Croatia Airlines’ CEO, jasmin Bajić, has said the carrier plans to add new routes on a continuous basis over the next three years as it takes delivery of new Airbus A220 aircraft. With the jet operating its first commercial service between Zagreb and Split yesterday, and its first international flight today, between the Croatian capital and Frankfurt, Mr Bajić, said, “We are currently analysing twenty routes, which will be progressively introduced as new aircraft join the fleet. I can’t specifically say which ones due to the competition”. He added, “Foreign leasing companies purchased these aircraft for half a billion dollars and gave them to us to develop a business utilsing them, and that is exactly what we will do”. The airline will take delivery of a further fourteen A220s from late this year through to 2027.
Croatia Airlines previously said the majority of the new routes it plans to introduce over the next three years will be in Europe and the Mediterranean region. Although the carrier has ruled out long-haul flights, it plans to commence new intercontinental operations, making north Africa and the Middle East likely options for its future network expansion. As previously reported, an emphasis will be put on year-round connectivity and reducing the carrier’s high summer seasonality. “The acquisition of new aircraft was a strategic decision made by the Croatian government and the management of Croatia Airlines because the carrier fulfills a very important strategic role, which isn’t purely commercial, and that is connecting Croatia to Europe and the world year-round, in contrast to many others who fly to Croatia seasonally. This will be further evident in the upcoming years”, the Croatian Minister for Tourism and Sport, Tonči Glavina, said.
This summer, Croatia Airlines introduced new flights between Split and Istanbul, as well as from Zagreb to Berlin, Stockholm, and Tirana. All the new destinations it added from the Croatian capital this year were previously part of its network. Since the coronavirus pandemic, the airline is yet to restore flights from Zagreb to Helsinki, Milan, Oslo, and Bucharest. Despite the resumption of services between Zagreb and Dublin, the route has since been discontinued by the airline as it faced strong competition from Ryanair. In 2020, Croatia Airlines also scheduled new services from Zagreb to Podgorica and Sofia, but they were never launched due to the pandemic.
And this could not have been done before the A220?
ReplyDeleteA220 is more cost effective than current A319/A320s in the fleet. So it gives them more opportunities to open new routes.
DeleteNo, it doesn’t. Leasing price is so much higher than the benefit of reduced fuel consumption
DeleteDo You have the calculations?
Delete09:19
DeleteYou should notify every airline in the world that it's more cost effective to fly 20 year old aircraft instead of new efficient ones! 😆
Should get MD80s. They are probaby so cheap to operate and there is hundreds of them.
DeleteIt is not just for "reduced fuel consumption"... Stop copy/pasting anything you once read on the internet as the expert`s opinion... There must be some reason airlines tend to operate new aircraft.
DeleteI wonder why JU retired the Boeing 737s since they weren't paying any leasing for them. They would be money printing machines.
DeleteInstead they are paying leases for A320s
🤔🤔🤔
They would or they would not done it before A220 - totally irrelevant at the moment. The most important thing is that they are planning to open new routes, only important thing to discuss.
DeleteThe A220 has the same capacity as an A319-100 and consumes around 60% as much fuel as the A320s (and around 80% as much as the neos)
DeleteCroatia Airlines OWNS its Airbus A320 family aircraft so the lease cost is 0. The lease cost for the A220 is astronomical.
DeleteWhy on earth did they need to wait for the A220 to arrive before launching new routes? Where is the logic in that?
Croatia doesn't own anything anymore, my friend...
DeleteCroatia owns the company, majority owner. By the way, ownership over assets does not guarantee positive business results.
DeleteHaving old aircraft in the fleet can be very expensive, once aircraft exceeds 15 years of age, efficiency and utilization of passenger jet drops significantly, buy the time aircraft is 20 years old, annual C checks must be performed for every year of operation and D checks every 24 months. Suffice to say C check takes aircraft out of service for at least several weeks, D check for several months. D checks are also very expensive for the entire passenger jet needs to be checked, its engines disassembled, checked and carefully cleaned. D check can cost in the region of €3-4 million each time it is performed.
