Minister: Croatia Airlines’ recovery in full swing


Croatia Airlines is undergoing a comprehensive recovery according to the country’s Minister for Sea, Transport and Infrastructure, Oleg Butković, as he ruled out the need for the carrier to be recapitalised by the state in the coming period. The comments come as the airline prepares to replace its entire fleet over the next three years, starting this summer, with the lease of fifteen new Airbus A220 aircraft. “Croatia Airlines had a big drop in revenue during the pandemic, but even before that it faced many difficulties. We made the decision to inject funds into the company through loans and recapitalisation. In the meantime, Croatia Airlines has restored its operations to pre-pandemic levels. They are still not achieving record results, but are close to it”, Mr Butković said.

The Minister said Croatia Airlines’ fleet renewal was a necessity and would not impose a financial burden on the company. He assured that the airline is well-equipped to fulfill all financial commitments associated with leasing the fifteen new jets. “We are in the process of modernising the fleet. Fifteen new planes have been contracted. The first one is coming this year. Due to the maintenance costs of existing aircraft, which have run their life cycle, the fleet modernisation process was necessary”, Mr Butković said. He added, “I believe that by reducing expenses for maintenance, which have become unsustainable, and the development of a balanced business model with the introduction of new routes, they [Croatia Airlines] will become commercially independent”. Croatia Airlines is due to take delivery of its first A220 this June, with another unit expected later this year. This will be followed by six aircraft in 2025, four in 2026 and the remaining three in 2027.

Croatia Airlines is yet to publish its operational and financial results for 2023, although it is expected to do so at the end of this month. It is anticipated the airline has seen an improvement across key metrics, while the sale and leaseback of five ageing Airbus A320-family aircraft has provided the carrier with additional funds. At the end of the third quarter of last year, the airline had 97.9 million euros on its bank accounts, however, its debt at the time amounted to 78.8 million euros. Last year, the company 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 in 2022 at a 2% fixed default interest rate. However, the Croatian flag carrier requested for a deferral, and the loan will now mature in January 2025 instead.


Comments

  1. Anonymous09:01

    I am so happy to read this as a certain person has been hysterical about their mismanagement. Once people who know what they are doing take charge things start moving in the right direction.

    ReplyDelete
    Replies
    1. Anonymous09:03

      +1

      Delete
    2. Anonymous09:08

      you mena BCG ;P

      Delete
    3. Anonymous09:41

      Well at least it seems BCG didn't conclude that feeding LH hubs is the best way forward and the only way to make money, which is good.

      Delete
    4. Anonymous09:57

      Considering how many flights they launched to Munich in the last two years, I wouldn't be so sure.

      Delete
    5. Anonymous10:15

      I haven't seen mr Pozdrav in quite some time. I'm a bit concerned

      Delete
    6. Anonymous10:18

      I guess it took some time for them to implement the BCG strategy but what matters is that it is paying off right now. With the A220 things are going to change even faster and they will have an efficient plane to attack and fight FR.

      Delete
    7. Anonymous10:49

      Idk how they can fight FR and on which routes but okay.

      Delete
    8. Anonymous11:03

      Who is BCG?

      Delete
    9. Anonymous11:04

      The consultancy firm they hired several years ago to draft their "post-Covid strategy".

      Delete
    10. Anonymous13:33

      I wish OU best of luck never the less, but if you guys believe some BCG or whatever consulting firm is going to magically fix the problem here then you are dreaming...

      Delete
    11. Anonymous19:40

      10:15 Me too. He hasn't commented/replied in nearly a month or so.

      Delete
    12. Anonymous20:35

      I hope he is okay…

      Delete
    13. Anonymous14:29

      I don't...

      Delete
    14. Anonymous08:13

      I have read an article lately that mentioned the so called Phantom legions, a common practice in the late Roman empire where administratively legions that in realty did not exist any more were accounted for as fully staffed and equiped to go strength... In reality there was nothing. But of course someone collected the pay for the non existing soldiers and funds for their equipment were also regularly taken. CA is the modern parallel to this, there is nothing left; a hollowed out corpse of what that airline once was... To be frank it wasn't much, but today it is a completely delapidated shell especially in terms of human potential - starting from the top allllll the way to the bottom, to the very last worker. It is a pit of demoralized people who watch corruption and destruction and are told that everything is great. Everything IS actually great... Until it isn't.

