Croatia Airlines on the road to financial recovery
Croatia Airlines has recorded its first net profit in six years, indicating the airline’s cutting measures are proving successful. In the first nine months of the year, the Croatian carrier managed to turn a profit of 2.6 million euros, its first positive result since 2007. During the same period last year, Croatia Airlines recorded a loss of 1.3 million euros. The result comes despite a drop in revenue of 8%. However, cost cutting measures, introduced as part of the airline’s restructuring program, have seen expenses decline by 10% on last year.
Over the past nine months, Croatia Airlines has seen a decrease in passenger numbers, destination network and fleet size. By the end of September, the Croatian national carrier welcomed 1.4 million passengers on board. The result represents a 3% passenger decrease on domestic flights and a 9% decline on international services. In total, the airline decreased its number of operated flights by 7%. In addition, sales decreased by 13% while international sales were hit by a 19% decline. The airline is currently operating a fleet of thirteen aircraft, though one of its Bombardier Dash 8 Q400 aircraft will be out of action until the end of the year as it undergoes repairs. The airline’s results have also been significantly impacted by a ten day industrial walk out by staff in May.
Croatia Airlines’ encouraging financial performance so far in 2013 is a strong reference for potential strategic partners. Last week the Croatian government began the carrier’s privatisation process. This year the airline embarked on a restructuring program which is set to last until 2015 and aims to see Croatia Airlines back into profitability, which it has achieved. In 2012 the Croatian carrier recorded a loss of 62.6 million euros, its worst result on record. It last posted a profit of 131.000 euros in 2007.