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.
Comments
The title is misleading.
http://www.investopedia.com/terms/e/extraordinaryitem.asp
or congratulation on taking leans?
The only way to solve this is to desperately find an investor (4K perhaps ??), or to sell even more slots, which will bide you time but not solve it long term
Everyone here seems to think that LF is the be all and end all - it isn't. It is important, but not if it doesn't make you money
Jel vam sad jasnije? :)
Oni barem imaju obraza objaviti brojke za razliku od nekih, ha, ha.
cost structure would be interesting to see. they should had some engines repaired.
This year net loss for first half of year was at about -12m EUR. Last year -11m. OU had large spending on airplane and engine maintenance during this year's period, a lot more than just 1m EUR! That explains the difference.
At the same time their operational revenue and income was higher than last year so regarding ops they were financially more successful this year so far (until June).
This morning I arrived from LCA on JU 507 and when we landed there wasn't a single free gate for us so we were parked at B4 next to an Atr that went to VCE later on.
I can't remember if there was ever a time when every single air-bridge plus remote C stands were occupied. I guess it has to do with JU launching JFK and with Wizz Air basing a second aircraft at the airport.
I know BEG is not close to its maximum capacity but the airport is in desperate need of extra space during these busy periods. Will be interesting to see what will happen next summer, especially if QR increases BEG to ten weekly meaning their flight will arrive some time between 05.00 and 06.00.
As for the loads:
JU 506 BEG-LCA 124/144
JU 507 LCA-BEG 137/144
A319, YU-APJ
About 65 passengers disembarked in BEG, the rest were predominantly Westerners heading to Paris, Vienna and Germany.
You do know that in first 6 months there are 5 weak months included (all but June)?
In second half of the year you've got only 3 weak months and 3 strong ones (July, August, Sept).
Therefore money is clearly to be made much more in second half of the year whereas costly maintenance and other larger expenditures are done primarily in first half of the year!
Perhaps wake up, have a strong coffee and then think again :)
So if engine overhaul costs X and expected engine lifetime on wing is Y, you create reservations (which equals to cost in financial terms) each year in the amount X divided by Y. Because if for example, you buy 100 new aircraft, you will have a lot of profit (and will have to pay tax on this profit) for first 10 years. Then in year 11 you will have to overhaul 200 engines and you will have significant loss.
But I imagine here in exyu it's better to show lower loss every year and then claim "engine maintenance" as reason for bigger loss couple of years later.
but as you noticed, the practice in these parts is not to pay it and then beg for money from the government. same thing jat and mgx did.
i don't know what is the practice in OU, but i doubt they are paying maintenance reserves for owned aircraft, for leased they probably do, due to leasing contract.
https://web.archive.org/web/20131015153353/http://www.jat.com/active/sr-latin/home/main_menu/about_us/financial_reports.html
Cargo volumes are not seasonal like passenger traffic, so there is no reason for such poor performance, other than people not doing their job and in mgt not giving any focus to cargo
JU can't expect to have same yield during the winter as in summer, but despite it they rather fly with half empty planes than to lower prices.
I am not saying it would be profitable for them, but surely it would make their loss during winter lower.
Of course, if you keep your head in the sand, JU, JP and OU are the best airlines in the world, run by the best management and have the best service.
Why is it then that JU is diminishing at such a rapid rate?
Because they sold all LHR slots and apparently sold both A330 engines. A330 will now sit on the tarmac every day. Happy?
Too early to tell. Especially about the new routes, since they had only been around for a month at the end of June.
OU makes most of its losses in first quarter, due to seasonality.
Airline puts two or more aircraft out of service, performs C and D checks on scheduled aircraft, as you know D checks are done every 5 years and C checks every 2.
D-checks are very expensive and for A320 type aircraft could cost as much as $3 million per check. C-checks are at least $1.2 million.
B checks need to be also completed on the entire fleet too.
New engines aren't cheep, each costing around $5.5 million.
So it normal for OU in what is considered an investment cycle for most airlines, to lose money. €10-12 million is about right amount, or €1 million per serviced aircraft.
