Commenting further on the carrier’s performance, Mr Bajić noted, “Until then [2028], we are going through a demanding but necessary transition process: maintaining our existing operations while simultaneously introducing a new fleet and gradually retiring the old one. In practice, this means bearing double costs, which is why recent years may appear from the outside as something of an investment gap between growth and profitability”. He added, “Once completed, the fleet will be fully standardised on the Airbus A220, bringing lower maintenance and training costs, greater operational flexibility, improved capacity utilisation, reduced fuel consumption and higher reliability. It will also enable the strategic development of the network without the limitations imposed by the current fleet”.
The CEO is confident the airline will take delivery of a total of seven A220s this year, and its final jet of the type in 2027 in order to complete its fleet renewal process next year. “Given the current geopolitical situation, I can say that 2027 remains an achievable target, albeit with a realistic degree of flexibility”, Mr Bajić said.
He did not wish to speculate about the company’s financial performance for this year, following heavy losses during the first quarter, noting, “Negative financial results were anticipated during the fleet replacement period. This year is particularly significant because, for the first time, two opposing trends are overlapping. On one hand, we achieved the strongest first quarter in the company's history, carrying 405.000 passengers, an increase of 22%, or approximately 74.000 more passengers than in the same period last year. On the other hand, we continue to face elevated costs associated with the ongoing fleet renewal programme, alongside additional geopolitical risks and operational pressures. The more than twofold increase in jet fuel prices at the onset of the crisis will place further pressure on this year's financial performance. This comes on top of a roughly 20% increase in passenger and airport charges at Zagreb Airport, which took effect on June 1, 2026”.
No idea if they'll even be around in 2028
ReplyDeletesamo negativno po OU..
DeleteNaravno da negativno kada je kompanija u negativnom u svakom pogledu
Delete“1m people on the Mars colony by 2050”
DeleteWell i hope so, but giving a rate of other moves made by OU managment i doubt there is only a problem in fleet transition and geopolitical situation.
ReplyDeleteIf the airline requires perfect economic conditions to become profitable, then it does not have a viable business model.
DeleteBased on his comments, 2028 also looks unlikely to be turning point.
ReplyDeleteEvery year there seems to be a new reason for poor financial results: Covid, inflation, fuel, geopolitics. Eventually the airline has to prove it can make money in normal conditions.
DeleteFuel prices, airport charges, inflation... airlines have always dealt with these issues. Carriers find ways to remain profitable regardless.
DeleteWhat worries me is that management appears to be setting expectations for another round of losses before any improvement materialises.
DeleteAt some point, the number of world economic destroying events that are occuring just to stop OU from being profitable will no longer be considered a coincidence. Is it Jasmin and plenkovic orchestrating thongs to have an excuse? or maybe Vučić because he is jelouse of the shiny new A220 that OU have? Who knows
DeleteDoubt it.
ReplyDelete"This comes on top of a roughly 20% increase in passenger and airport charges at Zagreb Airport, which took effect on June 1, 2026”.
ReplyDeleteThat's huge
They gotta pretend they are wizz or ryan and get those airport fees slashed or they will walk out of zagreb airport
DeleteSounds deeply unrealistic that by 2028 anything will change significantly for the better. What a badly run company.
ReplyDeleteAt some point shareholders should ask whether the returns from this massive investment justify the cost.
DeleteNo they will not. "Shareholders" are government. Government is controlled by mafioso individuals. They deliberately appoint aparatchiks to "manage" OU to remain shameful LHG feeder and operate entirely leased fleet what brings benefits to mafiosos who control government. There is no democracy and no market economy in Croatia, we have partitocracy and simulation of democracy. OU is just one of the examples
Delete*there is no democracy and no market economy in EU. Fixed it for you
DeleteThe government hasn't even started PSO tendering and the PSOs expired months ago. So what to expect....
Delete@11:01 -1
DeleteIf 2028 is the first profitable year, that means taxpayers are expected to cover losses for another two years. At what point does the transition stop being an excuse?
ReplyDeleteThey are already warning 2028 won't be profitable either
Delete"the current crisis has disrupted and rendered unsustainable much of the framework on which airline planning and operations have traditionally been based under normal conditions."
Fleet renewal was always going to be expensive. The important question is whether the A220 strategy actually delivers the promised cost savings once the transition is complete.
ReplyDeleteFleet renewal via leases will be expensive
DeleteLOL
ReplyDeleteThere is good money to be made by being a premium carrier in Europe, the issue is their product is terrible.
DeletePassenger numbers are growing strongly, yet the airline is still losing money. That should concern management more than fuel prices.
ReplyDeleteThe question is whether those passengers are paying enough to cover the airline's costs.
DeleteQ1 results show the more passengers they carry, the bigger the loss.
DeleteExactly. If the first quarter was the strongest in company history and the result was still negative, that should set off alarm bells.
DeleteTickets are not cheap! Rome to split in July, paid 4k Australian a family of 5 one way. (2 adults, 3 kids!!)
DeleteWhy did you pay it then?
Delete@13:22 That's rather expensive indeed, but I guess you chose the cheapest option anyway. The secondary cities, like Split can get very expensive.
