Croatia Airlines posts €11 million loss
Croatia Airlines registered a net loss of eleven million euros in 2018, ending its run of five consecutive years in the black. It marks the carrier's worst financial performance since 2012. The company blamed its results on higher fuel prices, which were up 29% year-on-year, as well as the announced industrial action by its staff over the summer, which did not materialise following a court injunction. Revenue amounted to 229 million euros, while expenditure was up 2.9%, totalling 239 million euros. It spent most on flight operations, primarily due to the higher cost of fuel, followed by aircraft leasing, as a result of the wet-lease for two Air Nostrum Bombardier CRJ1000 jets, as well as a number of short-term leases due to the protracted time it took to service the airline's aircraft. The carrier also increased its expenditure on maintenance by 5.2%, while revenue from cargo declined.
Croatia Airlines handled a record 2.168.863 passengers during the year, an increase of 2%. Of those, 1.642.285 travellers were handled on international flights, up 3% on 2017, while 526.578 travelled on domestic services, which is on par with figures achieved the year before. The company operated 28.003 flights during 2018, which was up 1.9% compared to the year before. The average cabin load factor, a measure of seat capacity utilisation, stood at 73.5%, down from 74.4% in 2017. Passenger carrying capacity, measured in Available Seat Kilometres (ASKs), amounted to 2.3 billion, up 3.4% year-on-year. The airline’s cargo operations recorded a decline of 0.4%, with 2.264 tonnes of mail and freight uplifted in 2018, compared to 2.273 tonnes the year before.
Croatia Airlines' market share on its home turf averaged 25% during the year, down from 38% in 2017, although it grew up to 56% over the winter months (January). Its lowest market share was recorded in July when it averaged just 16%, marking its smallest monthly share on record and down 1% on the year before. "The high level of seasonality on the Croatian aviation market continues to pose a major problem for the company and its business. During the summer season, there are almost 100 airlines operating flights to Croatia, with more than a half of all passengers carried during the third quarter, while competition is minimal in winter. Croatia Airlines maintains flights throughout the entire year, providing Croatian airports with year-round connectivity", the carrier said.
In May 2018 Croatia Airlines' CEO, Jasmin Bajić, said he anticipated for the carrier to record an annual profit of one million euros, however, this did not materialise. Last week, Mr Bajić noted the airline was in need of 33 million euros in order to launch a new investment cycle and better compete against its rivals. The comments came after the Croatian government set up a multi-member, inter-agency committee whose main task will be to seek out potential investors for Croatia Airlines. Mr Bajić noted the company would not go bankrupt if it fails to secure a new partner but warned it would likely downsize its operations.
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