Saturday, August 1, 2015

Croatia Airlines’ losses widen

Croatia Airlines posts mixed half yearly results

Croatia Airlines has seen its financial losses widen in the first half of the year compared to the same period in 2014, while its passenger numbers remained mostly unchanged. The Croatian carrier recorded a net loss of 12.8 million euros during the first two quarters, significantly up from the 3.9 million euro loss registered during the same period in 2014. The airline says its financial performance is usually weaker in the first half of the year due to the strong seasonality of the Croatian market. Its expenses increased by 3%, while revenue dropped 7%. The carrier spent most on maintenance (up 37% on 2014), as it performed regular six-year checks on two Airbus jets and C checks on two Dash 8 turboprops. Furthermore, expenditure on flight operations and passenger services also grew, while fuel prices declined.

On the passenger front, Croatia Airlines handled 802.559 travellers during the six-month period, an increase of 0.2% on 2014. Of those, 205.824 travelled on domestic flights, representing a decrease of 3%, while 574.729 passengers boarded scheduled international services, up 1% on 2014. The remaining 22.000 passenger flew on charter flights, an increase of 1%. The average cabin load factor stood at 64.3%, down 0.4% on the same period last year. This Monday, Croatia Airlines handled it millionth passenger of the year, one day ahead of 2014. As a result, the carrier welcomed 197.441 travellers between July 1 and 28.

Overall, Croatia Airlines saw its passenger numbers improve on flights to and from France (+21.8%), the Netherlands (+19.3%), the United Kingdom (+4%), Italy (+2.1%), Bosnia and Herzegovina (+2%) and Switzerland (+0.5%). On the other hand, the carrier recorded weaker results on services to and from Austria (-7.8%), Germany (-4.8%), Macedonia (-2.2%) and Belgium (-0.8%). Passenger numbers on other markets remained unchanged. Ticket sales grew 2%, with the greatest increase recorded in North America (+11%), as well as the United Kingdom, Ireland, Germany, Greece, Denmark, Sweden and Switzerland. Poorer sales were registered in Australia, the Netherlands, Macedonia, Bosnia and Herzegovina, Montenegro and at home in Croatia (-9%).

H1 passenger numbers by market

The Croatian carrier has twelve aircraft in operation, five of which it owns (one A320 and 4 A319s) and the other seven which are on financial lease (one A320 and six Bombardier Dash 8s). Together, the fleet operated 17.455 block hours of flying time, up 2% on H1 2014. The airline has 951 employees on its payroll (319 of which are non-operative), which is up from 907 staff at the end of 2014.

62 comments:

  1. Croatia Airlines fail

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  2. It would be great if Air Serbia could also publish such detailed reports. In theory they should given that they are a state-owned company.

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    1. Air Serbia belongs to a non EU country so it doesn't need to have the same reporting standards.
      It can have as many losses as it wants and the state can cover them. And it is not obligated to report them to anyone.
      It is operating under Serbian laws, not European.

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  3. 319 non-operative?! That basically means one third of their employees are unable to work? But do they also get paid?

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    Replies
    1. It means 319 do not work in operations, probably paper pushers.

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  4. They will sell some property and at the end of the day they will be again "profitable" company.

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    1. If they have any property they don't really need it is perfectly OK to sell it and bridge the losses. It will buy them some precious time. Of course it cannot go on like that forever but it is a good trump in bad times.

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    2. But it does not show real business result

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    3. Well, potential investors for sure know how to read financial statements, so no danger for them. The only damage is the ammo such reports give to notoriuos duck-o-meters on the internet.

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    4. Sell all remaining jets in a leaseback
      deal and numbers will look good.

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  5. Well the on-board service has deteriorated over the years. I for one have taken my business to Austrian, after being loyal to OU for many years! Its time Kucko was replaced by someone who knows how to run an airline!

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  6. OMG. OU has published H1 2015 financial results, whereas we still (on August 1st, 2015) cannot get the full year 2014 JU results. What a difference a border makes.

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    1. APR jos nikome u Srbiji nije prikazao izvestaje za 2014. a ne samo ASL.

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    2. Can anyone comment on OU results without bringing up JU? Or are the results so bad that you have no other glimmer of hope?

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  7. Kao poreski obveznik Srbije moram da izrazim veliku zabrinutost za poreske obveznike Hrvatske.

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  8. Nadam se da ćemo jednom videti ovako detaljne rezultate iz Air Serbie, ali to se krije kao državna tajna.

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    1. Rezultati su izneti i prezentovani na vreme. Ranije niste verovali Jat-u iz manje ili više opravdanih razloga a sada ne verujete Etihadu i KPMG. Samo napred, ako vas to teši..

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    2. Ok, i gde su rezultati?

