Tuesday, November 1, 2016

Croatia Airlines' profit and revenues fall


Croatia Airlines has seen its net profit and revenues decline over the last three quarters, while its passenger numbers rose. The carrier handled 1.516.197 travellers on board its aircraft during the first nine months of the year, an increase of 3.4% compared to the same period in 2015. Of those, 384.436 passengers were carried on domestic flights, up 4.2%, while 1.075.704 travellers flew on international services, an improvement of 3.9%. The remaining 56.057 passengers were carried on charter flights, down 8% year-on-year. However, charters accounted for just 4% of overall traffic. The airline operated 20.927 flights during the first three quarters, an increase of 2.9% compared to the same period last year. The average cabin load factor stood at 70.3%, up 0.1% on 2015. Loads improved on international flights by 0.1% for an average of 69.9%, while on domestic services they were up 0.9% to 68.0%.

Croatia Airlines handled its millionth traveller of the year on July 15, twelve days ahead of 2015. "This year's passenger record comes as a result of positive trends in our business, as well as the growth of our destination network. In June we launched flights from Zagreb to Lisbon, Milan, Prague and St. Petersburg, which we did not serve beforehand", the airline's CEO, Krešimir Kučko, said recently. He added, "By the end of the year, we expect to see our passenger numbers grow 6%". During the January - September period, Croatia Airlines improved its ticket sales, with bookings at similar levels to 2015 outside of Croatia and up 5% in its home market. At the same time, foreign carriers saw sales decline 5%.

On the financial front, the Croatian carrier’s consolidated net profit fell by 33% to 609.600 euros, down on last year’s 910.260 euros, and well below 2014s 5.6 million euro profit. Croatia Airlines' revenue declined 0.6% to 157.2 million euros. The airline said revenue growth slowed as a result of reduced fares in the face of strong seasonal competition on the Croatian market. Furthermore, last year, the airline sold some of its property - a jet engine - which helped boost revenues in 2015. Proceeds from cargo handling fell 7% this year. The airline reduced its expenditure by 1% to that of last year. It spent most on flight operations, passenger services, maintenance and promotions and sales. In a statement, Croatia Airlines said, "Currently, the greatest internal risk which impacts on the company is maintaining liquidity. Due to significant seasonality, it is regular practice to take out short-term loans in order to cover periods with lower revenues". The carrier has taken out three short-term loans this year.

73 comments:

  1. What I don't get is that their profit margins were higher in 2014 during restructuring than it is immediately post restructuring. Doesn't that mean that the restructuring failed?

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    1. Based on numbers it seems both theirs and Adria's restructuring failed, Adria's much more since they actually recorded a loss last year.

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  2. Now we know why Heathrow slots are being sold.

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  3. LF is still a bit low. Croatia Airlines should perhaps consider some more charter flights.

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    Replies
    1. That's an issue for all ex-Yu airlines.

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    2. And that will always be a problem in this region because of strong seasonal passenger flow.

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  4. ..."910.260 million euros"...

    (million) ??

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  5. Good that numbers are up. Losses are still quite high though.

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  6. Could OU manage 2 million passengers by the end of the year?

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    1. Possible but I think they will be just around 1.9 million. Next year for sure.

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  7. Last year they sold engines, this year they will sell slots. Profit insured.

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  8. We are now in November and there is still no news about their regional jet acquisition. I think we will be seeing Fokkers next summer too.

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    1. Someone in the comments here was claiming how they have already completed talks with Bombardier and that a deal has been done to order new planes.

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    2. Yeah well there are many dreamers on here.

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  9. They should take a greater advantage of the coastal cities.

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    1. Difficult... What do u do with the extra aircraft in WITT? Not so easy to find the right balance with all the competition they hve to the coast nowadays

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    2. @ JU520 BEGLAX what was the service like on your OU flight yesterday?

