Croatia Airlines is moving towards securing a further 35 million euro capital injection from the Croatian government, potentially bringing forward funding originally scheduled for 2027. The carrier has called an Extraordinary General Meeting for tomorrow, October 29, at which shareholders will vote on a proposal to increase the airline's share capital through the issuance of 35 million new shares to the state. The proposed transaction forms part of a wider government-backed recapitalisation package approved in December 2025, aimed at strengthening the airline's financial position during its transition to an all-Airbus A220 fleet.
According to the meeting notice, Croatia Airlines is seeking approval to increase its share capital from 213.27 million euros to 248.27 million euros through a 35 million euro cash contribution from the Croatian government. The transaction would involve issuing 35 million new ordinary shares, each with a nominal value of one euro, all of which would be subscribed to by the state. Existing shareholders, other than the government, would be excluded from participating in the new share issue. The proposal also seeks to exempt the state from the obligation to publish a takeover offer as a result of increasing its ownership stake.
The timing of the meeting suggests Croatia Airlines may be preparing to receive the second instalment of the government's seventy million euro cash contribution earlier than originally envisaged. Under the recapitalisation programme announced on December 12, 2025, the government planned to provide 35 million euros in fresh capital during 2026, followed by another 35 million euros in 2027. The first instalment was approved by the airline's shareholders at an Extraordinary General Meeting on January 19, 2026, and the funds were received that same month. The previous shareholder meeting notice similarly did not specify an exact payment date, with the capital increase subsequently completed following shareholder approval.
The wider recapitalisation package, valued at approximately 156 million euros, combines seventy million euros in fresh cash contributions with the conversion of existing government loans and accrued interest into equity. The first 43 million euro debt conversion was completed in December 2025, followed by the conversion of approximately 42.9 million euros in outstanding loans and interest in January 2026, alongside the first 35 million euro cash injection. The latest proposed capital increase would complete the cash component of the programme.
The Croatian government has justified the financial intervention by pointing to the substantial costs associated with Croatia Airlines' fleet renewal programme, under which the carrier is replacing its existing aircraft with fifteen Airbus A220s. The transition, launched in 2024 and scheduled for completion next year, has placed additional pressure on the company's finances, compounded by supply chain disruptions and aircraft delivery delays. When announcing the recapitalisation last December, the government maintained that the investment was being undertaken in accordance with the market economy investor principle, under which a state investment can be considered commercially justified if made on terms comparable to those acceptable to a private investor.
The proposed 35 million euro injection does not represent additional funding beyond the previously announced package. However, its approval at tomorrow's meeting would advance the implementation of the government's recapitalisation programme and raise the prospect of Croatia Airlines receiving its remaining cash contribution ahead of the original 2027 schedule.
How long can this go on for? It is clear that they won't start being profitable any time soon.
ReplyDeleteWith an article like this, I go straight to the comments for a daily dose of entertainment
DeleteSame:)
DeleteThey will be bancrupt soon...
ReplyDeleteThey do not have any assets behind Heathrow slots.
DeleteDidn't they sold those 4 years ago for 18 millions?
DeleteThey sold but they still have existing slots which they didn't sell.
DeleteThey have 4 or 5 left. afternoon/evening departures mostly i believe
DeleteThey have 4 slots still on Monday, Wednesday, Friday and Saturday. All Afternoon/ evening.
DeleteI can only imagine what the finances are if they are rushing to get the state aid approved.
ReplyDeleteThe government keeps explaining why the fleet transition costs money. Would be nice to hear when it expects the investment to start paying off.
ReplyDeleteI support keeping Croatia Airlines, but that doesn't mean every capital injection should pass without questions. What targets does management have to meet in return?
ReplyDelete+1
DeleteSame. I don't object to the state investing. I object to how little we hear about the results it expects from that investment.
DeleteInvesting? Is that what they call throwing money into an endless pit now?
DeleteI have lost all hope with these guys. So much potential, so little done.
ReplyDeleteDo you use them?
