Croatia Airlines has seen its losses narrow to 12.9 million euros during the first quarter of the year, down from 14.6 million over the same period in 2020. The figure is also an improvement on the pre-pandemic 2019, when it registered a 13.3 million euro loss during the first quarter. Revenues were slashed by 54.4% to 15.1 million euros in the January - March period, from 32.7 million a year earlier, while expenditure was down from 47.2 million to 27.9 million euros, primarily because of the decreased volume of flight operations. At the end of the quarter, Croatia Airlines had 949 employees, down from 1.037 during Q1 2020.
The Croatian carrier had a high level of liquidity by the end of March this year due to state aid, a government equity loan and state recapitalisation which was carried out towards the end of 2020. However, the airline warned it may soon face liquidity issues again. “The company is facing decreased demand for travel and ticket sales. Therefore, the question of liquidity may arise again in the coming period, especially when we take into account the uncertainty over the duration of this crisis. The company is undertaking all measures to actively monitor liquidity, as well as optimise its business. As a result, we continue with the implementation of rigorous cost saving measures”, the airline said.
Croatia Airlines has registered an 89% decline in bookings during the first quarter, while passenger numbers were down 73% to 72.263. At the start of the year, Croatia Airlines employed an external consultant, BDO Savjetovanje, to draft a document entitled “Analysis of the intended use of state aid and savings made since the start of the Covid-19 pandemic”, which covered all aspects of the austerity measures undertaken by the carrier. The document also includes a savings plan for 2021. Croatia Airlines recently said it had begun work on a “Post Covid Strategy” and was also seeking an external advisor to work alongside it in creating the document.
I honestly don't understand why they need an external advisor to write a document on how they are using state aid, and then another on what their strategy will be after Covid.
ReplyDelete+ 1000
DeleteSo someone can get money.
DeleteThis seems totally senseless to me too. Can't the airline itself write how they are using the aid and what they will do after the pandemic? Why do you need an external entity to do it for you???
DeleteYou are obviously not from Croatia but the government here loves paying their experts for nothing because they are usually their friends, lovers, family...
Delete"The company is facing decreased demand for travel and ticket sales. Therefore, the question of liquidity may arise again in the coming period,"
ReplyDeleteSounds to me like they will ask for more state aid.
Well for starters they will feel the non-stop flights from JFK to DBV. There will be less and less need for transfers and now US carriers will handle most transfers from teh US going to DBV.
DeleteThere will definitely be more requests for aid. The question is will the government be able to provide it.
DeleteThe loss is not that huge, all things considered.
ReplyDeleteConsidering they had a bigger loss when there was no deadly pandemic, it really isn't that bad.
DeleteThat's not good news though. This means that there is a positive relationship between the level of operations and the financial loss. Meaning that the loss will increase if they fly more. A healthy airline should be able to reduce its losses by increasing their operations.
DeleteSo they are losing money by flying less, that is while doing less of what their main purpose is?
ReplyDeleteCringe.
Everyone is loosing money and flying less.
DeleteYes but OU's results are better now when they are flying less than before covid!
DeleteSo they should not fly at all to be on positive zero :-)
DeleteUnfortunately I think that's what's going to happen before spring 2022. I don't think they can survive a post-covid winter with FR in town. They already reduced BRU from 1.400/1.600 HRK to just 860.
DeleteThe government will cover the losses.
DeleteLike they did for CY or MA?
DeleteI think we are seeing the end of OU as we knew it until now. Now comes the end, long and painful like for JP. FR will put an end to them.
DeleteOU is like that out of control Chinese rocket, heading for the fiery crash. No one knows exactly how long before that happens but now it's certain it will happen soon.
DeleteI think it will happen somewhere either in November or February when demand absolutely crashes.
DeleteAt least they decreased the number of employees.
ReplyDeleteThey got rid of people that had contract for a certain period of time. And seasonal workers.
DeleteI see they reduced ZAG-BRU fares by some 40% on the days FR is supposed to fly. I expect their finances to get much worse over the summer.