      Delete
    15. I'm gonna wait and see what. happens when OU switches to "single" type fleet. But I really don't think that's gonna do good with the current management and ideas they have about running the company.

      And concerning mister Pozdrav, he deleted his account here because his comments got removed. He was an expert what ever anyone though about his comments.

      Delete
    16. Anonymous04:45

      aaaaaa ok so he deleted his account I was already worried I thought something happend to him. And yes he was a EXYU Aviation expert. i hope he comes back one day

      Delete
  2. Anonymous09:01

    A220 to Mostar and Brač☺️

    ReplyDelete
    Replies
    1. Anonymous09:04

      They have to save Dash, but it's too late. Bulgaria Air, for example, leaves the old A319 and A320, as well as the E190 for ACMI. FB will get 7 A220. Why didn't OU do this, they even have a chance to be used on the regular lines as well.

      Delete
    2. Anonymous10:10

      They are broke they need to sell old plains to survive one more year. RA im dise za vratom.

      Delete
    3. Anonymous21:51

      Dashes should be leaving last in my humble opinion.
      Keep the until you see how these inter Croatian routes work out with A220s and adjust accordingly.

      Delete
    4. Anonymous23:31

      Nobody needs turboprops. Those are aircraft of the past. A220 is best for short haul, long haul etc.

      Delete
    5. Anonymous10:25

      Ok if you say so... But doesn't mean you are right 😉

      Delete
  3. Anonymous09:03

    Bravo OU, Bravo Hrvatska!

    ReplyDelete
  4. Anonymous09:04

    Oleg also says that he will build a train station in Sesvetska selnica

    ReplyDelete
  5. Anonymous09:06

    Hope for a turnaround but I'm not convinced.

    ReplyDelete
    Replies
    1. Anonymous09:14

      Especially in election year.

      Delete
    2. That's it, it's the election year.
      Both for the Croatian and the EU parliament...and for the president too.
      We're yet to see actual results. As of now, this is only a politician talking.

      Delete
  6. Anonymous09:09

    Now I'm interested to see what this new routes will be. It was mentioned the other day in an article too that they plan new routes from ZAG.

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    Replies
    1. Anonymous09:14

      They finally loaded just the other day the seasonal routes they launched last year from SPU and DBV back in the system for this summer.so hopefully new routes will be revelead soon.

      Delete
    2. Anonymous09:32

      I'm trying to think all the routes that could be added with the new aircraft.

      Delete
    3. Anonymous09:40

      I don't think there are many. Key markets are being taken up by Ryanair

      Delete
    4. Anonymous09:55

      Almost all EU countries have healthy competition and their flag carriers have adapted to LCC. Time to restructure and move on with reality.

      Delete
    5. Anonymous10:04

      But what can Croatia Airlines really do to stay competitive against Ryanair? I just don't see a solution.

      Delete
    6. Anonymous10:47

      Croatia Airlines still has the advantage over Ryanair by flying to main European airports. Also they carry a lot of connecting traffic through European airports.

      Delete
    7. Anonymous10:47

      More routes to Balkans, good prices, new fleet as mentioned in the article . A good example for your question is Athens with Aegean Airlines which has successfully managed to 'destroy' Ryanair.

      Delete
    8. Anonymous12:04

      Most of the routes that they have not resumed from Zagreb are now on the airport's incentives list. Let's see if OU brings any of them back now so they can get funds for flying there.

      Delete
    9. Anonymous13:12

      @9.14 thx for the info! wow, SKP-SPU for 120€ return. Grab them before they climb again well over 200€ like last summer

      Delete
    10. Anonymous13:14

      @10:08. Maybe Ryanair demonstrated that people prefer a direct service compared to a connecting one. Connect though European major hubs is and expensive and mostly a very disruptive experience.

      Delete
    11. Anonymous16:38

      ^ agree. Ryanair also demonstrated that seasonal flights from ZAG can work, something which never seemed to have crossed the mind of Croatia Airlines' route planning department.

