The union representing Croatia Airlines' pilots, cabin crew and mechanics, ORCA, has begun preparations to launch industrial action after mediation talks with the company's management failed on Friday over an impasse concerning a new collective bargaining agreement. The previous agreement expired on December 31, 2016 with negotiations taking place since. "All conditions to begin talks over the terms of the new collective agreement were met at the beginning of March and, over the past two months, we have been engaged in a number of meetings with the management which have failed to deliver any results that would improve workers' rights. As a result, we began mediation talks which have, unfortunately, been unsuccessful", ORCA said. A final decision on whether Croatia Airlines' employees will go on strike will be made in late May or early June, the union added.

Croatia Airlines' CEO, Krešimir Kučko, said that the management proposed to extend the terms of the previous collective agreement until the end of 2017 and for negotiations over a new deal to resume after the busy summer season, during which the airline generates the bulk of its profit and revenue. Mr Kučko noted that ORCA came to the negotiating table with 150 demands, which would set the company back 6.7 million euros annually. "All of the demands are of a financial nature. If we, for example, reduce their work hours, it would generate losses for the company because we would have to hire more people. I think their objective was for the mediation talks to fail as soon as possible so they could pressure us into doing something", Croatia Airlines' CEO said.

Croatia Airlines’ staff were involved in their longest-running industrial dispute four years ago. In May 2013, unions staged an eight-day walkout, paralysing the airline and its operations. Staff first held a warning strike, which lasted twelve hours, after which they called for an immediate work stoppage. In 2015, pilots, cabin crew and mechanics also threatened with industrial action but did not follow through with their plans. A potential strike now would come at a delicate time for the airline, as it faces increased competition across the country but also continues to improve its finances and results. Furthermore, the Croatian government is currently in the process of deciding whether to extend the term of airline's existing management team or select a new leadership for the company.