Croatia Airlines will cancel around 900 flights over the next three months, representing roughly 5% of its planned 27.000 operations due to the sharp surge in jet fuel prices triggered by the conflict in the Middle East. This is despite the carrier continuing to see strong demand, reflected in its growing passenger numbers. Speaking to the “RTL Croatia” network, Croatia Airlines’ Chief Commercial Officer. Slaven Žabo, said, “The unfavourable geopolitical situation has had a negative impact on fuel prices. Jet fuel prices have doubled since the outbreak of the crisis and have risen more sharply than crude oil prices. Current jet fuel costs will result in multi-million-euro losses for all airlines, including Croatia Airlines, during this period”.
Mr Zabo noted the carrier is attempting to reduce the financial burden by revising its timetable. “We are trying to offset costs through network and capacity optimisation, as well as by improving efficiency. That means aligning capacity with current demand, operating costs and revenue levels on individual routes, which naturally also includes flight cancellations”, the Chief Commercial Officer said. The carrier has discontinued six routes this summer and has trimmed frequencies on several services. “Besides fuel, which remains the key cost factor, ticket prices in the coming period will also be affected by rising charges from other stakeholders. For example, Zagreb Airport announced a 20% increase in fees from 1 June, which will directly impact fares through higher passenger charges”, Mr Žabo noted.
Despite the difficulties, Mr Žabo remains optimistic about the airline’s operational performance. “In these negative geopolitical circumstances, the strong operational growth Croatia Airlines achieved during the first part of the year is encouraging. In the first four months, we recorded passenger growth of 23%, carrying almost 100.000 additional travellers. That growth made a significant contribution to the positive tourism results in the first part of the year. Looking at those figures, as well as current booking trends, we have reason to be optimistic and can expect a good season”, Mr Žabo concluded.
Everyone at fault but the management
ReplyDelete+1
DeleteThe real issue is profitability. Passenger growth means little if every additional passenger generates losses because costs are out of control.
Delete9A-BTI yesterday did a test flight after maintenance with Croatia Airlines flight number... They will probably lease it for the summer... That's all you need to know how the flight planning is going
ReplyDeleteIt sounds terrible.
DeleteDon't they want to have fleet consisted of 1 plane type only? 🤣
They don't have it scheduled on any flight yet at least.
Deleteand why is that a problem?
DeleteAirBaltic does same, it rented its planes to JU and to many others, like LHG, etc. Why so much hate to OU and its management?
They try to decrease the minuse and get at last some profit. Its not goo when planes are sitting on tarmac, its not good when planes are rented, its not good when planes are flying.. Some people you cannot satisfy cause they are pure haters.
Praziluk im iz zadnjice viri..
The problem is that they have more than enough planes. It means they will park planes.
DeleteAnd to add, how are they decreasing minuses? The minuses are getting bigger and bigger every quarter. They are making the minuses bigger, not reducing them.
DeleteI am not management and neither are you. so we dont know what story is behind.
Deletemaybe its apparatchiks, maybe its ruling party drains money from PSO, maybe its totally opposite, but we dont have full story and never will. We all would love to have 4 or 5 strong regional carriers, but we dont.
What? So they have new planes which are very fuel efficient and now they're renting an old plane which is less fuel efficient and they're cancelling flights because of high fuel prices??
Delete
ReplyDeleteCroatia Airlines keeps blaming external factors for everything, but cancelling 900 flights is massive. At some point passengers lose confidence when schedules become this unstable.
+1000
DeleteFuel prices are hurting everyone, not just Croatia Airlines. The difference is that some carriers seem far better prepared to absorb shocks than others.
ReplyDeleteCroatia Airlines has always been heavily dependent on the summer season. Any disruption during these few key months has a huge impact.
DeleteBla bla excuses.
DeleteDemand is clearly there if they carried 100,000 extra passengers. Cancelling flights while demand is growing sounds contradictory.
ReplyDeleteI understand reducing frequencies on weaker routes, but cutting nearly 1,000 flights in summer could push passengers towards Ryanair and other competitors
ReplyDeleteThe irony is that tourism demand to Croatia remains extremely strong yet the national carrier is reducing capacity during peak season.
ReplyDeleteStrong bookings despite higher fares show people are still willing to pay to visit Croatia.
Deleteit is not ironic- the ones that book holidays can come by car.
DeleteBut gasoline prices will also rise, so good luck to them as well.
There are alot of very rich people in Europe who dont actually look at petrol prices as much as we think. If you live in Vienna an extra 50euro here or there on petrol is hardly noticed by many.
Delete^ you think on my fasoline prices rise when fuel is up?
DeleteIf the goal is to bring more tourists, then get some A321 or used A380s and start bringing huge number of tourists. Profit is not as important.
ReplyDeleteEh?
DeleteCroatia Airlines has been expanding capacity aggressively while introducing the A220 fleet. Maybe the airline simply expanded too quickly.
