Croatia Airlines swings to Q1 loss


Croatia Airlines has posted mixed results for the first quarter of the year by recording an 11.4 million euro net loss, while passenger numbers improved to reach record levels. The carrier's consolidated net loss slumped from a profit of 1.2 million euros last year. However, the airline noted that 2017's quarterly results were impacted by the sale of its five weekly slot pairs at London's Heathrow Airport for eighteen million euros. If the one-off sale was to be deducted from last year's financial performance, the airline's net loss in 2018 would have improved 13% to that of Q1 2017. During the first three months, revenue grew 2% to 34.6 million euros, while expenditure was down 2% totalling 46.4 million euros. It spent most on flight operations, primarily due to the higher cost of fuel, followed by passenger services, as a result of the growing number of travellers handled, then maintenance, as well as promotions and sales.

The carrier handled a record 354.390 passengers during the first quarter, an increase of 7.6%. Of those, 92.018 travellers were carried on domestic flights, up 12.3%, while 259.486 passengers flew on international services, an improvement of 6.4%. The strong growth in domestic passengers was partly caused by Pula Airport, which was closed between January and March of last year due to the overhaul of its runway. The remaining 2.886 passengers were carried on charter flights, down 18.2% year-on-year. However, charters accounted for only 1% of overall traffic. The company operated 5.089 flights during the three-month period, which is up 2.4% compared to 2017. The average cabin load factor, a measure of seat capacity utilisation, stood at a record 70.6%, up 7%. It marks the first time the average cabin occupancy rate has exceeded 70% during this part of the year. It totalled 71.3% on international services and 64.9% on domestic flights. Passenger carrying capacity, measured in Available Seat Kilometres (ASKs), amounted to 335 million, down 3.7% year-on-year.

Croatia Airlines' Director for Network and Revenue Management, Krešimir Mlinar, recently noted that similar growth trends are expected throughout the year. "We have managed to stabilise the business. We expect for our passenger numbers to continue growing in 2018 and to overtake last year's record when 2.1 million travellers were handled", he said. The carrier will introduce seasonal flights from Zagreb to Dublin, Split to Copenhagen and from Dubrovnik to Munich this summer, as well as a year-round service between Zagreb and Mostar. At the same time, it has discontinued its seasonal flights between Zagreb and Pristina, Rijeka and London Heathrow, Pula and Zurich, as well as Dubrovnik and Nice, which were all operated last summer.

Comments

  1. Passenger numbers congratulations. Financial figures very poor.

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    Replies
    1. So in conclusion BAD MANAGEMENT because at the end what counts is the financial figures.

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    2. Wrong, what counts is the stabilisation of ALL KPIs.

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    3. Jedino sto je bitno, je predznak na kraju dana.
      Sve ostalo su prica za malo djecu

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    4. Cut expenses to get more profit.

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  2. The load factor is a nice surprise in these results.

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  3. What will OU sell this year to improve financial situation at the end of the year?

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    Replies
    1. I don't think there are any plans to sell anything. They will probably be going hybrid like they already announced. Maybe that increases income and reduces expenses.

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    2. They can always sell the remaining LHR slots.

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    3. What else can they do?

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    4. Address where is it they are loosing money.

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    5. They can always just sell tickets to fly people to different places.

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    6. Alen Šćuric Purger30 April 2018 at 17:15

      They still have assets to sell:
      - rest of LHR slots
      - rest of planes and engines
      - Croatia Technics
      - real estate especially in Zagreb airport

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  4. Any particular reason for this loss>

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    Replies
    1. They always have big losses during the winter and make up for it in the summer. Nothing new here.

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    2. Always? Big losses in the winter, but they have mostly never been able to 100% cover the winter looses with summer “gains”

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  5. everyone is surprised they made losses now, then everyone critizises them for selling their slots

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  6. Good to see the load factor up.

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    Replies
    1. I agree. 70% is not bad in the slowest time of the year.

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  7. Financial results are bad but the passenger numbers are quite good.

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  8. Will they be able to make up for this loss in the second and third quarter which are usually strong?

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    1. They usually do, but we'll see if that will be enough to swing them out of the negative balance.

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    2. Let's not forget enormous costs they had in April 2018 (Q2) for last minute wet leasing of the aicrafts. It surely will not improve their financial situation

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  9. 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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    Replies
    1. These days they had a lot of cancellations so the numbers will not be representative.

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  10. This shows they filled those seats by dumping fares. Competition got the best of them. Growing lcc presence in the region does affect them.

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    Replies
    1. What dumping fares??

