like it or not.
DeleteWith the same route structuring, the same pricing policy, the same lack of waves system, the same lack of marketing, the same seasonality, the same mindset and the same corruption, in addition to New LEASE, it will not be investment but WASTE OF MONEY, you like it or not
DeleteBravo anon @1414
DeleteTransitioning to a high tech fleet like the A220 involves big risks and rewards.
ReplyDeleteA220 is just regular 150 seater. It's nothing sophisticated. But it's really good.
DeleteSome people here 🙂
DeleteSpeaking of an average regional aircraft (with tons of issues btw) as of Intergalactic Spaceship..
But when Universe begins and ends in Graz or Minken, it's simply like that 🙂
"tones of issues" you know nothing about modern day aviation whatsoever Pozdrav iz HLP aerodroma.
DeleteSo this will be anther loss making year?
ReplyDeleteSad
ReplyDeleteHave a feeling they will eventually wet lease some of their A220s to LH group
ReplyDeleteWorld champions in excuses, they never miss a chance to craft a new narrative for their losses
ReplyDeleteAgree. Surprised they haven't blamed the loss on the Heathrow slot penalty they received.
DeleteThat will be used as excuse for 2025 losses. This is for 2024.
DeleteI am optimistic they can survive this, but I hope the management realizes that the fact you have new planes will not persuade people to fly with you more often. You need to have good prices, good slots, connecting flights etc.
ReplyDeleteCroatia Airlines Week on Ex-Yu.
ReplyDeleteIf I was in charge of damage control at OU, I would try to find aviation equivalent of laser pointer for cats. In this case cats being public, aviation enthusiasts, passengers etc, and laser pointer being fun toy to distract public from serious issues at the airline by offering them some fun&entertainment. That could be opening a couple of new or previosuly operated lines, some ticket discount days etc. Failing that, at least point the laser dot at competitor's issues, no matter how small and irrelevant they are, as long as it keeps "cats" away from questioning the state of OU.
ReplyDeleteSurprise surprise, ....... even a food delivery boy could have told them that transitioning from one tech concept a/c (airbus to bombardier - completely different techs) to another would cost a bundle ...... this is the result of politics meddling in economics and/or incompetence due political appointments .....
ReplyDelete