Croatia Airlines Operating at a Loss despite Recovery Efforts

Croatia Airlines reported increased operating costs, with fuel costs having the largest impact to its bottom line.



March 1, 2023

DALLAS — Croatia Airlines (OU) reported a net loss of US$19m for the year despite carrying 1.45 million passengers. This number was still a third behind what was attained in 2019.

According to the airlines, the average passenger load factor last year was 62%. For the time period, it made US$223.96m in revenue, of which US$178.6m came from passenger services.

Nonetheless, the airline reported significantly increased operating costs, with fuel costs having the "largest impact" at US$29.34m, according to the report.

The Airbus A220 will be used to replace the airline's current fleet of A319, A320, and Dash-8 Q400s. Photo: Airbus

Fleet Update

The one-time cost associated with returning an Airbus A319 to its lessor was one of the consequences of the losses, which totaled US$13.92m in operational revenue for the entire year.

It has been putting into action a post-pandemic recovery program with strategic initiatives over a three-year period that it expects will allow the business to achieve sustainable operations. The program was developed in mid-2021. The primary objective of this initiative is to replace the carrier's fleet of aircraft with more affordable models.

Croatia Airlines has chosen 149-seat Airbus A220-300s and 127-seat A220-100s for delivery between 2024 and 2026. OU reached long-term operational lease agreements with an Irish-based company connected to US lessor Air Lease in January of this year for six aircraft — four -300s and two -100s.

The airline plans to buy 12 planes, with the potential to add three more in 2027.

Featured image: Croatia Airlines 9A-CTL AIRBUS A319-112. Fabrizio Spicuglia/Airways