Croatia Airlines says it expects multi-million-euro losses at this time due to the impact of the Middle East conflict and rising fuel prices, but remains optimistic for the summer season, supported by strong bookings and planned capacity growth. Speaking to the “HRT” public broadcaster, Croatia Airlines’ Chief Commercial Officer, Slaven Žabo, said, “Despite challenging geopolitical conditions, Croatia Airlines has delivered strong operational results in the first quarter of the year, recording a 22% increase in passenger traffic. However, these same circumstances have driven a sharp rise in fuel prices, which have increased at a faster rate than crude oil itself, placing significant pressure on the aviation industry, including our airline. As a result, the company anticipates multi-million-euro losses during this period”. The flag carrier is expected to publish its first quarter financial performance over the next two weeks.
Croatia Airlines has revised its network for the upcoming season, discontinuing six routes that were in operation last year. These include services from Zagreb to Bucharest, Milan and Tirana, as well as from Split to Amsterdam, Bucharest and Skopje. At the same time, the carrier is introducing new seasonal flights from Split to Nantes, along with a new service between Dubrovnik and Stuttgart, set to launch next month. “The airline has introduced crisis management measures aimed at offsetting rising costs through the optimisation of its timetable, capacity and overall operations. Currently, we handle an average of 5.100 passengers per day and remain in constant communication with fuel suppliers to ensure uninterrupted supply”, Mr Žabo said. He added, “While fuel costs are expected to impact ticket prices, they are not the only factor. The broader fuel crisis is also affecting other stakeholders across the aviation sector. For example, in Croatia, Zagreb Airport has announced plans to increase its passenger service charge by 20%, a cost ultimately reflected in ticket prices”.
Commenting on the upcoming peak summer travel months, the Chief Commercial Officer said the airline is recording positive trends despite ongoing uncertainty in the global market. “Despite these challenges, we remain optimistic about the upcoming summer season. A strong pre-season performance, with an additional 74.000 passengers, alongside solid forward bookings for the peak summer months, provides confidence in a positive outlook. Our priority remains to ensure the stability and efficiency of air connectivity, deploy appropriate capacity across key markets, and support the development of a robust tourism product, the wider economy, and the needs of the local population”, Mr Žabo noted.
Yes, the oil is the problem.
ReplyDeleteIt certainly does not help
DeleteQ1 results would not be much impacted by oil prices. The war began of 28 February.
DeleteBut wasn't the A220 transition sold as a way to save on fuel? They said they will have lower unit costs
Delete0910, u čemu je problem sa zamjenom flote? Ona je bila potrebna jer su stari avioni postali preskupi za održavanje, cijena leasinga I potrošnja u kombinaciji s lošim poslovnim modelom i pre više uposlenika nisu bili održivi. Flota je zamijenjena, poslovni model ostao isti, OU ima hrpu uhljeba I rezultati su isti. Ovo su samo izlike.
Delete@9.10
DeleteThis is still a transitional year before the full benefits of the new fleet kick in.
Oil prices will affect everyone (at least in Europe) the same way, no need to look into that factor specifically when evaluating the performance. It will hit the companies with long haul even harder...
DeleteEternally transitioning to nowhere.
DeleteSounds like a good name for a band
DeleteI think Polymarket and Kalshi should get involved into Croatia Airlines
DeleteNot quite correct 09.55. It's eternal transition to better LHG feeder
DeleteWhat was their loss during the first quarter of last year?
ReplyDelete15.9 million euros
DeleteI wonder if there will be any more routes discontinued
ReplyDeleteHopefully not. This is already too much for an airline of their scale.
DeleteThey serve just 25 destinations from Zagreb this summer. And this includes Athens (which is actually a flight from Dubrovnik) and 5 domestic destinations. So just 20 international destination is, in my opinion, a disaster.
DeleteDon't be so harsh on them 09.17. As long as there are 11 Vrankvurt and Minken daily, everything is fine, we keep on smiling
DeleteThe airline is clearly prioritising stability over expansion. That’s probably the right move in this environment.
DeleteYou mean they plan stabile losses?
DeleteI suggested to cut one more summer and to low other frequences. So, probably they will after reading our comments. Zaba lion fighting.
Delete09.30
DeleteIt's not an airline. It's Party entity and uhljeb sanctuary, which takes care of Party bosses and their aparatchiks and their benefits, rather than fleet, network, marketing and pricing policy improvement and development. "Prioritising stability over expansion" is Buzin 3rd floor vocabulary, which translated to regular language mean: remaining humiliated feeder at any cost. That's real description not only in this environment but over the past three decades
A220 payments could not come at a worse time.
ReplyDeleteYou could argue it's the perfect time for them to move to the A220 and save on fuel.
