Croatia Airlines In Talks To Cancel A320neo Order

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Croatia Airlines is said to be in talks with Airbus regarding a cancellation of its Airbus A320neo order. The order was for four aircraft, due to arrive in 2022 and 2023. At first sight, this might appear like a rational move following the outbreak of COVID-19. However, this is likely not to be the only reason. Let’s take a look at why this might be so.

Croatia Airlines was already expected to receive the new Airbus aircraft, but it has prolonged the delivery. Photo: Croatia Airlines

A320neo aircraft are not coming

In a statement to Ex-Yu Aviation News, Croatia Airlines confirmed that it is in the process of terminating its order for four new Airbus A320neo aircraft. The airline said,

“Negotiations concerning the Termination Agreement, which will result in the cancellation of the A320neo order and the use of the deposit for other Airbus services are currently on hold due to Covid-19 and will resume as soon as possible.”

Croatia Airlines Dash 8 Zagreb Franjo Tudman Airport
Croatia Airlines aircraft currently has a fleet of Airbus and Dash 8 aircraft only. Photo: Croatia Airlines

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Croatia Airlines already changed the order once

The order was first made in 2008, at an unfortunate time, just before the global financial crisis hit the aviation industry. The original order was for four A319 aircraft due to be delivered in 2013. However, the arrival of these A319s was put on hold as Croatia Airlines entered a process of restructuring, following several years of three-digit million euro losses.

The order was then converted to an Airbus A320neo order in 2015, with a delivery period between 2022 and 2023. A deposit of 8.5 million euros was paid last year for these aircraft. Now, after one conversion and one delivery delay, Croatia Airlines has announced it will be terminating this order. Further details are unclear at this stage.

Croatia Airlines Airbus A320 Dubrovnik
Croatia Airlines has drastically cut its weekly operations. Photo: Getty Images

Croatia Airlines is downscaling its fleet

This news is not unexpected. As Simple Flying reported in February, Croatia Airlines had made arrangements to lease three aircraft this summer. These three were: one Airbus A319 from easyJet, one Dash 8 Q400 from Austrian Airlines, and an Air Nostrum CRJ-1000. Two of these were meant to be seasonal dry leases, and one, the A319 from easyJet, a long-term lease.

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However, all plans changed when the current slump in demand for air travel hit the industry. The A319 from easyJet has arrived, and Croatia Airlines is using it, but the terms of the lease have been re-negotiated. Croatia Airlines is now only paying for this A319 when it is using it.

The Air Nostrum CRJ-1000, and the Austrian Airlines Dash 8, have not been leased in the end. Thus, Croatia Airlines joins a long queue of airlines worldwide that are in the process of retiring their aircraft or canceling orders.

There are, however, a few exceptions: Enter Air, for example, recently placed a 737 MAX order.

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Do you think Croatia Airlines made the right decision to terminate the order for these Airbus A320neo aircraft in light of the COVID-19 outbreak? Do you think other airlines will follow suit? Let us know what you think of this story in the comments below.

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