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    3. Rezultati za 2014:
      http://www.exyuaviation.com/2015/03/air-serbia-records-strong-2014-results.html
      Rezultati za I kvartal 2015:
      http://www.exyuaviation.com/2015/04/air-serbia-records-strong-quarterly.html


      Rezultati za I sest meseci 2015:
      http://www.exyuaviation.com/2015/06/air-serbia-expects-improved-results-in.html

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  9. One of the biggest factor of this loss is overhaul of 3 CFM-56 engines, every overhaul is priced at around 50 million kuna (~6.5 million €).

    As I said weeks before, there are some big news coming from OU... Let's just say that this deal is going to give OU aditional wings.

    Pozdrav svim ljudima dobre volje!
    9A-CRO

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    Replies
    1. CFM56-5B engines*

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    2. Is this OU deal related to MRO side of OU?

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  10. Drzava Hrvatska ponovo mora pokrivati gubitke svoje avio kompanije. Hrvatska nije dovoljno bogata da stalno subvencionira Croatia Airlines i mora staviti tocku na ovaj projekt.

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  11. ASL samo mora da se odupre A3 i TK sa linijama za Bliski istok i Ameriku i onda je ona vladar Ex Yu Aviacije.
    INN-NS

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    Replies
    1. And how exactly is it going to resist Aegean and Turkish Airlines (not to mention Alitalia on the west and Austrian on the North) to "rule" ex-Yu?

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  12. SkyGreece ending YYZ 1st of October, ending all services actually all togther... Didnt see this coming did you....

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    1. Skygreece završava s letovima Zagreb - Toronto 7.10. Letovi Atena - New York 1.9. Znam da si se ponadao i razveselio ali ipak nisi u pravu ;)

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    2. Thats what I just said.

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    3. Роштиљ AirwaysAugust 2, 2015 at 2:19 AM

      official explanation from SkyGreece fb page: The crisis in Greece and the drop in new bookings has forced us to end the season sooner.

      Crisis is over, it's the drop in new bookings.

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    4. They operate to JFK once per week, was planned to be twice per week and then cut it. It's never been operated by their aircraft always by the BH air A330 LZ-AWA. They have had so many cancelations and very unhappy customers especially the ones who were on the two flights that had tech problems like a decompresurisation and the oxygen system wasn't even working.

      Very dodgy company. The owners were part of the botched Hellenic Imperial, and still they haven't officially announced end of their flying at all!!

      Delete
  13. It doesn't prevent JU from publishing it's results if they wanted to... but they must be hiding something, oh wait, government subsidies, etc.
    All banks in Serbia have published their FY2014 results, as well as Q1 2015 results, so the APR is not preventing JU from doing so. This is what I call good business practice, not.

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    1. Podaci su objavljivani na redovnim koferencijama od strane ASL CEO, a vi ako imate problema sa poverenjem to je vasa stvar.

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  14. No, those are not financial reports. That's called PR and an embellished vision of the reality. If you want to see what a financial report is, you don't have to go far away. Have a look at Aegean: http://en.about.aegeanair.com/investor-relations/financial-results/

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    1. Admin was pretty clear a few weeks ago when he said in a response to a comment that Croatia Airlines is the only ex-Yu airline that reports detailed results

      Adria has not posted its financial report for 2014
      Air Serbia has not published its financial report for 2014
      Montenegro Airlines has not published its financial report for 2014

      Croatia Airlines wouldn't have published them either if it were not listed on the Zagreb Stock Exchange. Same with Belgrade Airport, it publishes its financial results regularly only because it is listed on the Belgrade stock exchange.

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    2. Ok.. PR... ASL nije na berzi kao Aegean pa nemora kvartalno da iznosi zvanican finansijski izvestaj. Nisam video da ga je OU objavila?

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    3. Objavljuje kvartalne izvestaje. Na sajtu su im.

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    4. Da video sam, hvala.

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    5. That is the difference between being a completely private company, listed in a stock exchange and operating in a European union country with being owned by the state and operating in a non EU Balkan state.

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  15. Oil price has halved compared to the same period of last year and they still managed to produce losses.

    Something is terribly wrong here.

    my2cents

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    1. Zato sto imaju samo 64% LF. To je gore i od Adrije i od Er Srbije, ne znam za Montenegro.

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    2. Zvaniičan LF Air Serbia u prvoj polovini 2015. godine je bio 64.5%, tu su skoro jednaki.

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    3. Hehe a kad jedan lokalni "analiticar" spomene ASL, prva rečenica mu je katastrofalni LF.. eto sad moze da ima drugi reper, OU.

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    4. Upravo sam to napisao na CAF-u "Katastrofalni rezultati OU i katastrofalan LF CTN-a".

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  16. OT: Sea Air; Sarajevo-Kuwait from August 18

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  17. Expect similar news regarding Adria Airways.

