Croatia Airlines registers €47.3 million loss in 2020
Croatia Airlines has registered its biggest financial loss in eight years, while carrying the fewest passengers in over two decades as the aviation industry was obliterated by the coronavirus pandemic in 2020. The carrier recorded a 47.3 million euro loss, however, it factored in 11.7 million euros in direct state aid and 33.2 million euros granted to the company as an equity loan by the government. The company was also recapitalised by the state with a 46.2 million euro cash injection. “The year 2020 was marked by significant changes to the business environment which had an enormous impact on the company’s finances. The crisis caused by the coronavirus has drastically slashed demand for air travel, which, in line with travel restrictions, resulted in a decrease in capacity, a drastic reduction in planned flights, as well as the termination of existing or planned new services”, Croatia Airlines said.
The Croatian carrier handled 618.000 passengers during 2020, representing a decrease of 73% on the year before. It operated 13.052 flights, a decline of 54%. Its average cabin load factor stood at a record low 49.6%, down 24 points. The amount of cargo carried declined 32.5% on 2019. Croatia Airlines maintained scheduled revenue services throughout the height of the global lockdowns by operating flights between Zagreb and Frankfurt. The Croatian flag carrier managed to improve its market share in its home country by thirteen points to 36%. This was primarily down to foreign carriers significantly reducing their operations to the Croatian coast over the summer months.
Croatia Airlines has undertaken a number of measures in order to reduce costs. “At the very start of the crisis in March 2020, Croatia Airlines introduced rigorous cost saving measures in all segments. This included the inking of a new agreement with trade unions for the reduction of rights in the existing collective agreement, as well as negotiations with suppliers which resulted in significant savings. The airline renegotiated leasing terms for aircraft and engines, cancelled the lease of additional jets over the summer and terminated plans to hire seasonal staff members. The company also slashed spending for marketing and promotion”, Croatia Airlines said.
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