Thursday, May 21, 2009

Croatia Airlines reports big losses

Big Q1 loss at Croatia Airlines
Croatia’s national flag carrier Croatia Airlines has announced its first-quarter loss of 38.3 million Kuna (5.2 million Euros), worse than the 17 million kuna (2.3 million Euro) loss initially expected. The carrier’s CEO has blamed the global economic crisis and falling demand for the bleak result. The airline’s January to March revenues reached only 338 million Kuna (45.8 million Euros), down from 347 million Kuna (47 million Euros) in the first quarter last year, while the total number of passengers fell by 3 percent in the same period. Croatia Airlines’ domestic routes saw a 4% drop in passenger numbers, while its international operations managed to keep about the same number of clients. However, chartered flights registered a 68% drop to mere 2.500 passengers in the first three months of the year. Cargo traffic was down by 16%, reflecting a recession-hit market at home and abroad. Croatia Airlines had an agreement with Cargo Counts for distribution and management of the airliner’s cargo services, but switched to Lufthansa Cargo in early 2009. Direct ticket sales were down by 15% year-on-year, while indirect sales through agents increased by 13%, primarily due to stronger sales on the North American markets.

The management of Croatia Airlines has said it will differ its investments if the negative financial trends continue. One of these investments would be aircraft orders. Croatia Airlines currently has 4 Airbus A319s on order whose deliveries should start in 2012 and it has 4 Bombardier Q400 aircraft on order, 2 of which are expected to arrive this year.

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