Croatia Airlines has reported strong financial and operational results for the first three quarters, while at the same time strongly criticising shortcomings at Zagreb Airport's new terminal building.
During the nine-month period, Croatia Airlines registered a record profit of 13.4 million euros, up from 609.600 euros last year. The carrier noted that the strong financial results were fuelled by the January sale of its five weekly slot pairs at London's Heathrow Airport to Delta Air Lines amounting to eighteen million euros. The carrier increased expenditure by 10%, while revenue grew 18% on last year. It spent most on flight operations, primarily due to the higher cost of fuel (+32%), followed by aircraft leasing, as a result of the wet-lease for two Air Nostrum Bombardier CRJ1000 aircraft, then maintenance, due to the overhaul of two jet engines and C checks on three aircraft, as well as passenger services. "Expenditure has partly increased due to daily operational issues witnessed since the opening of Zagreb Airport's new terminal", the airline said. Other financial indicators show that passenger yield, based on revenue passenger kilometres, amounted to 11.6 euro cents, down from 12.1 last year. Croatia Airlines has taken out loans from local banks amounting to 9.3 million euros, of which 5.6 million are long-term and 3.7 million euros short-term.
The national carrier handled a record 1.654.396 passengers on board its aircraft during the January - September period, an increase of 9.1%. Of those, 406.680 travellers were carried on domestic flights, up 5.8%, while 1.193.550 passengers flew on international services, an improvement of 11%. The remaining 56.166 travellers were carried on charter flights, up 0.2% year-on-year. However, charters accounted for only 3% of overall traffic. The airline operated 21.531 flights during the first half of the year, which is up 3% compared to the same period in 2016. The average cabin load factor stood at 74.2%, up 3.9%. Loads improved on international flights by 4.2% for an average of 74.1%, while on domestic services they were up 4.6% to 72.5%. Passenger carrying capacity, measured in Available Seat Kilometres (ASKs), stood at 1.7 billion, up 6.5% year-on-year. The airline’s cargo operations recorded a decline of 15.9%, with 1.681 tonnes of mail and freight uplifted in the first three quarters of 2017, compared to 1.998 the year before.
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| Croatia Airlines hits out at Zagreb Airport |
Croatia Airlines has again criticised Zagreb Airport's new terminal and the negative effects the organisational inadequacy is having on its business. In its most strongly-worded statements to date, the carrier said, "Given the shortcomings the airline noticed during the testing phase of the terminal (some of which have still not been resolved), as well as the regular operational incidents since the opening of the facility, there is a growing risk in providing and maintaining product quality, i.e. Croatia Airlines' schedule, which directly impacts on the unplanned increase in operating costs, delays, passenger dissatisfaction and the company's image". The carrier noted that the number of its flights being delayed at Zagreb Airport have increased 38% this year. "There have been numerous problems since the opening of the new terminal, noticeably an increase in delays due to the late arrival of transfer passengers caused by poorly thought-out passenger flow, problematic pushback procedures, handling, baggage transfer, as well as long waits at baggage claim. It is also necessary to improve passenger check-in and boarding procedures. Along with the issues concerning Zagreb Airport's management and the handling agent, there are also growing delays in the supply of fuel. Furthermore, there are issues with requests being made by boarder control and the processing of crew". For its part, Zagreb Airport said last month, "We regularly hold meetings with airline representatives where we discuss all problems and shortcomings. We then seek out joint solutions". The airport noted that, as a result of the new terminal and the implementation of new procedures and technologies, some problems may occur, but added that the management is trying to remedy the situation.
So the issues at ZAG airport and its new terminal are not just a myth as some have led us to believe here. I hope they resolve those problems.
ReplyDeleteA baggage cart hit and damaged their plane a few months ago. I wouldn't be happy either.
Delete^That is not the only problem. Other airlines have also complained.
DeleteThey have done good in attracting new airlines but they need to do much better in managing the operational aspects of the terminal.
