Croatia Airlines' losses widen

Croatia Airlines has posted mixed results for the three quarters of the year by recording a 4.6 million euro net loss, while passenger numbers improved to reach record levels. The carrier's consolidated net loss slumped from a profit of 13.4 million euros last year. However, the airline noted that 2017's results were impacted by the sale of its five weekly slot pairs at London's Heathrow Airport for eighteen million euros. The company said that if the slot sale were to be excluded from last year's results, the carrier's financial performance would have improved 10% in 2018. The airline also blamed its results on higher fuel prices and the announced industrial action by its staff over summer, which did not materialise following a court injunction. "During this period there were 1.666 articles and reports about Croatia Airlines in the media which is more exposure than the company gets in an entire year. As a result of the media's coverage of the planned strike, our business results were affected. The strike announcement occured during the height of the summer season (third quarter), which is the worst possible time for Croatia Airlines, keeping in mind the seasonality of the market and that the company earns the greatest amount of revenue at this time of year, which it uses to cover inccured losses over winter", the carrier said.

During the Q1 - Q3 period, Croatia Airlines increased both its expenditure and revenue by 4.7% on last year. It spent most on flight operations, in part due to the higher cost of fuel, followed by passenger services, as a result of increased compensation claims due to a surge in the number of cancelled or delayed flights earlier on in the year, then maintenance and promotion and sales. The airline took out a long-term loan valued at 8.5 million euros in June, as well as an additional revolving loan amounting to 3.2 million euros. At the end of the third quarter, Croatia Airlines had 1.022 employees and fourteen aircraft, two of which were on wet-lease from Air Nostrum until the end of the summer season. In Q3 alone, the airline posted net profit of six million euros, however, this wasn't enough to cover the accumulated losses from the first half of the year.

The national carrier handled a record 1.705.470 passengers on board its aircraft during the January - September period, an increase of 3.1%. Of those, 412.420 travellers were carried on domestic flights, up 1.4%, while 1.223.170 passengers flew on international services, an improvement of 2.5%. The remaining 69.880 passengers were carried on charter flights, up 24.4% year-on-year. However, charters accounted for only 4% of overall traffic. The airline operated 21.891 flights during the first three quarters of the year, which is up 1.7% compared to the same period in 2017. The average cabin load factor stood at 73.7%, down 0.5 points. Loads were down on international flights by 0.2 points for an average of 73.9%, while they declined 0.1 points to 72.4% on domestic services. Passenger carrying capacity, measured in Available Seat Kilometres (ASKs), stood 1.8 billion, up 4.1% year-on-year. The airline’s cargo operations recorded a decline of 0.4%, with 1.674 tonnes of mail and freight uplifted in the first three quarters of 2018, compared to 1.681 the year before.

During the week, the Croatian government nominated to extend the term of the acting CEO, Jasmin Bajić, by another six months. The company said that the airline will begin procedures by year's end to seek out the best recapitalisation model and indentify and verify potential investors with the help of financial consultants.