Croatia Airlines to suspend several routesCroatia Airlines is planning a major shakeup of its international network with flights to Podgorica, Priština and London Gatwick to be suspended as part of its restructuring and financial recovery programme. The airline has shortlisted flights to London Heathrow, Paris, Istanbul and Copenhagen for suspension unless the routes do not start making money in the foreseeable future, Croatian media reveal. The suspensions have been proposed by the three financial consulting companies the airline hired to assist with its recovery programme. The Croatian carrier is expected to boost ticket prices to London, Paris, Istanbul and Copenhagen in a last ditch attempt to make the services profitable. In spite of this, financial advisors have proposed for Croatia Airlines to sell some of its lucrative slots at both London and Paris.
Some domestic services are also struggling including flights from Zagreb to Split and Dubrovnik. However, Croatia Airlines receives state subsidies for its domestic network, a practice which will be banned once the country enters the European Union in the summer of 2013. Other regional routes are also recording losses, though flights to Skopje and Sarajevo will be kept as they currently carry large amounts of transit passengers. Croatia Airlines’ most profitable flights are to Lufthansa’s major hubs - Munich and Frankfurt.
It has been estimated that Croatia Airlines will need somewhere between 80 and 130 million euros in order to come back up on its feet. The Croatian government is planning to provide at least part of the cash injection in coherence with European Union laws and regulations. Local aviation analysts believe that the major network reduction planed for the Croatian national carrier starting this winter could serve as major blow to the airline and its reputation.