Wednesday, 1 May 2019

Burdened Croatia Airlines Continues to Endure Financial Losses

As Poslovni Dnevnik writes on the 30th of April, 2019, Croatia Airlines' operating losses during the first quarter of this year stand at 90.2 million kuna, with a net final loss for that period totalling a massive 98.6 million kuna, as Croatia Airlines announced on Tuesday.

Croatia Airlines explained that these significant losses are to be expected in view of its highly seasonal business performance. The air company added that the lower net result, in comparison with the previous year, was significantly influenced by the increase in amortisation costs, standing at 26.5 million kuna, caused by the change in international financial reporting standards, ie, with the application of IFRS 16, as well as major work on the engines made in the previous period.

Croatia Airlines made sure to add that the net effect on the result, resulting from the change in the method of recognising operating lease costs, amounted to 4 million kuna for the first quarter of 2019.

They point out, however, that its EBITDA performance indicator is more positive, standing at as much as 16.6 million kuna when compared to the same period last year.

In the first quarter of this year, 345,800 passengers were transported by Croatia Airlines, which was 2.4 percent less than during in the same period last year. This reduced demand has been put down to Easter having been later this year than it was in 2018, as well as the fact that it was higher at the same time last year because the demand for the European handball championships in Croatia was of course high. Given the favourable booking and demand, the fall in the number of passengers for Croatia Airlines during 2019's first three months will likely be compensated for during the remainder of the year.

This season, Croatia Airlines will continue to fly to all ten of the destinations which have been included in its flight network over the last three years - Lisbon, Milan, Prague, St.Petersburg, Stockholm, Oslo, Helsinki, Bucharest, Dublin and Mostar, as well as the seasonal Split - Copenhagen and Dubrovnik - Munich routes, which was first introduced last year. The news is that there will be an additional flight on Tuesdays on the normal Zagreb - Dublin route, so that passengers will have three flights available to them per week, on Tuesdays, Thursdays, and Sundays.

During this year's summer tourist season, the company will fly directly to 38 European destinations in 24 countries, with Zagreb being directly connected to 24 European destinations in 22 countries.

The air company's report also states that Croatia Airlines recorded an operating loss of 76.5 million kuna in 2018, with a net loss of 82.9 million kuna.

The company also recently announced that the consortium of Privredna banka Zagreb and DVB Banka has been selected as the financial advisor for the company's much needed recapitalisation, the consortium will also seek an equally needed strategic partner.

Make sure to follow our dedicated business page for much more.

Friday, 26 April 2019

Financial Advisor for Croatia Airlines' Recapitalisation Model Chosen

What with all the stories about the ailing Uljanik and 3 Maj shipyards in Pula and Rijeka, the dire situation with the seaplanes, and even the old sagas about the plight of the former Agrokor, which is now of course Fortenova, we often forget about one of the most strategically important companies there is in this country - Croatia Airlines.

While news of the seemingly rather unpleasant impending fate of Croatia's shipyards and shipbuilding industry circulates and dominates the media, news about Croatia Airlines and its very internal struggles tends to get buried. The reality, however, is that Croatia's flag carrier is very much in hot water and has been for a considerable amount of time now, with a much needed strategic partner still apparently nowhere to be seen, it's hard to imagine that Croatia Airlines is heading in a good direction, even with its record numbers of passengers but continual posting of losses.

It seems however, at least for now, that Croatia Airlines' many financial woes might have been lifted with the choosing of a financial advisor to help with the model of the airline's recapitalisation.

As Poslovni Dnevnik writes on the 26th of April, 2019, the chosen consortium should soon propose a model for the recapitalisation of Croatia Airlines, as well as the seeking of a strategic partner.

The committee for the preparation and the implementation of the procurement procedure for financial advisory services for the elaboration of Croatia Airlines' recapitalisation model and the finding of a strategic partner (yes, that's quite the mouthful), has decided on the selection of a financial advisor, and the offer of a consortium including Privredna banka Zagreb and DVB Bank SE, has been chosen. 

The consortium was chosen in strict accordance with the national plan for reform 2018, and deliver financial advisory services to Croatia Airlines with regard to the proposal of a model for the air company's recapitalisation, as well as seek a strategic partner.

