Croatia Airlines posted its first annual profit in six years by ending 2023 2.3 million euros in the black. It represents a notable improvement on the 18.2-million-euro loss the carrier generated in 2022. Croatia’s entry into the Schengen Area and switch to the euro currency are believed to have benefited the airline’s business. Furthermore, the recent sale of Croatia Airlines’ five Airbus A320-family aircraft to World Star Aviation are included in the company’s overall cash flow. The airline also yielded 12.5 million euros from the state. Overall, Croatia Airlines has 79.1 million euros on its bank accounts. Operational profit grew 20% year-on-year to reach 4.1 million euros. The carrier’s cash outflow increased considerably due to the pre-delivery payment of two instalments for the financial lease of Airbus A220 aircraft, as well as a 10% pre-delivery payment for an engine for the aircraft type.
Commenting on its performance, Croatia Airlines said, “2023 was characterised by the growth in demand for air travel following the coronavirus pandemic. Accordingly, Croatia Airlines continued to grow its frequencies and add new routes, which led to an increase in the number of operated flights and an increase in passengers carried. During the 2023 summer season, Croatia Airlines expanded its international network by adding flights from Split to Oslo and Skopje, from Dubrovnik to Prague, from Brač to Munich, as well as from Zagreb to Mostar. During the winter season, new flights were introduced between Zadar and Munich while a number of summer seasonal services have been extended”.
Croatia Airlines handled 1.733.529 passengers in 2023, representing an improvement of 19% on the previous year. However, the figure is still down 20% on the pre-pandemic 2019, or by 435.334 passengers. The carrier’s market share in Croatia last year stood at 15%. Its average cabin load factor, a measure of seat capacity utilisation, stood at 65.3%, up three points on the previous year but down 8.2 points on 2019. The airline operated a total of 25.977 flights during the year, up 11% on 2022. “Based on these results, the continued recovery and normalisation of traffic following the pandemic period is visible”, Croatia Airlines concluded.
fantastic!!!!!
ReplyDeleteCongratulations!!!
Kučko did the same, sold half of it and claimed profits. The good news is that kučko didn't want to show more profit - then he would have sold everything and then this slide of the hand wouldn't be possible
DeleteBravo OU!
ReplyDeleteIndeed, now the company is striped of all assets
DeleteBravo indeed. The only problem it will be impossible to invite the proformers : "BIS"
The company is in transition towards a new business model, that's all.
DeleteLess passengers than in 2014, yeah let's pop the champagne.
DeleteBravo Hrvatska!
ReplyDeleteI see the cheerleaders are out already, probably because they don't care (or don't have the capacity) to realise that this "positive" result is only due to selling the last of family jewelry.
ReplyDeleteSelling old technology A320s and paying deposits for brand new fuel efficient A220s is what will keep the airline alive and profitable in the future.
DeleteIt's exactly what will make sure the airline is NOT profitable in the future. Pity you're unable to see that.
Delete1236,reasoning?
DeleteThe reasoning is simple - the leasing cost of this aircraft far outweighs the savings due to fuel efficiency, both because OU fleet utilisation is not optimal, and because oil prices have been dropping lately. Furthermore, when the Dashes are phased out, the already mediocre load factor on many routes will become abysmal.
DeleteAnd what is the lease per month per unit?
DeleteIf leasing cost of this aircraft far outweighs the savings due to fuel efficiency, then no one would be taking A220.
DeleteActually Croatia Airlines has such maintenance costs for its old A320s that it makes sense to lease the A220
DeleteLeasing A220s isn't the issue, but this is probably the last installment they're getting from the government as pandemic recovery assistance, if I'm not mistaken.
DeleteAnyhow, even if they've got one more to count on, that will be only the remaining 6 -7 million euros and that's it. So the best case scenario if they continue to grow at this rate is: they do have one more installment, they continue growing at about the same rate this year and carry around 2 mill. passengers, in which case they'll again be in the red by €2 - 3 mill. at the end of 2024.
The only way this can work is if they finally get their act together, formulate a strategy with a significantly higher fleet utilisation and start implementing it.
Pax & LF numbers are so sad
ReplyDeleteWhy is the LF so low?
DeleteHigh seasonality.
DeleteDependence on seasonality of Croatian tourism
Deletetoo little demand in winter from Zagreb, with this OU business model
DeleteThe is a saying in Croatia, it's rude so I'll just write the first word: "Rđavom..."
DeleteNo, the LF is low because prices are astronomically high
DeleteIn Croatia we don't use the word "rđav". Therefore, what you are referring to is not a Croatian saying.
Delete20:05 what kind of Croatia do you live in? In today's Croatia at least half of the people are allergic to letter "H" and don't use it, just like our Eastern neighbours.
DeleteOU is in deep red!!!
ReplyDeleteWithout state help they would be 10 mil in red and what would be the amount without sold 5xA320?
Deep, deep red at the time when all the companies register fat profits without creative accounting!
Cope harder.
DeleteCope harder with what? The airline is on its last legs, and the A220s will be the final nail in its coffin.
DeleteThe results say that the company would have been 20-30 million in the red without state money and asset sale.
