• Croatian Aviation

Does Croatia need a national airline?

The summer flight schedule is in use from the end of March, but the real season actually starts from the beginning of June and ends in the middle of September. During this period, Croatian airports are connected to numerous destinations in Europe.

photo: croatiaairlines.com

Although we are in early June, the airports on the coast have lower traffic than in January, but that should change soon. Namely, the European Union announced the opening of the borders of the member states from June 15th, which will enable the restart of air traffic. Airlines are currently demotivated (apart from weak demand) by specific restrictions of individual member states, so the current introduction of international routes by airlines is unprofitable.

If the borders between EU member states will be open from mentioned date, it is very clear that airlines will respond by re-launching their routes, primarily those which have existed for years, routes which are recognised among passengers (tourism, diaspora or business demand).


All EU member states (and beyond) have realised in this crisis how important it is to have a national airline. An example that we can point out is that of neighbouring Slovenia, which after the bankruptcy of Adria does not have a national carrier and air traffic depends exclusively on the decisions of airlines from other countries. They will restart their routes to Ljubljana only in one case - when there is enough demand for it.


If we look only at the profitability of one airline, in that case we could say that Croatia does not need Croatia Airlines either. Realistically, the company has been losing money for years, so does that mean it's better to sell it or let it go in bankruptcy? In fact, it is not. This crisis has once again confirmed this fact. Namely, if Croatia did not have its own national airline, the government would, at the peak of the pandemic, be forced to pay other airlines to perform repatriation flights so that its citizens could return to their country. What did Croatia Airlines do in cooperation with Zagreb airport and the relevant ministry? Very good thing - they left Zagreb Airport open for commercial traffic (when all the airports in the neighbourhood were closed, like those in Sarajevo, Ljubljana, Belgrade and other cities) and encouraged Croatia Airlines to fly to Frankfurt daily, which enabled continuous repatriation of Croatian citizens, as well as foreigners who found themselves in Croatia returning to their home countries. Other governments have paid airlines for repatriate flights which is a major financial expense. Of course, there is no doubt that Croatia Airlines was making losses by operating those flights, but the costs are certainly lower compared to going for the second option and paying foreign companies to perform mentioned flights.


Another advantage of a national airline is the fact that it will be able to respond quickly and efficiently (at least in theory it should) to a resurgence in demand. Croatia Airlines holds Zagreb Airport as its hub, but in the summer it flies on direct flights to European destinations from coastal airports as well. For years, they have been losing their percentage in passenger share, which is not surprising considering that domestic coastal airports are full of low-cost airlines in the summer months, with which Croatia Airlines simply cannot compete. Such a system is certainly not good for the company, the dispersion of capacity stops the development of Zagreb as its hub, but the company must earn as much as possible in the summer months in order to be able to cover the business throughout the year. Unfortunately, company can't do that and they have been losing the money for years.


This summer, Croatia Airlines, in cooperation with the competent ministry, the national tourist board, as well as local, hoteliers and tour operators, will organise flights from traditional tourist destinations to airports on the Croatian coast. Until then, the company will re-establish international flights to and from Zagreb with the possibility of connections to the coast. Clearly, demand will be weaker this year than ever, but if many other airlines that normally operated to Croatian airports choose not to do so this year, Croatia Airlines could have market supremacy. If the 2021. season would be again at the level of 2019., foreign companies will return to Croatia and again take a large part of the "cake" to the Croatian national airline, but there is room for development, the question is whether there is will, primarily political, given to the fact that Croatia Airlines is state-owned company.


In the peak season, it is almost certain that Croatia Airlines will fly from Split to Frankfurt and Munich, as well as from Dubrovnik, Pula and Zadar to Frankfurt. It is possible that Croatia Airlines will re-launch the Rijeka-Munich route, given that the company is a member of the Star Alliance and both Munich and Frankfurt are the hubs of this alliance.

The company has operated a large number of charter flights in the past, but this share of traffic has also been reduced nowadays. However, the company will certainly have the opportunity to operate more charter flights than it has done in recent years, of course, only if it will reach agreements in cooperation with earlier mentioned parties and if there is adequate market demand for Croatia, which should not be be questionable, especially from August this year.

We can conclude that Croatia definitely needs a national airline. The figures justify this - in 2019., over 11 million passengers passed through Croatian airports. A world-famous tourist destination deserves to have a national airline, but not in this form, the company must find a new business model and a new partner/owner. Thus, the future of the company should not be in question, which is not the case at the moment.

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