DeleteC Check are slightly cheaper @€1-1.5 million each time they're performed. Suffice to say keeping an aircraft that is over 20 years old, from financial stand point is far more expensive than wet leasing entire aircraft and the crew, by a significant margin. Leasing an aircraft on 10 year operational lease is rather cheep in comparison, also cheaper then buying a new aircraft, again by a significant margin.
Brand new A 220 300 is around €55-57 million, paying it off over 10 years will cost an airline around €5.7-6 million per year, whilst leasing an A220 over 10 years is around €2.8-3.2 million per aircraft. So it is far cheaper to lease an aircraft then own it, and owning an aircraft has diminishing return, so ideally leasing would be best option for a small airline.
Croatian Airlines still has loads of assets and engines will be bought brand new, each costing around €7-8 million.
"C check takes aircraft out of service for at least several weeks"
DeleteNot if you gradually do all the C check work cards you can on A and B checks and whenever appropriate section is opened for servicing.
Gustav Floberka
@Gustav Floberka
DeleteOn 20 year old passenger jet aircraft, you need to perform C checks on an annual basis, including A and B checks. D checks will still take an passenger aircraft out of commission for several months and they need to be performed every 2 years once the aircraft is 20 years old or older.
P.S.
DeleteC & D checks are actually inexpensive as far as routine C & D task cards are concerned - it's just orings and filters basically; what can be expensive are the additional non-routine tasks... But those are done on C or D only for convenience, they're not C & D related cost.
@ anon 11:37
DeleteA & B & C & D and basically all the routine maintenance tasks are done based on flt hours/cycles, (some systems are on calendar limit regardless if the aircraft age, like fire extings, oxygen, batteries...) nothing to do with aircraft's age.
There are added tasks for aging aircraft, like corrosion prevention, lap joint modification etc. However, when talking cost, bear in mind the price difference of spare parts needed for older and new aircrafts. Old parts are dirt cheap and abundant, new parts are beyond any comparison ( CSD for 737 classic is, say, 6-7 thousand USD; Generatos are even cheaper; overhaul of both is a couple thousand.... In comparison, IDGs do the same work but go for over $100K each, shop visits are correspondingly high too...
Also, you can probably have 10 older aircraft for the price of 1 new - which you won't even be able to purchase directly from the OEM, without waiting forever for delivery, but even then you won't be receiving AirAsia price.
OU's equipment is constantly breaking down and yet some people are still arguing in favor of operating old aircraft, lol!
DeleteI guess all the airlines in the world are just plain wrong, you know better.
Armchair experts always know best, that's the rule of thumb.
Welp, nobody's stopping you from investing your own money into this "brilliant" business idea. Or go to your bank and request a business line of credit based on a super cost-effective bizz-wizz plan involving flying junkyard planes.
You should name your business venture Krstić Air! 😂
Anon 11:22 check your math. You are saying that when leasing airplane will cost airline around 3 million per year. Price od aircraft is 55 millions. So let me get this straight, 10 year lease will cost around 30 millions, after which aircraft price will be around 20 millions or less. So what are you saying somebody will buy aircraft for 55-57 millions, lease it for 30 and sell for less than 20. Do you see where am I going with this or you need further explanation.
DeleteIt is a shame that OU hasn't taken significant share of leisure market from Croatian coast. Older aircraft are perfect fit for seasonal markets like the Croatian. You take old jet, fly it for 3 to 6 months, and after that you get rid of it or simply put it in storage and service it for another season.
DeleteCroatia Airlines Airbus fleet is out of service almost all winter anyway. They can perform all checks from A to Z every year.
DeleteFor all anons which have no clue about aviation and Michael. New planes are good for large companies which have developed network, high load factor, high profit and certain number of passenger to whom they may present good quality hardware and which are ready to pay for it. Small companies should use mid age air crafts, which have a lot smaller leasing price, but still pretty good quality. That will give them opportunity to develop the network, gain passengers and grow gradually for relatively small price, so one day may buy new planes freely. Just like JU is doing. But OU have no worries, while government is behind them.
DeleteYea, but goverment is not behind JU all the time, got it!
DeleteAnon 28
DeleteSo JU doesnt have high LF and high profits?
Well at least they finally have some ambitions.
ReplyDelete+1
DeleteFlew the A220 to SPU yesterday- amazing :)
DeleteYes we saw your report on your analytic blog, thank you
DeleteAbout time! I'll probably book a flight to Skopje. Always wanted to visit that city anyhow and now I finally have an excuse!