DeleteLast time in May
DeleteGosh. I used to use them often during the 2000s/ early 2010s from London. Since the new terminal I've never once found them cheaper than BA or Ryanair. Never once.
DeleteUsed to use them for flight tp BiH from NA. Now better option is direct Air Serbia and rent a car. Cheaper and faster.
Delete€156 million just in the past 12 months...
ReplyDeleteFree fall
DeleteMore will have to come in 2027 to save them
DeleteHopefully completing the fleet change will finally allow them to focus on selling seats and developing the network. Passengers won't choose an airline just because its aircraft are new.
ReplyDeleteOne does not wait to complete a three-year fleet change before introducing changes to one's business model. It should have been done from the second the first A220 touched the ground at ZAG.
Delete^ true
DeleteBlatant corruption.
ReplyDeleteCroatia Airlines is too expensive for the country.
ReplyDeleteThe Croatian government should get things in order, otherwise nothing will change and they’ll keep giving money for no reason every year.
As long as they have routes with no passengers and planes that don’t fly, it’s sad. At least in the summer they could try to add connections that would be attractive or interesting, but Croatia Airlines just brings back routes that aren’t even interesting.
In translation.... They ran out of money
ReplyDeleteThey never had any money to run out of because any money they have are handouts from HDZ.
DeleteFifteen new aircraft is a big commitment. Hopefully they have a convincing plan for using them during winter as well as summer.
ReplyDeleteDoes the evidence suggest that they do?
Deletenope
DeleteI hope it works. Croatia Airlines needs to emerge from this with a sustainable business, otherwise they will be gone in a few years.
ReplyDeleteThis will be enough until spring 2027
ReplyDeleteOptimistic
DeleteThe problem is that Croats and Slovenes are so used to fly low cost, that they don't even consider flying with OU. They would much rather choose FR from ZAG or Trst, Marco Polo, Treviso, Budapest or Vienna.
ReplyDeleteIts not about being 'used to', its about people will select the best value/ease for where they need to go. Not only are OU shite at pricing, but yes the offer a very limited network.
Delete@9.26 that is not a problem at all. If we are in a store and there are two food items of the same quality and one is for a quarter of the price of the other, the vast majority of people will (and probably should) choose the cheaper one. People travel to get from point A to point B, not to experience the "luxury" of the premium Croatia Airlines. Companies should be punished for bad management.
DeleteWell, OU will never be able to offer 25€ tickets to Thessaloniki, Kos or Memmingen.
Delete^ No strictly speaking true. They have total ability to control dynamic pricing and to attempt to drum up custom, maybe not 25Euros (hell Ryanair rarely does anymore). Sure their cost base is higher than FR, but by leaving flights totally empty they do themselves little favours.
DeleteRight now ZAG - Warsaw Modlin 9.-14.11. return ticket for 36€.
DeleteGreat!
Delete^ I selected a random day: December 9. FR Stansted-Zagreb two flights both base fares £41. Croatia Airlines from Heathrow £141.
DeleteFor comparison Lufthansa one-stop £100 and even JU (admittedly with a night's layover) is only £101. OU really ain't got a clue on pricing for this, what should be a fundamentally important point to point route.
Does OU offer checked luggage for the 140 euro fare?
DeleteIts pounds. And nope.
DeleteFR adds all extra charges on top.
DeleteStill cheaper than OU mate. By alot
DeleteBravo OU
ReplyDeleteUseless waste of your time.
DeleteBravo Mafia you meant? Stealing from us on daily bases?
DeletePIR you have no pride in your national Airline.
DeleteHahah he does not! Which is right. Nobody should have pride in crap
DeleteSome people seem to think the last old aircraft leaving will automatically turn the airline profitable. There will still be lease payments, maintenance costs and a lot of seats to sell.
ReplyDeleteThe government is clearly committed to seeing the fleet replacement through. Now management needs to show how it plans to make the most of that support.
ReplyDeleteThere needs to be some patience during a fleet change of this size. But patience should come with deadlines and accountability.
Delete09.50
DeleteĆaci comment. Croatian variant
Interesting that many airlines changed fleet without having permanent state bail out.