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    2. On average their tickets were 17% lower than last Q1. If that's not dumping then I don't know what is.

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    3. How did you come to that conclusion? Im curious i want to see the facts of your statement.

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    4. I used to work for OU. I quit like most sane people. Management is becoming impossible.

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    5. +1
      Fares are widely available, all tour operators have access to them.

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    6. If OU something doesn't do it's price dumping.

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    7. Average fare in Q1 went down meaning their yield per passenger is down.
      Also, LH is putting additional pressure on OU to fill flights to their hubs. LH is one of the rare airlines in ZAG whose numbers decline yoy.

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    8. Btw my guess is that a combination of LO and EK is the worst thing that could happen to Star Alliance clan in Zagreb.

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    9. You probably mean LH clan since LO is star alliance member as well

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  11. These results should be ok for Croatia Airlines to be interesting to some potential investors.

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    1. Yes, mounting losses are a great selling point.

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    2. Results are better than the last year, reminder this is the slowest portion of the year.

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  12. They are finally getting passengers back in their planes. I am sure they hurt KL as they have not sent anything larger than a E90 in months now. Good job OU!

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    1. OU is a codeshare partner of KLM and on certain days more than 50% of CA passengers transfer via AMS to KLM's long haul network.
      Simple schedule check (taking into account banks) - KLM is not competing in either ZAG or BEG (with HV) with home airlines, it is just complementing their service. In addition to this last year KLM added SPU and as far as I know they are expanding it to double daily this summer.

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    2. KLM is increasing SPU to double daily. This is also part of the reason. Next year daily KLM to DBV.

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  13. They just informed me that my flight on the 14th May is cancelled -.-

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    1. Sorry to hear that. Where are you flying to?

      Have they offered to rebook you or to give you a refund?

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    2. Split-Belgrade. They offered me a refund or a different day so I will take the refund because I had to travel on those dates.

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    3. Sorry. How will you fly now? JU?

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    4. I will have to see now. I chose Croatia because the times suited me and I'm collecting Star miles.

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    5. Is this related to those cancellations the unions were talking about?

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    6. So it continues in May as well. OU will have to wet lease other planes and it costs too much money.
      Second quarter might be in red too

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    7. Or in this case they are cancelling flights meaning they have to return money they most likely already spent on these extra leases.

      This is turning out to be such a mess.

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    8. Alen Šćuric Purger30 April 2018 at 17:23

      tablicu najmova u 12 dana, kada je iznajmljeno 13 aviona tri istočnoeuropske kompanije:

      Datum Umjesto Croatie letio
      23.3. Air Explore (Slovačka)
      24.3. Air Explore (Slovačka)
      25.3. Get Jet (Litva)
      26.3. BH Air (Bugarska)
      27.3. BH Air (Bugarska)
      28.3. Get Jet (Litva)
      29.3. BH Air (Bugarska) i
      Get Jet (Litva)
      30.3. BH Air (Bugarska) i
      Get Jet (Litva
      1.4. BH Air (Bugarska)
      2.4. BH Air (Bugarska)
      3.4. BH Air (Bugarska)

      U posljednje vrijeme za Croatiju leti Jet Time, NEOS, Carpatair, People's Viennaline i Trade Air. U sve to vrijeme Croatijini piloti i kabinsko osoblje dobiva plaću, a ne leti, jer su avioni 45 dana duže od plana u hangaru.

      Lista otkazanih letova Croatie Airlines u tjednu od 12. do 17. travnja:

      12.4. OU660 Zagreb-Dubrovnik
      12.4. OU632 Zagreb-Zadar
      12.4. OU632 Zadar-Pula
      13.4. OU660 Zagreb-Dubrovnik
      13.4. OU460 Zagreb-Zurich
      16.4. OU660 Zagreb-Dubrovnik
      17.4. OU663 Zagreb-Dubrovnik
      18.4. OU660 Zagreb-Dubrovnik
      18.4. OU456 Zagreb-Brussels
      Naravno i pripadajući povratni letovi su otkazivani. Ovo znači da je u 7 dana otkazano 18 letova. HSPP i dalje prati sva otkazivanja i iznajmljivanja zrakoplova. U idućih pola mjeseca ova otkazivanja će se bitno povećati:

