Croatia Airlines hit by poor Q1 performance


Croatia Airlines saw its losses widen and passenger numbers decline during the first quarter of 2019, with the carrier blaming a range of factors for its weaker performance. The company recorded a net loss of 13.3 million euros during the three-month period, up from its loss of 11.4 million euros in Q1 2018. During the first three months, revenue declined 3% to 34.5 million euros, while expenditure was up 2% totalling 48.1 million euros. The airline blamed the result on the high cost of engine maintenance, which totalled 3.6 million euros, as well as new international accounting standards. It spent most on flight operations, primarily due to the higher cost of fuel, followed by promotions and sales, as well as maintenance.

The national carrier handled 345.800 passengers on board its aircraft during the January - March period, a decline of 2.4%. Of those, 88.214 travellers were carried on domestic flights, down 4.1%, while 256.435 passengers flew on international services, a decline of 1.2%. The remaining 1.151 passengers were carried on charter flights, down 60.1% year-on-year. However, charters accounted for only 1% of overall traffic. The airline noted its softer operational performance was down to the Easter holidays falling earlier in 2018, as well as Croatia's hosting of the European Men's Handball Championships in January of last year, which generated more traffic. Croatia Airlines noted its passenger numbers should rebound in the coming quarters based on solid advanced bookings.

The airline operated 5.019 flights during the first quarter of the year, which is down 1.4% compared to the same period in 2018. The average cabin load factor stood at 68.6%, down two points. Loads were softer on international flights by 1.3 points for an average of 70%, while on domestic services they were down 4.6 points to 60.3%. Passenger carrying capacity, measured in Available Seat Kilometres (ASKs), stood at 333 million, down 0.6% year-on-year. The airline’s cargo operations were weaker by 10.2%, with 476 tonnes of mail and freight uplifted in the first quarter of 2019, compared to 530 the year before. The number of employees at the company increased slightly, from 979 to 1.000.




Comments

  1. The privatization might be too little too late.

    ReplyDelete
  2. I was expecting a loss but I was not expecting passenger numbers to decrease as well.

    ReplyDelete
  3. I love reading their reports to see who they will blame for their poor performance besides themselves, of course.

    ReplyDelete
    Replies
    1. +1
      accounting practices is a new one.

      Delete
    2. For Q2 they will blame early Ramadan.

      Delete
    3. HAHAHAHAHAHHAHAHAHA i dropped on the floor, thank you Anon 09.08

      Delete
    4. Love them or hate them, I do appreciate that they publish such detailed reports.

      Delete
  4. Polij to benzinom i zapali. Da se konačno riješimo ovog otpada.

    ReplyDelete
  5. Everything decreased but the number of employees, the one statistic that is already too high for the airline of OU's size...

    ReplyDelete
    Replies
    1. How many employees do you think would be optimal for OU?

      Delete
    2. Based on their operations, not more than 700

      Delete
  6. So at least now we know why ZAG had such sluggish performance. Time to bring in someone new who can do their job properly.

    ReplyDelete
    Replies
    1. They can't handle it. OU does not have their own check in their hub. They are like unwanted guests in own base. The worst catering is provided in ZAG. Do you know that QR does not take catering only in ZAG (of all their destinations)? All African and Asian airports can provide QR standards, but ZAG not.

      Delete
  7. This is bad. The winter loss is getting bigger to the point that summer profits can no longer cover it.

    ReplyDelete
  8. Purger kaze da je kargo u Zagrebu cudo jedno

    ReplyDelete
    Replies
    1. Speaking of cargo I notice this number is constantly decreasing at Croatia Airlines. Anyone know why? Competition from other airlines?

      Delete
    2. Either other airlines or from LJU where cargo is booming. Another possibility is that they are becoming too expensive and that the industrial output in continental Croatia is softening.

      Delete
    3. But ZAG's cargo numbers are booming as well so it's down to the airline.

      Delete
    4. Emirates and Korea Air have probably take away cargo previously handled by Croatia Airlines.

      Delete
    5. Only small planes operated by Trade Air and later several different European carriers had only cargo only flights from ZAG on behalf of DHL till recently. Now DHL is sending to ZAG its own B757/B767 regularly. And I saw ASL cargo plane about a month ago, and there are plenty others on charterflights as well. So it's not only KE and EK, it's ALL OTHERS except incompetent and corrupt Croatia Airlines

      Delete
    6. Swift Air also switched its CGN-BEG to have the stop in ZAG in stead of LJU.

