Croatia Airlines registers €47.3 million loss in 2020


Croatia Airlines has registered its biggest financial loss in eight years, while carrying the fewest passengers in over 25 years as the aviation industry was obliterated by the coronavirus pandemic in 2020. The carrier recorded a 47.3 million euro loss, however, it factored in 11.7 million euros in direct state aid and 33.2 million euros granted to the company as an equity loan by the government. The company was also recapitalised by the state with a 46.2 million euro cash injection. “The year 2020 was marked by significant changes to the business environment which had an enormous impact on the company’s finances. The crisis caused by the coronavirus has drastically slashed demand for air travel, which, in line with travel restrictions, resulted in a decrease in capacity, a drastic reduction in planned flights, as well as the termination of existing or planned new services”, Croatia Airlines said.

The Croatian carrier handled 618.000 passengers during 2020, representing a decrease of 73% on the year before. It operated 13.052 flights, a decline of 54%. Its average cabin load factor stood at a record low 49.6%, down 24 points. The amount of cargo carried declined 32.5% on 2019. Croatia Airlines maintained scheduled revenue services throughout the height of the global lockdowns by operating flights between Zagreb and Frankfurt. The Croatian flag carrier managed to improve its market share in its home country by thirteen points to 36%. This was primarily down to foreign carriers significantly reducing their operations to the Croatian coast over the summer months.

Croatia Airlines has undertaken a number of measures in order to reduce costs. “At the very start of the crisis in March 2020, Croatia Airlines introduced rigorous cost saving measures in all segments. This included the inking of a new agreement with trade unions for the reduction of rights in the existing collective agreement, as well as negotiations with suppliers which resulted in significant savings. The airline renegotiated leasing terms for aircraft and engines, cancelled the lease of additional jets over the summer and terminated plans to hire seasonal staff members. The company also slashed spending for marketing and promotion”, Croatia Airlines said.


Comments

  1. Anonymous09:03

    So... Almost 92m if we don't count the state aid?

    ReplyDelete
    Replies
    1. Anonymous09:04

      Actually 138.4 million. The recapitalization is also included I assume.

      Delete
    2. Anonymous09:09

      So Croatia is having national airline, pumping millions in it yet they still register one of the biggest GDP drop in EU. How is this possible?

      Delete
    3. Anonymous09:10

      Because that national airline is not independent. Look at their network, they are basically there for LH Group.

      Delete
    4. Anonymous09:13

      Ah, so the loss is LH's fault?

      Delete
    5. Anonymous09:14

      Last anons, really stupid comments. GDP drop has nothing to do with national carrier.

      Delete
    6. Anonymous09:14

      No, LH is smart. It's the Croatian government that's stupid. They are basically funding an airline's loss so that a German business can profit from it.

      Delete
    7. Anonymous09:44

      138,4 mil EUR loss in 1 year ? Even in pandemic year it is...oh boy . More than 10 mil EUr loss per aircraft!

      Delete
    8. Anonymous10:28

      Plus didn't we read on here how OU played a key role in tourism on the coast this year? With these finances I can't see how unless they were dumping fares.

      Delete
    9. Anonymous11:55

      @09:14:

      Actually, not stupid. Or would you rather be paying LH directly as we're doing in Slovenia. At least people still have their jobs and paying taxes.

      Delete
    10. Anonymous13:09

      Create jobs for jobs sake. Re-capitalise airline every year, just so the same money could be paid back into government funds by taxes and other contributions.

      Very sound economical thinking.

      Delete
    11. The purpose of companies is not to "create jobs", not even government owned ones. Their purpose is to create value for their owners. If there's value, there's work, and there'll be jobs.

      Delete
    12. Anonymous19:35

      Anon 11:55

      Slovenia's moto for everything is: why pay our own people if you can pay others :)

      Delete
  2. Anonymous09:03

    So basically 47 million was thanks to creative accounting because they deducted 11 million and 33 million they got from state aid?So the actual loss was close to 100 million?

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  3. Crazy that today OU has just six flights out of ZAG from which 4 are PSO!

    ReplyDelete
    Replies
    1. It's the same on Saturday and Tuesday this winter timetable.

      Delete
  4. Anonymous09:05

    This wasn't that bad at all until I saw the state aid.

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  5. Anonymous09:05

    I wonder how long will it take them to pay back the 33m "loan"...

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  6. Anonymous09:06

    I think OU is one of the few airlines in the world that saw a reduction in cargo!