      8.5. OU640 Zagreb-Brač
      8.5. OU641 Brač-Zagreb
      8.5. OU456 Zagreb-Brussels
      8.5. OU457 Brussels-Zagreb
      12.5. OU336 Split-Beograd
      12.5. OU337 Beograd-Split
      12.5. OU320 Zagreb-Prague
      12.5. OU321 Prague-Zagreb
      15.5. OU436 Zagreb-Munich
      15.5. OU437 Munich-Zagreb
      15.5. OU530 Zagreb-St.Petersburg
      15.5. OU531 St.Petersburg-Zagreb
      15.5. OU673 Pula-Zagreb
      15.5. OU674 Zagreb-Zadar
      16.5. OU464 Zagreb-Zurich
      16.5. OU465 Zurich-Zagreb
      16.5. OU384 Zagreb-Dubrovnik
      16.5. OU385 Dubrovni-Zagreb
      17.5. OU344 Zagreb-Sarajevo
      17.5. OU456 Zagreb-Brussels
      17.5. OU457 Brussels-Zagreb

      Očekuju se i dodatna otkazivanje.

      Sindikati su najavili ovakvo stanje još u siječnju, a uz to su jasno rekli da će se isto produžiti do sredine svibnja. Kako sada stvari stoje izgleda da će otkazivanja produžiti i do lipnja (no u manjem obujmu).

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    9. This is really bad. I feel sorry for the passengers as they didn't sign up for this. I can only imagine the financial toll this will have on OU.

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  14. Funny how now they remind us that last year's profit was actually a big loss, whereas last year it was just a normal profit. Good news every year! :)

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  15. maybe I need another coffee but i dont get this: "The strong growth in domestic passengers was partly caused by Pula Airport, which was closed between January and March of last year due to the overhaul of its runway"

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    Replies
    1. Pula was closed last year for couple of months and there were no Croatia Airlines flights. So last year they had a big decline in domestic passengers during first quarter because of this. Now they have large increase because Pula is open.

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    2. chers mate :)

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  16. This is just Q1. In 2018, after summer season there will be no losses.

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    Replies
    1. After Q3 comes Q4. ;)

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    2. But what will be interesting to see is if they can increase profits this year.

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    3. Doubtful since last year's 'profit' was influenced by LHR slot sale. Without it it would not have been a profit. Same as them having profit in Q1 last year.

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    4. The 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 for?

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  17. Let's just hope there isn't any strike this summer. I wouldn't it write off that possibility.

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    Replies
    1. If crew, pilots or mechanics do that then they would be responsible for burying their own company. I don't think they would be that stupid.

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    2. Which mechanics would go on strike when most of their full time employees left.

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  18. This just proves how bad the management is. Sorry but negative saldo is negative no matter how creative book keeping you do.

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    1. Slots selling, many people leaving the company, wet leasing of other airplanes, flight cancellations, numbers in red...
      Excellent management!

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    2. It reminds on Jat 2013, but Jat didn't sell LHR slots

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  19. I think Tirana could be profitable destination for OU. I dont unferstand why they dont fly already to Tirana.

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    Replies
    1. I don't think there is much demand for travel between these two countries.

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    2. JU has healthy loads in TIA, increasing frequencies and planes.
      I don't know why OU hasn't tried in OU

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    3. JU has a much stronger network out of BEG so there are more transfer options than via ZAG.

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    4. Why OU hasn't tried in TIA

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    5. JU is focused on offering cheap connections.
      OU is mostly O&D. There is little demand, either for tourist or business travel between Albania and Croatia.
      Albanian air travel is almost entirely Gastos oriented. Few Albanian Gastos in HR.

      Just my 2cents

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    6. Have to agree with previous anon. It would be too hard for OU to enter the Albanian market, unless they have very good connection prices. Connections are already well covered by JU, TK, AZ, OS while O&D is barely existent between Croatia and Albania.

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    7. JU was cheap the first year, their connecting fares are in line with what others offer as in they are at market value.

      Also, night flights to SKP and other places are there for transfers so OU is not purely an O&D carrier. They just don't know how to expand and stay in new markets, that's why most of them are seasonal.

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  20. It's a shame that this airline is in the situation it is in. Good luck OU and I hope the management does the right thing and finances improve.

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    Replies
    1. I hope they get privatized and then get someone with a clear vision.

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  21. I agree that the most impressive stat in those result is the load factor which has grown nicely. That's a good result.

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    Replies
    1. It's still just 70%. Compared to other airlines in Europe, and I'm talking about flag carrier not LCCs, that is still low.

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  22. What is the passenger yield, based on revenue passenger kilometers?

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  23. Overall, not a bad result for the 1st quarter and the trends are good. It's refreshing to see actual, real results...portrayed in a transparent way. I still expect for them to end this year with a loss, probably a minimal one, regardless of the tourist season,

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    Replies
    1. Don't forget they had and will have many cancellations in Q2 which will affect their balance sheet. They need a spectacular Q3 to cover all this.