DeleteThe A220 is a good aircraft but aircraft alone do not create profitability. Network planning and commercial strategy matter just as much.
ReplyDeleteCroatia Airlines needs a stronger route network and more frequencies on key markets.
DeleteWe've heard similar promises before. Hopefully this time they are right.
ReplyDeleteI find it encouraging that management is openly discussing the challenges rather than pretending everything is fine. The next two years will be crucial for the company's future.
ReplyDeleteHahahahaha Hahahahahahahahahahahahaha Hahahahaha
DeleteHahahahahahahahahahahahaha
🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣
Ja sam mislio da samo kod nas ima borova!
DeleteThey are delusional
ReplyDelete"a situation further exacerbated by the increasing requirements of the defence industry”
ReplyDeleteIs Croatia Airlines part of the army?
Meanwhile, competitors are expanding aggressively. Croatia Airlines cannot afford to wait until 2028 to become more competitive.
ReplyDeleteThe government should demand a clear path to profitability before providing any additional support.
ReplyDeleteThe government should invite ryanair to expand in place of this operation.
DeletePretty much a lot of words, all stays the same.
ReplyDelete2028? That's just around the corner! LoL
ReplyDeleteHow do they get away with it - is what keeps me surprised everytime.
Croatia Airlines needs to focus on improving yields
ReplyDeleteIf I said at my company meeting that I wouldn't make any profit before 2028, and that my strategy was being disrupted by something that the rest of the industry is dealing with on a regular basis, I would be laughed out of the room and then fired.
ReplyDelete+1
DeleteExactly. The airline is asking for another two years of patience after years of losses... At some point there has to be accountability.
DeletePa treba čovjek još to malo do pemzije da na miru kahvu ispija na "poslu". A i šta su dvi godine, dok dlanom o dlan, to proleti....
DeleteWhat an outrageous statement hahaha
ReplyDeleteFuel prices today are $72 per barrel. Before the war started it was $70. Give me a break.
ReplyDeletePrice of jet fuel is still 52% higher than it was before the war. Price of jet fuel does not change on a day to basis as does a barrel on the market.
DeleteEvery year there seems to be a new explanation for why profitability is still around the corner.
ReplyDelete2028 is far enough away that nobody will remember today's promises if the targets are missed.
DeleteThe fleet renewal has become a convenient excuse for everything. Other airlines have renewed fleets without posting such large losses.
ReplyDeleteThe airline's network remains weak compared to competitors. A new fleet will not solve that.
ReplyDeleteMany airlines would love to have passenger growth of 22%. Most would also expect to make money from it.
ReplyDeleteCroatia Airlines has spent years shrinking, restructuring and modernising. Yet profitability always seems to remain just out of reach.
ReplyDeleteWhen does normal business finally begin?
ReplyDelete2028... maybe :D
Delete"Key turning point" as in - we will turn the key and lock the doors for good?
ReplyDeleteWhat a shameless bunch of incompetent... To translate what they said: we will have huge losses this and next year, because we can still blame it on the transition, and in 2028 everyone will forget this statement and we are likely to blame it on whatever is convenient at that point in time - fuel prices, wars in regions we don't fly to, pandemics, solar flares, bad omens...
Also, "greater operational flexibility"?! In a single-type fleet? I refuse to believe they are so incompetent. They are either abusing some substances or they are shameless frauds.
OU has a great potential and it should not be shut down, but unless these people are chased out, 2028 will indeed be a point when they can only turn the key and throw it away.
Amen. Well said
Delete2028 is also a year of parliamentary elections in Croatia. Maybe they are hoping someone else wins this time and its their problem now.
DeleteOr maybe they are hoping that due to elections they will get more money from the state.
DeleteWhen I see OU post, I come for PIR comments.
ReplyDelete2038
ReplyDeleteWhat a sad state of affairs.
ReplyDeleteNext two years are critical ! Like during covid times:)
ReplyDeleteAt the end of the day, it is a sad state of affairs that Wizz Air now has more capacity in Skopje than Croatia Airlines has in Zagreb.
ReplyDeleteThey also have a bigger network from Skopje than Croatia Airlines has from Zagreb.
DeleteDo they really?
DeleteYes
Delete@admin, can you tell us how many destinations Wizz has from SKP and how many Croatia Airlines from ZAG please?
DeleteThis month (June), Croatia Airlines serves 23 destinations from Zagreb, while Wizz Air serves 35 from Skopje.
DeleteWizz Air has 128.343 departing seats from Skopje, while Croatia Airlines has 99.778. However, Croatia Airlines has 837 departing flights from Zagreb this month, while Wizz Air has 537 from Skopje.
WOW it isn't even close! Wizz way ahead of OU. Thank you very much for the data. Really appreciate it.
DeleteTragic considering Zagreb's market size, economy, EU status...
DeleteDefinatly compred to Skopje given that citys lack of all those things. But its not really a useful comparison
DeleteDon't worry, Rodney. This time next year, we'll be millionaires!
ReplyDeleteShambles!!
ReplyDelete