Croatia Airlines has backed out of plans to sell its nine weekly slot pairs at London's Heathrow Airport after further analysing the matter with the government . "The slot sale has been definitely halted and the plan has been cancelled. However, the company is still in need of additional funds for the maintenance of its aircraft engines. We will seek a long-term loan instead", a source from the Ministry for Sea, Transport and Infrastructure told local media. The Croatian government initially put the slot sale plans on hold and requested for the airline's management to draft a detailed report of the company's finances and future plans by December 15, 2016. After scrutinising the results, a final decision was made concerning the sale of the airline's departure and arrival times at one of the world's most congested airports. Last week, EX-YU Aviation News inquired for an official response from the carrier, however, the company is yet to comment.
The Croatian carrier planned to finance the maintenance of seven aircraft engines this year with proceeds from the sale. As a result, services to Heathrow were to be discontinued by the second half of 2017. The engine maintenance is valued at thirty million dollars. "The situation is very serious", the source from the ministry said, adding that the engines must be serviced in order for aircraft to continue flying. Recently, the Ministry noted, "It is important to avoid solutions that would provide only short-term benefits but could pose significant problems for Croatia Airlines in the near future". Croatia Airlines' CEO, Krešimir Kučko, argued that the carrier had generated a loss of 37.5 million euros on its Zagreb - Heathrow service over the past thirteen years despite a high average cabin occupancy rate, noting that the airline is unable to compete against British Airways on the route.
For the upcoming summer season, Croatia Airlines plans to maintain seven weekly flights from Zagreb to London Heathrow, one weekly from Split and one weekly from Rijeka. There has been strong public criticism of the carrier's plans to sell its Heathrow slots, which are considered valuable. However, last month the airline said, "It is incorrect to assume that the slots at Heathrow are extremely valuable and of strategic importance. In current market conditions, the slot sale would end the negative effects the route is generating on Croatia Airlines' entire business. Therefore, it is wrong to label the slot sale as a damaging decision or a national tragedy". The company owns five morning and four afternoon slots at Heathrow.
Carriers from across the United Kingdom have identified strong demand for the Croatian market in 2017 and have responded with a sharp rise in capacity. Monarch Airlines will launch flights out of London Gatwick to Zagreb and from Manchester to both Zagreb and Dubrovnik, while Ryanair has announced a twice weekly service from Glasgow to Zadar next summer. Jet2.com and easyJet plan new services from across the UK to Dubrovnik and Pula, while Thomas Cook Airlines is offering new routes from May between Manchester and Split. Furthermore, British Airways will commence operations from London to Pula. The number of visitors from the United Kingdom to Croatia grew 26% in 2016 to three million over-night stays. London is Croatia Airlines' only destination in the UK. It previously served Gatwick as well.