In the first six months of this year, Croatia Airlines flew almost 630,000 fewer passengers than in the same period of last year
31st July 2020, Zagreb
In the first six months of 2020, Croatia Airlines, Croatia’s flag carrier, suffered the fate of the aviation industry as a whole, which has faced the deepest crisis in its history due to the coronavirus pandemic. The epidemiological crisis has drastically reduced the demand for air transport services in the said period. In consequence, this had an extremely negative impact on the company’s financial operations. In such market conditions, an operating loss of HRK 155.4 million was recorded, which together with the company’s net financial result amounts to HRK 173 million. By comparison, in the same period of last year, the result was almost twice as good, i.e. a loss of HRK 89.43 million was recorded.
In the first six months of this year, Croatia Airlines’ aircraft flew a total of 7567 block hours, which is a 59-percent drop compared to the same period of last year. A total of 5661 flights were operated, i.e. 7536 fewer flights, which is a decrease of 57 percent compared to the same period of 2019. The structure of flights was adjusted to the needs of traffic, and given the market circumstances, greater emphasis was placed on operating the Q400 fleet, whose seating capacity is smaller than that of the company’s Airbus fleet.
The number of passengers on scheduled domestic flights (83,618 passengers) decreased by 63 percent, on scheduled international flights (244,382 passengers) by 66 percent, and on charter flights (2935 passengers) by 84 percent. A total of 330,935 passengers were flown in the first six months of this year, or almost 630,000 fewer passengers than in the same period of last year, which is a 66-percent drop.
As a direct consequence of a decrease in the number of flights operated and a decrease in the number of passengers flown, operating revenues decreased by 55 percent (HRK -411.7 million), within whose structure passenger revenues dropped most sharply, i.e. as much as HRK 399.1 million. However, operating costs were also reduced by 41 percent as a result of traffic reduction, and operational and other cost reduction measures taken at all levels of the company. Cancelling the seasonal wet lease of a CRJ1000 aircraft, cancelling the dry lease of a Q400 aircraft and deferring dry lease payments for an A319 aircraft until the beginning of the summer season of 2021 are some of the operational measures taken.
The devastating effect of the coronavirus crisis was particularly pronounced in the second quarter (April-June), during which the company would, under normal circumstances, start making a profit to cover the losses generated during winter. More specifically, in the second quarter of this year, a loss of HRK 62.7 million was recorded, while in the same period of last year, an operating profit of HRK 10.5 million and a net profit of HRK 9.1 million were recorded.
It is worth pointing out that, unlike other airlines that suspended all flights to Croatia in the first half of March, Croatia Airlines did not suspend flights in these extraordinary circumstances. This has confirmed the importance of Croatia’s flag carrier as a strategic factor in Croatia’s transport infrastructure and has contributed to maintaining transport networks and connections for Croatia’s economy and citizens. Since the beginning of the crisis, the company has repatriated approximately 23,000 Croatian citizens, remained at the disposal of the Government of the Republic of Croatia, together with which the transportation of humanitarian aid was organised, flew Croatian soldiers back home from Afghanistan, operated a number of repatriation flights from different parts of Europe and a repatriation flight to and from China, which was the longest flight run in the history of the company.
Croatia Airlines is currently flying from Zagreb to 14 European destinations and 5 Croatian airports. Connecting Croatia’s coastal airports with European destinations makes Croatia Airlines additionally important and has contributed to Croatia’s tourism during the crisis mitigating the consequences on the tourist season. More specifically, the company is directly connecting Split with 11 European destinations, Dubrovnik with 7 European cities and Rijeka with Munich.