      Delete
    12. Anonymous16:43

      It never crossed their mind because the only thing the government wants from them is to bring tourists to Croatia. The local population is an afterthought for OU. The only way they commit to the local population are with PSO flights which are paid for by the government. If PSO was not made available they wouldn't be flying from half of the cities in Croatia.

      Delete
    13. Anonymous10:17

      If this and if that... Always a strong argument. Strange that OU caters to an industry that yields 13 billion EUR annually...

      Delete
  7. Anonymous09:15

    Is that recovery you speak of in the room with us right now?

    ReplyDelete
  8. Anonymous09:15

    Hope so, it would be about time.

    ReplyDelete
  9. Anonymous09:17

    Anyone by any chance know which airport that is at in the photo?

    ReplyDelete
    Replies
    1. Anonymous09:18

      Split Airport

      Delete
    2. Anonymous09:20

      Thank you!

      Delete
    3. Anonymous21:21

      How can you tell??

      Delete
    4. Anonymous00:47

      Grass is always greener in Dalamtia

      Delete
  10. Anonymous09:17

    These A220s will be either a curse or a saviour. We will see.

    ReplyDelete
  11. Anonymous09:19

    What is the plan regarding privatization? Is it still on the cards? Will they try to sell the airline after they get the A220s?

    ReplyDelete
    Replies
    1. Anonymous09:44

      I am sure they would sell tomorrow to the right buyer but as we have seen you need to either been in distress for Lufthansa and others to come in or showing signs of profitability. Not a huge amount of buyers out there and with EU rules its hard to super size the airline, as the rules favour Lufthansa and the other bigger EU airlines.

      Delete
  12. Anonymous09:25

    Really hoping things will change for the better.

    ReplyDelete
    Replies
    1. Anonymous09:27

      I've lost all hope for OU.

      Delete
  13. Anonymous09:26

    Just empty promises. I doubt there will be any sustainable changes both in management or operations.

    ReplyDelete
    Replies
    1. Anonymous09:57

      This airline actually has a lot of potential. When you put it down on paper, there are so many opportunities but things have to change from the ground up in the company in order to achieve any of them.

      Delete
    2. Anonymous10:01

      The airline with the most wasted potential in the whole exYU

      Delete
  14. Anonymous09:26

    I would rather see them first focus on new markets and deal with Ryanair, which is what they should have been doing 3 years ago.

    ReplyDelete
  15. Anonymous09:27

    A220 will be ideal for OU.

    ReplyDelete
    Replies
    1. Anonymous09:44

      Especially on routes like Zagreb-Mostar...

      Delete
    2. Anonymous10:32

      there are a lot of lines from Zagreb and Split on which they can't charge even Dash, Mostar is not a problem at all, they get extra money for that flight, it doesn't create losses....

      Delete
  16. Anonymous09:27

    They are finally waking up!

    ReplyDelete
    Replies
    1. Anonymous09:30

      No matter how it ends, at least something is finally happening at OU.

      Delete
    2. Anonymous09:30

      In the end, nothing will change.

      Delete
  17. Anonymous09:34

    Sounds of a broken record

    ReplyDelete
  18. Anonymous09:35

    Time to revisit plans to open a base in LJU.

    ReplyDelete
    Replies
    1. Anonymous09:40

      There is still an opportunity there.

      Delete
    2. Anonymous09:40

      I think it is too expensive to do something like that with limited chances for success.

      Delete
    3. Anonymous09:47

      It might be worth a try. I mean not a huge amount of low cost competition here. I think Croatian should also revisit its star alliance membership as feel it would benefit more joining one of the other 2 which dont have such a presence in close proximity

      Delete
    4. Anonymous13:58

      LJU is just 180 km from ZAG. So unnecessary

      Delete
  19. Anonymous09:44

    Hope their load factor has improved to fill those A220s.

    ReplyDelete
  20. Anonymous09:44

    Apparently production of first OU A220 is in final stage.

    ReplyDelete
    Replies
    1. Anonymous10:03

      Makes sense if the first one is arriving in just 5 months.

      Delete
    2. Anonymous18:07

      Wonder what new livery will look like!