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  24. Adria's CEO will announce, they are interested in buying OU - watch and see.

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    1. Does anyone have any numbers for JP? I mean financially wise.

      The guy working at LJU how were loads to BWK and DUB?

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    2. You can't really now with Adria - last year they had profit due to accounting wizardry. I guess this year there's going to be even more profit due to the money that went missing at Darwin.

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    3. Ljub bwk 62
      Bwk ljub 0

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    4. Let's see how JP performed in April. LJU numbers should be a good indicator of that. They launched many new routes so let's see.

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    5. Looking at the BWK numbers it seems it's basically a charter flight. Still, not too bad.

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    6. Wooow ljubwk 62? LF more than 80% on the first flight operated! Thats very good. In case if they had had saabs, this flight would have been sold out! Who would have thought? Im surprised, i thought this wont be sustainable at all! GO ADRIA! 2 days ago i had a bit too much of a free time and i checked connections to BWK via LJU - JP really offers great connecting times, for example zur-lju-bwk-lju-zur or fra-lju-bwk-lju-fra its never more than 4h, which is not bad at all!

      No numbers for Dubrovnik?🙏🏽

      Thanks buddy!

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    7. I am not from ljub airport but that was numbers of flight...need be 68 but 6 people not come on flight

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    8. The same day zagreb brac was sold out.

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    9. JP offers great connecting times via lju to bwk, much much better than OU, but i dont get the price difference on ljubwk sector and zagbwk. Why JP prices are double (or
      More) of the OU fares? Same week, ljubwk by JP 150€ return, OU zagbwk return 70€. For a 4 member slovenian family from LJU, it is still MUCH chepaer to drive down to ZAG and fly to bwk than to fly out lju. Its true that in the peak summer season there is traffic, border etc, but still 4x70€=280€=saving.

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    10. It could be that JP is primarily after locals and then whatever transfers they can get comes as a bonus.
      I suppose most passengers flying into BWK are going there with some tour operator. Can't imagine the island is that popular to attract large numbers of solo travellers like SPU or DBV do.

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    11. Transfer prices (and timing) is much much better than the one OU offers, there is just a huge price difference on a single sector (ljubwk)

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    12. I know, I am merely pointing out that JP might be after locals here, not so much transfers. I would assume that BWK is mostly a package holiday destination.

      It's as if JU scheduled flights to Zakynthos or Corfu. That flight would primarily be there for locals.

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    13. speaking of JP - 4 out of 6 saabs did a testflight today - example: https://www.flightradar24.com/data/aircraft/hb-izj#112914b5

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    14. Anon@4:46, does this mean they will be incorporated into JP fleet soon?

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  25. I am still hoping ZAG will manage to pass 300.000 in April this year. It's not impossible as last year they had 240.168.
    What worries me are all these OU cancellations. Let's hope other airlines compensate.

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    Replies
    1. 25% growth in April eh? impossibile

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    2. Have to disappoint you. Last year April grew 19%...due 5o late Easter. OU cancellations had up to 1.000 pax influence on total result. Very slow demand this April. The growth will not even be in double digits. May will do well.

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    3. :(
      Oh well ... it was nice while my hopes were up.
      Why was demand for April low? Any specific reason?

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    4. The good news is that Iberia and CSA will keep their seasonal flights to ZAG next winter.

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    5. How many flights will Iberia have?

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    6. I think they are being cautious. By winter time I am sure they will add one or two more flights.

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    7. @11.46 Because last year easter was in the middle of April. This year it was on April 1 so the boost in traffic happened mostly in late March.

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    8. Thank you. Let's hope booming tourist numbers in Zagreb compensate to a certain extent.

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  26. When do the two wet leased CRJ1000s for Croatia Airlines arrive?

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    Replies
    1. I think this week.

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    2. Who will do their maintenance? Will it be locally done or elsewhere? LJU maybe?

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    3. First CRK arrived today.

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  27. I don't understand how people are happy with these results. I don't see any positives.

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    Replies
    1. Revenue, LF and number of passengers are all up

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    2. Man its a 13% improvement on last year if we disregard the slot sales effect. That is pretty good if you ask me.

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    3. It would be good only if those extra passengers brought the airline closer to profitability.

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  28. Funny how they publish 2108 Q1 results before year end results for 2017

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    Replies
    1. They published 2017 results

      http://www.exyuaviation.com/2018/03/croatia-airlines-posts-record-annual.html

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    2. Sorry, my bad.I missed this one

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