Make sure to follow our dedicated business page for much more.

Sunday, 31 March 2019

Croatia Airlines Kicks Off Summer Flight Schedule

Sunday, March 31 kicked off the summer flight schedule for Croatia Airlines! The Croatian national carrier will travel directly to 38 European destinations in 24 countries, with Zagreb directly connecting to 24 European destinations to 22 countries during the tourist season, reports T.portal on March 31, 2019. 

Increased traffic on regular routes begins for the Easter holiday, which traditionally represents the beginning of the tourist season in Croatia, followed by the gradual introduction of seasonal lines from the most important markets for Croatian tourism. At the peak of the tourist season, Croatia Airlines will perform on average 105 flights per day.

Croatia Airlines continues to fly to all ten destinations that have been included in the flight network for the past three years. These include Lisbon, Milan, Prague, St.Petersburg, Stockholm, Oslo, Helsinki, Bucharest, Dublin, and Mostar, as well as the Split - Copenhagen, and Dubrovnik - Munich seasonal lines introduced last year.

On the regular Zagreb - Dublin line, an additional flight is scheduled for Tuesdays so that passengers will have three flights available per week - Tuesdays, Thursdays, and Sundays. Also, the year-round flights between Zagreb and Mostar will continue.

Croatia Airlines is expecting a 5 percent growth in passenger traffic this year, compared to last year, when 2.17 million passengers were transported by the airline. 

In this year's tourist season, as well as last year, Croatia Airlines boasts 12 aircraft in their fleet - four Airbus 319, two Airbus 320 and six Dash 8-Q400 aircraft. As in the past two years, two more aircraft will be hired for the tourist season from May to October.

The company marks its 30th anniversary this year, too. For the special occasion, the airline utilized its employees to select the best slogan to commemorate the big birthday, which is “Creating memories for 30 years!”

Along with the slogan, a unique birthday design was created, which also saw the help of its creative employees. 

To mark 30 years, Croatia Airlines has chosen to enhance the visuals of its fleet. Namely, on its 12 aircraft, the “CROATIA” logo has been enlarged, making it even more noticeable. Furthermore, the checkers, as a recognizable symbol of Croatian national identity, extend to the hull of the aircraft. 

The visuals on the exterior can also be noticed on the lower part (belly) of the aircraft, which is now white, giving the plane a touch of elegance. Thus, the Croatia Airlines fleet, which is usually a traveler's first introduction to Croatia, has become even stronger and more recognizable. 

To celebrate three decades, the company will also conduct several competitions this year where visitors or citizens can expect valuable prizes. The competitions will be conducted in cooperation with the media and on social networks, and surprises can also be expected on flights. All details can be found here

The story of Croatia Airlines began on August 7, 1989, when it was registered as Zagal (formally, Zagreb Airlines). On December 23, 1990, Zagal changed its name to Croatia Airlines and became the national carrier of passengers, goods, and mail. 

The first commercial flight of Croatia Airlines took off on May 5, 1991, from Zagreb to Split, while the first international flight was between Zagreb and Frankfurt on April 5, 1992. 

From the very first flight to the end of February 2019, Croatia Airlines has achieved 585,500 flights and carried over 38,240,000 passengers. Of these, 11,407,500 passengers flew on Croatian flights, 24,014,500 flew on international routes, and 2,818,000 were carried on special charter flights. For the upcoming tourist season, Croatia Airlines will travel to 38 destinations in 24 countries. 

It is almost essential to note that in the last 30 years, Croatia Airlines has become a member of the most important aviation associations, such as the International Air Transport Association (IATA) and Star Alliance, the largest aviation association in the world. Today, Croatia Airlines is classified as a mid-sized European airline, recognized by passengers for flight safety, professional staff, and quality of service. 

To read more about travel in Croatia, follow TCN’s dedicated page.

Saturday, 16 March 2019

Croatia Airlines Celebrates 30 Years, Over 38 Million Passengers

Croatia Airlines, the Croatian national carrier and Star Alliance member, celebrates 30 years! 

