Croatia Airlines Loss of 15.9 Million Euros in the First Quarter

Croatia’s flag carrier, Croatia Airlines, has announced its financial results for the first quarter of 2025. The company reported a net loss of 15.9 million euros in the period, increasing its loss by 60 percent compared to the same period last year. In the first quarter of 2024, the loss was 9.9 million euros.

Expenses Increased While Income Dropped

The company's total operating income fell by 3 percent to 42.9 million euros, while passenger revenues fell by 9 percent. Despite this decline, passenger numbers increased by 2 percent. In the same period, operating expenses increased by 7 percent to 58.3 million euros. The increase in expenses was due to the addition of two new Airbus A220 aircraft to the fleet, a 67 percent increase in depreciation expenses, and increases in personnel costs, maintenance and airport services.

The implementation of the new collective bargaining agreement and the recruitment of new personnel in preparation for the summer season also caused an increase in salary expenses.

Cash Flow and Equity Alarming

The company's cash reserves fell by 13 percent to 38.8 million euros as of the end of March, while a total net cash outflow of 6 million euros was recorded. Operational and investment expenses exceeded expectations due to prepayments made before the summer season.

On the balance sheet side, equity capital fell into negative territory to -14.4 million euros. While total assets remained the same, short-term debt increased by 26 percent. The main reason for this increase was given as advance ticket sales for the summer season. The long-term debt level remained the same.

Hope Pinned on Summer Season

The company is counting on a strong summer season to improve its financial structure. Croatia Airlines plans to operate over 18,800 flights and offer 2.29 million seats during the summer season. This is an increase of 8% and 15% compared to last year, respectively. New routes from Zagreb and increased frequencies from Split and Dubrovnik are expected to boost revenues.

Croatia Airlines management stressed that the successful integration of the new Airbus A220 aircraft and the strong performance during the summer season were critical to alleviating the financial pressure created by the transition process. The company added that the loss was an expected result after the first year of the transition.