However between April and October, airline is quite busy and they make huge profits, in fact they normally cover any losses made during the first 3-4 months and have enough to cover losses at the end of the year to still maintain profit margin.
OU's turnover of 1.75 billion Kuna, or $270 million should generate around $15 million profit. However, due to seasonality, and poor utilization of the fleet during winter months, airline barely makes 20 million kuna profit. Hopefully things change now that 4 or even 8 extra destinations might be flown this year out of Zagreb. As things stand OU will have very busy year.
No, not this winter, however in April, I anticipate they'll add Dublin, Lyon, Valencia,
Sofia and Milan.
This is if they can secure enough planes for 2018.
Adding these 4-5 new routes would bring number or routes to 37 in summer months, it can be done with 12 aircraft, but it might put strain on the entire fleet and staff too.
OU will be flying extra 4 destinations during this winter. So that's a biggie, as OU will maintain 28 destinations in winter months, usually OU maintains 24-25 destinations in winter months.
However airline will maintain less than 1000 staff policy for foreseeable future, they need to bring profitability of the airline up a fair bit.
I think you'll find, Pruger talks nonsense half the time, the other half he almost gets it due to low of probability, a "chaos" theory.
A ilegalni način bi EU odmah vidjela i sankcionirala. Konačno kako bi bilo koji ministar ili premijer mogao "prebaciti" novac bez rebalansa proračuna u Saboru? Pa za tako što bi završio u zatvoru iste sekunde. Vi znate da je jedan premijer Hrvatske radi daleko manje stvari još uvijek u zatvoru? I predsjednik godspodarske komore, niz gradonačelnika, župana, generala, direktora javnih poduzeća.
Milijun puta sam rekao, Hrvatska nije ni blizu ona što je bila prije 10 ili 20 godina. Ovdje su se stvari bitno promijenile. Korupcija je daleko manje prisutna na nižem nivou, a gotovo da je nema na višem.
NO!!!
EK arrived on June 1st, EK's Cargo started on August 1st.
n the other hand DHL and Qatar Cargo did play their role. DHL has started cargo operations out of Zagreb in 2015, but only in 2016 they put B757 on the route. So that'll have an impact on OU. Qatar Cargo is also playing its part and now arrival of Emirates Cargo could put even more pressure.
UPS is now looking at starting Cargo flights to Zagreb, and that'll put even more pressure.
However, Zagreb with 3 million pax should really have around 25-30 000 tons of Cargo, 10-12 000 simply isn't good enough.
On the other hand, why isn´t FR adding extra flights in Xmas/NY just like the rest of the destinations?
That's the reason why they are looking to lease out aircraft over the winter, or, to fly less - thereby saving money and improving their performance.
It is not rocket science
the reason they don't leave, is because they can't get a job elsewhere because they aren't good enough. Then, they demand the company meet their demands or else they strike - putting at risk the very company that feeds them.
Super logic....
Why then do their passenger numbers continue to go up if more airlines continue to fly to ZAG ?
So it applies to cargo but not to passengers ?
PAH-LEASE !!!
Simple answer is that they have no focus on cargo or they have the wrong people selling cargo
i can only imagine what people would be saying if he was presiding over massive losses like they are at JU
You're not happy ? LEAVE.
You don't like it ? LEAVE
You know of somewhere better ? LEAVE
As for OU, I hope they really include INI in 2018.
OU can offer connections to Germany as well as the rest of Western Europe, look how successful LX is there.
Also there is a general consensus that Dane must go, so...
They are all subject to the same seasonality fluctuations in the Northern Winter. Only destinations where the season is counter cyclical to Europe is the Southern hemisphere, or beach destinations in Asia, Indian subcontinent, Carribean - for which there is little to no scheduled demand
Do you need for OU to go bankrupt and have all 930 people lose their jobs ?
How is that a good outcome for everyone ?
So what do you think, Jordanian tourists who fly to Athens, who would they rather fly with? RJ or A3? ;)
Unlike passengers, cargo isn't coming to enjoy the beauty of the Croatian coast, so there is no reason for it to grow as fast. So yes, OU cargo rates will drop further as new carriers enter the market.
