Croatia Airlines has successfully postponed the repayment of a 33.7-million-euro shareholders loan it received from the Croatian government in 2019, which was aimed at financially stabilising the carrier prior to its privatisation, which was later shelved due to complications resulting from the coronavirus pandemic. The loan, which received European Commission approval, was to be repaid in full last year at a 2% fixed default interest rate. However, the Croatian flag carrier requested for a deferral, which has been approved by the Croatian Ministry for Finance. The shareholders loan will now mature in January 2025 instead. The airline has since been the recipient of several direct state aid packages to alleviate the impacts of the Covid-19 pandemic and will soon receive a 39.2-million-euro state injection in form of a recapitalisation package, which was approved by both the state and Croatia Airlines two weeks ago.
The Croatian government previously said it would strictly monitor spending at the country’s national carrier as part of the 2019 loan agreement, in arrangement with the European Commission. However, the state auditor has warned that this obligation has not been met. Under the agreement, Croatia Airlines was to submit a report on where the funds were being spent each fifteenth of the month, which has not occurred. According to the auditor, only two reports have been submitted by the airline. By the end of the third quarter of last year, Croatia Airlines had 3.2 million euros worth of long-term loan repayments and 67 million euros worth of shareholder loan repayments.
Croatia Airlines is looking to improve its finances through its ongoing post-Covid strategy. The carrier recently ordered six Airbus A220-300 aircraft, with the company telling EX-YU Aviation News last month that a financing model for the acquisition of the jets is still under consideration. Delivery of the planes is due to commence next year. Potential financing options include an operating lease, finance lease, as well as sale and leaseback agreements. The A220-300 aircraft is valued at approximately 91.5 million US dollars per unit at list price, before the customary discounts, bringing the Croatian carrier’s order for six to over half a billion dollars at list price. The airline also has plans to lease an additional nine A220 jets in order to operate a single-type fleet by 2026. The pace of deliveries over the two-year period has not been disclosed.
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It is beyond me how they are going to pay for those A220s.
ReplyDeleteThe government will give the money.
DeleteI doubt the government can give anymore money.
DeleteYeah, they can't pay a loan of 30 million, but want to buy new aircraft for 450 million :))
DeleteSky is the limit. Keep those loans and subsidies flowing.
Deletewhile the EU watches on
Deleteit will not be the govt who will hand out the money for A220, it will be kradeze on behalf of citizens. Waiting Pozdrav to confirm.
DeleteThe ordered A319neo have not been purchased, the conversion to A320neo has not been delivered. Why should the A220 actually come now? Rather, the order will be changed again, in ATR72 ;-)
DeleteFear the same as last anon mentions.
DeleteDon't worry the A220s will come. It will coincide with the parliamentary elections next year so it's an excellent photo opportunity.
DeletePozdrav confirms. Mafia at its best.
DeleteYou are all jealous and lack understanding for the business model ...
DeleteWhat is their loss for 2022?
ReplyDeleteIt was 13 million in the first three quarters. We still don't know the annual result.
DeleteAnnual result will be known at the end of the month.
DeleteThanks
DeleteMy guess is loss of around 30 million Euros in the end.
DeleteYes, that seems realistic. What was their result in 2019?
DeleteIn 2019 it was -13.1 million
DeleteWonder how they will perform this year
DeleteI don't see that anything monumental has changed in their business strategy or direction for the result to be significantly better.
DeleteI also expect a 30 million loss. Q4 is always loss making for them.
DeleteWhat a small price to pay to have the proud Croat name flown all over the globe and a link between earthly and heavenly realm...
DeleteAll around the world js 300km radius. Everything beyond that they discontinued as it didn't fit Lufthansa servant strategy.
Delete"Croatia Airlines was to submit a report on where the funds were being spent each fifteenth of the month, which has not occurred. According to the auditor, only two reports have been submitted by the airline."
ReplyDeleteWhat a surprise.
This company (and government) is a joke. How come people support that???
DeleteCroatia Airlines is least of the people's thoughts or something they care about.
DeletePeople don't support that. Kradeze installed partitocracy in which it rules with less than 20 percent of population voting for them, they buy "zetoncici" from various parties, they use lower level judiciary for their goals, and they centralized all the finances in order whole of Croatia to be their ATM. Croatia is not democracy, it's travesty of democracy, and Croatia Airlines is one of the better examples that prove it
DeleteIt’s quite sad how certain people are so troubled by people like Pozdrav, people who point out what’s wrong, and yet are not at all troubled by the things that are happening. Crazy times!
