Wednesday, March 1, 2017

Croatia Airlines posts mixed 2016 results


Croatia Airlines has posted mixed results for the previous year, with its net profit declining by 42%, while passenger numbers improved to reach record levels. The carrier's consolidated net profit totalled one million euros in 2016, down from 1.9 million euros the year before. Despite the weaker result, the figure represents the company's fourth consecutive year in the black. The carrier blamed high seasonality and increased costs during the winter months for the decline in profit. "The key factor to achieving profitability throughout the year is to minimise expenses during the winter by optimising the flight network", the company said. The airline's revenues edged up slightly to 217.9 million euros.

The carrier handled 1.94 million passengers during the year, up 5% on 2015. Over the course of 2016, Croatia Airlines operated 26.848 flights, an increase of 3.8%. The carrier recorded a decline in cargo operations, with 2.591 tonnes of freight and mail uplifted in 2016, representing an annual decrease of 5.2%. Network capacity, measured in available seat kilometres (ASKs), grew 5% year-on-year, from 1.97 to 2.07 billion. The average passenger load factor, a measure of seat capacity utilisation, increased to 70.0% in 2016, compared to 69.7% the year before, making it its best result on record. Croatia Airlines' market share in its home country averaged 29% during the year, although it grew up to 60% over the winter months (December and January). Its lowest market share was recorded in July when it averaged 19%.

Croatia Airlines has again expressed its concerns over Zagreb Airport's new passenger terminal, which is set to open at the end of the month. In its preliminary 2016 financial report, the carrier said, "The current state of the new terminal is such that it causes deep concern, primarily in the context of maintaining the quality of our product, i.e. the existing flight schedule and its associated operative costs". Despite its alarm, the Croatian carrier plans to launch four new routes out of Zagreb this summer. They include the previously reported Bucharest and Helsinki, while the operator of Stockholm Arlanda Airport, Swedavia, has also confirmed to EX-YU Aviation News that the airline will introduce services to the city this summer. Tickets are expected to go on sale this week.

110 comments:

  1. Good to see the load factor up. Not sure why profits declined. What was different compared to 2015?

    ReplyDelete
    Replies
    1. This year there were no sales of assets. The LHR slots that have been sold do not fall into the 2016 results.

      Delete
    2. A load factor growth of a measly 0.3% is really not even worth mentioning, in the sea of utterly abysmal figures. This company is about to go on life support.

      Delete
    3. Anonymous March 1, 2017 at 9:11 AM

      Of course they do. Financial year ended yesterday. The old OU practice of staying afloat by selling more and more assets each year. Such dilettantism.

      Delete
    4. Kucko said that it is not included. It will be accounted into the 2017 results.

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    5. Anon 9:24,

      Financial results are reported for the year ending 31 Dec 2016. Earnings from LHR slots will not be there.

      This of course does not mean that 2017 will be highly profitable due to LHR slots sale. That money will be spent on major technical things that are due this year.

      Delete
    6. Not quite, financial year ends on 28.02.

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    7. ^ Where and in which country? Financial year varies from country to country. The result being presented by Croatia Airlines is from January 1, 2016 to December 31, 2016. If you don't believe me you can access the report on their website - the dates are marked clearly.

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    8. For most airlines the fiscal year ends in February, I guess for OU that's December.

      Delete
    9. Alen Šćuric PurgerMarch 1, 2017 at 1:22 PM

      Not for most. It depends of company. Some have fiscal year till end of December, some till end of February, and some even till end of March.

      Delete
    10. Guys, fiscal year can end whenever. The REPORTING year - as demanded by authorities worldwide - is 1 January to 31 December. This is how financial statements are prepared and submitted to AUTHORITIES. How companies do it internally is their own business.

      Delete
  2. WTF?

    "The current state of the new terminal is such that it causes deep concern, primarily in the context of maintaining the quality of our product, i.e. the existing flight schedule and its associated operative costs".

    Why are they so negative about the new terminal? It's not the first time that they have openly criticized it. Like I said last time is it in the interest of both parties that they resolve this privately.

    ReplyDelete
    Replies
    1. I think this statement is old.

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    2. It isn't it was just released in the 2016 results which were published yesterday evening. Its on their website -.- and signed by K. Kucko.

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    3. OU is probably not happy that the French keep on increasing their charges.
      I am sure that recent hikes did not only affect foreign airlines but Croatia Airlines as well.