Saturday, 9 March 2019

Plans and Expectations for Croatia Airlines in 2019

March 9, 2019 - What does 2019 have in store for Croatia’s national airline? A look at the plans and expectations of Croatia Airlines this year. 

Sunday, 3 March 2019

Croatia Airlines Posts 82.2 Million Kuna Loss

ZAGREB, March 2, 2019 - Preliminary figures show that Croatia Airlines incurred a loss of 82.2 million kuna in 2018, which is a much poorer result than in 2017 when the flag carrier posted a profit of 25 million kuna, which was owing to the partial sale of slots at Heathrow Airport in the amount of 138.6 million kuna.

Excluding the sale of slots, the loss in 2018 was down by 28% or 31.4 million kuna compared to 2017, while fuel expenses rose by 71.3 million kuna due to an increase in oil prices, the airline's financial report for 2018 shows.

Operating revenue in 2018 amounted to 1.7 billion kuna, 4% more than in 2017, after one-off items are excluded.

Total operating expenditure amounted to 1.77 billion kuna, an increase of 3% on 2017. The cost of fuel, which accounted for 18% of total expenses, was one of the main reasons for the increase in operating expenditure.

The airline flew a record-high 2.169 million passengers in 2018, a 2% increase on the previous year, with the average occupancy rate being 73.5%.

Croatia Airlines is currently looking for a strategic partner, for which the government formed an interdepartmental commission last week. The process of hiring a financial consultant to define a model for the company's recapitalisation and find a strategic partner is nearing completion.

Zagreb's Franjo Tuđman international Airport (MZLZ) expects positive business results again this year and an increase in the number of passengers from last year's 3.3 million, and will continue upgrading its operating processes and expanding its capacity, MZLZ said.

Noting that preparations for the season are going according to plan, MZLZ said that the summer flight timetable would start on 31 March and continue until 27 October.

MZLZ announced several projects to improve the airport's facilities, including a new baggage conveyor belt as well as the construction of additional parking space and an additional 15 passenger registration counters and the implementation of the automatic boarding pass and passport control systems.

MZLZ said that in the past five years the airport's passenger traffic had increased by 36% and that in that period 15 new airlines had arrived at the airport.

"Today, 30 airlines have regular flights to the airport connecting Zagreb with 50 destinations in Croatia, Europe and the world. MZLZ is in intensive talks with a large number of airlines to open new destinations," MZLZ said.

MZLZ said that its business results for 2018 would soon be published in a consolidated annual report, noting that MZLZ had paid almost 200 million kuna in concession fees into the state budget over the past six years.

According to data for 2018, the airport logged 3.3 million passengers, an increase of 244,200 or 7.7% on 2017, almost 43,600 flights, up 5%, and almost 14,000 tonnes of freight, an increase of 16.7%.

In January 2019, 191,200 passengers used the airport, similar to January 2018, the number of flights increased by six or 0.2% on the year to 3,045, and the amount of cargo fell by 2.3% to 924,000 tonnes.

More news on Croatia Airlines can be found in the Business section.

Friday, 22 February 2019

Who Could Potential New Majority Owners of Croatia Airlines Be?

Minister Oleg Butković has stated that the company's business has now been stabilised, but who could the potential new majority owners of Croatia Airlines be?

As Poslovni Dnevnik writes on the 22nd of February, 2019, Minister of Maritime Affairs, Transport and Infrastructure, Oleg Butković, said that it was difficult to estimate what the potential ownership ratio could be in relation to the state, as well as with a potential strategic partner for the enfeebled Croatia Airlines.

"It's hard to say that this will be a 50, 60, 70 or 100 percent sale of the ownership of Croatia Airlines, and in any case, there are those who are interested, and international companies are coming and are interested. In that sense, we're waiting for the whole process to begin. Then we'll who will place an offer, who is the most serious, and how this whole situation will go further,'' Butković told HRT.

"It [Croatia Airlines] has transported a record number of passengers last year, and we're insisting that Croatia Airlines remains a Croatian brand, to keep hold of all the routes on which it is currently flying, the acquisition of new aircraft, the modernisation of the new fleet, and the opening up of new routes, that's in function with Croatian tourism and with the whole economy,'' the minister added.