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  18. Croatia Airlines is a mistery for me. They had the chance to start from scratch zero with independence. They had a white piece of paper and they will end up like some state owned dinosaurs, e.g. Cyprus Airways. With a dozen unions, unprofessional management, corruption and nepotism, political interference, huge staff and overhead account.....unbelievable. The fuel stands at 52$, tourism is booming, Tunesia, Egypt, Greece doing not so well......what's wrong with his airline, with this country?????It can't be just the inferior status withing the Star Alliance group. I am afraid there is some "balkanic" mentality in doing business. Not the best are at top, but someones with right names and background. In Frankfurt office there are couple of relatives and even a wife working!!! Unless the airline is fully privatized and profesionally managed, I don't see any brighter days.

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  19. And not just the airline, the whole country is legging behind. Look where Croatia stood in the late eighties! In the meantime, most of comparable countries jumped ahead. Slovenia, Slovakia, Czech Republic, Portugal leaving Croatia among poorest members of the EU just a bit ahead of Bulgaria.....very sad development.

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    Replies
    1. Well as long as it has GDP per capita two times larger than Serbia the political establishment is happy.

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    2. It is very difficult to maintain profitability in the airline business around the whole world. I would guess that maybe 20 percent of the world airlines would be profitably this year, the thing is, these airlines then might find themselves unprofitable next year!

      OU's biggest problem is the winter months where in the summer they could operate comfortably with 3 times the number of aircraft.

      This is where OU if they are ever sold could be very lucrative for a potential buyer who could boost capacity for OU during the summer season whilst at the same time utilise part of OU's fleet elsewhere during the slower winter months.

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    3. Same goes for Air Serbia.

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  20. And it gets worse, Fitch downgrades Croatia to garbage

    https://www.index.hr/novac/clanak/fitch-snizio-izglede-rejtinga-hrvatskoj-zbog-drzavnih-tvrtki-tesko-do-smanjenja-deficita/833899.aspx

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  21. Actually, it's called junk ;)

    No, they didn't downgrade them, kept the same rating, but with a negative outlook. However, this is still better than Serbia's Fitch rating which is B+

    https://www.fitchratings.com/site/fitch-home/pressrelease?id=987435

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    1. Serbia is not a topic. Neither is in EU.

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    2. Actually, junk is lower than B+

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  22. Etihad doesn't have smartphone app not counting loyalty app and Air Serbia doesn't have online check in. Which West Balkan airline will be first to offer smartphone app?

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    1. Croatia Airlines have an app!

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  23. What surprise me is that when a company has such bad financial results the Management should get fired .Please explain
    1) Croatia Airlines fired qualified staff to keep unqualified Management with high salaris .
    2) Fuel prices have never been so low .
    3) Passengers numbers gone up .

    Question is what's wrong with this airline?
    Maybe answer should BAD MANAGEMENT

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    Replies
    1. This is Balkans, the primeminister (Milanovic) retarded childhood friend (Kucko) who cant drive a traktor gets the job to run the national airline and the rest of idiots wonder why there is red numbers.

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  24. "Block hours of flying time"... ?!? Admin, did you made this up or is it CA corporate English?

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  25. This article dispels several myths:

    - First myth: Unlike Air Serbia, Croatia isn't on the shoulders of taxpayers.

    Truth is, it really is and with even less prospects of any return.

    - Second myth: Croatia, unlike Air Serbia, is transparent in its results

    Truth is that OU can sell a couple of jets or engines and still claim to be in the black, or blame the engine maintenance (why not aircraft handling fees?) for sudden losses. At the moment when the fuel is cheaper than ever and still going downhill, we all understand that is all crap.

    - Third myth: Croatia is gonna be affected by Air Serbia stealing passengers for it

    Far from truth, at least in Zagreb, but if to judge by passenger numbers, JU is "stealing" passengers from other carriers (namely TK) on lines OU isn't even flying.

    Conclusion is (no offence) OU is the carrier with the most stupid network in Europe that would be justifiable only for a low-cost or a charter carrier (if not a strictly feeder airline? Oups!) and given that fact, i'd say they're still performing surprisingly well. More red is on the horizon. Compliments of Lufthansa.

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    1. Lets wait for the year to pass and discuss results then. I'd say they are running the fleet very efficiently during the summer and would be chewing this initial debt down to very close to zero especially with the help of cheaper fuel.

      OU's strategy as a star feeder is not that bad. This allows OU to keeps its costs per available seat mile low because of the proximity of star hubs to Croatia. Where the airline is failing badly is overall efficiency and flexibility especially in the winter months.

      These issues are very hard for an airline like OU to solve on its own. It really does need a strategic partner which can both assist OU when extra capacity is needed and at the same time utilse OU's fleet for its own purpose during the leaner months.

      Delete

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