      I have to agree with OU on this one. I think the French should have postponed these new charges by a year until OU could recover from years of crisis.

      If I were OU, I would make sure to shift my attention to the coast where airports tend to be cheaper.

      Could they base a single Q400 in SPU and DBV and operate year-round flights from there?

      Something like SPU-FCO-DBV-FCO-DBV?

      Delete
    4. I think one of the reasons they are also unhappy is that the French have sprung to action in attracting new airlines, and many of those airlines are flying on routes that OU operates on.

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    5. It's old. I read it some time ago.

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    6. So where did you read it, then? Back up your argument. Otherwise we can assume that you've never seen this comment before.

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    7. I will try again. I accidentally deleted my comments.

      The statement is not old. It was published yesterday in the financial report dated 28 February. The statement is on the last page of the report signed by the company CEO. Here is the report.

      http://www.croatiaairlines.com/ResourceManager/FileDownload.aspx?rId=3155&rType=2

      Delete
    8. Thanks. Which means Anonymous March 1, 2017 at 9:25 AM is a troll. Case closed.

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    9. That's BS cause MZLZ is going out of it's way not to cannibalize OU.

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    10. Well DY and OU will compete on the ARN-ZAG so it's not like MZLZ is really protecting OU... they really can't and I am sure they don't want to.

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    11. DY and OU are over lapping on a high demand route right now. Scandinavian visitors have double digit growth in Croatia at the moment. BTW this is just the tip of the iceberg what DY have planned for ZAG.

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    12. Yeah but where are the Scandinavians heading to? Slavnojina or the coast? ;)

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    13. Yes mostly to the coast, but that's the beauty of how diverse Croatia's tourism is with it's multiple cities, and airports.

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    14. No one said otherwise, I just implied that their flights to Zagreb don't really serve the coast. They cover this market with their flights to the Adriatic airports.

      ZAG serves primarily the Croatian diaspora followed by tourists and some business passengers here and there.

      Delete
    15. Anonymus 9:33, I am not a troll, I read it hear, or in a croatian newspaper. You don't need to be so harsh. This is not new to me, it could be that he repeated it, but definitely not the first time he has made such a statement. Even Purger commented it and said that his statement is completely unprofessional. You are way to aggressive, no need for that.

      Delete
    16. Indeed, and I'm sure they will do well because it's undeserved, actually wasn't even served directly. Zagreb's just as crowded in the summer as the coast, it's not like the old hay day's, it's bustling with life, tourists every where day, and night. Consider Zagreb like Split, many people arrive stick around, and many people use it as a transit point.

      Delete
    17. Alen Šćuric PurgerMarch 1, 2017 at 1:27 PM

      Anonymous 20:25 is right. Kučko repeat this criticism to new terminal as mantra, every few weeks. I think he prepare that as excuses for 2017 results which, despite LHR slots sale would be very bad as they don't have enough funds for engine maintenance.

      Delete
    18. Alen, how can anyone anticipate a certain amount of maintenance cost without opening the covers? It could cost both 5M EUR or 500k EUR, to be known only once the covers are open, right?

      Delete
    19. Your speculating regarding end of year results. Only accounting, and the CEO have access to their actual financial position, unless you have a source there who are leaking sensitive information which would be illegal, and punishable by law. I hear a lot of negative rumors, but I certainly wouldn't post it here giving the bashers material to feed on. Regarding maintenance would you not think only a certified engineer would make that type of assessment, and forward it to the proper channels in OU unless you have a source there also which would lead to immediate termination of that persons position? Regarding the new airport it's expected to have teething issues until everything smooth ens out.

      I heard a rumor from a source who also heard it from a source who said a lady gave birth to a baby with a wooden leg not so long ago.

      Delete
    20. @ 2:04.

      It's standard maintenance or maybe a better word for it is overhaul therefore standard cost would apply here. Unlike a car for example, parts which fail are replaced all the time so unless the engine was completely abused than the cost of maintenance should be fairly predictable.

      Delete
    21. Alen Šćuric PurgerMarch 1, 2017 at 6:04 PM

      Estimation of costs was done by management and there is no enough money for it. In process it can be just more expensive than estimation. Not my words, but from management on one of important CTN body.

      Delete
  3. whats the problem with the new terminal!?