DeleteEndless money pit without any show of improvement.
ReplyDeleteThis airline has received more than 150 million euros in the last 3 years
ReplyDeleteyou think the "airline" actually got that money.
DeleteWell they had to pay wages from something
Delete150 million? In a country where 41,000 people net have left last year, emigrated abroad? That’s disastrous.
DeleteHow they plan to purchase planes in such financial state?
ReplyDeleteSeems they are not so sure themselves
DeleteOrder new airplanes, then start thinking about how you’re going to pay for them. Isn’t this how every profitable airline operates? :)
DeleteI find that to be the most bizarre thing they ever said. That they are now looking at financing models after they ordered the planes. Ok...
DeleteI still cannot believe you guys taking OU seriously when they tell you they are going to buy planes.
DeleteThere will definitely be more requests for aid. The question is will the government be able to provide it.
ReplyDeleteThey don't seem to have been fazed to give them aid year after year. I don't see why they wouldn't do it again.
DeleteThe government can just raise more taxes on a willing population. Those people who are still there of course and have not emigrated yet. How much VAT have I noticed on cheese? 25%? Good job!
DeleteThey were requesting aid even before covid and Ukraine.
ReplyDeleteThey have been getting aid from day 1, like all other ex-Yu airlines.
DeleteBut they simply used their aid to pay off wages. Other airlines used it wisely to develop and increase their country's connectivity.
DeleteThey used it for daily liquidity.
DeleteIt's just never ends with them, does it?
ReplyDeleteI cant wait to hear pozdrav iz Rijeke 😅
ReplyDelete+1 :D
DeleteLol!
DeleteTo hear what from him?
DeleteMaybe the truth you don't like?
DeleteDon’t worry Pozdrav, which I know you don’t, but our region has always made fun of people who pointed out what was wrong, instead of listening to them. So smart people emigrate and are successful abroad. And what remains are blind folks who joke when they should be absolutely livid instead.
DeleteDead man walking.
ReplyDeleteNot good.
ReplyDeleteWhere is BCG?
ReplyDeleteWho?
DeleteBaston Consulting group - thir consultant.
DeleteBCG was a waste of millions like the many privatizations advisors that were hired in the past.
DeleteGood luck OU! I hope they get out of this stronger and the government has a more clearer vision of what it can do.
ReplyDeleteAre you for real?
DeleteOne word : bot
DeleteBig mistake not selling this company years and years ago.
ReplyDeleteThere was no one to sell it to.
DeleteThere was Garuda.
DeleteAegean too.
DeleteHad the government sold the company, it couldn't employ its voters there and OU couldn't feed Lufthansa flights. This would be direct clash with the government and Misetic's interest.
DeleteSo, it wasn't a mistake, but a preconcerted action.
Airline does not need to be sold, just management held accountable.
DeleteUnfortunately, this airline like everything in Croatia government owned is just used as a personal piggy bank by those in power. How can the government not hold the management accountable for not submitting reports where millions of tax payers money is at stake. In Australia, politicians get the axe if they "forget" to declare a $100 bottle of win given as a gift but somehow in Croatia, the same political elites stay in power, scandal after scandal. This is not the Croatia we fought hard for. Just a sad sad story!!
Don't forget that the idea was to also to pay privatization advisors for absolutely nothing. We are talking about millions of euros.
DeleteOU will have to adopt a completely different approach and strategy if they want to survive.
ReplyDeleteTheir new approach is moving flights from Zagreb to Split...
DeleteIf it helps improve their financial results than so be it.
DeleteIt can, for two months of the year. Don't ask for the rest.
DeleteThe government won't let them go bust
ReplyDeleteAs EU member, there is (very) little space to maneuver
DeleteAnd Ryanair is watching their every move.
DeleteAnd people expect them to launch a multitude of new routes in this kind of financial state?
ReplyDeleteWell they are renewing their entire fleet so why not.
Deletesomebody must stop this endless loop sans changing anything...just hand over money-business-as-usual-hand over money-business as usual-and round and round it goes.
ReplyDelete+1
Deletesomething DRASTIC needs to change at this company!
ReplyDeleteThe management first and foremost.
DeleteManagement, feeder model, excessive administrative work force, work productivity, state of mind, crime, corruption and nepotism, inertness, sinergy with home hub, strategy which they don't have at all.........