ReplyDeleteCroatia Airlines has been expanding capacity aggressively while introducing the A220 fleet. Maybe the airline simply expanded too quickly.
ReplyDeleteCroatia Airlines needs stability more than growth right now.
DeleteIt needs money
DeleteExpanded too quickly??? They exist for 35 years. On the biggest ex-yu market and they are still midget and feeder. Please take a look at Air Serbia and their growth over only 10 years. The problem is not 900 cancelled flights in special situation. The problem is their tiny network, better say lack of network in normal situation.
DeleteOne crisis after another for European aviation. First the pandemic, then supply chain problems, now geopolitical instability and fuel shocks.
ReplyDeleteCarriers really can't get a break.
DeleteAs an aviation enthusiast, I am really not happy to witness such developments.
well that's life man. was always so
DeleteI suspect many of these cancellations will affect lower yielding routes so it will be interesting to see where the cuts are made.
ReplyDeleteWell it would make no sense to cancel high yielding routes.
DeleteAlthough with OU that isnt out of the realm of possibility
DeleteThe timing is unfortunate. Croatia is expecting another record tourism season and connectivity is being reduced instead of expanded.
ReplyDeleteCroatia deserves a better flag carrier.
ReplyDelete+1000
DeleteAt least their load factor will grow.
ReplyDeleteIt's like saying "at least the man on life support machines is still alive".
DeleteCroatia Airlines needs a few years without crises to fully benefit from its fleet renewal strategy but the industry won't allow that.
ReplyDeleteMarket situation is the same for all.
DeleteEven in the alsmost perfect times they were profitable only after seling some engines or Pleso prijevoz.
They need capable management and nothing else.
@09:36 what do you mean? Coping with changes ans volitilty is part of business. Your statement is just without meaning.
DeleteNot that this is the source of OUs fails, but ZAG should definitely revise their plans for increases fees considering the fuel price situation. They risk to lose more revenues from fewer passengers than revenues they might get from the price increase.
ReplyDelete+1
DeleteLH is cancelling
ReplyDeleteKLM is cancelling
Croatia is cancelling
Air India is cancelling
Spirit Airlines went belly up
Who's next?
I think the crowded Scandinavians have been pretty quit...
SAS was cancelling, Norwegian and Finnair did good bet and bought a lot of futures of oil pre-Persian conflict and now still fly on old prices
DeleteLooks like the very next step is bankruptcy.
ReplyDeleteI don't know how long EU will tolerate this company with all extra money they get from Government.
DeleteStrange how a corrupt Croatian company like OU gets preferential treatment compared to other airlines in the EU.
Deletewith such a low market share the EU won´t care- different if it was a dominant player on the market- then competition could complain.
DeleteWhen Jasmin the Lion try to handle things and stabilize company, then you have unsatisfied audience. They want OU profitable overnight. Full sypport for Zabo, Jasmin, Babogredac and others
DeletePity but expected
ReplyDeleteFunny how airlines always find a way to raise ticket prices but never reduce them when fuel becomes cheaper again.
ReplyDeleteYou realise flying today is proportionally cheaper than in previous eras?
DeleteEveryone talks about fuel, but staffing, maintenance and aircraft leasing costs have also exploded
ReplyDeleteYou see what a visionary Jasmin is. It was right time to sell its own planes, and lease entire fleet, with majority of leases with new, the most expensive and the most unreliable type in its category. Simply Genius.
DeleteAt least the company appears realistic
ReplyDeleteSo sorry, it's not realistic to be midget and feeder on the biggest ex-yu market and have 13 percent market share with lowest LF in Europe. With enormous losses. It's all but realistic
DeleteThe calculation is clear - strong demand and a sharp increase in passenger numbers, yet you make record losses = you are not doing something right.
ReplyDeleteAdria Airways 2.0
ReplyDeleteThe government bailout is inevitable.
ReplyDeleteThey got one just 2 months ago!
DeleteAnd another is already scheduled in January 2027.
DeleteJanuary 2027 is too far away, they might need one sooner. It amazes me though, are they really that good at walking the line of legality without breaking EU rules, or is Brussels simply turning a blind eye? I don’t claim to have followed them closely, so please forgive my ignorance, but it feels like they have been receiving state aid regularly for years now.
DeleteEU turns a blind eye. Croatian PM has very good standing in EU and will likely attempt to become next EU Commissioner. He was designated by the EPP as a negotiator for the allocation of top positions in European institutions in 2024
DeleteMy flight to Paris this Saturday probably my last with OU. Till july they’ll go bankrupt seems like..
ReplyDeleteThe government won't let it go bankrupt.
DeleteGood days for Pozdrav
ReplyDeleteNot good for our state moneys
I would have rooted for them if they were truly trying to make it in this competitive industry by working hard and making the best with what they have. Instead they have been taking really strange decisions. Complete fleet renewal was such as an arrogant move.
ReplyDelete