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    Replies
    1. Turn around time for those flights with Busgates. They will use somw of the old ac parking stands

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    2. It would be a nice tour of the airport especially the new military stand, plus can't OU just have pax ready and on the bus sooner? Its not like Zagreb airport wont have a bus shortage issue.

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    3. Alen Šćuric PurgerMarch 1, 2017 at 1:43 PM

      Today every single plane had bus ride of some 1-2 minutes. But every one.

      There will be few bus rides from old stand with some 3-4 minutes ride. Again, just few of them, minority, especially on OU who, for sure, will have priority in air bridges and new stands. Plus, new terminal has much bigger capacity (not like present mess in passport control and gate shortage), high-tech luggage facility, much better and quicker transits and communications... And how on earth that can make worst condition than old and overcrowd terminal?

      Delete
  4. Dismal across the board, to say the least. At least they have reached 70% load factor for the first time in their history. lol

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  5. Alen Šćuric PurgerMarch 1, 2017 at 9:08 AM

    Croatia negotiate with Air Nostrum to lease 2 CRJ-1000, and big Kučko wish is to lease CRJ-1000.

    There were some talks with Trade Air about Fokker 100, but they don't have contact with company any more for several weeks. In same time Trade Air rent one of aircraft during summer time. Croatia was also interested in Trade Air A320, but that plane is also rented for most of season out of Croatia. So it is not option any more.

    ReplyDelete
    Replies
    1. So will they get the CRJ1000s?

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    2. Maybe it's time for Trade Air to consider scheduled flying out of Zagreb.

      By the way, is the loss of contact with OU the reason why Trade Air services their aircraft in Belgrade and not Zagreb?

      Delete
    3. Would you please keep the he said she said coffee shop gossip to a minimum. Please stick to the facts cause your coming across as an attention seeker.

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    4. @ Nemjee, they probably do it in BEG because it's cheaper.

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    5. Last anon, thanks. I can only imagine how much more expensive it must be in ZAG if it's cheaper for them to ferry the aircraft to Belgrade.

      Delete
    6. Alen Šćuric PurgerMarch 1, 2017 at 10:46 AM

      No, it is not Nemjee, Trade Air is in Belgrade for A-check because of better price and free slots in Jat Tehnika.

      Trade Air has scheduled flying our of Zagreb. They have 6 flights per week to Osijek.

      Anonymous 9:44
      It is not coffee shop gossip. Information which I put here are from top source. The highest possible. Did I ever publish something that did not happened?

      Delete
    7. Thank you. That said, when I was referring to scheduled routes out of ZAG I was thinking of non-PSO routes such as ZAG-STR/TXL/PAR/LON

      I am sure they could slowly enter this market with their F100.

      Delete
    8. So I figure your top source is from Trade Air. They are one of many options Croatia Airlines has to lease additional metal. Every airline can over haul where ever they choose. Since this is regarding OU wouldn't you figure what really matters is what they have to say, or even better what they will eventually do. Now that's the actual source that matters regarding OO operations, and I'm sure he's not going to share confident information with some who's posting on a public forum.

      Delete
    9. Alen Šćuric PurgerMarch 1, 2017 at 1:46 PM

      You figure wrong. As you can see 6 days ago, Trade air for sure was not my source for new routes, profitability etc.

      Well for sure he will not, but some others will. For different reasons.

      Delete
    10. Regarding OU's new routes we fell off our dinosaur a very very long time ago when we knew the routes, but we decided to let OU have the honors of publically announcing them.

      We could of easily taken OU's thunder by leaking the routes, but then we are not attention seekers.

      Some times loyalty is worth a million words.

      Delete
    11. Loyalty to whom? You are joking, right?

      Delete
  6. Bravo OU. At least a profit and increased L/F!!

    OT: LH will change flts to ZAG frm CR9 to A319
    Both flights morning and afternoon x ZAG

    ReplyDelete
  7. When will they finally announce this expansion? So we have Bucharest, Helsinki and Stockholm now officially confirmed. So it means the posters here were right and the fourth one is Oslo.

    ReplyDelete
    Replies
    1. They will probably announce them today or tomorrow. Maybe they are still negotiating the lease of additional aircraft so are holding off publishing them at the moment.

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    2. They will announce what they will announce when they are good, and ready.

      Delete
  8. OT: LX operating most part of the summer at least one of their 2 daily weekend flts ZRH BEG with 321

    ReplyDelete
    Replies
    1. Would be nice if JU could bring back their third daily to Zurich. Flights are full to the last seat most of the year.