      Delete
  9. Financial figures are very poor this year an they can't blame it on having sold slots.

    ReplyDelete
  10. Well let's see how they go in the second and third quarters. That's when they make the most money.

    ReplyDelete
    Replies
    1. There has to be a plus after quarters 2 and 3 but especially after number 3. If result after third quarter is negative then it's another loss making year.

      Delete
    2. This is just Q1. In 2019, after summer season there will be no losses.

      Delete
  11. The load factor is quite worrying. Again under 70%.

    ReplyDelete
    Replies
    1. That waste metric that was constantly improving. I remember when it was in the low 60s a couple of years ago.

      Delete
  12. Bilo bi zanimljivo vidjeti Adrijin report

    ReplyDelete
  13. Given the results, 2019 will be a disaster. Let's hope someone takes over and OU ca realize its full potential.

    ReplyDelete
  14. Crazy, that is about 20.000 HRK loss per flight!

    ReplyDelete
  15. Does anyone know what Croatia Airlines' best performing routes are money wise?

    ReplyDelete
    Replies
    1. Probably Frankfurt.

      Delete
    2. Hau jes nou. FRA, probably because LH is famous of charity, and charges like 300 euros for its long-hauls, leaving 300 to OU for the feeder part. LOL

      Delete
    3. So which one could it be?

      Delete
    4. Toronto? Seoul? Newark? Bangkok? LOL LOL LOL

      Delete
    5. In winter none of them make money, at least that's what Kucko claimed.

      Delete
    6. Kucko claimed he would acquire regional jets and open regional bases, as well :)

      Delete
  16. Any particular reason for this loss?

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

    ReplyDelete
    Replies
    1. I don't think anyone is surprised at all.

      Delete
  18. With only 12 aircraft, 1,000 employees seems excessive. That is what drives their costs up.

    ReplyDelete
  19. gde je sada onaj "Bravo Hrvatska" o.O

    ReplyDelete
    Replies
    1. Jos spava.

      Delete
    2. Mozda jos nisu stigli sendvici :)

      Delete
    3. Pa brate što gnjaviš!!!??? Danas je prvi maj!!!! Tko bi danas radio u državnoj firmi. A na Bundeku nema još 4G signal. Ili di se već ono dijeli fažol

      Delete
    4. U Maksimiru. I baš je bio dobar. I ima 4G signala.

      Delete
  20. Croatia airlines seems to be constantly doing something with its engines. How come other airlines don't have such huge expenses for engine maintenance?

    ReplyDelete
    Replies
    1. Same question! last year they took out 8,5 million EUR loan for engine maintenance.

      Could anyone shed some light on this?

      Delete
    2. I'm pretty sure that $8.5 million went to Airbus. They couldn't say we need to take a loan out to pay for planes we don't even have or can use to generate revenue so they made up the engine maintenance story.

      What a mess!!

      Delete
  21. Losses are quite normal amongst airlines. They will adapt to the market and will find a quick solution.

    ReplyDelete
    Replies
    1. LOL LOL LOL!! ! My friend, with politically appointed "management" and hundreds of excessive administration employees, they can neither adapt to the market nor find quick solution. And if they don't find solid investors which would thoroughly change the state of mind, workforce/productivity problem, scheduling/hub system, problem of ageing and inadequate fleet, and bad marketing, there will be nothing to write about OU very soon as they would be past tense

      Delete
  22. Dismiss the management!!

    ReplyDelete
    Replies
    1. Government just extended their term by another 6 months.

      Delete
  23. Mora li ovakva vest za praznik?

    ReplyDelete
    Replies
    1. A ti bi samo lepe vesti i nove linije za praznik? Nema

      Delete
  24. Airline industry is in stagnation.
    - JP reduced operations.
    - JU was saved by EY 5 year contract.
    - YM began with fewer losses.
    - Many Euro bankrupcies.
    Max problems.
    - Venezuela oil.
    - Gulf airlines in trouble: WY, EK, EY.
    - W6 Eastern network stagnation.