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    Replies
    1. Anonymous09:06

      Well their network collapsed so where would they carry the cargo? I don't think they had special charter flights either.

      Delete
    2. Anonymous09:10

      Cue all the commentators here who wrote "national carriers were vital in carrying cargo during the pandemic".

      Delete
    3. Anonymous09:11

      Just because OU is incompetent doesn't mean other airlines were as well. Even Wizz Air operated cargo charter flights from Budapest, of course those contracts were never made public so we don't know how much Hungary pumped into Wizz Air.

      Delete
  7. Anonymous09:06

    Anyone know why AMS and FRA were delayed this morning?

    ReplyDelete
  8. Anonymous09:09

    This is bad.

    ReplyDelete
    Replies
    1. Anonymous09:28

      Well it's not really surprising. It's not like any airline had a good result...

      Delete
    2. Anonymous09:30

      But not that bad, that's almost, 10m loss per aircraft.

      Delete
    3. Anonymous09:32

      Well few airlines have reported their full year 2020 results, so we will see how bad it is.

      Delete
  9. Anonymous09:28

    Yes the loss is big but it is not as bad as I thought it would be if you take into consideration Croatia Airlines was producing losses well before this crisis.

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    Replies
    1. Anonymous09:40

      But so huge... Terrible

      Delete
    2. Anonymous09:42

      I wonder what the loss of some certain other airline in the region will be, since you are so shocked and appalled by this.

      Delete
    3. Anonymous09:46

      You mean those that fly TATL?

      Delete
    4. Anonymous10:29

      I think he's referring to OS which struggled big time in covid. They even sold three B767 yesterday.

      Delete
  10. Anonymous09:42

    Money being pumped into the airline - given the prevailing circumstances - I totally get. No airline will be immune from handouts. HOWEVER, what is unfortunate with this, is that unlike many other airlines who have and will receive handouts, there are no strings attached ie. no requirements what they do with the money e.g. no mandate that they reinstate certain flights, or invest in new planned routes, or that they cut their headout by XX%, or that they re-fleet given favourable current market rates ... no reset of anything ie. NO NOTHING !

    So what will happen, is exactly that - NOTHING. We will see the same incompetant management remain in place doing the same things that they have been doing for the past 5 years - which is NOTHING !

    They will squander this opportunity to reinvent themselves and then in 5 years time when the money runs out - the same story - we need more money !

    OU is just like Groundhog Day - the same story time and time again.

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    Replies
    1. Anonymous09:45

      +100

      Delete
    2. Agree and sign every single word. Just with one small correction : they have been doing nothing not for past 5 but for past 25 years

      Delete
    3. Anonymous12:13

      For past 25? Are you sure? They had 13 aircraft and 2.2 mil. passengers in 1995?

      Delete
    4. Anonymous 12:13, basic aviation lesson. It does not matter how many airplanes you have or how many passengers, the only that matters is if you have money profit.

      Delete
    5. Anonymous12:58

      For private owned company yes.
      For state owned company it is important how much money directly AND indirectly airline brought to the country.

      Delete
    6. Anonymous13:05

      And since the latter is extremely difficult to quantify, it gives the perfect excuse to continously pour money into black holes that are most state-owned airlines.

      Delete
    7. @An.12.13
      Yes, I am sure. OU started approximately same time with Ryanair. Ryanair had to compete with pretty strong flag carrier - Aer Lingus, OU did not have that problem. Ireland at that time was not so developed yet, they had disputes with and about Northern Ireland, so not fully stable both politically and economically. Much less favourable geographical position. No tourism at all. And despite all of those, how many passengers and how many aircraft has Ryanair today? 13 and 2 million, right? I feel so sorry for you to advocate, defend and praise company which had potential to become much much much bigger and much much much better than it is, and to really contribute to overall Croatian economy, but is something totally opposite - tiny, unimportant feeder with ageing fleet, dominantly turboprop, which missed all opportunities because of political influence, lack of vision, inertness, incompetence and mismanagement

      Delete
    8. And if you don't accept comparison with Ireland, just look at Latvia - Air Baltic and Smartlynx - 60 aircraft, some of them newest, most expensive and state of the art. And both profitable. Not speaking corona time, of course, but regular situation until 2020. And they were till recently Soviet Union - occupied, and totally destroyed. And look what they did. Or look even closer, to Serbia - yes, they are heavily subsidised by the state as well - but totally they received much less subventions than OU, because of the shorter aid period, and in relatively short time modernised the fleet, expanded network, introduced long-haul service which is on the way to become profitable. In the country with no EU advantages and with almost no tourism, and poorer than Croatia. So if you don't want to comment my Ireland story, are you really not ashamed for what Latvia and Serbia did and Croatia didn't?