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    2. Nemjee, send us sometimes the 330 over like in the good old JAT times

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    3. Haha well, with current oil prices it could work. Would be nice if they did it around Easter holidays.

      What would be even nicer is if ZRH could actually add a few more gates. :)

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    4. I think TK probably is a higher bet for 332/333 ops to BEG than ZRH and LX, especially now that JU is out.

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    5. Sporauzum o vazdušnom saobraćaju između Srbije i Turske ne dozvoljava ništa veće od B738 ili A321.

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    6. Имајући у виду да Ер Србија не лети више за IST не видим зашто ТК не би имао права да шаље ,ваздуплохов' који жели.

      Delete
    7. By the way, BEG-ZRH has been ASL's best performing route since long.

      Delete
  9. Financial results are so and so but the passenger numbers are quite good. Could they hit 2 million this year finally?

    ReplyDelete
    Replies
    1. With new routes and the upgrade of last year's seasonal to yer long flights - quite possibly.

      Delete
  10. OT

    I have a question for someone who is familiar with Wizz Air. In May they are adding BEG flights with the second A320. How many extra passengers can they handle? Last May BEG handled 416.322 passengers, do you think a 20% growth is realistic? If yes then BEG could pass 500.000 in May.

    We are going to have JFK, AtlasJet, Transavia, additional flight to GVA and Wizz Air.

    Thank you.

    ReplyDelete
    Replies
    1. Well February growth was 10% so I am sure May will be between 15% and 20%.

      Delete
    2. It wasn't 10%
      http://www.exyuaviation.com/2017/03/belgrade-airport-records-busiest.html

      Delete
    3. An A320 with a LF of ~85% with three full rotations (6 segments) per day will add around 27k pax in a full month.

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    4. Which means around 150k until the end of December.

      Delete
    5. Ok, so we need an additional 50K which is not impossible.

      Delete
  11. Passenger results are good. I'm quite interested to see whether all this new competition in Zagreb will help them add more passengers or take away passengers from them. I guess we will only see this when stats for the third quarter are published.

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  12. Does this mean growth at ZAG was thanks to foreign carriers?

    ReplyDelete
    Replies
    1. Yes. Because OU had 5% growth across its entire network which includes many airports in Croatia.

      Delete
  13. There is something else I noticed:

    Cargo in 2015
    ZAG: 9.225
    LJU: 18.570

    Cargo in 2016:
    ZAG: 10.074
    LJU: 19.580

    How much cargo movement could LJU be 'stealing' from ZAG?

    ReplyDelete
    Replies
    1. What do you mean by stealing cargo movement?

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    2. LJU has strong Lek Sandoz (Novartis) exports. Only one lane in the USA is more than 1000 tons a year

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    3. And Novartis will build the biggest logistic centre in Europe as part of the Ljubljana Aeropolis.

      Delete
  14. Sell silly LHR slots, expand eastwards, connect the Croatian coast just like Greece. Collaborate with the big boys et voilà!

    ReplyDelete
  15. At the end of the day. They recorded a profit and growth in passengers, which is a good thing.

    ReplyDelete
  16. JU have promotion on JFK flights.
    one-way ticket from Vienna, Sofija, Skopje, Bucharest, Podgorica and Ljubljana are sold from 179 eur.

    ReplyDelete
    Replies
    1. I am impressed by the strength of JU, even LH does not dump the prices to those levels, despite the bitter competition. But JU is so powerful that it can sell transatlantic tickets for these prices and still remains healthy. Congratulations!

      Delete
    2. Your cynicism-covered hate does not help the discussion too much. And it case the hate blocked your eyesight too (it often happens), these are one-way fares and you may find yourself surprised with how much the return flights are.

      Delete
    3. So....Why don't they sell at this price? ?!!! Air Serbia is a state owned airline so the cover of the loss is going to be paid you all know from who....don't you?!!! May the Serbian taxpayers have their health and pay their taxes on time.

      Delete
    4. Travelers to and from from Vienna, Sofia, Skopje, Bucharest, Podgorica, Ljubljana, Athens, Larnaca and Thessaloniki would like to thank ASL and the taxpayers of Serbia for subsidizing their trips.
      God bless all of you!

      Delete
    5. Air Serbia is a profitable airline so the taxpayers are not paying for anything.

      Delete
    6. Anon 4:07
      LOL dude!

      Delete
    7. What? My reply is well in line with his rhetoric.