ReplyDeleteProbably Croatia should think which connectivity has to remain under OU, how much it will cost (like a PSO) and the rest given to the "open market".
A "New OU" of around 10 aircrafts properly utilised shall be sufficient.
Airlines usually don't go all in to buy a large number of planes without actually having the finances to do it.
Delete^ or a plan on what to do with the planes
DeleteA common fleet should eventually simplify things. Getting there is obviously proving expensive.
ReplyDeleteWill the full business plan ever be presented publicly, even in summary form? We get very precise figures for the capital increases and much less detail about the expected outcome.
ReplyDeleteFull business plan is to continue feeding LHG for peanuts on expense of poor tax payers. Highly corruptive BCG deal on single type fleet is the best proof of my claims
DeleteAs someone who would like to use Croatia Airlines more often, I hope this eventually translates into better connections and fares. That's where passengers will notice the investment.
ReplyDeleteis there no end to this? isnt this illegal under EU rules..for state to prop up failing carriers?? others were fined wetent they? How DOES Croatia Airlines get away with this? double the price than others on all routes..for a glass of water in board. recently..In September i paid 190euros onecway Split to London Gatwick. i tried to buy a coca cola and bar of chocolate ( i had no time in terminal. Reply " we have nothing at all..We were not loaded. it happens often". No real apology.. " not loaded?" they have aircraft based at SPU?? i wonder how often it happens. Easyjet and Ryanair would gave sold me 5 colas and 5 choc. They openly admit that on board sales are big profit centre. not OU...too much like work??
ReplyDeleteMost likely have no catering loaded in Split at all. Likely only in Zagreb and if the plane is flying from outstations when they run out they no longer have anything. Crazy but wouldn't be surprised at all.
DeleteThat is insane business model.
Deleteit happened on ZAG-LHR in july.. they had zero goods to sell.
Deleteonly Pringles. i am flying ZAG-LHR next week so will see. it is not a big deal re me but loss of oncome is huge.. Easyjet sells so much on board..followed by Ryanair
Do a trip report. I would really love to read more reports from OU flights.
DeleteHow dare they not give out free proper drinks and real food given the immense amounts we pay for this sham airline.
Delete-change the whole C level team with outside expert, hell pay them millions in salaries and it will still be worth it
ReplyDelete-make sure that they understand the seasonality of the coast and that they understand the hub strategy in Zagreb, with waves included
-allow them to experiment, middle east, africa, charter segment is not covered at all
-long haul opportunistic routes - india, bangladesh, marrakesh
-dubrovnik needs more premium ops
-in winter for all I care wet lease the planes to Nigeria
+100
DeleteI'd love to see a Rijeka-Bangladesh route via Dubai. I think it's a money-spinner.
DeleteThe truth is that Rijeka-Bangladesh route via Dubai makes much more sense than sending A220-300 to Sarajevo with 12 pax on board
DeleteI have to agree, would be super fun for aviation reviewers too! Imagine Josh Cahill's face after getting a box of olives and breadsticks somewhere over central India :-)
DeleteMeanwhile. Icelandair has today announced a codeshare with Air China, just a day after Air China launched Beijing-Copenhagen-Reykjavik flights. Management at OU probably still unaware Air China has started flying to Zagreb.
ReplyDelete10.21
DeleteOnce again: Croatia Airlines is not an airline. It is Party entity realizing Party directives to feed LHG at any cost. In addition, it's Party sanctuary for "deserving soldiers" and tool for few individuals (among 200 families) to fill pockets through (double) lease contracts and other corruptive actions. You shouldn't expect anything what's normally done in an airline from such entity
Croatia Airlines to secure €35 million state funding ahead of schedule
ReplyDeletePhew, that’s good. For a moment there I thought they were actually going to have to do some work.
No time for that
DeletePIR has yet to emerge.
ReplyDeleteI'm waiting patiently for his views 😃
DeleteHe enlivens our days with his obsessions on shame.
DeleteThis is not even subsidy but direct state financing of air company, how is this not against EU laws?