Butković didn't want to talk about any possible solutions for Croatia Airlines for the time being. He believes that the commission which has now been formed must delve much deeper into all the information and operations of Croatia Airlines and see what is, and what isn't a healthy part of that company, or what else can be done from within company in order to boost its function.

Gordan Maras said that Croatia Airlines should find a strategic partner with which the burdened flag carrier would remain a Croatian company.

"We need to find a partner that would work with Croatia Airlines on the level of world-wide destinations, that they're strong and outside of the EU, and not in the situation in which we just end up as their distributor. My position is that we need to find a partner outside the EU in order to develop that destination story," Maras said.

Minister Butković said that Croatia cannot influence exactly where a potential strategic partner will come from.

"Of course, there are certain restrictions as far as EU legislation is concerned, nobody who isn't from the European Union can become the majority owner of Croatia Airlines. There are many things that we have to take into account before the final decision is made,'' he concluded.

Make sure to stay up to date with the unfolding Croatia Airlines situation and much, much more by following our dedicated business page.

Thursday, 21 February 2019

Government to Select Strategic Partner for Croatia Airlines

ZAGREB, February 21, 2019 - The procedure to choose a strategic partner for Croatia Airlines will be conducted by an interdepartmental commission to be tasked with considering further steps in finding an experienced air transport partner that would contribute to the future development and competitiveness of the national flag carrier, the Croatian government decided at a session on Thursday.

"The commission's main task is to consider further steps to be taken in order to find a quality strategic partner with significant experience in civilian aviation, who, among other things, would ensure the expansion of the airline's network and increase its market share. Special attention should be paid to the importance of regular, year-round domestic and international transport and the need for strong support for the further development of Croatia's tourism potential, as well as participation in the renewal of the company's fleet and its recapitalisation," said Transport Minister Oleg Butković.

The commission will propose the partner it chooses to the government in line with valid national and EU laws so as to secure that the majority ownership and management of the national flag carrier is in the hands of legal or physical persons from the EU, with the aim of maintaining the airline's operating licence.

In September 2018, a procedure was launched to procure financial consultancy services in elaborating a model for Croatia Airlines' recapitalisation and selection of the strategic partner. So far, there has been no information on possible applicants.

More news on Croatia Airlines can be found in the Travel section.

Friday, 15 February 2019

Croatia Airlines Anticipates 5% Growth for Record 2019

Great news from the Croatian national carrier Croatia Airlines as they are targeting 5% growth in 2019, which would make it their busiest year yet. Namely, the airline should handle some  2,280,000 passengers this year, thanks to the lease of two Bombardier CRJ1000 aircraft which will be used for seasonal routes, reports Ex Yu Aviation on February 15, 2019. 

Seasonal flights between Zagreb and Dublin will also be upgraded to year-round operations this year, while the airline may also extend flights on other seasonal destinations.

The Croatian airline also signed a five-year agreement with trade unions representing its pilots, mechanics and cabin crew, which is said to be in line with the airline’s financial capabilities. 

"Additional wriggle room in reaching a deal was made possible by the recent amendments made to the law on income tax rules. The contract is of great importance for the next development phase of Croatia Airlines which is aiming to find a strategic partner in line with the government's National Reform Programme. By successfully reaching a deal with trade unions, it is assumed that future services will be free of disruptions. Therefore, it is expected that this agreement will positively impact on the national carrier's competitiveness and lead to a better position on the market in the future, with a constant focus on the needs and satisfaction of passengers,” Croatia Airlines said. 

"Croatia Airlines will continue to focus on managing all business risks, and on ensuring the best possible conditions for regular business operations. Jet fuel prices are expected to continue being the most significant risk, and the company will, in that regard, try to reduce its negative effects on the airline's overall business operations. The further improvement of the quality of service and network business model is also the company’s goals, as well as further investment in the fleet in order to maintain the highest level of flight safety,” the airline concluded for Ex Yu Aviation

To read more about travel in Croatia, follow TCN’s dedicated page

Friday, 8 February 2019

Rijeka Airport Hopes to Grow in 2019 from Year-round Flights, New Airlines

After a record 2018, what should Rijeka Airport expect in 2019?

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