      Delete
    9. Anonymous14:22

      In the case of Serbia, we are talking about 850€ million, that was injected by the government since the creation of the carrier in 2013. OU has returned received much less.

      Delete
    10. Anonymous14:29

      I like how you made up a fake number and are then presenting it as fact every other day.

      Delete
    11. "returned received much less" LOL LOL LOL Returned or received? Returned much less, fully agree, LOL again. Someone is little nervous :) :) :)

      Delete
    12. Anon 14:22
      In the case of Serbia you're telling fairytales made by self-proclamated expert named Purger who don't know what he is talking about.

      Delete
    13. Anonymous16:00

      If Croatia Airlines does the same thing as Malev and CSA it won't be the end of the world. Trade Air will continue domestic lines with PSO. Legacies Lufthansa, KLM, British, Air France etc will increase connectivity to main hub airports. Charter flights to coast were mostly done by other airlines and not OU. Wizz and Ryan will increase presence for direct connectivity. Overall not a catastrophic scenario as some think would happen when OU ends.

      Delete
    14. Anonymous18:01

      Or if OU reforms itself like BT or LO did then it might not have to go the way of MA or OK.

      Delete
    15. Anonymous18:18

      To get to new fleet like BT or to get some widebody aircraft like LO, OU would need more than a billion. Even just to modernize current fleet with EU help, bank loans and government help would not be realistic in this crisis. As is OU needs hundreds of millions just to stay afloat and additional large investment would mean billion or more.

      Scenario by Anon at 16:00 is more likely. Government can give subsidies to some foreign airlines if they base aircraft in Croatia and hire local crew. It would cost much less than any other scenario.

      Delete
    16. My point : OU HAD chances to do what BT or LO or A3 or even JU, did, 10-15 years ago, when Jat Airways was down on the knees, when MA collapsed, when Adria started to be weaker, when tourism in Croatia was starting booming, when LCC were not that much present both in Croatia and region, when debts were smaller, when fleet was younger, when general atmosphere in Croatia, and globally, was much more optimistic and relaxed. Now, it's too late. And the worst of all is that nothing will change and hundreds of millions of taxpayers money will be poured continuously into OU in order to feed and make money for LH. Because it is precisely what the people whose World ends in Graz are happy with and proud of.

      Delete
    17. Anonymous00:58

      You're being too optimistic about the potential chances OU has. And all your comparisons are flawed.

      Ryanair is an LCC operating not just out of Ireland, but all over Europe. OU is a network carrier operating out of its home country.

      AirBaltic is in a niche position, has little to no competition, spreads its operation over three countries, of which two, Estonia and Latvia, are quite booming for business, especially in IT and high-tech. And the most important element: AirBaltic adopted the hub-and-spoke model. OU is not in a niche position, has lots of competition, Croatia isn't as booming for business, and OU is basically a P2P airline, beside serving as a feeder for LH.

      Air Serbia inherited all the assets from JAT plus help from Etihad and Serbia has almost twice as much citizens = potential customers than Croatia.

      OU could certainly be bigger, but not if it keeps depending on its home market. OU has one advantage, which is that Zagreb is seen by other airlines as the main airport in former Yugoslavia. So these airlines are creating and enlarging the market and it is up to OU to claim market share.

      Delete
    18. Anonymous02:22

      @15:01 - não!
      Purger was quiet about ASL but the truth is that GoS heavily invested in the carrier to be where it is now. OU cannot allow itself this luxury because of EU law. There are so many articles about state aid going to ASL, which is still good. The market share in BEG has now increased to 60%.

      Delete
    19. Anonymous04:12

      Anonymous 00:58 Zagreb is seen by other airlines as the main airport in former Yugoslavia

      Main airport only in terms of fans with illusions of grandeur. Reality says PRN overtook ZAG in 2020. Once tourism recovers both SPU and DBV will overtake ZAG within 5 years. BEG had more than double passengers than ZAG in 2020 and when expansion is complete it will have 29 jet bridges to Zagreb's 8. Wake up.

      Delete
    20. Anonymous06:48

      JU's market share grew from 42% to 53% now in covid so I don't know where you found the 60%. On the other hand, OU has over 90% market share in ZAG.
      I think you were trolling on purpose when you wrote about airlines considering ZAG as the main airport in ex-YU. That argument would fall flat on its face when you look at who kept flying there now in the crisis.

