Friday, February 15, 2013

Tough times ahead for Croatia Airlines

Desperate times call for desperate measures

Croatia Airlines is in crisis mode as its looks to shed its workforce, fleet and network. The carrier ended 2012 with a record deficit of 62.6 million euros as a result of a nine million euro operational loss and the revaluation of its fleet worth around 40 million euros. As a result, the company has announced plans to reduce its workforce by 20%, a decision which did not go down well with employees. Yesterday, representatives of the workers’ union met up with the airline’s management and the consultancy firm advising the carrier on its restructuring program. However, employees stormed out of the meeting after tempers flared with the consultancy firm BDO, who called the workers “nothing more than a mob”.

Croatia Airlines is planning to reduce its fleet by one Airbus A320. It is also considering suspending services to London Gatwick and Priština this year, while flights to London Heathrow will be reviewed in 2014. Other destinations also struggling include Paris, Istanbul and Copenhagen as well as domestic flights between Zagreb, Dubrovnik and Split though they are subsidised by the government and local authorities. The carrier’s most profitable destinations are Frankfurt and Munich. Early last year, consultancy firms warned Croatia Airlines of the need to reduce its destination network and fleet. However, the airline did the opposite, leasing additional aircraft throughout the summer and drafting one of its busiest upcoming summer season timetables with a significant number of new destinations and frequency increases.

The poor financial performance in 2012 comes on top of the airline’s busiest year on record. Croatia Airlines welcomed 1.951.501 passengers, an increase of 4% compared to the year before. The carrier’s average cabin load factor for the entire year stood at 69.1%, its best since launching services over twenty years ago.

19 comments:

  1. Sounds familiar... Adria Airways copy paste story.

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  2. The smaller airlines will never be profitable! OU should be expanding or merging with another carrier, as this will allow resources to be shared and lower costs. I think the Croatian government should sell 100 per cent of Ou to the likes of Lufthansa! I think OU would be best leaving Gatwick, but it would be a mistake to sell the slots off in Heathrow! There are a lot of transait passengers to SJJ on these flights and would affect loads on those flight's if they were to pull out!

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  3. Unlucky one expands a fleet the needs to reduce... Like mentioned in other thread there is no room to shred any codb in OU which won't affect its number... 20% cut of workforce will make it a miserable place to work, reduction of network and fleet will drop pax numbers and overall only slightly increase its gp can't see it in the green anytime soon

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  4. Reduction in fleet and destinations will lead to the end of OU especially under the E.U regulations!

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  5. Time to get the government out of Croatia Airlines, if it fails then some private company will take its place. If there are people who want to fly to the Croatian coast there surely will be some airline willing to take them there. It doesn't matter to the airport and tourism business who brings them customers as long as they get there.

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  6. Off Topic: FlyDubai asked for two more additional flights per week to SKP, and out of nowhere WizzAir is considering launching Skopje - Dubai as well, according to 'Utrinski' newspaper: http://bit.ly/15hRUFv

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    1. FlyDubai`s move is logic but I really doubt about Wizz launching flights SKP-DBX

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    2. Wizz Air asked ukrainian air authorities to take over abandoned Aerosvit routes, including Kiev-Dubai !!! It is so interesting. Also Wizz asked for some Almaty route !?!?!?

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  7. Hmm what do you think would happen if Croatia Airlines doesn't make it? I doubt we would see a new airline re-established by the government and I wonder if Wizz Air or easyJet might step in to take over the market.

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  8. Yes Easyjet or God forbid Ryanair would propably step in, but the problem is they would only serve profitable routes, and with less competition these low cost carriers will suddenly become very expensive! But with Croatia joining the E.U, sadly I can see O.U collapsing!

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  9. Or Lufthansa Croatia!

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  10. Jat croatia with Boeing 737 classic fleet!

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    1. HAHAHAHAHAHAHAHAHAHAHAHA!!!!!!

      The best joke ever!

      ...and in same time A319 and A320 to Belgrade... that time was finished 22 years ago!

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  11. As my muslim brothers from Emirates sink lufthansa, OU has to feel the pintch.

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  12. Your muslim brothers and sisters actually fly OU as well!

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  13. This comment has been removed by a blog administrator.

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