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    3. Service was fine. I dont expect anymore on this short haul flight. But OU was on time. Capt infd well. F/A friendly and prof
      Drinks incl wine and beer for free
      No Sandwich but they surf kinna crackers. Same act as LH did FRAZRH
      Inflt magazine is fine, took it home as it had an article on Zagreb Gastronomy. Seat pitch was on 15A acceptable. PA clears. There was German audio PA which was excellent understandable
      All in all not worse than LH flight FRAZRH. I ve flown now around 16 single legs on OU and all of them were ok for me.

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  10. Would be good if they published ASK and RPK. Would give us a clearer picture of the state of their business.

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  11. They will go bankrupt for sure if they don't come up with some actual strategy soon. Selling slots at LHR (!!!) and engines just to achieve profitability is pathetic.

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  12. Passenger numbers are good. Financial figures very poor. Change the management ASAP.

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  13. Does anyone know what are Croatia Airlines best performing routes in terms of LF?

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    1. My guess is routes to Germany.

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    2. I think routes to London and Paris have good LF.

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  14. Summer was below expectations which is crazy since the tourism industry had record numbers. What happened?

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  15. So in 1Q-3! we have
    Air Serbia - 2,08 million
    Croatia Airlines 1.5 million
    Adria ?

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    1. The difference between JU and OU has been increasing each year.

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    2. The only difference is that OU's money stays in Croatia while JU's goes to AUH

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    3. JU employs many more people than does OU - so for sure alot more money stays in the country because more people pay taxes and the company buys more local produce/products.

      Also, JU flies many more people through BEG airport than does OU through ZAG, so all of that money that BEG airport earns stays in the country, unlike in ZAG as the airport is foreign owned.

      In any event, OU barely earns anything, employees far fewer people than JU and flies many less people through its main hub unlike JU .... My guess is that JU contribution is far greater to Serbia than is OU's contribution to Croatia ....

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    4. Anonymous November 1, 2016 at 11:02 AM

      "OU's money". Ha ha ha! Yeah, the whole 600,000 euro worth if it. OU is a minor player when compared to JU. Both operation and revenue wise. And, btw, 51% of JU revenue stays in Serbia, not to mention indirect benefits to the economy. A whole different ballgame, as opposed to your ever-shrinking OU.

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    5. +1, anonymous 2:05

      And that's why Serbian GDP per capita is... and Croatian GDP per capita is...

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    6. So how many people does Air Serbia employ? And how many OU? It would be good for Croatia to keep its national carrier because of tourism and domestic routes, but doubt it will happen if they don't change their management ASAP! It's simply unbelievable for them not to have strategy in a country with so many tourists and with Zagreb airport management giving them a second chance before new terminal opens!

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  16. With more and more people choosing to fly with low-cost airlines, I wonder if there are any chances of them expending a bit more in the next few years.

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    1. You probably meant expanding. And I think yes. How about ZAG-SPU, or BEG-TTG route?

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  17. Ok figures. Nothing special.

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  18. Such great potential, but underutilized. New management immediately!

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  19. You could not buy tickets through croatiaairlines.com for almost all of last week

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  20. Well I am curious what government is going to do with OU Management as this is the proof that the current Ceo Kucko
    has totally no idea how to run an airline.
    Curious also to hear what his supporters got to say to defend him

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  21. "an increase of 3.4% compared to the same period in 2015. Of those, 384.436 passengers were carried on domestic flights, up 4.2%, while 1.075.704 travellers flew on international services, an improvement of 3.9%."

    If domestic pax grew by 4.2%, and international ones by 3.9%, how can total growth be 3.4%? :)

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    1. Because charter traffic fell. Read the rest of the paragraph.

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  22. In spite of constant expensive prices of tickets that OU offers, they have bad financial data.....hmmm, defalcation maybe from OU management? Just a thought.

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  23. OT BEG in October handled 438.980 PAX, that's +9% yoy, Ops +5% yoy. Nice surprise ! Source Aviatica

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    1. It's on the airport website:
      http://www.beg.aero/lat/vest/14151/novi-rekordi-na-beogradskom-aerodromu

      Looks like a good finish of the year for BEG.

