Croatia Airlines posts stronger results

Croatia Airlines has reported improved financial and operational results for the first half of the year, when compared to the same period in 2016. The Croatian national carrier swung back to profit during the H1 period, partly due to the sale of its five weekly slot pairs at London's Heathrow Airport to Delta Air Lines. It confirmed that the transaction was factored into the result. The company recorded a net profit of 5.8 million euros, which is up on last year's 11.3 million euro net loss. Croatia Airlines sold its Heathrow slots for eighteen million euros on January 27. The carrier increased expenditure by 10%, while revenue grew 32% on last year. It spent most on flight operations, in part due to the higher cost of fuel, followed by maintenance, as a result of the overhaul of two aircraft engines, and passenger services. The airline took out a short-term loan amounting to one million euros in January, as well as an additional revolving loan in June. It noted that taking out short-term loans is standard procedure due to the highly seasonal nature of the Croatian market. At the end of the first quarter, Croatia Airlines had 923 employees and fourteen aircraft, two of which are on wet-lease from Air Nostrum until the end of the summer season.

The national carrier handled 903.188 passengers on board its aircraft during the January - June period, an increase of 9.8%. Of those, 223.071 travellers were carried on domestic flights, up 4.8%, while 662.326 passengers flew on international services, an improvement of 11.6%. The remaining 17.791 passengers were carried on charter flights, up 11.5% year-on-year. However, charters accounted for only 2% of overall traffic. The airline operated 12.684 flights during the first half of the year, which is up 2.4% compared to the same period in 2016. The average cabin load factor stood at 69.7%, up 4.2%. Loads improved on international flights by 4.5% for an average of 69.9%, while on domestic services they were up 3.8% to 67.4%. Passenger carrying capacity, measured in Available Seat Kilometres (ASKs), stood 968 million, up 6.8% year-on-year. The airline’s cargo operations recorded a decline of 17.5%, with 1.064 tonnes of mail and freight uplifted in the first half of 2017, compared to 1.290 the year before.

Croatia Airlines anticipates handling over two million passengers this year, making it its busiest on record. The growth is being fuelled by the introduction of four new routes this summer season from Zagreb, on top of the four new services launched from the Croatian capital last year. The airline says it competes against 100 other carriers, which maintain flights to its home market during the summer. It also criticised Zagreb Airport's new terminal over several mishaps which have occured since its opening in late March. It says such incidents are putting pressure on the airline's operational costs. "Keeping in mind some of the terminal's shortcomings, which were identified during the transition period (some of which have not been addressed to this date), as well as other frequent operational incidents since it opened, there is a growing risk of providing and maintaining the quality of our product, primarily our schedule, which has a direct impact on increasing operational costs, delays, passenger satisfaction and Croatia Airlines' image", the carrier said in its half-yearly report.