Croatia Airlines Lost $27.5 Million Between January And June

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Croatia Airlines registered a loss of over 173 million Kunas (27.5 million USD) in the first half of 2020. However, this is not even twice as large a loss as was registered last year. In 2019, the damage was just under 90 million Kunas (14 million USD).

Croatia Airlines Dash 8 Zagreb Franjo Tudman Airport
Croatia Airlines lost money as a result of COVID-19, but not much more than it lost last year. Photo: Croatia Airlines

Croatia Airlines makes a loss

Nacional reports that the flag carrier of Croatia saw a “drastic” reduction in demand for services offered by the aviation industry as a result of COVID-19 this year, which is in line with the impact seen by all carriers worldwide.

The operational loss registered by the firm between January 1 and June 30, 2020, was 155 million Kunas (25 million USD). Together with the “net financial result” for the same period, the company registered a total loss for the year of just over 173 million Kunas (27.5 million USD).

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For the duration of this period, Croatia Airlines aircraft operated 5,661 flights. This represents a 57% fall compared to the first half of 2019. Because of the major fall in demand for air travel, the fleet utilization changed too: Airbus aircraft were used very scarcely, especially the Airbus A320 aircraft, which were grounded for two months. Instead, Croatia Airlines used its Dash 8-400 aircraft.

Croatia Airlines Airbus A319 aircraft
Croatia Airlines did not utilize its Airbus fleet of A319 and A320 aircraft much this year. Photo: Croatia Airlines

Passenger numbers are down 66%

Other statistics that accompanied the release of the financial results for the first half of this year are also in line with those of the rest of the aviation industry worldwide, though they remain relatively less severe than those of some of the other regional airlines in Europe.

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Passenger numbers totaled 330,935. This is 66% less than last year’s 630,000. Of that, domestic traffic fell 63%, to 83,618. The fall in international traffic was 66%, at 244,382 passengers. Charter traffic was, expectedly, the worst hit, with an 84% fall to just 2,935 passengers.

The loss is just slightly worse than last year

Croatia Airlines’ loss of 173 million Kunas (27.5 million USD) in the first half of 2020 is less than twice the loss incurred in the first half of 2019, which was just under 90 million Kunas (14 million USD). This indicates that there are perhaps adverse factors in the company that cannot be attributed to COVID-19.

Revenue is down 55%, of which ticket sales represented the most significant decrease. This decrease totaled 400 million Kunas (63.5 million USD). However, costs have been decreased by less: 41% only.

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Croatia Airlines cut costs by 41%, but its revenue fell by 55%. Photo: Croatia Airlines

The loss in the second quarter of the year presents a particular problem for the company. This is because the second and third quarters are when Croatia Airlines makes a profit with which it attempts to cover the losses made in the winter months.

Croatia Airlines is counting on the Croatian government’s financial assistance in the near future again, following a cash injection of 250 million Kunas (40 million USD) last year. The airline is counting on its track record over the past few months to help facilitate this financial assistance: it continued to operate flights from Zagreb to Frankfurt throughout the period of travel restrictions, and it carried Croatian soldiers from Afghanistan to Zagreb too.

Do you think smaller, regional airlines like Croatia Airlines will withstand the adverse impact that COVID-19 has had on the industry?

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