October 31, 2020 – A closer look at 2020 for Croatia’s national carrier, as Croatia Airlines recorded almost 1.2 million fewer passengers and a net loss of HRK 243.5 million.
Croatian Aviation reports that Croatia Airlines ends the first nine months of 2020 with a financial result directly affected by the coronavirus pandemic, which caused the deepest crisis in civil aviation history.
The epidemiological crisis has drastically reduced the demand for air transport services, which, together with the resulting traffic restrictions, has imposed the need to reduce capacity and drastic cuts in the scheduled flight schedule by reducing crashes, that is, by canceling or reducing flight operations on existing routes or by abandoning the introduction of new planned routes.
In the current market circumstances, Croatia Airlines made an operating loss of HRK 222.4 million in the first nine months of this year, which with a net financing result, gives a net loss of HRK 243.5 million.
The increase in the net loss of HRK 195.1 million compared to the same period in 2019, which is a direct consequence of the reduction in demand for air transport service in the context of a global pandemic, directly reduced the company’s revenues by 70 percent between April and September 2020.
As a result, there was a reduction of 11,709 flights and a drop in the number of transported passengers of 69 percent (-1,168,190 passengers). The structure of the crash was additionally adjusted to the needs of reduced traffic. Given the market circumstances, greater emphasis was placed on using the Dash 8-Q400 fleet, whose capacity is smaller compared to the fleet of Airbus 319/320.
Due to reduced demand for air transport services during the coronavirus crisis, Croatia Airlines recorded a drop in passenger traffic of more than 90 percent in April and May, 80 percent in June, 70 percent in July, 67 percent in August, and 80 percent in September.
In the first nine months of 2020, the number of passengers in domestic regular traffic (142,958 passengers transported) decreased by 64 percent; in international regular traffic (384,712 passengers), this decrease was 69 percent, and in extraordinary traffic (5,700 passengers), there was a decrease of 91. A total of 533,381 passengers were transported in the first nine months, i.e., 1,168,190 fewer passengers than in the same period in 2019 (-69 percent).
Given the worsening epidemiological situation and a further decline in bookings in the coming period (autumn and winter), no significant improvements are expected. These are low season months (winter season) when the company makes losses under normal conditions. An additional problem in maintaining liquidity is the unpredictability of the duration of the crisis caused by the pandemic and the pressure on its cash flows.
The company’s operations until the end of 2020 will largely depend on external factors, decisions and recommendations of the Croatian Civil Protection Headquarters, which directly affect the possibility of travel in domestic and international regular traffic, reciprocity in abolishing or facilitating measures at the interstate level and the achieving optimal occupancy and average tariffs in conditions of reduced demand caused by COVID-19 directly (public health restrictions) or indirectly (financial and security reasons).
As the Croatian national airline, Croatia Airlines represents a strategic part of the Croatian transport infrastructure, which came to the fore in this crisis period because the company contributed to maintaining transport connections with the Croatian economy and citizens.
From the beginning of the crisis until May 2020, the company helped 23,000 Croatian citizens return, made itself available to the Republic of Croatia to transport humanitarian aid, returned Croatian soldiers from Afghanistan, and performed several repatriation flights from different parts of Europe.
In the conditions of the crisis and the consequences for the tourist season, the additional importance and contribution of Croatia Airlines to tourism is in connecting Adriatic airports with European destinations in the season when the arrival of foreign airlines was significantly reduced. In the autumn-winter period, and especially due to the current deterioration of the epidemiological situation, the importance of Croatia Airlines will be further emphasized by maintaining Croatia’s connection with major European destinations, as a large number of foreign airlines have already withdrawn from the Croatian market or reduced flights.
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