Croatia Airlines Secures €77.9M Boost to Fuel Airbus A220 Fleet Transition.
Key Points
- 1Croatia Airlines' share capital increased by €77.9 million, reaching a new total of €213.27 million.
- 2The capital injection is a critical phase in the total €156 million government-backed financial restructuring plan ending in 2027.
- 3The funding is explicitly dedicated to supporting the full fleet replacement with 15 new Airbus A220 aircraft, a project facing global supply chain and delivery delays.
- 4The increase was executed via a €42.9 million debt-to-equity swap and a €35 million cash investment from the Republic of Croatia.
The shareholders of Croatia Airlines, the national flag carrier, have approved a significant capital increase of €77.9 million. This move is a crucial step in the airline’s comprehensive financial restructuring. It is designed to bolster the company’s financial stability during its historic fleet replacement Airbus A220 program.
The decision was formally adopted at a recent shareholders’ assembly. The increase was executed through a combination of methods. The Republic of Croatia investment included the conversion of state debt claims worth €42.9 million into equity. An additional €35 million was injected as a cash contribution.
Following this action, the total share capital of Croatia Airlines now stands at €213.27 million. To facilitate the increase, 77,878,556 new ordinary shares were issued. Each new share has a nominal value of one euro. These shares were entirely taken over by the Republic of Croatia, the majority owner.
Context of the Financial Restructuring
This recapitalization is part of a larger plan approved by the Croatian government. In late 2025, the government decided on a total Croatia Airlines capital increase of approximately €156 million. The goal is to raise the carrier's share capital from an initial €92.38 million to €248.38 million by 2027.
The overall financial support package is structured over several years. It includes a total of €70 million in cash injections and nearly €78.8 million from converting existing state loan claims into equity. This strategy strengthens the balance sheet. It also significantly reduces the company’s interest burden.
Fueling the Airbus A220 Fleet Modernization
The financial injection is directly tied to the largest project in the company's history. Croatia Airlines is in the process of a full Croatia Airlines fleet modernization. This involves replacing its entire current fleet of Airbus A320-family and Dash 8 turboprop aircraft.
The new uniform fleet will consist of 15 next-generation Airbus A220 aircraft. The transition began in 2024. The fleet replacement Airbus A220 program is scheduled for completion in 2027.
Challenges and Industry Impact
Minister of the Sea, Transport and Infrastructure Oleg Butković noted the necessity of the capital boost. He stated that the airline faces significant aviation supply chain challenges. These global issues have caused delays in the production and Airbus A220 delivery delays.
These delays and the transition period itself have led to increased cost exposure for the national carrier. The new A220s are expected to enhance efficiency and passenger comfort. They will also offer lower fuel burn and a reduced carbon footprint.
This state aid national carrier action is a form of financial restructuring. It is intended to ensure the airline’s liquidity and competitiveness. This is particularly important against the backdrop of fierce competition from regional low-cost carriers.
As a state-owned enterprise in an EU member state, such financial measures are subject to European Union rules. The European Commission (EASA is the EU's aviation safety agency) has previously approved state support for the airline. This latest recapitalization aims to ensure the long-term viability of the carrier.
Key Takeaways for Stakeholders:
- Financial Security: The capital increase provides a strong equity base. This is vital for Croatia Airlines financial stability during the fleet transition.
- Operational Upgrade: The funding secures the completion of the 15-aircraft Airbus A220 fleet replacement by 2027.
- Market Position: The move enhances the airline's ability to compete. It allows the carrier to better manage the challenges of the transition period and global supply chain issues.
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Written by
Ujjwal SukhwaniAviation News Editor & Industry Analyst delivering clear coverage for a worldwide audience.
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