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Croatia Airlines generated net profit in the fist half of 2017

Zagreb, 31st July 2017

Croatia Airlines continued to operate positively in the first half of 2017, having generated HRK 49.6 million in operating profit, while net profit amounted to HRK 42.6 million.

The net result achieved was HRK 127.2 million higher than in the same period last year, and is also better than the net result planned for the first six months of this year.

Operating revenues were 32 percent higher than the first six months of 2016. In the structure of these revenues, a passenger revenue growth of 10 percent was recorded, and revenues generated from the technical maintenance of foreign aircraft also grew, while other revenues increased 2.5 times due to the planned sale of a part of the slots at London’s Heathrow Airport.

From the beginning of January to the end of June, the number of flights operated by the company’s aircraft increased by 2 percent (12,684) compared to the same period in 2016, and a total of 903,188 passengers were carried, which is 10 percent more than last year and 3 percent more than planned. At the same time, the number of international passengers increased by 12 percent, and the number of domestic passengers by 5 percent. During the same period, the average passenger load factor (PLF) also improved by as much as 4.1 percentage points, having reached 69.7 percent, which is better than planned by 3.5 percentage points.

This growth of passenger traffic is the result of, amongst other things, the introduction of four new seasonal flight routes in May this year – from Zagreb to Stockholm, Oslo, Helsinki and Bucharest – with our having continued our seasonal flights to Lisbon, Milan, Prague and St. Petersburg, which were introduced in 2016. More specifically, within the period of 365 days, our company has introduced as many as eight new international flight routes, having offered an additional 100,000 seats on the market. Due to an increased flight volume, particularly during peak tourist season with 105 flights per day, Croatia Airlines is planning, for the first time in the company’s history, to fly a record-breaking 2,000,000 passengers this year.

In the first six months of 2017, operating costs were 10 percent higher than in the same period last year. The most significant increase was related to flight costs, and this due to a 30% (or HRK 25 million) increase in fuel prices resulting from higher fuel prices in the market compared to the first six months of 2016, and a 14% (or HRK 8.7 million) increase in aircraft lease costs resulting from the lease of two additional aircraft for this year’s tourist season in comparison to only one aircraft having been leased in the tourist season of 2016. An increase in the number of major works on engines and aircraft in 2016 and 2017 caused an increase in depreciation costs by 33 percent (or HRK 13 million) compared to the same period last year.

Maintenance costs also increased by 4 percent or HRK 5 million, due to higher engine lease costs resulting from major engine inspections and works in the first half of the year compared to the same period in 2016. Passenger service costs were also higher due to an increase in passenger attendance costs and passenger complaint and compensation costs resulting from a 10 percent increase in passenger numbers. The cost of air traffic services grew slightly by 2 percent due to an increase in airport costs.

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