ReplyDeleteIt's going to be tough against FR, especially in winter when revenue is generwlly down for them.
DeleteThe question is, would there be a loss if there was no corona?
ReplyDeleteOf course as there were losses before corona too.
DeleteYes but the question is by how much.
DeleteProbably a few million more since now they are flying less and losing less. Without corona they would have more staff and more loss making routes.
DeleteLet's hope there is a strong recovery in Q3 and Q4.
ReplyDeleteI wouldn't hold my breath. Not just OU but any airline for that matter.
DeleteThe Q1 results are very good considering the circumstances.
ReplyDeleteOU will have to adopt a completely different approach and strategy to their operations once things stabilize with the pandemic if they want to survive.
ReplyDeleteSuch as?
DeleteSuch as - renegotiate lease contracts, fire uhljebs, start real hub model with real connection possibilities from region (night wave to region, overnight, early morning flight from region to Zagreb), focus on your own niche (like AS found Russia), use more summer tourist potential for Croatian coast and winter potential for region), cut umbilical cord to mutti and grow some cojones for God sake!
DeleteWhile they are thinking they are losing ground. KLM just announced DBV flights. This will be a big hit for them since they had many transfers to AMS.
Deleteremember my words 2021 for that is their last year
ReplyDeleteThey have just 11 flights today from which...
ReplyDelete...six are PSO
...three are to FRA
...two are to AMS and ZRH
So outside PSO routes only AMS is not to LH Group hub. Then they wonder why ZAG made a deal with FR.
Situation is bad
DeleteWow 3 flights to Frankfurt!
DeleteWhere is Pozdrav iz Rijeke today ? ... this is his favorite topic for debate!
ReplyDeleteIf only we knew what his thoughts on this subject were. ;-)
DeleteI am here. And this is not my favorite topic. It is well known fact that OU is loss making insignificant feeder full of uninterested uhljebs and led by inert and incompetent people placed there by even more incompetent politicians in order to make profit for foreign Master by criminal acts and other similar actions. So what should I comment and debate about?
DeleteNow that was one long sentence and you didn't mention long haul once.
DeleteUhljebs should also be happy because Aegean suspended ATH-ZAG over the summer. All flights are sold via BEG on JU. Now OU will have a bit of an easier time.
DeleteGood luck OU and I hope the management does the right thing and finances improve.
ReplyDeleteHahahahahahahaha
DeleteWhat is the passenger yield, based on revenue passenger kilometers?
ReplyDelete:(
ReplyDeleteYes 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.
ReplyDeleteTrue considering LX had 201Mil. OS 100 Mil. loss in Q1.
DeleteYou can't compare the size and structure of Swiss and Austrian with Croatia Airlines.
DeleteExpected
ReplyDeleteNothing better could be expected in these times.
ReplyDeleteAll of the world's airlines are posting financial losses so the figures mentioned aren't surprising.
DeleteActually airlines in the US and China are now posting profits for the first quarter.
DeleteIt seems they make less loss when they fly less passengers.
ReplyDeleteThis demonstrates that not all is well at the company. Because in addition to fixed costs you are producing greater losses by actually carrying passengers.
DeleteFor more than a decade the gross mismanagement of OU has been legendary. Tens of thousands go from Split to Dubrovnik and back every summer and where are OU flights. Ditto from Split to Zagreb and back but OU continues abysmal before 7AM flight from Split to Zagreb and that's it until the afternoon. Just following what successful buses do will.make a difference. It's not just the destination. The Boston to NYC shuttle, hourly, is an example to follow. Imagine getting up.at 8 am.and taking 40 minutes to get to the airport and another 45 for the flight to get a civilized 925 flight to Zagreb? Why not 3 morning and 3 afternoon and 3 evening flights in season from Split to Zagreb. Split to Dubrovnik. Dubrovnik to Split?
ReplyDelete+1
DeleteNice at least that they report their results.
ReplyDelete+1
Deleteunlike others.
Reading about Croatia Airlines and its failures is my nearly daily dose of masochism ...
ReplyDeletehopefully things get better...
Delete