ReplyDeleteNo, it's the increase of the airline's share capital, it's said in the article. This is not subsidy, aid, loan or similar, these are new shares so there's no obligation of paying back this money. Eventually it is a form of cash injection but not illegal. However, this will have consequences in the OU books and ratios which are already looking bad.
DeleteCreative accounting.
DeleteTo me it looks like it's better to let them go down and start Air Croatia or whatever, from the scratch.
ReplyDeleteWhat would that change? Or so they stop paying the debts to any supplier?
DeleteWell they will lose any assets, and they don't have much.
DeleteThere were plans for airline called Air Croatia back in 1995, approximately. Fleet was supposed to include DC-10, B737 and Dornier 328 turboprops and network to include North America, Australasia, Europe, region and Croatia. Everything was cut in the roots as it was potential danger to OU, despite (declarative only) "free market" and "competition" promises and expectations. The same happened to Anić Airways and later to Air Adriatic and Dubrovnik Airline when both announced scheduled network from Zagreb, and even later to Dalmatian.hr, founder and CEO of which was threatened to "quit everything if wants to keep his head on his shoulders". Aviation in Croatia, like 90 % of other "state owned businesses" are entirely controlled by Mafia, consisting of 200 "rich families" but not a single soul in Croatia, "independent investigative journalists" included dares talking about it.
DeleteA waste of public money.
ReplyDeleteGet ready when the Q3 financial report cones out soon. It won't be pretty
ReplyDeleteThey dont even have enough money to pay the wages, can you imagine?!?
DeleteThe A220 will be the nail in the coffin. An extremely miscalculated order.
ReplyDeleteOU should keep the profitable routes only and discontinue majority of unprofitable. Concentrate on ZAG only. Try to find and continue profitable charters.
ReplyDeleteOR continue with 20+ routes and making huge minus. Simple solution. If LH and other gigants has to consolidate, small OU from 3,9 mill. Croatia has to do it also. Otherwise sooner or later another Adria will be "grounded".
OU should be sold to IAG (if they'd have it) for 1euro and then fundermentally redeveloped to feed Spain and the UK.
DeleteYou’d need to pay them to take it, and underwrite all the debt. It’s pointless.
Delete13.57
DeleteAgreed, except for "to feed Spain and the UK". Instead, it should be "to develop its own network, long-haul and region included, with new professional management and with no political influence and control"
As we know its not going to be able to remerge as a functional long-haul airline even in the medium term and with your professional management, surely its better to work for/with/as part of an airline group that has little footprint in south east Europe. Feeding regional UK airports via Zagreb/Split to the Balkans in a way the JU wouldn't due to visa issues/lack of point to point demand. Edinburgh, Birmingham, Bristol and Newcastle etc. Similarly with Spain, offering robust connections as part of Iberia and British Airways would be fantasy airline route for OU.
DeleteYou forgot "just" and "only" United, Transat, Air Canada, Air China, T'way/Trinity operating to Croatia and dozens of legacy carriers with approximately half of the cabins filled with transfer passengers to distant markets, where Croatia gains increasing popularity. Forgetting about it and "feeding regional UK airports from Balkans" is utter stupidity and Air Serbia is not doing it precisely because of UK-Balkans visa regime. Why do you want an airline from the biggest ex-yu air market, which has only 13 percent of the market, to remain small or become even smaller, is completely other story, which I do not want to comment
DeleteYou are so very strange mate.
DeletePlenty bigger airlines, such as A3 do not want to indulge in longhaul. If the longhaul market to Croatia existed plenty other airlines would be flying longhaul routes, butthey dont.
DeletePIR will write 5 paragraphs abour why you are wrong. But of course Croatia hasnt the capacities he likes to like it has.
DeleteJust let it go bust, for Gods sake. It would be better to hire any old ACMI outfit to run winter routes that bring much needed tourism to the coast, than blast away money on this. And sure, we can get a real luxury business class for the elite political class, even lounge access for them and all their family (and their wives hairdresser’s best friend) and it would STILL be cheaper.
ReplyDelete