Croatia Airlines renegotiates aircraft leases
Croatia Airlines has renegotiated a number of aircraft leases in order to reduce the financial impact of the coronavirus Covid-19 pandemic. The airline has cancelled its planned seasonal summer lease of one Bombardier CRJ1000 aircraft from Air Nostrum, as well as the planned long-term dry lease of a Dash 8 Q400 turboprop, previously operated by Austrian Airlines. The aircraft was to have a low utilisation rate and was to be primarily used as a spare, so as to limit network disruption, by supplementing any aircraft which may go out of service due to technical reasons. Out of the current thirteen lease agreements for aircraft and engines, the carrier has renegotiated more favourable terms for eleven and reduced the monthly leasing costs.
Last month, Croatia Airlines took delivery of a newly leased Airbus A319 aircraft, which has since been stored. The carrier has renegotiated the terms of the lease and will use a Power by the Hour contract during the first year of the lease, until the 2021 summer season. Power by the hour leasing is a form of operating lease wherein the lessor eliminates the requirement of a fixed monthly lease rate and instead charges for the aircraft’s utilisation during a fixed period of time. The carrier used the same system for several other aircraft leases, which were renegotiated.
During the first quarter, due to minimal fleet utilisation, Croatia Airlines performed maintenance on a number of aircraft, including C checks on four Airbus jets and one Q400, as well as an engine overhaul and an undercarriage replacement. The carrier’s CEO, Jasmin Bajić, recently said, “We are adjusting to the current situation and are doing our job to the best of our ability. All our costs have been reduced as much as possible”. Croatia Airlines also has four Airbus A320neo aircraft on order, with the first two scheduled for arrival in 2022 and the other two in 2023.
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