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    2. Nice! Looks like 5 million is reachable this year.

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    3. What is this fascination with BEG reaching 5 mil. It is already at 98% of that number. Everyone is gonna go mad for a few thousand pax more. I'll celebrate when they reach 5.5 mil since that is much more bigger number

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  24. Mr Kucko is a big optimist for last quarter. Having only 3,4 % more pax during first three quarters and main summer season and now you'll make it up in last quarter. Yea right. Everything he says is spinplay and shows his incompetence. Not to talk about his arrogance gained after becoming CEO. Used to sell tickets and now due to the friendship with prime minister is managing company. No wonder that they are selling everything they got and supervisory board managed by zlatko matesa, a big aviation expert with years of working in aviation, is ok with everything. I seroiusly hope they find a buyer or end this "playing" of aviation

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    1. Agree with every word

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    2. There are other carriers during summer, you know, not just OU! Look at the list of carriers flying to/from SPU or DBV! Not justifying Kucko, he is an idiot!

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  25. The new/old government (same thing) has shown very little interest in sorting Croatia Airlines out. I don't think it will be their priority in the next few years.

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    1. And it shouldn't be their priority, there are other things to solve in this country before OU!

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  26. Is Trade Air's Fokker still flying for OU?

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  27. It is good to see that the LF went up despite the higher capacity F100 flying for several months.

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  28. Do we know if all of the new seasonal routes from Zagreb will be kept for next summer?

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    1. All we know is that LED had a LF of 60% for the rest I don't know. I'm assuming most will resume next year.

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    2. They are all on sale in the GDS and have been for a long time.

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  29. There is ni reason why OU should not be making at least some returns in the age of low fuel prices (usually one third of a airline's cost). If I temember well their employee count is arround 1300 which doesn't seem to high, their product is not over the board, Tehnika is bringing good revenue for them, they have PSO for some domestic lines etc.

    Anybody have any insights why is their cost structure so bad? Leasing terms so bad?

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  30. Ima toliko Destinacija koje bi mogle doneti profit CTN ne znam sto se one ignorisu i samo se linije po Evropi otvaraju a ignorisu se Trzista Afrike i Bliskog istoka pa i u samoj Evropi.
    INN-NS

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    1. Kao da ih netko namjerno usporava (Lufthansa?), jednostavno treba smijeniti menadžment što prije iako je možda već i sad prekasno jer nitko nije zainteresiran za kupnju OU!

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  31. Despite they are employing free labour, they are not able to find a way to sort out. They have seasonal pilots flying for them for free. OU is involved in PAY TO FLY scheme and making money from its own staff.
    http://www.vecernji.hr/hrvatska/mladi-piloti-placaju-croatia-airlinesu-30000-eura-da-nauce-voziti-avion-987389
    Without any partners and clear strategies they will go bankrupt for sure in a few years...

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  32. OT British will inaugurate twice weekly flights from Heathrow to Pula

    TUIfly Belgium will inaugurate twice weekly flights from Charleroi to Sarajevo and from Brussels to Tivat and will increase its frequencies from Antwerp to Split

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    1. Can you give us source regarding TUIfly?

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    2. Sarajevo is bookable on their website:)

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    3. their fb
      https://www.facebook.com/TUIflyBelgium/

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    4. British to PUY? Great news!

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  33. 6 different airlines (Jet2, BA, Norwegian, Ryanair, Thomson and easyJet) will fly from different LON airports and OU management says there is no demand on London-Pula flights. Hmmm

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    1. Great news, another excellent year ahead of Croatia! OU is lying, once they sell LHR slots, there is no way back! Btw, no one mentions selling them now, is it a done deal or have they changed their mind?

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    2. I think its in process.

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  34. Sorry edit .....will fly to Pula from different airports....

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