    OU needs to restructure at once.

    ReplyDelete
  25. They blame handball championship but in fact there were more tourists in Croatia during first quarter of this year than last year!

    ReplyDelete
    Replies
    1. The problem is they are not coming to Croatia with OU.

      Delete
  26. At least this summer there won't be any strike threats.

    ReplyDelete
    Replies
    1. True, they finally managed to sign new collective agreements.

      Delete
    2. Unfortunately for OU's management, lack of strike threats meant they couldn't add it to their list of reasons for a loss.

      Delete
  27. They need to operate more charters.

    ReplyDelete
    Replies
    1. In winter?

      Delete
    2. If they renewed their fleet during an appropriate time and chose the right aircraft they could have already had a fleet of up to 5 A319/A320's dedicated to charters and leasing for the entire year.
      Remember Dubrovnik Airline carried about 500 thousand passengers during their last year of operations. Why OU could not see this as an opportunity to expand into the Croatian charter market when that airlines ceased operations is still may beyond me. Now these 500 thousand and probably a few million more are flown to Croatia with foreign airlines!

      Delete
  28. This just proves how bad the management is.

    ReplyDelete
  29. OU remains and will remain a legacy, Star Alliance airline. I am confident that the new logo and changes wilm enhance its prestige.

    Plus, LH will always be there to help OU.

    ReplyDelete
    Replies
    1. Comment of the year.

      Delete
    2. Please give me some of what you take. Or at least your pink spectacles :)

      Delete
    3. 12 aircraft, half of it turboprops and the other half knackered old A320s and you call this legacy airline :)

      Delete
    4. He is obviously the member or fan of the ruling party. They claim they made Croatia as a state and it is their legacy. Subsequently, the airline, owned by the state is legacy as well. Pure linguistics :) :) :)

      Delete
    5. But definitely the best part ever of the comment is LUFTHANSA HELPING. I 'm on the floor again, can't stop laughing

      Delete
    6. Save your baseless comments elsewhere. There have been few OU declines during its 30 year old existence.
      Croatia Airlines was found on 20th August 1989, hence soon serving the people for 3 decades.

      Flawless records, punctuality, primary destinations and most importantly never downgrading service.

      It is of LH Croatian interest to keep the airline sustainable. The market and the coast remain crucial.

      Delete
    7. Please don't explain to me when OU was founded as I was one of those involved in it. I was the crew of the FIRST OU commercial flight in 1991. I left it long time ago because instead of regional power, it became servant and feeder for LH, because it missed to use the opportunity of the Croatian market and tourism, and instead of at least 40 or 50 % it has shamefully 15 or 20 %of the market, because it is not led by expert managers but by politic aparatchicks, because it is mentally not in 2019 but in 1970, because I feel ashamed entering Q400 in MUC instead of having our own direct US flight, and so on and so on, but hey if you are one of those 200 now sitting in Buzin, writing this in office hours and praising your party fellows charity, and being afraid for your pathetic litlle chair, I understand protecting this failed project so bitterly

      Delete
    8. Flights to America don't mean anything. What is important, is to be performing well in your region. There are other much more tragic aviation projects, such as MA, OK and so on.

      FYI, those are the latest CTN reviews on TA:

      https://www.tripadvisor.com/Airline_Review-d8729057-Reviews-Croatia-Airlines

      As you can see, the airline is one of the cleanest, safest and most punctual.

      Work still needs to be done for the IFE but the catering is excellent, customer service, etc.
      The Q400 is a Canadian jet and one of the most reliable aircraft in the industry. Nothing to be ashamed of operating a smaller jet, when there is less demand on certain days.

      Delete
    9. Catering? What catering? The shameful little snack you get onboard? Don't make me laugh.

      Delete
    10. I understand, you are one of those who must be right, no matter of the facts and arguments. But please, don't comment on safety, as in Europe there are only 2 groups of airlines : safe and blacklisted. OU is not more or less safe than any other carrier, as in order to operate you must be SAFE. Only people who have no clue of what aviation is can make safe and non-safe distinction within EU airlines. And I never said OU had bad on time performance or bad catering/service. I speak of much bigger and more important things which you either don't understand or refuse to understand. But as I see who I am talking to, I will now say : Yes, absolutely, you are right, OU is the best and one of the biggest and most important airlines in Europe, and most successful too, and it is precisely what today's topic is about. Cheers!