DeleteWon't the issues just get bigger as the numbers of carriers and passengers continues to increase at the airport?
Delete@9:05
Deleteonce you scratch the surface you get to see the real situation. Same with Croatia Airlines.
The most impressive stat in those result is the load factor which has grown nicely. That's a good result and will probably settle around 71-72% at the end of the year. I won't talk about the financial part since this year's results will be completely unrealistic because of the sale of slots.
ReplyDeleteSo what would the profit be without the slot sale?
DeleteLoad factor has indeed grown, but:
Delete"passenger yield, based on revenue passenger kilometres, amounted to 11.6 euros, down from 12.1 euros last year."
So the problem is still there.
See below - a minus of 4.5 mil EUR.
Delete@admin. Yield is not 11.6 Euros. it is 11,6 Euros-Cents. This alone does not means anything, as long the Pax numbers grow.
DeleteLF doesn't mean much. Yield is the most important. You can sell tickets at 5 euros each and have a 100% LF but make a loss.
Delete"record profit of 13.4 million euros, up from 609.600 euros last year"
ReplyDelete"sale of its five weekly slot pairs at London's Heathrow Airport to Delta Air Lines amounting to eighteen million euros"
So actually they turned a 609k EUR profit last year into a 4.5m EUR loss this year. Amazing results.
Selling assets and showing it as a profit is normal business practice. Whether it is good is a completely different thing but it's not like they are cheating the books.
DeleteI think OUs results are potentially creatively amazing. Could be much worse eg. JU realised loss of Euro35m or comparatively even worse YM
DeleteCongrats OU.a good result
I didn't imply that they are cheating the books, of course any revenue should be presented as such. I'm saying that without the slot sale their liquidity would be disastrous. The business still isn't managed well.
DeleteMy thoughts exactly.
DeleteBut realistically it's not false or creative accounting. The fact that it is black and white is another thing.
DeleteThis is true. Regardless of the fact that everything is 'by the book', this still doesn't change the fact that without assets sales, they would in fact be in deep minus this year. Now, one could argue that without those sales, OU would not have engaged in additional investment, such as the leasing of new planes and adding new route. However if that had been the case, they would've also lost out on some good numbers which came as the result of introducing these new routes...so ultimately this really isn't a sign of an improved business strategy in my opinion.
DeleteAt the same time, the management of the new terminal, in terms of day-to-day operations has been rather poor and the issues highlighted here represent a fair criticism.
But realistically it's not false or creative accounting. The fact that it is black and white is another thing.
DeleteEx yu aviation (OU,AS,MGX...): New routes, new risk, probable money loser! Less flying, less passengers, less debt...
DeleteI don't understand that ZAG management can't get its act together when it comes to resolving this issues. Have they cut staff numbers so there are these delays or has traffic grown so much and they haven't hired new workers?
ReplyDeleteWe gave contract to design a new airport terminal to a man how never designed airport terminal before, but is our local man and known expert for all things construction. Hilarity ensues.
DeleteProblems with passenger flows and push back are direct results of terminal design and can't be fixed by hiring additional staff.
Is there some way this problem can be resolved?
DeleteAha zatvrois zgradu i smanjis broj izlaza na 6 koliko je trebalo da ima, ali imas 6 mesta za sirokotrupne avione. Kosta.
DeleteDon't forget that this terminal is a lot different to the original design. Biggest problem here is ramp space which again was reduced a lot from the original design but can easily be expanded.
DeleteQuestion is, who will pay for it?
Zag Airport should pay for the necessary expansion, but most of all, they should hire additional personnel.
DeleteSO basically Oman Air management reads something like this "profit, excellent results, bla bla bla" and they hire Kučko... If you scracth deeper you see that all of that profit is really loans, and sold slots and engines/aircrafts... Ha ha, nice one Kučko, play of the year!
ReplyDeleteIt's Gulf Air, not Oman Air.
