Croatia Airlines makes $8.5 million in Airbus payments
Croatia Airlines has made 8.5 million dollars in advanced payments on its order for four Airbus A320neo aircraft, the company's CEO, Jasmin Bajić, has said. According to Mr Bajić, the aircraft will be delivered in 2022 and 2023, despite their arrival being initially slated a year earlier (2021 and 2022). The CEO noted, "These A320neos are part of a package that has to be resolved with a future strategic partner". He dismissed claims the airline is facing bankruptcy following a loss of over eleven million euros last year. "From time to time this story about bankruptcy reapers. Croatia Airlines is not on the verge of bankruptcy but the company has to create conditions for its future based on new foundations. We are undercapitalised and that is our main problem. But we continue to operate, even in winter when we run fifty to sixty flights per day and 110 daily flights in summer".
The CEO blamed 2018's poor results on threats of industrial action and noted that the company did not sell any of its assets, which wasn't the case in previous years when Croatia Airlines posted an annual profit. Speaking at the European Regions Airline Association conference in Prague, Mr Bajić said the Croatian government resumed the company's privatisation process last month. "The emphasis is on finding a partner that will invest in fleet and network development. The government wants an investor that will help grow the airline. After more than two years of negotiations, Croatia Airlines has signed a five-year labour agreement with its workforce earlier this year. This should give stability in the medium term as previous labour agreements lasted for two years. Such an agreement may make the airline more attractive to investors".
The Croatian carrier successfully converted a 2008 order for four A319s to the A320neos four years ago. Although the new aircraft were originally to be delivered by the end of 2013, their arrival was put on hold and the deal was renegotiated. The carrier put off the delivery of the jets due to the company's financial situation. Neither Airbus nor Croatia Airlines have disclosed the exact cost of the aircraft, however, the four jets were valued at 424.8 million US dollars at list price at the time. On the other hand, the carrier's former CEO, Krešimir Kučko, said the deal is worth "almost the same" as the one agreed on in 2008. Mr Bajić noted that the company is need of some 33 million euros in order for it to launch a new investment cycle and expand its operations.
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