Croatia Airlines hit by €14.6 million loss in Q1

Croatia Airlines saw its losses widen and passenger numbers decline during the first quarter of 2020 as a result of the coronavirus Covid-19 pandemic, which began in March. The carrier registered a net loss of 14.6 million euros during the three-month period, up from its loss of 13.3 million in Q1 2019. During the first three months, revenue declined 3% to 32.7 million euros, while expenditure was up 1% totalling 47.2 million euros. The airline warned the full effects of the coronavirus will be felt during the second quarter, when much of its operations were suspended. Croatia Airlines was one of the few carriers in Europe to maintain services during the height of the pandemic by maintaining a daily service between Zagreb and Frankfurt.

Croatia Airlines said, “Revenue from tourism makes up a significant share of Croatia’s GDP, while the tourism and transport sectors have been hit hardest by the coronavirus pandemic. It is now obvious that the pre-season has been lost, and the main tourist season will be impacted as well. European countries, most notably Germany, Slovenia, Italy and Austria, as the main markets for Croatian tourism, have had their economies severely affected”. The carrier added, “The company’s performance in 2020 will greatly depend on external factors, as well as the decisions and recommendations made by the Croatian Civil Protection Authority, which directly impacts on the likelihood of domestic and international travel”. From the onset of the pandemic until the end of March, Croatia Airlines saw its sales decline by 18.3 million euros, while the amount it spent on ticket refunds increased by 1.2 million euros on 2019. “Despite launching a voucher system, which can be used by passengers for future travel, it is expected that a significant number of unused tickets will have be refunded which will serve as another blow to the business and the company’s liquidity”, the airline noted.

The national carrier handled 270.413 passengers on board its aircraft during the January - March period, a decline of 21.8%. Of those, 65.809 travellers were carried on domestic flights, down 25.4%, while 203.130 passengers flew on international services, a decline of 20.8%. The remaining 1.474 passengers were carried on charter flights, up 28.1% year-on-year. However, charters accounted for only 1% of overall traffic. The airline operated 4.528 flights during the first quarter of the year, which is down 9.8% compared to the same period in 2019. The average cabin load factor stood at 60.1%, down 8.5 points. Loads were softer on international flights by 9.5 points for an average of 60.7%, while on domestic services they were down 3.9 points to 56.5%. Passenger carrying capacity, measured in Available Seat Kilometres (ASKs), stood at 305 million, down 8.4% year-on-year. The number of employees at the company increased slightly, from 1.000 to 1.037. This was primarily as a result of taking on additional cabin crew members in the lead-up to what was to be a busy summer season with a record number of aircraft in the airline’s fleet.