DeleteMy bad, you're right!
DeleteYes, sure... internet trolls and blog warriors knows all about Kučko, and selling lots (how to make profit), but someone who hire (and will pay) Kučko does not know anything about him. People, please!
DeleteThe results speak for themselves. That's the luck with C-level positions.
DeleteZnaci napravili su gubitak od 4.5 miliona evra do danas sto znaci do kraja godine bar jos 3 miliona.
ReplyDeleteU izvjestaju pise da su napravili nekoliko velikih zahvata na avionima. Ako im je nakon toga ostalo jos tih 100milijuna, to je odlicno. Jer znaci da je osim prodaje slotova bilo jos nekog plusa. A ako nisu napravili to sto su napisali, a izgubili su tih 4 milijuna, onda je katastrofa.
DeleteTih nekoliko velikih zahvata na avionima su svakako morali da naprave i to je redovan deo operativnog održavanja flote.
DeleteZnaci ti kazes da se owerhall (ili kako se vec pise) radi svake godine? Zamjena trapa isto? Mislim da ne. Sad su to rijesili i mirni su bar kolko? 5 godina? Normalno, bit ce odrzavanja ostalih motora, ali s ovima je mir neko vrijeme. Mene vise zanima iznos rate za Airbuse. Mislim da je receno da prva stize na naplatu ove godine.
DeleteNe, ali je prošle godine bilo C i D chackova koji koštaju opako (posebno D). Odgovorne kompanije institucionalno održavanje (motora) planiraju unaprije i rezerviraju sredstva svake godine, a ne kad to dođe da moraju prodat slotove ne LHR da namire ovaj planirani i velik trošak.
DeleteTo je kao da si znao da moraš na generalku sa svojim taxijem pa zato prodaješ stan u kojem živiš da to napraviš a da ne ostaneš bez posla. A godinama si odlazi na godišnji na Karibe ne razmišljavši o stanu.
Samo da su takva sredstva razrvirali, kao što to rade druge kompanije, ne bi bili svih tih godina u plusu. Čak i sa prodanim avionima i motorima.
E to je to. Dal je CA ikad vodjena odgovorno i strucno? Sumnjam.
DeleteNot commenting on the actual result, but it's nice to see detailed results from at least one airline in ex-Yu so we can draw our own conclusions.
ReplyDeleteWouldn't it be better for ZAG and OU to resolve their issues behind closed doors rather than airing their dirty laundry to the public.
ReplyDeleteWhy? ZAG and OU are two different companies. OU has kept silent for some time but all the things they listed are correct. It is also true that none of these issues are being addressed by the management. So I understand they want to go public and put pressure on ZAG airport's management. Also, OU's own image is being affected by this.
DeleteHave you given any thought to the fact that maybe they haven't been able to do so behind closed doors and that is why OU have decided to now air it in public, in the hope that it force ZAG to address the issues ?
Delete+1 exactly.
DeleteThe sad thing is absolutely every single ex-Yu airline is operating at a loss and presenting their numbers as record profit. I just don't know who fot? Just look at JU and JP.
ReplyDeleteSo taxpayers would be happy.
DeleteTaxpayers are not financing Adria, yet they also sold their name to show a profit.
DeleteWelcome to the modern age anon 9.19. Of course the management of each company wants to present excellent results and that it has been doing an excellent job.
DeleteAnon: 9:19. You can apply that comment to nearly every airline in the world. Welcome to aviation.
DeleteTaxpayer dont finance Adria? And to who they sold the name? Government maybe?
DeleteI have been to ZAG. I think the airport is nice, definitely a massive improvement compared to before. The thing I don't like is the massive empty open spaces where there is nothing. I don't know if this is planned for the future to add things but it looks a bit empty. Also I would extend the work hours of the shops. Everything works till 10pm. If it wants to be more of a transfer hub they should extend the times.