      Delete
    11. Anon 12:17

      I invite you to read this lovely report:

      https://www.exyuaviation.com/2019/02/trip-report-croatia-airlines-zagreb.html

      Rijeke,
      No need for all this euphoria. OU is not the best airline in Europe but it is definitely much much better than others.

      https://www.exyuaviation.com/2019/03/summer-2019-croatia-airlines.html

      Take a look at the effecient network covered. All 4 Scandinavian capitals and major European cities.
      The coast is excellently connected to essential destinations and a strong, domestic market.
      You also have to be thankful for the experience OU gave you, me and them an experience in life.

      Delete
    12. Please take a look at dictionary under "euphoria" and find one connection with my posts.
      One report means nothing, it's subjective point of view of particular individual, maybe you.
      Network cannot be efficient. Operations can be efficient or not, network big or small.
      Domestic market is not strong, quite opposite, Slavonia and Dalmatia are not connected satisfactory, neither North and South Adriatic. There is potential for SPU and ZAG flights to be every hour, not 3 or 4 times per day.
      I do not have to be thankful to OU for anything, actually I transferred some of my previous experience to people in OU.
      If you think you need to be thankful to your employer, and show your loyalty by writing appraisals, it just proves my previous points.
      Case closed. Not discussing any more. Ciao!

      Delete
  30. I think Tirana could be profitable destination for OU. I don't understand why they don't fly already to Tirana.

    ReplyDelete
    Replies
    1. To understand that, you need to know about something called "those whose most distant destination ever is Graz syndrome" and which describes subject mentality excused by some prestige and similar BS stuff. Bottomline : good to be servant as long as everything is shiny around. Unfortunately, such people are dominant in croatian "structures", and lead the country in definitely wrong way. If we add to mentality problem usual incompetence tied to politics everything becomes more than clear. Just one example, very much related to your TIA comment. Long, long time ago on board meeting, OU representative in ZRH suggested prices for ZRH flights, which were at those times some 20 %higher than Swiss air's, to be reduced and brought to equal level with Swissair. As a result of he guaranteed 90%LF, and drastic financial improvement on both ZAG-ZRH and ZAG-SKP flights which at the time had LF of cca 40 and 50 %, respectively. The "CEO" answer was : NO! We are not going to drop the prices and we are not going to transport "that kind" of passengers. And since then, the things have not changed or have changed very very little. Cheers!

      Delete
    2. Interesting. I hope things can change. What do you think is the solution to OU?

      Delete
    3. Privatization ASAP with several both EU and non-EU investors, and drastical change of the way they work (I don't even dare calling it business model). If not, bye, bye

      Delete
    4. But the longer they wait the more debt OU accumulates!

      Delete
    5. No, debt is not the biggest issue, actually in summer they usually earn enough to cover the operational debts from winter. Problems are lack of vision, no strategy, not earning enough to invest in development, law work productivity/to many employees, bad organizational, bad scheduling, lack of hub and spoke system, qualified expert work force leaving, marketing almost non-existent...... .

      Delete
    6. Pozdrav iz Rijeke duboki naklon do poda. Iskreno!

      Delete
    7. Hvala Purger :) I sori ako sam nekada malo grub ili pretjeram ako se o necemu ne slazemo, ali takav sam, jbg

      Delete
    8. O da kužim Vas full. O i te kako kužim. Jel sam i ja apsolutno takav. Jbg...

      Delete
  31. 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.

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

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

    ReplyDelete
  33. Having pilots paying to fly in OU isn't enough to make profit I guess.

    ReplyDelete
    Replies
    1. Nearly the entire industry engage in this practice now but what is more unfortunate is that they are unable to take advantage of having on average such a low paid workforce. How do airlines who charge less for their airfares but pay their employers more than double that of OU perform better financially?

