Croatia Airlines hit by €23.1 million loss


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. During the first six months, revenue declined 52.4% to 48.3 million euros, while expenditure was down 37% due to fewer flight operations. The carrier’s losses widened, and passenger numbers declined during the first half of 2020 as a result of the coronavirus Covid-19 pandemic, which began in March. Croatia Airlines was one of the few carriers in the region to maintain services during global lockdowns by maintaining a daily rotation between Zagreb and Frankfurt between April 5 and June 11.

The company said, “Currently, the biggest internal risk impacting Croatia Airlines is maintaining liquidity in the coming period due to the cancellation of numerous flights - up to 90% in April and May, 80% in June, while the situation is not expected to improve in the coming months when Croatia Airlines makes the greatest share of its annual revenue”. It added, “In order to reduce the impact of the crisis, the company has undertaken a number of initiatives to reduce costs including the cancellation of a short-term lease for a CRJ1000 aircraft, cancellation of a long-term dry lease for a Q400 and the deferral of payments for the long-term lease of an A319 jet until next summer season. Out of the current thirteen aircraft and engine lease agreements, rates for eleven of them have been reduced by utilising a Power by the Hour Agreement [where the lease is accounted based on the number of hours the aircraft is utilised]. Also, costs have been reduced and payments deferred by other suppliers. We have reduced all kinds of investments, including the hiring of seasonal staff, deferral of promotional campaigns and the reduction of wages”. The carrier has also managed to delay payments on loans it has taken out with several banks.

During the first half of the year, Croatia Airlines handled 330.935 passengers, representing a decrease of 66%, or 629.685 travellers, on the same period in 2019. Of those, 83.618 passengers were carried on domestic flights, down 63%, while 244.382 travellers flew on international services, a decline of 66%. The remaining 2.935 passengers were carried on charter flights, down 84% year-on-year. However, charters accounted for only 1% of overall traffic. The airline operated 5.661 flights during the first half of the year, which is down 57% compared to the same period in 2019. A total of 7.536 flights were cancelled. The average cabin load factor stood at 58.7%, down 12.4 points. Loads were softer on international flights by 11.7 points for an average of 60.1%, while on domestic services they were down 10.7 points to 53.9%. The Croatian carrier previously estimated its passenger numbers would decline some 60% in 2020, while its annual losses would amount to thirty million euros.

Comments

  1. Anonymous09:03

    I was expecting worse to be honest. So it's not a complete disaster.

    ReplyDelete
    Replies
    1. Anonymous09:05

      Or it goes to show how unprofitable the business was before the crisis.

      Delete
    2. Anonymous09:11

      That's true. If OU couldn't make money in the current climate... they have no hope in a recession.

      Delete
    3. Anonymous17:24

      Just because you were expecting worse doesn't mean it is not a disaster.

      Delete
  2. Anonymous09:04

    The results aren't too bad considering the current situation.

    ReplyDelete
    Replies
    1. Anonymous09:07

      +1

      Delete
    2. Anonymous09:55

      When you add to a few years of bad results then you get a very different picture.

      Delete
  3. Anonymous09:06

    Dang that's a lot of money.

    ReplyDelete
  4. Anonymous09:07

    Q3 results will be key.

    ReplyDelete
    Replies
    1. Anonymous09:08

      Why would they care? The government will cover the losses.

      Delete
    2. Anonymous09:08

      They obviously do care. Read the second paragraph.

      Delete
    3. Anonymous09:14

      But still more than 1,000 employees

      Delete
    4. Anonymous09:51

      Too many employees.

      Delete
    5. Anonymous 09 :08. Best answer, simple and comprehensive!

      Delete
  5. Anonymous09:09

    Let's see how they go in third quarter. That's when they are supposed make the most money.

    ReplyDelete
  6. Anonymous09:09

    30 million loss in 2020 seems realistic.

    ReplyDelete
    Replies
    1. Anonymous09:20

      Maybe even more since summer months will be dead and that's when they make most of their money. I guess close to €40 million will be the loss.

