Despite positive financial results in the summer third quarter, Croatia’s national airline still reported a financial loss of €8.98 million for the first nine months of this year due to losses incurred in the first two quarters.
On this occasion, Croatia Airlines issued a press release, which we are transmitting in its entirety.
“In the first nine months of 2024, Croatia Airlines transported 1.4 million passengers, which is 6 percent more compared to the same period in 2023. The passenger kilometers traveled increased by 5 percent, with an average passenger cabin occupancy (PLF) of 64.7 percent. The number of passengers in domestic regular traffic increased by 6 percent, and in international regular traffic by 7 percent compared to the same period last year. A total of 20,433 flights were performed (+2 percent compared to the same period in 2023). a surge of 28,858 block hours (+ 3 percent).
In the second and third quarters of 2024, a net profit was realized in the total amount of 947 thousand euros. However, since the net loss in the first quarter of this year, i.e. in the period of low demand, amounted to EUR 9.92 million, the realized net loss in the period January – September amounts to EUR 8.98 million.
Namely, the transition period of the beginning of fleet replacement is characterized by increased cost exposure of all business processes, especially operational ones. The increased costs of aircraft maintenance and short-term aircraft rental to fulfill the planned flight schedule amount to 11.6 million euros compared to the same period last year and are higher than the reported net loss for the period January – September. As a result, the saved slots at the airports and the investment in new lines will be positively valorized when the traffic of a larger number of A220 fleet aircraft begins, which is planned already in 2025.
Total business income was achieved at the level of the first nine months of 2023. The largest share (88 percent) in total business revenues relates to revenues from passenger transportation, which are higher by around 10 million euros, i.e. 6 percent, with a growth in the number of passengers of 6 percent in the observed period. At the same time, operating costs are higher by 9 percent compared to the realized costs of the first nine months of 2023, and the main impact on their growth was the costs of short-term aircraft lease that arose due to the need to bridge the maintenance period of the Airbus fleet, as well as higher aircraft maintenance costs. Investments in training in the first nine months of 2024 amounted to 1.3 million euros and related to the training of operational personnel (pilots, cabin crew, and aircraft maintenance personnel) which is operationally necessary. Also, in the first nine months of 2024, the first training of flight crews for the new type of Airbus A220 aircraft and other operational personnel (aircraft mechanics, engineers, and operations center employees) was conducted. The training of a new group of pilots and mechanics for the new type of Airbus A220 aircraft is underway to accept the second A220 aircraft at the end of the year.
The inflationary trends, the increase in the number of flights (+3 percent), and the increase in the number of passengers (+6 percent) had an additional impact on the growth of costs. The increase in employee income is also one of the reasons for the increase in costs compared to the first nine months of 2023. As a reminder, the gross salary increase of 10 percent was implemented from April 1, 2023, with a significant increase in the lowest salaries in the company, to mitigate the negative impact of inflation. As of July 1, 2024, salaries have also increased based on the signed new Collective Agreement, which will be valid for the next five years.
The renewal of the fleet of the national airline in its 35th year of existence marks a new period of business, which is also decorated with a refreshed visual identity through which, with an even greater orientation towards passengers and the target public, and following the trends and habits of passengers, the values of Croatia Airlines continue to be consistently communicated. In its jubilee year, the Croatian national carrier received significant international recognition on March 6, 2024, when Jasmin Bajić, President of the Management Board of Croatia Airlines, was elected to the Board of Governors of the International Air Transport Association (IATA), which is an additional recognition for Croatia Airlines and confirmation of the visibility of the company’s achievements in the air transport industry and on the market.”
