Croatia Airlines has requested financial assistance from the government in order to alleviate the effects of the coronavirus pandemic. “In order to secure liquidity and sustainability, the company is in urgent need of additional financial resources that would cover the damage caused by Covid-19, in the form of subsidies or donations on behalf of the owner - the Republic of Croatia”, the airline said. It added that a financial injection is part of intensive negotiations with the state. The company also expects to get state guarantees in order to take out long-term loans. Croatia Airlines registered a net loss of 23.1 million euros during the first half of the year, up from its loss of 12.1 million in H1 2019. The carrier expects for its passenger numbers to decline 60% in 2020 compared to last year’s record of 2.179 million. As a result, it will likely handle under one million travellers for the first time since 1999.

Croatia Airlines has drafted three different scenarios as to how the ongoing pandemic may affect its business. “The first projections prepared for our crisis plan foresees a loss of thirty million euros on December 31, 2020. With this result we would have marginal liquidity. Therefore, in order to maintain sustainable operations, we would require additional funds through loans and state guarantees. The second cashflow projection, based on revenue levels being at 52% to that of last year, the suspension of some seasonal routes and a lower average cabin load factor, we project a loss of forty million euros. In case the crisis drags on and revenue levels reach 37% of last year, while border reopenings are delayed, which will result in lower demand at the start of 2021 and our schedule being reduced to significantly fewer routes, we could except a shortfall of 73 million euros”, the company noted.

The Croatian Ministry for Sea, Transport and Infrastructure has reiterated it will assist the country’s national carrier in the face of the coronavirus pandemic, with a solution expected to be presented to the public either next month or in October. Minister Oleg Butković said, “We will have to find a solution to help Croatia Airlines. Of course, we share the faith of all other European countries that are trying to save their national carriers. We certainly won’t back away from helping Croatia Airlines. We will find a solution that will be in line with European regulations. Once the situation stabilises, we will complete the process of finding a strategic partner”. Last month, the ministry said it may merge some airports and other state-owned enterprises into a holding with Croatia Airlines, noting that the entire aviation industry in the country has been hard hit as a result of the pandemic.

Tougher entry and travel rules by countries such as the United Kingdom, Austria and Italy have thrown Europe's long-anticipated August break into disarray, dealing a setback for Croatia Airlines. In the United Kingdom, quarantine measures have been reimposed onto Croatia, while Austria and Italy now require all arrivals from the country to possess a negative coronavirus PCR test. “Currently, the biggest internal risk impacting Croatia Airlines is maintaining liquidity in the coming period due to the cancellation of numerous flights”, the company said.