Croatia Airlines’ full-year losses have doubled, a situation which the carrier attributes to weak revenue growth – despite stronger traffic – and higher costs, particularly relating to its transition to a modernised fleet.
The airline is undergoing a €156 million ($183 million) recapitalisation, approved by the government in mid-December.
This includes €86 million in conversion of state claims on shareholder loans – of which €43 million was included in 2025 with the remainder in January – plus two cash contributions, each of €35 million, at the beginning of 2026 and 2027.
Croatia Airlines says it is continuing to invest in its fleet replacement, moving to Airbus A220s, but the three-year transition period is bringing “pronounced operational and financial challenges”.
It estimates last year’s transition costs for the fleet modernisation at €21.2 million compared with €19.4 million in 2024. The carrier ended the year with 16 aircraft: seven A220s, five Airbus A320-family jets, and four De Havilland Dash 8-400s.
Croatia Airlines says it has been burdened by delays in withdrawing older aircraft, notably a pair of Dash 8-400s which stopped operating for the carrier in January and April last year.
It reiterates that the final return of both aircraft to their owners is being delayed by supply-chain holds-ups and lack of capacity in aircraft- and engine-maintenance workshops, adding that it has continued to pay the “significant” and “unplanned” lease costs.
One of the Dash 8s was returned in January this year but the second requires renovation and return of its engines.
The airline has procured a spare engine and parts for its A220 fleet, and invested in infrastructure to receive them, and been hiring pilots earlier than needed to support the crew-training process while maintaining current operations.
Transition has also generated disruption costs as a result of changes to flight operations.
Croatia Airlines’ passenger traffic was up 11% last year but this was not matched by passenger revenue, which rose only 2% to €225 million.
The carrier blames this weak growth in revenues on “aggressive pricing strategies” of competitors, in the context of falling fuel prices and US dollar exchange rates.
Croatia Airlines adds that it faced other obstacles including the impact of Middle East conflict, estimating lost revenues from Israel charter flights at €2.6 million.
Operating costs increased by 13% to €306 million, with almost all of the additional expenditure arising from elements over which the airline has little control. These included depreciation – notably from inclusion of the A220s – plus higher maintenance, air traffic service, and European emissions-trading costs.