      Those LJU charters were supposed to be their lifeline, shame they are not working out as expected.:(

      Delete
    2. Anonymous09:20

      LJU charter to Dubrovnik was a lifeline? lol ok.

      Delete
    3. Anonymous09:36

      Charter flights are the most sought after business in aviation. Here flight is short so costs are low, good yield and the agency buys seats upfront. Plus it would help them activate one Q400 a few times per week so that it doesn't sit parked collecting losses. I don't know if you are aware of it but the worst thing that can happen in aviation is for a plane to be sitting on the ground. So yes, like the CEO said, they need liquidity and charters offer it.

      Delete
    4. Anonymous09:39

      All six Q400s are in use. All flew this morning already.

      Delete
    5. Anonymous09:40

      *sorry I was meant to say all are scheduled to fly today. Half of them have already flown this morning.

      Delete
    6. Anonymous09:44

      They all flew this morning because loads are so weak it's not economical to send anything larger, be it A319 or A320.

      Delete
  7. Anonymous09:11

    Hope they get state aid soon so that they can go back to losing €12 million.

    ReplyDelete
  8. Anonymous09:13

    This is terrible.

    Let's not forget that they did not have flight ban at all

    ReplyDelete
    Replies
    1. Anonymous09:16

      It's exactly the same situation at pretty much every airline. It's not like OU is unique in some way in this situation.

      Delete
    2. Anonymous09:21

      And how many airlines operated scheduled flights during corona? Not many. OU is unique in that regard.

      Delete
    3. Anonymous09:31

      Which EU airline did not fly at all during this crisis?

      Delete
    4. Anonymous09:32

      Air Baltic

      Delete
    5. Anonymous09:33

      Air Malta also suspended all flights.

      Delete
    6. Anonymous09:36

      Quite a few. Air Malta, Air Baltic, Austrian Airlines, Blue Air, Brussles Airlines, CSA, Jet2.com, La Compagnie, Lauda, LOT, Luxair, Transavia... and I'm sure there were more.

      Delete
    7. Anonymous09:37

      airBaltic, Air France, Austrian Airlines, LOT, Tarom and so on.

      Delete
    8. Anonymous09:44

      Grounding your airline was the right and moral thing to do in order to reduce the chance of the infection spreading.

      Delete
    9. Just a few companies did not fly, and those were minority, most of companies did fly. Anonymous 9:37 not true Air France did fly all the time, even long-haul flights.

      Delete
    10. Anonymous14:21

      Nope, no they did not. They didn't have scheduled flights during the lockdown

      Delete
    11. Air France did fly all the time. I wrote about it how many flights in Europe there was on 10 articles during Covid 19, Air France including. For example on 13th April there were 44 flights from CDG out of which 19 were long-haul:

      https://tangosix.rs/2020/14/04/kolumna-alena-scurica-kakav-ce-biti-zracni-promet-nakon-korona-virusa/

      Delete
  9. Anonymous09:13

    Now I realize why they said the other day they will handle under 1 million pax.

    ReplyDelete
  10. Anonymous09:15

    Hopefully OU will have a new concept soon with its privatization.

    ReplyDelete
    Replies
    1. Anonymous09:18

      But can a holding with airports, possibly owned by a pension fund really turn things around?

      Delete
  11. Anonymous09:16

    What is good about OU is that they expose the numbers publicly and not hide them as other airlines we already know...
    Basically the loss is around 4m per month, which is quite acceptable. The Euro adoption in 2023 together with Bulgaria, will be of great benefit for OU no longer accounting it's losses in Kunas. Good luck, OU and stay strong! <3

    ReplyDelete
    Replies
    1. Anonymous09:22

      I agree, I tried looking for OS financial reports but none sicne 2013 are available. lol

      Delete
  12. Anonymous09:17

    This is depressing.

    ReplyDelete
  13. Anonymous09:18

    Sell the 4 remaining slots at Heathrow and move to Gatwick. It could save them money and I doubt they would loose too many passengers by moving airports.

    ReplyDelete
    Replies
    1. Anonymous09:20

      I don't think there are any plans to sell anything.