ReplyDeleteAgain this stems from the changes made to the original design. This empty space was supposed to have a indoor rainforest type feature with a pretty decent size waterfall. Remember the entire roof structure was supposed to be glass and the airport was going to act as a large 'green house'
DeleteHmmm yes I preferred the original design. Not saying this is bad, quite the opposite, but that initial project was amazing.
DeleteAnd what is exactly the point of having business open after 10pm when you barely have any flights after that time?
DeleteBecause they already start cleaning up and closing by 21.00.
DeleteAnyone know which path Croatia Airlines might take with the new CEO now named. Or will it be more of the same?
ReplyDeleteIt depends with what the government wants to do with OU and if they want to sell it.
DeleteMore of the same in my opinion as already indicated by the extension of the Dash lease.
DeleteThe government has shown very little interest in sorting Croatia Airlines out. I don't think it will be their priority in the next few years.
DeleteThis is why governments shouldn't run businesses. They usually do a terrible job.
DeleteThere were articles in Croatian media that a few airlines are unhappy with the state of affairs at ZAG concerning handling, so Croatia Airlines is not the only one, although they have been vocal since the start. This is the most critical they have ever been.
ReplyDeleteNice to see their pax numbers improved. I expect over 2 million this year.
ReplyDeleteQuite a detailed financial report. Wish any of the other Ex-Yu airlines would be so professional in publishing their numbers.
ReplyDeleteAnd what has OU done with their timetable adjustment and increased transfer of pax? Nothing. They only added more seasonal flights but old ones are still operated as they did years ago. I want that job, being time table planner for OU. Issues with new terminal were expected, especially because many things were new. There were worse and better launches in the world, usually it takes around 6 months to correct most of the mistakes. And one more thing is making procedures hard to organise. Terminal is designed for shengen and croatia is not there yet.
ReplyDeleteLF is particularly good considering they added capacity.
ReplyDelete+1
DeleteFinancial performance this year will be influenced by this slot sale. We won't know the exact numbers.
ReplyDeleteZasto lupetas? Vidi se jasno u izvestaju prihod od prodaje slotova.
DeleteА зашто стално говориш народу да лупета? Јел те родитељи нису боље научили?
Deletetalking about the slots, did JU gained some money when they left IST and AUH, are those sold (like OU did in LHR), or they just just left them?
ReplyDeleteOnly IST which is an IATA level 3 coordinated airport, meaning slots can be purchased. AUH is not level 3 and there are no slot constraints so no money would be exchanged.
DeleteI have noticed some Croatia Airlines planes still parking at the old terminal even though all gates were empty at the new terminal. Why?
ReplyDeleteMe too. Usually three planes. This would significantly increase loading/off loading times since the two terminals are not very close.
DeleteGreat news! And soon the neos will start coming.
ReplyDeleteSay what you will the terminal is miles ahead of the previous one.
ReplyDeleteWithout doubt.
DeleteVery true. For me the main issue is how limted the ramp space is. Expand this and they will solve not all but a lot of the issues here.
DeleteOverall it will be a good year for Croatia Airlines.
ReplyDeleteCargo is a shocker though. Really bad result in that sector.
ReplyDeleteAnd interestingly Zagreb Airport has never handled more cargo.
DeleteThat's primarily the result of Emirates.
DeleteThe more new airlines arrive, especially long haul, the lower the cargo levels will be at OU.
DeleteOU sucks at Cargo.
DeleteWell limited network and a lot of turboprops are nota great selling point when attracting cargo businesses.
DeleteGood luck OU. Wish them all the best.
ReplyDeleteI have found the transfer procedure to be confusing at the new terminal - transferring is something that should be blindingly obvious, but at ZAG, even despite it's small size, the process is actually very poorly laid out and signed
ReplyDeleteSame experience here.
DeleteI was hoping BA would step in with more flights to Zagreb to make up for Croatia Airlines' reduction to London because of the slot sale. Oh well, maybe next year.