DeleteNot when that saving is offset by massive lease costs.
DeleteOU is stabilizing. Zabo knows job. And Jasmin as well
DeleteOne more excuse.
ReplyDeleteДобар изговор пара вреди.
DeleteI wonder how much of this could have been hedged better. Some airlines seem less exposed than others.
DeleteLet's be honest and say that with or without expensive fuel OU would have made losses.
DeleteHuge losses.
My guess is loss is around 20-25 million euros in Q1.
ReplyDeleteMost likely
DeleteThey added pax. If they increase the loss that would be huge red flag saying: you lose more when you sell more. Let's see.
DeleteCutting six routes while talking about growth feels contradictory.
ReplyDeleteThey are opening 2 new routes and probably have better load factor and probably more frequencies on some routes. Stronger performances. Bravo Zabo
Delete“Crisis management measures” usually means cost cutting.
ReplyDeleteWhich in OU means network cutting cause there's no other costs to cut :)
Delete5,100 passengers per day isn’t bad for Croatia Airlines
ReplyDeleteIt is awesome, thanks to Jasmin magic and Zabo lion fighting
DeleteIf ticket prices go up due to fuel and airport fees, demand might not hold as expected. That’s the biggest risk going into peak season.
ReplyDeleteOverall, a realistic statement from management. Acknowledging losses while not panicking. Probably the best they can do in current conditions.
ReplyDeleteWhy would they panic? Not like they will lose their job if they underperform.
Delete^ exactly. This just gives them a convenient excuse.
DeleteThe last time OU made money was when most of their planes were grounded during Covid.
ReplyDeleteMore state aid incoming. Mark my words.
ReplyDeleteWhy not? Stoka sitnog zuba do nothing to stop it. Why should they bother to reduce losses?
DeleteI doubt. Strong performances with cutting routes and losses mean less aid to come. Zabo, Zabo,...
DeleteGood luck Croatia airlines. My best experience with them was when they were still flying Zagreb to Lisbon, we bought return ticket for 140€, which was a great deal. Unlike by Ryanair, where you have to pay for everything separately and the base price is far from final price, here, with Croatia airlines, everything was covered in base price (luggage, snacks and drinks - I remember pršut with olive oil, coffee, we also didnt have to pay to sit together, ...). The crew members were very friendly, totally different experience compared to LCCs. But as I know from experience, most of the people I know would rather drive to Vienna, buy Ryanair ticket which is cheaper in the beginning, but more expensive in the end after paying for all the services. Wishing all the best to Croatia airlines and greetings from Slovenia.
ReplyDeleteGood points. People think they are clever buying their 9.99 Ryanair ticket but in the end costs them much more than a flag carrier once all the hidden charges are added on.
DeleteExactly. Often people ask me which site I use to search for tickets and they often state, that they use Ryanair. Then I explain to them that Ryanair is an airline, not a site to search for all the flights available from all the airlines.
Delete1. Croatia Airlines no longer offers luggage for free
Delete2. Even seats you have to pay for to select before check in
3. The food you mention is all gone
4. 140 euros return prices never existed on the Lisbon route. I do not believe you, unless you had an under-26 discount or you bought it as part of some promotion.
That was in year 2018. We were five adults and the price for each of us was 140€ return. The tickets were bought around 6 months in advance.
DeleteNot very reasonable to post flight experiences from 8 years ago. So much has changed in the aviation world since then.
DeleteExactly. I had a great flight with Croatia Airlines in August 2000, don't mean a thing in the modern era. They provide poor conectivity and bad pricing and offer nothing that a LCC cant.
DeleteNonsense, I just bought FR flights from Vienna, it cost me less than 40 EUR combined for luggage for both directions. If I opted to take checked-in luggage it would be even cheaper.
Deletethe real question is profitability, not passenger growth.
ReplyDeleteIt depends on the owner's expectations. As far as I can see, CRO govt doesn't put profit goal for the company.
DeleteAirlines in this region always seem to be reacting rather than planning long term.
ReplyDeleteNot all
DeleteExactly, not all.
DeleteJU is very much proactive.
Delete@09:33 you mean in Croatia? Because in the wider region Air Serbia and Aegean and even Sky Express have been very good in forward thinking.
DeleteThey would have loses even if the fuel would be free of charge. Their issues are a lot bigger than fuel
ReplyDeleteZabo me odusevija.. Pametno i podrska iz Dalmacije
ReplyDeleteGrass is green and the sky is blue
ReplyDeleteOnly if one smokes grass, skies over OU could seem blue. No grass, or no pink glasses, skies over OU are dark dark grey to black, no matter how they pretend it to be blue
Delete