      Delete
    2. Anonymous09:22

      I doubt they will be selling anything at LHR. In OU they are aware of Kucko's crazy decision to sell some of those LHR slots years ago.

      Delete
    3. Anonymous09:38

      Why was it crazy if they were not making money flying into LHR?

      Delete
    4. Anonymous10:11

      It was crazy not selling ticket, but the fact that they were not making money on that route.

      Delete
    5. Anonymous10:12

      Wait a minute... Someone in OU is aware of something?!?!

      Delete
    6. Anonymous11:27

      Anon 10:12, answer is no.

      Delete
  14. Anonymous09:19

    They should do more with their maintenance division.

    ReplyDelete
  15. Anonymous09:19

    Future tourism trends will have a big impact on OU.

    ReplyDelete
    Replies
    1. Anonymous09:21

      What are you trying to say?

      Delete
    2. Anonymous09:24

      I don't see what's unclear. Tourism trends may change in the future as deep recession hits across the world. AA flights to DBV have been cancelled indefinitely for a reason.

      Delete
    3. Anonymous09:39

      AA cut many other tourist heavy destinations, BUD included. They did partner with B6 so they are launching JFK-ATH flights next year. So bigger and more mature tourist markets will be fine but smaller ones will need more time to recover.

      Delete
  16. Anonymous09:23

    LF really low. Understandable of course.

    ReplyDelete
    Replies
    1. Anonymous09:25

      Not as low as I would have thought. I guess they deployed the Q400 more on some routes.

      Delete
    2. Anonymous09:25

      They didn't fly most of their network for most of the first half of the year. So without too many flights the LF can't get too low.

      Delete
    3. Anonymous09:28

      Very correct!

      Delete
    4. Anonymous09:47

      True @9.25. Same way expenses declined because there were fewer flights.

      Delete
  17. Anonymous09:26

    Can someone recount end of year results for OU from 2015 until 2019?

    ReplyDelete
    Replies
    1. Anonymous09:28

      Here you go (in millions of HRK)

      2015 | 14.6
      2016 | 7.7
      2017 | 26.4
      2018 | −82.2
      2019 | −79.8

      Delete
    2. Anonymous09:30

      Losses started when Kucko left and there was nothing to sell.

      Delete
    3. Anonymous09:37

      Kucko come back!

      Delete
    4. Anonymous09:41

      No thanks, keep him in Bahrain.

      Delete
    5. Anonymous09:43

      He destroyed the airline and was then rewarded with a high position.

      Delete
    6. Anonymous09:45

      I am sorry but why exactly was he bad? He ran the airline perfectly during a very challenging time.

      Delete
    7. Anonymous09:48

      I agree with the last anon. He did the best he could with what he was given.

      Delete
    8. Anonymous09:56

      Kucko wasn't the problem, it was the government who was running the airline behind closed curtains.

      Delete
    9. Anonymous10:03

      We all talk about CEOs but what about people such as Zlatko Matesa who has been president of the supervisory board for years and years and is the one with political connections. Why hasn't he used his influence and power to do something good for the airline other than collect a huge wage for his position?

      Delete
    10. Anonymous10:05

      Matesa is too busy running the Olympic committee...

      Delete
    11. Anonymous10:06

      Do people on the supervisory board really do anything for the company?

      Delete
  18. Anonymous09:29

    Unfortunately this year is dead.

    ReplyDelete
  19. Anonymous09:30

    For people advocating privatization, I actually think it's good they haven't been privatized. Had they who knows if the new owner would be able to cope with the losses and the corona crisis. This way the government will certainly save them as a business of strategic importance.

    ReplyDelete
    Replies
    1. Anonymous09:42

      I guess it would depend who they found as a partner. But yes, if they had selected someone as 4K Invest, that would probably have been the outcome.

      Delete
    2. Anonymous09:45

      ^ +1

      Delete
    3. Anonymous09:52

      OU needs a billionaire investor who wants to become a millionaire.

      Delete
    4. Anonymous10:02

      lol

      Delete
  20. Anonymous09:44

    Well one metric that probably improved is their market share in Croatia.