DeleteNothing better could be expected
ReplyDeleteI hope things improve and this loan deferral helps them.
ReplyDeleteHope is a fools strategy
DeleteIf things keep going this way, in a year or two they will no longer be able to get any loans
ReplyDeleteThey don't have many loans. Just 3.2 million. They have big loans from the state and the idea is probably for them never to repay it anyway.
DeleteIt was already becoming difficult in 2019 which you can actually see in their financial reports.
DeleteThe amount of money OU needs just to cover their operations is getting bigger and bigger.
ReplyDeleteIt's funny how some people really believe that those A220s are going to be delivered.
ReplyDeleteI'm starting to doubt it more and more.
DeleteIt's even more funny how some people claim, even if delivered, that they could change anything for better
DeleteClose it down and create Slo-cro airline that also operates from Sarajevo
ReplyDeleteyeeee, and call it Air Yugoslavia :)
DeleteAdria Airways actually would have been the perfect name.
DeleteAir Adria :P
DeleteOr restore Pan Adria :)
DeleteI mean this would be fantastic to see airline with few A319 or even better the E290. Mainly station them at LJU, ZAG and SPU and maybe one or two in DBV and MBX. Could be called Adriatic airlines or something like that. Basically in the concept of Air Baltic
DeleteWYA - Western Yugoslav Airways☺
DeleteGermany would not allow it. They are against new Slovenian airline, let alone bigger Slo-Cro airline.
DeleteSo much lost potential with this airline.
ReplyDelete+ 1000000
DeleteThis loan will probably never be repaid and that's the point of the deferral. In 2025 it will be differed until 2027.
ReplyDeleteMost likely
DeleteI am tired of my tax money going to OU and getting nothing to show for it.
ReplyDeleteHow far can they go until the European Commission pulls the plug? When it comes to Malev, Estonian or Adria, the end came rather quickly.
ReplyDeleteAnd so it will for OU. And if it does i really hope that Slovenia and Croatia create something together in terms of a stabile airline.
DeleteI am sure Air Serbia would jump in opening at least 20 weekly frequencies to ZAG :)
DeleteAnonymous 23:12 your fantasy will never happen!
Delete@An.09.02
DeleteIt will happen, and it will happen soon. Croatia Airlines will not go bankrupt as long as it is used as laundry machine for Kradeze. But because it's purpose is not to be an airline, but a laundry machine, companies which have aviation as their business will grow more and more in ZAG. Air Serbia is already on 14 planned in ZAG. With further network growth, it will be on 20 soon. Maybe even more. But those blinded by hate are not willing to accept OU needs drastic changes and reforms will continue writing about fantasies that would "never happen"
Maybe this is the wrong place to post this, but question to anyone that might have an idea - does any of the ex-yu operators use Skywise to help their operations? They're all Airbus heavy, thus using such tool I guess makes sense. I'm wondering to which extent would it benefit the airline operations
ReplyDeleteI don't see Croatian Airlines surviving till 2025. Now the EU is controlling all the decisions of loads or state help as they are officially in the Eurozone. So I can say its only a waiting time before we see the airline officially bankrupt...
ReplyDeletePerhaps they should prepare the exit strategy in terms of a subsidiary which would take over all good assets and leave the bad ones to the old company. It helped Alitalia numerous times and worked to a lesser extent for the Swiss and Brussels. I am no expert in these things, but there must be a legal way to do so. In that way, even if bankruptcy comes, they could reinstate main routes immediately and try to survive ASAP as Croatia 2.0 or Adria 2.0. There is no other option.
ReplyDeleteWith all due respect, strategy and OU in the same sentence, or action of any kind and OU in the same sentence, or common sense and OU in the same sentence, unfortunately no go
DeleteWe witnessed that, I am aware. However, the hope dies last. Even being from Serbia, I'd love to see OU prosper and JP revive, in one way or another. Call me crazy or naive, but I'd hate to see Lufthansa/Turkish colored European skies.
DeleteEight, times are different now with the post covid strategy by major reserve banks of just printing money and putting "that money to work", in other words stimulus. I don't agree with it, I think it will result in a major global economic crises but for now the EU seem to be happy to just turn a blind eye to crazy spending by governments. We don't have capitalism anymore, we just have greed!!
DeleteThe gouvernement will pay any money just to keep the flag flying!!! ;)
ReplyDelete