Croatia Airlines dd : reported profits in the first three quarters with an increase in thh number of passengers

Zagreb, October 30, 2015

In the first nine months of this year, the Croatian national air carrier Croatia Airlines recorded a net profit of HRK 3.9 million and an operating profit of HRK 4.8 million, which was better than the projected forecast - a result of the company's continuing upward trend stemming from the implementation of the restructuring programme.

The positive operating results are due to the 2 percent growth in passenger transport, while in regular international traffic, the company transported 3 percent more passengers than last year. Total sales in the first nine months increased by 4 percent when compared to the same period last year, while international sales grew by 6 percent.

The aircraft carried a total of 1,465,997 passengers with the same number of flights as in 2014, of which more than two-thirds were passengers on international flights. The passenger load factor was 70.2 percent, an increase of 0.6 percentage points. Taking the current traffic indicators into consideration, this year's number of passengers is expected to be around 1,880,000.

There was an increased growth in investments, primarily in aircraft and spare parts, reaching almost HRK 60 million, which is an increase of 25 percent when compared to the same period last year; in terms of operating expenses, there was a 3 percent increase - the most significant cost being fleet maintenance, i.e., rental and engine maintenance.

In 2015, Croatia Airlines entered into agreements with 12 code share partners, and started cooperation with Singapore Airlines and Air Canada in the area of passenger transport.

The results achieved are directly connected with the implementation of the company's strategic, operational and financial restructuring measures, the results of which were positive financial results at the end of business years 2013 and 2014. In 2015, the last year of the restructuring program, Croatia Airlines continues to carry out the planned measures and activities in order to allow stable and sustainable operations in the future, further organizational development, and even better positioning across regional and European markets.

According to the company's Management Board, the successful completion of the restructuring program at the end of this year, proven by our business results, will enable realization of the growth plan. Financially stable and sustainable operations, ongoing investment in the fleet, training of operating personnel and continuous improvement in quality provide a good basis for further development. Social peace, a two-year collective agreement signed earlier this year, new code share partners, the opening of the third hangar for technical services, and the successful completion of negotiations with Airbus are important steps in that direction.

In the Croatian aviation market, Croatia Airlines holds nearly 30 percent of the total passenger traffic at its domestic airports, with peak season traffic accounting for serious competition in the summer months. During the summer season, over 100 airlines provide their services on the Croatian market, and more than half of the total number of passengers are transported in the third quarter. During the winter period, however, the presence of foreign airlines is minimal, while Croatia Airlines operates all year round. Thus, the company's year-round activity ensures that Croatian airports stay open all year long, providing permanent connections between Croatia and the world as well as positively impacting other business entities in the air traffic system and adding general stability to the industry as a whole.