    ReplyDelete
    Replies
    1. Anonymous09:49

      Another one that improved was decline in expenses.

      Delete
    2. Anonymous09:49

      Both of the things you are mentioning did not come naturally or organically but because of the corona situation.

      Delete
    3. Anonymous09:55

      One thing that does seem to have come out of it is that Lufthansa has handed over the FRA-ZAG route completely to OU.

      Delete
    4. Anonymous09:57

      There is also a decline in prospects ;)

      Delete
    5. Anonymous10:01

      @9.55 which makes you think how money making this route is. LH also left JP fly from Ljubljana to Germany and we all know how that ended.

      Delete
    6. Anonymous14:22

      It's not, Kucko said it himself, he was quoted on here some years ago.

      Delete
  21. Anonymous09:44

    I don't see any possibility that the results will be much better in second half of 2020 or in 2021 but let's wait and see.

    ReplyDelete
    Replies
    1. Anonymous09:46

      Everyone is in the same boat.

      Delete
  22. Anonymous09:48

    All of the world's airlines are posting financial losses so the figures mentioned aren't surprising.

    ReplyDelete
  23. Anonymous09:50

    Good luck OU! I hope they get out of this stronger and the government has a more clearer vision of what it can do. I think they definitely realized the importance of OU.

    ReplyDelete
  24. Anonymous09:53

    Kudos to them quickly renegotiating leases and loans. Good work.

    ReplyDelete
  25. Anonymous09:56

    Pity that the other EX-YU airlines do not publish such detailed infos at all.

    ReplyDelete
    Replies
    1. Anonymous10:01

      It would nice to have detailed results for every airline.

      Delete
    2. Anonymous10:18

      At least OU is the best in the region in something. They are always open about their financial results while other carriers are probably too "successful" to show it.

      Delete
  26. Anonymous09:56

    Bad

    ReplyDelete
    Replies
    1. Anonymous10:12

      Q3 is when its going to get really bad unfortunately.

      Delete
    2. Anonymous11:19

      Financial figures are very poor this year but you can't blame them for it.

      Delete
  27. Anonymous10:01

    Ok so we can safely assume they are not going to be sold. Can someone make a realistic prediction of what will happen to OU in the next five years?

    ReplyDelete
    Replies
    1. Anonymous10:09

      Croatia Airlines is the flag carrier of Croatia, and all of us know very well Croatians, as well as any Croatian government will never allow this Airline to go bust.... if they sell good, if not, the taxpayers will assume the bill.

      Delete
    2. Anonymous10:15

      As Croatian taxpayer, I would love to see OU as successful carrier independent from the state or just not see it to exist anymore.

      Delete
    3. Anonymous10:37

      Are there any realistic chances OU could find a strategic partner now that corona has happened?

      Delete
    4. Anonymous10:38

      I think there were few chances before corona. Now there are virtually none.

      Delete
  28. Anonymous10:12

    How the government said how much they will give OU?

    ReplyDelete
    Replies
    1. Anonymous10:13

      No. But it is more than obvious it will give money in September or October (before winter). Remember Butkovic said they will have a "solution" for OU then. They will probably create a holding a pump money to bypass EU restrictions.

      Delete
    2. Anonymous10:15

      https://www.exyuaviation.com/2020/07/state-revives-plans-for-croatia.html

      Delete
  29. Anonymous10:15

    The question is, would there be a loss if there was no corona?

    ReplyDelete
    Replies
    1. Anonymous10:20

      There would. But it seems to be it would have been lower than last year.

      Delete
    2. Anonymous10:34

      It can't be known

      Delete
    3. Anonymous14:23

      I fear in this case it is known.

      Delete
  30. Anonymous11:20

    Let's hope there is a strong recovery in 2021.

    ReplyDelete
    Replies
    1. Anonymous11:28

      I wouldn't hold my breath. Not just OU but any airline for that matter.

      Delete
  31. Anonymous16:49

    Not too bad for the dyno.

    ReplyDelete

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