Croatia Airlines in the first half of 2024 in loss of 9.5 million euros

(Patria) - In the first six months of this year, Croatia Airlines' net loss amounted to 9.5 million euros, the company announced.

The announcement states that, in line with the plans of the Croatian national carrier, but also the current situation in the air transport industry worldwide, characterized by a low level of profitability, the net loss for the low demand period in the first quarter of 2024 was 9.92 million euros, while the net loss for the period January - June 2024 was 9.5 million euros.

In the second quarter of 2024, a net profit of 420,000 euros was achieved.

It is stated that this is due to the transition period of the fleet replacement program, which is characterized by increased cost exposure in all, especially operational business processes.

Namely, in order to maintain the planned flight schedule, Croatia Airlines had to lease aircraft on a short-term basis, which resulted in increased costs for their maintenance and short-term leasing, compared to the same period last year, amounting to 10.4 million euros.

Thanks to this, it is emphasized, airport slots have been preserved, while the investment in new routes will be positively valued when a larger number of A220 fleet aircraft begin operating, which is specifically planned for 2025.

Total business revenues are three percent higher compared to the first half of 2023.

The largest share (87 percent) of total business revenues comes from passenger transport revenues, which are seven percent higher, with a five percent increase in passenger numbers during the observed period.

Achieved operating costs are 14 percent higher compared to the costs achieved in the first half of 2023, and the main impact on their increase (67 percent of the nominal amount of total cost increase) is the costs of short-term aircraft leasing, which arose due to the need to bridge the maintenance period of the Airbus fleet, as well as higher aircraft maintenance costs.

Additional impact on cost increases came from inflationary trends, a two percent increase in flight hours, and a five percent increase in passenger numbers.

The increase in employee salaries at Croatia Airlines also contributed to the increase in costs compared to the first half of 2023, with a 10 percent increase in gross wages implemented from April 1, 2023, which includes a significant increase in the lowest salaries in the company to mitigate the negative impact of inflation.

In the first half of 2024, Croatia Airlines flew to 28 international and eight domestic destinations. It transported 814,553 passengers, which is five percent more than in the same period in 2023.

Achieved passenger kilometers increased by six percent, with an average cabin occupancy of 62.2 percent. The number of passengers on domestic scheduled services increased by seven percent, and on international scheduled services by six percent compared to the first half of 2023.

In the first half of 2024, activities related to the acceptance of the first two new Airbus A220 aircraft into the fleet continued intensively, in accordance with Croatia Airlines' Post Covid strategy.

The first Airbus A220 aircraft joined the fleet two days ago, while the second is expected in December.