DeleteTrue dat.
DeleteYeah, from a high level view, it looks like w/out sale of planes gov assistance, would be in loss category. Are there details of revenue vs costs?
DeleteOU growth is good news for Franjo Tudman Airport!
ReplyDelete+1
DeleteBut it didn't grow out of Zagreb. It had less passengers in Zagreb than 2019 and 8 fewer routes.
DeleteBut it has grown compared to 2021,2022.
DeleteCongratilations. It grew compared to the two years global aviation was in the toilet.
Delete@13:45 It hasnt grown, it has recovered and yet not fully, 8 routes are still missing.
DeleteIt hasn't recovered. 20% below 2019 is nowhere near recovery.
Delete1407 so says you. One of those people who greets others with good day at 8am just because he woke up at 5am
DeleteHow can this be?
ReplyDeleteExperts here have been saying again and again that OU paying for A220 deposits and instalments will bankrupt the company. Selling the old A320s and receiving only 12.5 million from the state subsidies for PSO and fleet modernization won't be nearly enough to stem the losses.
Looks like the expert analysts were wrong again. Also seems that transitioning to a modern and fuel efficient fleet does not kill a company.
When you sell 5 aircraft, it generates immediate cash. You should also take note that OU's debt has ballooned to almost 100 million EUR due to the amount of loans it took out.
DeleteThe 12.5 is not from PSO. It is from the second recapitalisation instalment that was paid in January last year.
You should also take note that most airlines have reported record profit for 2023 due to a range of circumstances. So celebrating 2.3 million euros as an amazing result, after recapitalization and property sale, on top of 65% load factor, 20% fewer passengers than 2019 and 15% market share, is really out of place.
1038,BS.
DeleteAlso remember that OU still hasn't paid back its loan from the government and was given permission to delay payment until 2025. So the airline is on the edge of collapse. If there are further delays to the a220 it will ruin them. Unless the government put even more money in and magaes to delay the loan repayment again
DeleteYou know the old saying when a man gets asked how did he go bankrupt? “At first very slowly, but then all of a sudden”. I guess that’s a bit hard to comprehend for all OU apparatchiks who don’t understand basic stuff about income statements and cash flow, but the rest of us have our popcorn ready for the coming years. It’s going to be very fun based on these numbers.
DeleteOU isn't on the edge of collapse. Ways can be found to get around repaying the loans.
Deleteif there were ways around the loans from the state, im sure Hungary and Malev would have found it. not even Alitalia could be saved in the end.
DeleteThey sold the Airbus planes to cover two pre delivery payments and got some extra from the state.
ReplyDeleteIt is obvious they will need a serious financial injection in the next 2-3 years in order to pay for those A220's. There is no way they will be able to finance daily operations and regular payments for the new aircraft.
ReplyDeleteThe worst thing about all of this is that Croatia Airlines won't actually own the new A220s.
DeleteWould have been much smarter for them to have gone for Embraer planes, especially since they were being offered an amazing deal. Avoid delays in delivery due to engine issues, have much lower costs, have much better capacity that would actually fit your airline operations.
DeleteE2 doesnt have an engine issue?
DeleteLoad factor will likely improve with the A220s. They will first replace A319s/A320s and since the A220s have less capacity so LF will grow. The tricky part starts when they have to replace the Dashes.
ReplyDeleteThey operate Dashes on most of their routes to hubs like Amsterdam or Zurich already, so...
DeleteAt least the price of tickets will go down, as A220s have more seats and better fuel economics
Do we know how much they earned from the sale of their Airbus planes?
ReplyDelete20 millioin
Delete* million
DeleteSo, without creative accounting they would be 30 million in red at the time when almost all other companies without state support register good profits.
DeleteWhat are their most profitable routes?
ReplyDeleteI would guess Frankfurt and Munich considering they operate it from every single city.
DeleteMUC should be even better for them now that Ryanair is cutting ZAG-FMM.
DeleteOn the contrary, FRA and MUC are one of the least profitable routes because they rely on feeding LH hubs rather than P2P traffic. And LH does not pay royal sums to its feeders.
DeleteI also don't think this is a very profitable route for them as LH is reducing MUC-ZAG from 14 to 13 weekly this summer. I imagine many who transferred in the past are flying nonstop with Ryanair these days.
DeleteFR is basically HR's national carrier at this point
I guess putting greater focus on Split is paying off
ReplyDeleteOf course! They simply can't compete with FR in ZAG.
DeleteAlmost all airlines in Europe have record profitability this year.
ReplyDelete"The airline also yielded 12.5 million euros from the state."
ReplyDelete12.5 million for what?
OU will rise like a slow phoenix and will grow. They are just being silent. After all, prestige is very important.
ReplyDeleteThe prestige of serving business class passengers on 500 euro return tickets a box of crackers.
DeleteI booked a return flight with OU LGW- SPU in May for £175. The same flight on the same dates with easyJet came to £290 when luggage was added. So OU can beat low cost Airlines on price.
DeleteTheir market share in Croatia last year was just 15%. With announced growth by Ryanair and others, this will quickly get to under 10%. They are on a one-way road to oblivion.
ReplyDelete