Delete@09.27 write a trip report. I'm sure people would love to see
DeleteYes, please do
DeleteCongrats on the A220s but I really hope they try to explore some new regions with them. Ryanair has shown leisure flights from Zagreb can work. OU could have done this over the last 35 years. Why not try flights to Egypt, Morocco, Middle East.
ReplyDeleteYup. Tunisia too. Israel and Lebanon would also definitely work once peace is restored...hopefully soon. Fingers crossed!
DeleteFinally they might add something from Zagreb. Knowing them it will probably be 2 weekly, while they will reduce something else in order to launch it.
ReplyDelete5th daily flight to Frankfurt and Munich.
DeleteThey plan big expansion out of ZAG
DeleteThey will reduce one Zagreb-Zurich and one Zagreb-Munich flight to launch 2 weekly flights to Madrid for four months. And we Croatian taxpayers will give them a million euros for that.
DeleteYou Croatian taxpayers won't be paying for anything. It is the Tourist paying from the Tourist taxes.
DeleteThe Croatian taxpayers are paying. Every purchase in the supermarket, every salary payment, every company that makes a profit, every investor that withdraws their money and makes a profit, everyone who orders items from outside of the EU, etc etc.
DeleteI'm wondering which are these 20 routes. Any guesses?
ReplyDeleteMost of the routes are out of ZAG - LIS, OTP, PRG, HEL, PRN, CAI, GYD, RIX, VNO, OSL, NCE
DeleteATH directly, TLV, summer seasonal LCA.
DeleteThose would be decent choices.
DeletePotentially Rome, Athens, Milan (with FCO and Linate soon to become Star Alliance hubs, it'd make sense). Moreover, Lisbon, Geneva and Oslo are big ones that are also missing. Cairo seasonally would probs work if done in cooperation with reiseburos
DeleteRome nonstop after 35 years is long overdue. I mean which European airline flies to Rome with a bloody stop.
DeleteSame with ATH.
Deletehmm let's see. Will they start from this winter?
ReplyDeleteDon't think they will have enough aircraft to start new routes this winter. What they will probably do is extend one of the newly launched Zagreb routes into winter.
DeleteThey mentioned a while ago they might start some winter routes from DBV. But that probably depends if the city tourist board will pay them. And the city tourist board in DBV does not like Croatia Airlines.
DeleteSo this could mean potentially some destination in Middle East?
ReplyDeleteI hope so. No use in starting Dubai since it is already covered by Flydubai but maybe they could go for Abu Dhabi.
DeleteThey could launch Split-Dubai in summer. Would be full.
DeleteAbu Dhabi with Etihad code share year round could work.
DeleteDon't hold your breath. They won't go beyond Turkey.
DeleteI wouldn't be surprised if it includes Hurghada or Monastir. They are operating some charters to Monastir this summer. So maybe they located it on the map.
DeleteMaybe we get Cairo seasonal and Tel-Aviv year round, or at least some winter capacity
DeleteYes, I think Tel Aviv would work both for pilgrims and regular tourists. Hurghada and Monastir have decent prices.
DeleteAlso, given how well the Greek islands have been working for Ryanair, why not try some that aren't yet covered? Lord knows there are "quite a few" Agaean islands. Western coast of Turkey should be taken as an option as well.
Why did they stop serving Tel Aviv as a scheduled destination? I think it was served normally till covid. Then it turned into a charter destination.
DeleteEh, just as covid was finished and the traffic had begun to normalize, the regular biannual cycle of violence exploded yet again...and this time it's been going on for almost a year now, at a level unseen in decades.
DeleteIt's the sad reality of that part of the world.
Bravo Hrvatska!
ReplyDelete“The acquisition of new aircraft was a strategic decision made by the Croatian government and the management of Croatia Airlines "
ReplyDeleteI thought the government never inteferes in Croatia Airlines operations. At least based on the comments here.
It doesn't. The comment is a shameless promotion.
DeleteGoC is the majority owner. Majority owners manage, they don't interfere.
DeleteSure, story changes depending on article and country.
DeleteIf you somehow interpret
Deletethe constant whining about taxpayer money keeping OU afloat in the comments as the government never interfering, then yes. Smh.
