Croatia Airlines carried a record number of passengers and recorded double-digit growth in operating revenue during the first six months of 2026. However, a sharp rise in costs, adverse foreign-exchange movements and additional expenses associated with the fleet transition resulted in a net loss of €49.7 million.

The first-half results also show that the Croatian flag carrier continued to operate at a loss during the second quarter. After recording a net loss of approximately €29.9 million in the first three months of 2026, the cumulative loss increased to €49.7 million by the end of June. This means that an additional net loss of approximately €19.8 million was generated in the second quarter alone.

Although the second-quarter result was more favourable than the first-quarter figure, the airline did not return to profitability during a period traditionally characterised by rising demand and the beginning of the summer season.

According to the financial report for the first half of 2026, Croatia Airlines’ total revenue amounted to €129.1 million, compared with €132.3 million a year earlier, representing a decrease of approximately two percent. Total expenses increased by 19 percent, from €150.3 million to €178.8 million.

The operating loss widened from €21.2 million to €36.8 million, while the net loss increased from €18 million in the first half of 2025 to €49.7 million. EBIT amounted to a negative €42.8 million, compared with a negative €13.4 million a year earlier, while EBITDA fell from a positive €2.5 million to a negative €23.8 million.

It is important to distinguish total revenue from revenue generated through regular operations. While total revenue declined by two percent, operating revenue increased by 12 percent, from €111.5 million to €125.4 million. The difference was largely caused by the significant deterioration in the financial result, primarily due to adverse foreign-exchange movements.

Passenger transport revenue increased by 11 percent, from €94.2 million to almost €105 million. The growth was achieved through a 15 percent increase in passenger numbers, although the average gross fare was three percent lower. Passenger yield, or revenue per passenger kilometre, declined by four percent, from 15.3 to 14.7 euro cents.

Cargo revenue remained virtually unchanged at €514,000, while other operating revenue increased by 19 percent to €19.9 million. The increase was supported by revenue from the sale of non-current assets, technical services, marketing activities and revenue relating to previous years.

Croatia Airlines carried 981,482 passengers during the first half of the year, approximately 129,500 more than in the corresponding period of 2025. Passenger numbers increased by 15 percent, revenue passenger kilometres by 16 percent and available capacity, measured in available seat kilometres, by 11 percent.

The passenger load factor increased from 63.5 to 66.2 percent, an improvement of 2.7 percentage points. The airline operated 12,631 departures, two percent more than a year earlier, while operating time increased by five percent to 17,648 block hours.

Croatia Airlines grew considerably faster than the overall Croatian market. Croatian airports handled approximately 5.5 million passengers during the first half of the year, three percent more than a year earlier, while the flag carrier’s passenger numbers increased by 15 percent.

A total of 228,420 passengers were carried on scheduled domestic services, while 739,470 passengers travelled on scheduled international services. Domestic traffic increased by six percent and international traffic by 18 percent.

However, the airline noted that passenger numbers fell by two percent in June, ending the 21 percent growth recorded between January and May. Croatia also recorded a seven percent decrease in tourist arrivals during the same month. Weaker demand prompted competitors to reduce fares, which also negatively affected Croatia Airlines’ revenue.

The main reason for the deterioration in the result was a 22 percent increase in operating expenses, or €29.4 million, to a total of €162.2 million. Flight-related expenses increased by 45 percent, from €33.3 million to €48.3 million, while maintenance expenses rose by 22 percent to €29.2 million.

Air traffic service expenses increased by 12 percent to €32.2 million, while depreciation rose by 19 percent to approximately €19 million. Passenger service expenses increased by 11 percent, while promotion and sales expenses rose by two percent.

Fuel expenses alone increased by €11.9 million. Aircraft handling and air traffic control expenses rose by €3.4 million, aircraft maintenance expenses excluding personnel costs by €4.9 million and depreciation by €3.1 million.

The combined increase in these four categories amounted to €23.3 million, representing approximately 79 percent of the overall increase in operating expenses.

Croatia Airlines attributed the rise in fuel costs to the escalation of conflict in the Middle East and the sharp increase in jet fuel prices. In addition to higher market prices, the mandatory use of sustainable aviation fuel and the cost of emissions allowances created further financial pressure.