      Delete
    8. Anon 3:59,

      As a Serbian taxpayer I say no need for anyone to thank me for JU fares or anything less my government spends the taxes it collects. My only regret is they would not pay for your psychiatric treatment which is so much needed. That would be a taxpayer buck damn well spent.

      Delete
  17. net profit of €1mil.
    slots sold for ~€18mil
    ---------
    real results -€17mil loss


    botomline: sexy accounting!

    is it possible that nobody from the region cannot create value?!?

    ReplyDelete
    Replies
    1. Exactly how many times people have to repeat to you and the likes of you, that the slot sale will appear in the 2017 financial statements, not 2016?

      Delete
    2. ouch, my bad. thanks for correction

      Delete
    3. Then it means the sale has not yet taken place since financial year only finished yesterday.

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    4. The result being presented by Croatia Airlines is from January 1, 2016 to December 31, 2016.

      Delete
  18. The good news here is that they didn't seem have lost much or any money on the 4 new routes launched last year. This should encourage the airline to be a bit more bold in the future and we are seeing that now with the announcements of the new routes this year.

    In terms of the problem OU has with the new terminal I can see their point regarding limited parking positions but they should be able to fit 6-8 remote Q400 stands (just a guesstimate) on the new complex if the lines are repainted so until they at least expand the ramp a bit, than the impact here should be limited especially if they do eventually re-open the old terminal for low cost operations.

    ReplyDelete
    Replies
    1. I am 100% sure both PRG and MXP were profitable for them. I am sure they brought it the much needed capital for the airport to survive in winter.

      Delete
  19. So Croatia made a €1.000.000 profit and €200.000 of that will be taken away by the government. Such a shame.

    ReplyDelete
    Replies
    1. why exactly is that a shame?

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    2. Because these 200.000 could have been used to lease some more aircraft and launch new routes rather than to go to the budget and to be taken by corrupt politicians.

      Delete
    3. You suggest that OU should be exempted from taxes in spite of actually being owned by that same state? Maybe it can actually give something back to that same state + what you are saying is valid for absolutely any business, and having zero taxes is not really possible, is it :)

      Delete
    4. Well I am just saying that OU should not pay the profit tax, they already pay for the other ones. :)

      Also, I am sure the state gave special treatment to Todoric and others. So why not OU?

      Delete
    5. Everybody pays profit tax; I am not saying that what is happening with taxes afterwards is perfect, but you cannot relieve company of taxes. Where were you when the state was funding OU and losing money? It's bit hypocritical :)

      Delete
  20. OT

    INI seems to be on a roll these days. Not only has W6 announced additional flights to DTM and BSL but it seems that EW might launch flights soon.
    According to the link below, the airline is considering several destinations not only in Germany but in western Europe. Due to space restriction the airline will most likely start with a single flight.

    https://flyfromnis.blogspot.rs/2017/03/aviatica-rs-saznaje-eurowings-mozda-pokrene-letove-iz-nisa.html

    ReplyDelete
    Replies
    1. INI's fantastic growth is the biggest success story of ex-yu aviation for 2016.
      Looks like 2017 would be a repeat.

      Delete
    2. I am still in shock how INI did it... I mean not only did they get W6 but they also got FR. On top of that they added Germania and Swiss. How?

      I am wondering, what should TZL or SKP do to 'diversify' their offer the same way INI did?

      If they also get EW then they are going to be a serious threat to neighboring airports.

      Delete
    3. Air Belgrade should have recognized INI's potential years ago.

      Delete
    4. Air Serbia's cost structure and lack of planes can't make INI work.

      Best case scenario we can expect BEG-INI-BEG in summer.

      Delete
    5. What do u guys think...

      how much would it cost for maintaining two daily flights BEG-INI?

      This could be something for a PSO...

      Delete
    6. I think 5 weekly BEG-INI could work in summer:

      BEG-INI 13.50-14.30
      INI-BEG 15.00-15.40

      I highly doubt there would be any O&D traffic but it could be interesting for Serbs who live in Germany, Austria, Switzerland, Sweden...

      By the way, I think INI wouldn't be JU's shortest flight, SJJ would still be shorter.

      Delete
    7. How they did it? 3 euro is the answer

      INI will get all the airlines that SKP wanted

      Delete
    8. Let's see what happens with PRN now that thy have their scheme. However I think it's a bit too late now.

      Delete

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