      In my opinion, OU is done. They have gone way down the rabbit hole and I don't think anyone is willing to invest in them now. For the government it would be easier to just let them go and have EW base one CRJ in ZAG and fly to main airports around Europe.

      Delete
    21. Anonymous07:35

      Air Baltic profitable? Well, accounting tricks only permitted in Latvia have allowed them to portray themselves as such, but when they needed to source financing of their new fleet in the international market, they had to adapt their accounting to "international standards" and suddenly they were loss-making.

      https://news.err.ee/979989/air-baltic-continues-to-make-losses-but-still-flies-on

      Also, there are rumours that Latvia accepts a tax haven set-up for Air Baltic's crew salaries as a hidden subsidy.

      Delete
    22. Anonymous10:04

      "Also, there are rumours that Latvia accepts a tax haven set-up for Air Baltic's crew salaries as a hidden subsidy."

      So... like Slovenia?

      Delete
    23. @An.00.58
      I had intention to comment on all other nonsenses you wrote but I gave up when I read about ZAG being the main airport of ex-yu. After that statement, no further argument is needed.

      Delete
    24. Anonymous23:35

      Pretty much every major European airline flies to ZAG, with not all of them flying to BEG, PRN or other ex-yu airports. Moreover, ZAG is the one receiving long-haul flights from Canada and Asia pre-covid. So airlines obviously view ZAG as the main gateway to ex-Yugoslavia. Are their choices nonsense? Nonsense is what you wrote before, comparing OU with FR. There's no way that makes sense.

      Delete
  11. Anonymous10:03

    Investing money into the airline if fair enough. 2020 was a BAD year for everyone. However, what this exposes, is just what a poor state the airline was in going into a year such as 2020 turned out.

    If they needed this much money just because of 2020, they will be lucky to see out 2021 with the money that has been invested. 2021 will be no better than 2020 and by all accounts, will be another horror show.

    My question - then what ? What can we expect in 2022 and 2023 - more handouts ?

    ReplyDelete
    Replies
    1. Anonymous11:25

      Most probably. But it will be the same everywhere under the explanation that the effects of the virus will be felt for years.

      Delete
  12. Anonymous10:51

    Expected

    ReplyDelete
  13. Anonymous11:08

    I don't like this, news like this make me sad.

    ReplyDelete
    Replies
    1. Anonymous00:04

      Cheer up, it will be OK ;) with the strong backing it has from the government, OU will live to see another day.

      Delete
  14. Anonymous11:35

    I am amazed that they operated almost half of the normal number of flights last year. Compared with other European airlines, that's a lot! I know that they have used the smaller Dash 8, but wouldn't they have saved a lot of money by consolidating frequencies too? It's not like the average cabin factor was particularly high. But fair enough, it's easy for me to judge with the benefit of hindsight...

    ReplyDelete
    Replies
    1. Anonymous00:03

      Yes, quite impressive with the number of operated flights, especially since OU didn't have many repatriation flights.

      Delete
    2. Anonymous07:39

      You say impressive, but the point I was trying to make is that it rather seems foolish and a key reason why they made such a big loss.

      Delete
  15. Anonymous14:54

    Totally don't get this obsession with national carriers in the Balkans-and even less the ridiculous arguments poster use to justify the existence of these losers.
    Yesterday, Czech Airlines (one of the oldest carriers in Europe) filed for "reorganization" and fired all 600 + employees because the Czech Government would not bail them out after making a one in time $70 million loss, but here we go, OU a perpetual loss maker got bailed out again, because "it is good for the economy".

    ReplyDelete
    Replies
    1. Anonymous18:02

      Yah it's only the Balkans. Say taht to the French, Austrians, Swiss, Belgians or the Italians.

      Delete
    2. Anonymous21:53

      Ironically, three of those countries flag carriers are owned by Lufthansa :)

      Delete
    3. Anonymous01:08

      Well, national airlines are very important for the economy. Actually, it is the network that is important for the economy. National airlines can play a key role in that, but then they have to adopt the hub-and-spoke model. KLM with Schiphol Airport is a prime example of an extensive network that would normally be way too big for that country, but it is the hub-and-spoke model that makes it work. Same goes for Gulf carriers, Icelandair, Singapore Airlines and Cathay Pacific and their home airports. Croatia Airlines is clearly following a different strategy, so the value of its network is smaller.

      Delete
  16. Anonymous09:09

    Bravo Hrvatska!

    ReplyDelete

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