ReplyDeleteIt will be interesting to see whather OU will resume Zagreb-Garrick next summer to make up for the loss. I assume the demand is there for more than 4 weekly flights.
DeleteI assume you meant Gatwick :D
DeleteYes haha typing on my phone
DeleteIt would be a logical step.
DeleteCould OU manage 2 million passengers by the end of the year?
ReplyDeleteCertainly. It will surpass that number.
DeleteI expect 2.1 million this year.
DeleteBravo Hrvatska!
ReplyDeleteReading the article rather than just the title would be good.
DeleteJust 3% of traffic is charters? Why doesn't the airline operate more. I am sure there is enough demand.
ReplyDeleteThere is very little demand for charters in the winter.
DeleteI'm talking about summer.
DeleteThey don't have enough planes in summer to do that. Haven't you noticed that they have to lease aircraft to open up new routes?
DeleteThings are changing
DeleteNext summer they will be flying charters: Split-Kuopio (Finland), Split-Molde (Norway) and Split-Umea (Sweden).
Plus Split-Lullea or they stop flying to Lullea?
DeleteWe are now in November and there is still no news about their regional jet acquisition.
ReplyDeleteForget about that. They will again lease 2 CRJ1000s.
DeleteOU needs some RJs besides the Dash-8.They should get a E-190 or E-195.
DeleteThey said in report that lease was 25milions kuna more than last year. So two crj was about 25milion kuna. How much is long term lease of CRJ? For one year?
DeleteSo record profit and passenger numbers at the end of the year. Now would be the time for the government to try and sell the airline.
ReplyDeleteBefore someone decides buying a company they look into its books so you can't scam them with flowery made up numbers.
Deleteat least there are some numbers to look at. Other airlines in the region just say they are profitable and then initiate drastic cost cutting measures.
DeleteThose same airlines have already found a buyer, though ;)
DeleteHow come the number of flight operations didn't increase much even with all the new routes launched this summer?
ReplyDeleteLess flights from the coast.
DeleteSelling LHR was a good move. They can easily switch to LGW but they have managed to generate much needed cash. They won't loose much plus they still have 4 weekly flights to LHR.
ReplyDeleteBut what when they spend the cash? What sold then?
DeleteIf you say that company can easily switch from LHR to LGW and that it is same for company to fly to LHR or LGW that shows that your knowledge about air business is equal to zero.
DeleteOn same pattern Croatia can switch from Frankfurt to Hahn.
LGW is not as far from London as Hahn is from Frankfurt. ;)
DeleteI really hope you are joking, and that this ;) means that.
DeleteLondon Gatwick to London = 44 km
DeleteHahn Airport to Frankfurt = 142 km
Does it seem like a joke to you Alen?
My god you are serious?
DeleteOf course it is not about how far it is, but that serious legacy carrier fight for slots in Heathrow because of connections as LHR is one of the main airport in the World. That is reason why so many airlines want to pay even 70 million EUR for 7 weekly slots to LHR.
To say that company can easy transfer its business from one of main airports with thousands connection to P2P airport Gatwick is dilettantism, nothing else.
I am not the original anon who said they should move but I was merely saying that LGW is a valid alternative to LHR while HHN is not for FRA.
DeleteLHR can only work if you have the customer base that is willing to pay a premium to fly there. JU has it, OU and JP seem not to have it.
Airlines are businesses that are here to make money. Many airlines use LGW because they can make money there due to lower costs, airBaltic is a great example.
Can't we just shut Croatia Airlines down and fly with Lufthansa. It has better aircraft, crew, pilots, connections etc etc.
ReplyDeleteWe have already sold the airport to the French and look at how much better it is doing. The foreigners just do business better and we should just focus on our tourism.
"Croatia Airlines posts strong results"?
ReplyDeleteThe heading should be "Croatia Airlines covers successfully its losses by selling Heathrow slots".