Croatia Airlines is undergoing a comprehensive recovery according to the country’s Minister for Sea, Transport and Infrastructure, Oleg Butković, as he ruled out the need for the carrier to be recapitalised by the state in the coming period. The comments come as the airline prepares to replace its entire fleet over the next three years, starting this summer, with the lease of fifteen new Airbus A220 aircraft. “Croatia Airlines had a big drop in revenue during the pandemic, but even before that it faced many difficulties. We made the decision to inject funds into the company through loans and recapitalisation. In the meantime, Croatia Airlines has restored its operations to pre-pandemic levels. They are still not achieving record results, but are close to it”, Mr Butković said.
The Minister said Croatia Airlines’ fleet renewal was a necessity and would not impose a financial burden on the company. He assured that the airline is well-equipped to fulfill all financial commitments associated with leasing the fifteen new jets. “We are in the process of modernising the fleet. Fifteen new planes have been contracted. The first one is coming this year. Due to the maintenance costs of existing aircraft, which have run their life cycle, the fleet modernisation process was necessary”, Mr Butković said. He added, “I believe that by reducing expenses for maintenance, which have become unsustainable, and the development of a balanced business model with the introduction of new routes, they [Croatia Airlines] will become commercially independent”. Croatia Airlines is due to take delivery of its first A220 this June, with another unit expected later this year. This will be followed by six aircraft in 2025, four in 2026 and the remaining three in 2027.
Croatia Airlines is yet to publish its operational and financial results for 2023, although it is expected to do so at the end of this month. It is anticipated the airline has seen an improvement across key metrics, while the sale and leaseback of five ageing Airbus A320-family aircraft has provided the carrier with additional funds. At the end of the third quarter of last year, the airline had 97.9 million euros on its bank accounts, however, its debt at the time amounted to 78.8 million euros. Last year, the company successfully postponed the repayment of a 33.7-million-euro shareholders loan it received from the Croatian government in 2019, which was aimed at financially stabilising the carrier prior to its privatisation, which was later shelved due to complications resulting from the coronavirus pandemic. The loan, which received European Commission approval, was to be repaid in full in 2022 at a 2% fixed default interest rate. However, the Croatian flag carrier requested for a deferral, and the loan will now mature in January 2025 instead.