      Delete
    3. Anonymous21:26

      ^ me too. But we probably won't find out before June. I'm guessing they will keep it a secrete.

      Delete
  21. Anonymous09:54

    They have a lot of work ahead of them with the arrival of the new planes.

    ReplyDelete
  22. Anonymous10:03

    They should have focused on having a good network rather than spending millions on new fleet .

    ReplyDelete
    Replies
    1. Anonymous10:06

      I'm sorry, but I beg to differ. The absolute first priority and focus is to get the best team in place. With the right team in place, then you can go and do all of the other needed things

      Delete
    2. Anonymous10:14

      You are playing Airline tycoon?

      Delete
    3. Anonymous00:51

      No, its common sense. A poor leadership team for 20 years and counting looks like this airline

      Delete
  23. Anonymous10:04

    Minister mentions 1 plane is arriving this year, while it has been said 2 are planned to arrive this year. Wonder what will actually happen.

    ReplyDelete
    Replies
    1. Anonymous10:53

      none will arrive.

      Delete
    2. Anonymous13:57

      In your dreams. Both are coming

      Delete
  24. Anonymous10:05

    They need to explore new routes.

    ReplyDelete
  25. Anonymous10:15

    They should get 2 A321LR or A321XLR, run them over summer on the cost from Split, and over winter move to Zagreb 2x weekly JFK and YYZ while wet leasing additional capacity to JetBlue, AerLingus, TAP for their USA-EU operations (when not in maintance)

    ReplyDelete
    Replies
    1. Anonymous10:27

      Erm. Nope..

      Delete
    2. Anonymous13:55

      Yeah let's go transatlantic while our European and regional network is in complete shambles. Great idea

      Delete
    3. Anonymous19:11

      In my absolutely unpopular opinion, I think OU should get a widebody or 2 for those routes because of diaspora and tourists. But OU should focus on Europe and maybe even destinations in the Middle East and North Africa.

      Delete
  26. Anonymous10:48

    Croatia Airlines will continue to do what it has been doing for the past 20 years and the govt will continue to provide them with funds from time to time to cover their losses. Nothing will change like nothing ever changes with them. They will simply move along as they have done so far.

    ReplyDelete
  27. Anonymous11:55

    Let's hope we see the first changes with the 2024 summer season.

    ReplyDelete
    Replies
    1. Anonymous12:00

      Summer season starts in a month and a half

      Delete
    2. Anonymous14:15

      It's too early for OU

      Delete
    3. Anonymous16:37

      This year seems to be a bit different for most airlines (don't know why). Many European airlines still haven't finalized their schedules.

      Delete
  28. Anonymous12:04

    Exciting times ahead for OU

    ReplyDelete
  29. Anonymous17:18

    Nice news, bravo komsije.

    ReplyDelete
  30. Anonymous17:20

    Bravo Croatia! In a full swing again...

    ReplyDelete
    Replies
    1. Anonymous17:40

      When Minister says recovery is in full swing it must be true, right? Media in democratic countries is usually there to hold government accountable.

      Delete
  31. Anonymous18:27

    More flights to UK market please!

    ReplyDelete
  32. Anonymous20:12

    How long can this bullshit last...???

    ReplyDelete
    Replies
    1. Theoretically, it can last forever.
      People on this forum are interested in the subject since we like aviation, but we are such a tiny minority to the point of being completely irrelevant.
      Try talking to an average person...they don't know and don't care about any of this whatsoever.
      Croatia Airlines doesn't even appear in the croatian mainstream media or if it does appear from time to time, it's either portrayed neutrally, or in a positive light as a short aside - Croatian flag carrier upgrades its fleet with 15 new aircraft. And on to a different news.
      Also, given everything else we're paying for, such as the Rafale fighter jets, new missile systems, Bradleys, even more Patrias, shopping for 100 new tanks, reintroducing the draft, at least a dozen or so state companies way larger than OU...this is just a drop in the ocean.

      Delete
  33. notLufthansa13:05

    “Minister: Croatia Airlines’ recovery in full swing“. Swinger party is going on, we know that. All in line with famous “jebe lud zbunjenog”.

    ReplyDelete

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