You should be the first one to come back ... your presence will surely make the world of difference. I've no idea how they missed that spark you so clearly demonstrate.
just to add, employing more people - especially the HR department - will do wonders for the already overstaffed numbers at the airline
Also, I am not on the airline's payroll for me to come up with strategies. All I am saying is that if Kondic was a good businessman ASL wouldn't be alive today only thank to state subsidies. ;)
I did not lose a job nor did I work for ASL, I am just an aviation enthusiast discussing aviation on an aviation blog. ;)
Pilot's market is probably at its best since 9/11. There are thousands of jobs out there for pilots.
JU have more than doubled the number of passengers they carry; tripled the size of their fleet; are flying to almost 20 more destinations (when you incl the charter destinations) and refreshed and modernised their product.
Unfortunately, OU were under EU restructuring, so they couldn;t do too much, but they have started to grow again over the past 12 mths, with new destinations and additional capacity leased in.
Have i missed something ?
Maybe it is a curse with that airline - no matter who runs it, it is destined to make losses and have the govt cover it every year in order to keep it alive.
We all know what happened to dinasours, don't we ?
It is growing, just that slump, from 2008 - 2015 was a quite big, economic recession hit Croatia hard. For 6 years Croatia had no growth, finally Croatia started to recover in 2015 and this is when cargo volume started to go up, a bit.
Zagreb airport Cargo terminal is very small, could theoretically handle around 15000 of cargo, 20 000 if you really push it. Zagreb airport needs new cargo terminal, and this will be the next investment, that should happen in next 12 months. Old Terminal, which is 200x60m building will be transformed in to a very large cargo terminal capable handling 100-150 000 tons of cargo per year.
Once UPS, FedEx and few other cargo airlines arrive and start to service Zagreb, numbers will go up. Ljubljana cargo has little to do with Zagreb cargo numbers. Problem with Zagreb is lack of cargo airlines that serve Zagreb. DHL has arrived in 2015 and Qatar Cargo followed suit in 2016. Emirates Cargo just arrived. UPS has announced their arrival, and where is UPS FedEx follows suit. By 2020, you'll see major air-cargo players at Zagreb airport, and numbers should tell.
Zagreb airport should be handling around 20-25 000 tons of cargo, by 2020 I expect airport will handle these numbers. So 2018, 2019 and 2020 we'll see massive growth of Cargo at Zagreb airport.
By 2025, Zagreb airport could handle 50 000 tons of cargo, we'll see how things develop once all major cargo carriers set up their shop in Zagreb.
OT:,
BTW Croatian economy is finally waking up, projected growth 3.5% this year. even with Agrokor mess. Number of tourists is up by 20% across the board. 17.5 million visitors expected this year, 2 million more than last year, and if you add "foreign friends" that number is 18.7 million at least. 100 million nights, €12 billion revenue.
Country is so confident of good times ahead, Croatian MOD is negotiating JAS-39 E/F purchase from Sweden. Aircraft will enter service in 2020/2021 replacing 12 Mig 21. Number of fighters is still being negotiated, between 12 and 16. Total cost of new fighter purchase, €1.5-1.7 billion.
Are you threatening to kill/exterminate us? That's a serious threat
Sure, all of them are professionals, but still, 3-4 times. Every time Croatian has good deals, tickets end up being sold with in days. On of my friends, flew to London - twice, Porto, Edinburgh, Dublin and is about to fly to Frankfurt next week. 6 times already and he plans to fly again in October and December. so that is 8 times. What my friend does for living, he is an teacher with pay of 7500 kuna. An enrage pay in Croatia is 6200 kuna, his pay is bellow average in Zagreb where he lives.
He said, his pay will go up to 8600 kuna, but in September.
Based only and purely on how my friends fly as of late, I predict numbers @Zagreb will skyrocket. If number of LCCs start to fly to Zagreb, I can easily imagine Airport hitting 10 million pax by 2025.
Well till now I was so good in those "nonsense and chaos theory". And you find that I don't know nothing but just guess. Finally you got my mask off.
Really. Jat in 2012 had 17 planes, Air Serbia today have 21 planes. So, how is that tripled????