Croatia Airlines seeks €92.7 million in state aid
Croatia Airlines is seeking 92.7 million euros from the government in order to cover losses generated by the ongoing coronavirus Covid-19 pandemic and safeguard its future development. The carrier estimates it will register a twenty million euro loss by year’s end, while it would use the remaining funds from the state to invest in its fleet. The airline has four Airbus A320neo aircraft on order, with deliveries due to commence from 2022 onwards. The Croatian carrier recorded a 14.6 million euro loss during the first quarter of the year. Its privatisation process has also been halted, as a result of the virus.
The Croatian government said it plans to assist its national carrier in overcoming the financial fallout of the ongoing Covid-19 pandemic. Dinko Staničić, the Director of the Civil Aviation Sector at the Ministry for Sea, Transport and Infrastructure, said, “It [assistance] depends on what we can negotiate with the European Commission and the Ministry for Finance. What we can do at this point is cover the airline’s losses. However, there have to be some limits to this because we do not have boundless means, and neither would that be approved. For now, we are negotiating with the Commission to see how we can help the airline”.
The carrier’s CEO, Jasmin Bajić, recently noted, “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. Me and my management team are confident that we can reach our 2019 figures by 2022. Personally, I would not be surprised to see Croatia Airlines’ figures reaching 2019 levels by the end of 2021, but we all agree that the recovery will be a long-lasting process during which we may again be exposed to another wave of the virus spread. Having said that, I also want to emphasise that, besides “U” shape and “V” shape scenarios, we need to be prepared for other scenarios too. This applies to many airlines around us as well. Many carriers will have to downsize for an unspecified time”.
Croatia Airlines is continuing to rebuild its network. After announcing the resumption of international flights from Split, the carrier will now reintroduce international services from Dubrovnik as well. Four weekly flights to Frankfurt will be reintroduced on June 29. As reported over a month ago, the carrier has shelved its seasonal flights from Zagreb to Stockholm, Oslo, Helsinki and Tel Aviv which will not be returning this year.
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