Btw those are legit concerns but if we at least get something in return, the situation becomes marginally more tolerable.
Has OU ever flown beyond Tel Aviv? Is/was this their furthest route?
ReplyDeleteNo
DeleteThey flew Montreal - Copenhagen 1 week ago
DeleteThey flew to Beijing as a one off during COVID.
DeleteTianjin actually
Deletehttps://www.exyuaviation.com/2020/07/croatia-airlines-touches-down-in-tianjin.html?m=1
That's impressive, didn't know that
DeleteAlso Afghanistan
DeleteThese were all one off charters, we are talking about scheduled flights.
DeleteYes. And we all were totally serious about the answers.
DeleteThey should expand to Portugal before Ryanair starts it. There is no hope for Spain anymore since Ryanair has taken that market.
ReplyDeleteRyanair needs to launch Porto quickly and Agadir
DeleteYes, both would be good options.
DeleteThey could finally bring back BCN to year round.
DeleteZagreb Airport need to give the same incentives to OU as they give Ryanair if they want OU to expand there
ReplyDeleteThere is already incentives that Croatia is using for opening new routes - connection unserveed capital cities with Zagreb
DeleteWhich is not the same as the discounts Ryanair got.
DeleteThey can use same discounts with same conditions as Ryanair if they want. Incentives are there published and ready.
DeleteAnyone can get the incentives. Croatia Airlines chose not to apply.
DeleteI would love to see this list of destinations.
ReplyDeletehttps://youtu.be/BNDmaJwDmeo?si=r3yj2JAOpN2COK9U
DeleteFrom time 2:15
They should first fix their European network and the way many European destinations miss regional connections.
ReplyDeleteYes, it is a complete mystery to me why they don't do it. If they just moved some of their flights by 15 minutes they would be able to create much more connections and probably generate more passengers.
DeleteThey are talking about decreasing seasonality yet every new route they have launched since 2016 has been seasonal, with exception to Mostar which is paid.
ReplyDeleteTrue
DeleteIs A220-300 more efficient than what Ryanair has in their fleet?
ReplyDeleteRyanair has much much much lower costs, bigger aircraft, shorter turnarounds, more flights, cheaper tickets, a better route network.
DeleteCroatia Airlines has a Star Alliance membership but 0 meaningful codeshares, barely any destinations, expensive tickets, an unproductive workforce with clueless management and delays.
If that's true, the only way for Croatia Airlines to beat Ryan in Zagreb is to count on ZAG airport removing all discounts to Ryan.
DeleteRyanair does have lower costs but not due to the type of aircraft in their fleet.
DeleteThe answer to the question posed is: yes, A220-300 is more efficient than what Ryanair has in its fleet.
That of course doesn't mean that OU's prices will ever get as low as FR's, but they could and should be lower than they currently are.
The A220 family is objectively more efficient than the A320 family. However, keep in mind, Ryanair is very much optimised to lower costs, from cheaper seats, higher density, cheaper workforce, etc.
DeleteWas there any hint on a new base in Ljubljana?
ReplyDeleteThey are not going to open Ljubljana. They asked the Slovenian government for money to do it 2 years ago and got rejected.
DeleteThere was another meeting about a year ago with Bajić himself present, offering A220 base in LJU. This is still not off the table.
DeleteHope so but doubtful anything will come out of it.
Delete"Foreign leasing companies purchased these aircraft for half a billion dollars and gave them to us to develop a business utilsing them, and that is exactly what we will do"
ReplyDeleteYou my friend are paying 300k per month for each unit, they didn't give it to you
300k per month = 3.6 mil per year
DeleteA new A220-300 costs 91 million. If they wanted to pay that off over 15 years, it'd cost 500k per month or 6 mil per year. They only needed to pay for the cabin
You're quoting the list price. The actual price of the aircraft is a lot lower, otherwise no leasing company in their right mind would finance such deals.
DeleteCA needs to be privatised ASAP and every day I pray to God for that . Jasmin Bajic is by far the biggest uhljeb in Croatia
ReplyDelete+100
DeleteGood. Finally time to spread their wings!
ReplyDeleteThe new aircraft looks very sleek
ReplyDeleteReally nice.
ReplyDelete