From the beginning of 2026, the allocation of free emissions allowances to the aviation sector under the EU Emissions Trading System was abolished, leaving airlines fully exposed to market prices. At the same time, carriers must comply with the requirements of the European Union’s ReFuelEU Aviation regulation.

Financial expenses had a particularly significant effect on the final result. The net financial result was negative at €12.9 million, compared with a positive €3.2 million in the first half of 2025.

Net foreign-exchange losses reached €6.25 million, while a positive result of €7.31 million was recorded on the same basis a year earlier. The year-on-year change in foreign-exchange differences therefore worsened the result by approximately €13.6 million.

Interest expenses increased from €4.6 million to €6.9 million, largely relating to liabilities associated with leased aircraft and other leased assets.

The airline stated that higher fuel, air traffic service, maintenance and depreciation expenses, together with the adverse effect of foreign-exchange movements, had a combined negative impact of €36.9 million. This represented approximately 74 percent of the total net loss recorded during the first half of the year.

Croatia Airlines is simultaneously going through the most demanding phase of its fleet renewal programme. At the end of June, its operational fleet consisted of 15 aircraft: seven Airbus A220-300s, two A220-100s, four Airbus A319s and two Dash 8-Q400s. All aircraft were under long-term operating leases, while an ATR 72 had also been wet-leased from April to maintain the planned flight schedule.

Two additional non-operational Q400 aircraft were being prepared for return to their owner. The process was delayed by spare-parts shortages and limited maintenance workshop capacity, meaning Croatia Airlines continued to incur lease expenses until the handover process was completed.

During the first half of the year, two Airbus A320s, registered 9A-CTK and 9A-CTO, and two Q400s, registered 9A-CQA and 9A-CQB, left the fleet and were returned to their owners following the completion of the required work.

Seven new Airbus A220 aircraft are scheduled for delivery during 2026. Two had been delivered by the end of June, one A220-100 and one A220-300, while the remaining five were expected during the second half of the year. Croatia Airlines would therefore end 2026 with 14 of the 15 contracted A220s.

The airline warned that deliveries had already been postponed several times and that the cumulative delays across individual aircraft amounted to 73 months at the time the report was prepared. The delays complicate capacity planning, the retirement of older aircraft, maintenance organisation and the achievement of planned financial results.

The number of employees stood at 1,044 at the end of June, 36 more than a year earlier. The number of operational employees increased by 33 and non-operational employees by three. Croatia Airlines employed eight more pilots and 12 more cabin crew members than at the end of June 2025, while the number of employees in other operational departments, primarily the technical sector, increased by 13.

The airline invested €981,000 in training during the first six months of the year, of which 97 percent related to operationally necessary training for pilots, cabin crew and maintenance personnel, including training for the Airbus A220.

Cash and cash equivalents amounted to €21.6 million at the end of June. Cash inflows during the first half of the year totalled €180.1 million, 33 percent more than a year earlier.

Equity and reserves increased following a capital injection by the Republic of Croatia. The decision adopted at the end of 2025 provides for an increase in capital of approximately €156 million through a combination of converting state loans and accrued interest into equity and direct cash contributions. As of 30 June, Croatia Airlines had no long-term or short-term bank borrowings, although it continued to hold substantial liabilities relating to leased aircraft and other leased assets.

The first-half results therefore present two contrasting sides of the airline’s operations. Croatia Airlines carried a record number of passengers, improved its load factor and grew considerably faster than the Croatian market. At the same time, revenue per unit of traffic failed to keep pace with the increase in capacity and expenses.

Operating revenue per available tonne kilometre declined by three percent, while the unit operating cost increased by five percent. Employee productivity improved by 12 percent, but average daily aircraft utilisation fell from 8.3 to 7.6 block hours.

Following a loss of €29.9 million in the first quarter, the additional loss of approximately €19.8 million in the second quarter indicates a degree of seasonal improvement. However, it also shows that passenger growth has not yet been sufficient to offset the costs of the fleet transition, fuel, maintenance, leasing and financing. The third quarter, when Croatia Airlines traditionally generates the largest share of its annual revenue, will therefore be crucial for the full-year result.