      Delete
    2. Because OU is political project. Because with 12 planes they have same number of administrative employees like other companies with 60,70, 80 planes. Because they invent positions for cousins, mistresses and loyal ruling party members who don't even come to the office, or positions non-existent in other airlines, with more than "decent" salaries. Because "managers" get annual bonuses in several zeros amounts, for leading the company unsuccessfully, because they are getting their "share" for letting passengers be carried by other airlines, because they issue free tickets to politicians, supervisory board and managers friends and relatives, because they are sponsoring events and organizations financially and in other ways without having anything in return for it, because in their state of mind they still live in past century and ex-system

      Delete
    3. "Nearly the entire industry engage in this practice now"

      Not even FR/EZY/W6 (or any other LCCs) take money from first officers per hour to sit in the cockpit on line flights, let alone any other Star Alliance member, except OU.

      Delete
    4. Interesting, Qantas proper (or mainline) is the only airline is Australia which doesn’t. Jetstar (Owned by Qantas) charge their new pilots $33,000 to work for them as a pilot. Virgin changed their policy recently but if you leave the company before a 5 year period you owe them money $30 grand if you leave less than one year, 24 grand after 2 years etc etc. I’m pretty sure the airlines in Europe have a similar policy.

      Delete
  34. BTW, as interesting fact, in Q1 Eurowings minus is €257 millions

    ReplyDelete
  35. All airlines have had bad Q1 results including Lufthansa, Ryanair, Easyjet. The late Easter, and high fuel prices have had an effect.

    ReplyDelete
    Replies
    1. Yes but for Croatia Airlines the bad results come every quarter. This is not an exception.

      Delete
    2. if 20 airlines will have a bad results, that doesn't mean that Croatia airlines have to has bad results as well.

      Delete
    3. Where did you find Q1 financial results for EZY and FR?

      Delete
    4. Google is your friend.

      Delete
  36. Can someone predict what are realistic and possible outcomes for OU? Please exclude privatization as I don't think that's going to happen.

    ReplyDelete
  37. Ove računovodstvene standarde su izmislili mrzitelji svega katoličkog i rvackog.

    ReplyDelete
    Replies
    1. Majstore da te nema trebalo bi te izmislit :) :) :) :) :) :)

      Delete
  38. Big percentage of customers is the exyu diaspora (Benelux,D,S,F) wich is now using Ryanair to BNX. Direct link to passengers decline.

    Hope to see more flights to BNX!

    ReplyDelete
  39. Croatia Airlines Fail

    ReplyDelete
  40. @ pozdrav iz Rijeke - it is clear, that OU was and still is political project. So is Lufthansa. It is only question of modus operandi. And here all simillarities between CTN and DLH come to abrupt ending. It would be terrible shame to end operations, just because of the abuse. Stop the abuse and let the company breathe and operate without "cousin" pressure. I'm totaly against privatization of companies, established by the state, because they in essence belong to all citizens. But at the same time I am even strongly against meddling with their business. Establish them, givem them a kick start, give them priorities (and fund them if possible - like non-profitable, but important routes) and leave them be. One must be fool to think German State is indiferent to Lufthansa's fate...
    Othervise - I like your comments...eventhough they are in essence sad (because they are true).

    ReplyDelete
    Replies
    1. This comment has been removed by the author.

      Delete
    2. I can't agree Bor. Most successful countries in the world have small governments. If Croatia Airlines plus all the other state owned companies like the ship building industry for example was privatised properly years ago than they would all look completely different to how they do today (maybe they would not exist) but in their place, again if government got out of the way, would be better than what we have today. The evidence from examples around the world even suggest that they could, if not profitable at least be larger where they would employ more people and pay more taxes to the state.

      Unfortunately and sadly the only reason these state own companies exits is to make certain individuals wealthy while the most vulnerable suffer.

      Delete
    3. up to you if you agree or not, it depends on what are your criteria for succesful country. Every normal country defends its cruical infrastructure. Of course, Croatia, unfortunately as well, is not normal country. As all ex-yu countries....

      Delete
  41. Well, no wonder.

    Today I heard them advertising on Serbian radio stations "Travel to Split from Belgrade for 119 EUR with 8kg hand luggage"

    Summer vacation travel with hand luggage only? And I guess, when zou want to add checked luggage they charge you like you are boarding another passenger...

    ReplyDelete

Post a Comment

EX-YU Aviation News does not tolerate insults, excessive swearing, racist, homophobic or any other chauvinist remarks or provocative posts with the intention of creating further arguments. A full list of comment guidelines can be found here. Thank you for your cooperation.