Croatia Airlines (OU, Zagreb Franjo Tuđman) will be recapitalised, the country's government confirmed on September 19, as the cabinet greenlit a grant worth HRK250 million kuna (USD37.4 million) to stabilise the business ahead of the procedure, the Croatian news agency HINA reported.
The grant, first publicly mentioned during the carrier's 30 year anniversary event, is to be paid in two parts including at least HRK100 million (USD15 million) in 2019 and the rest in 2020. It would stabilise the airline and prevent any damage from a number of negative impacts in the aviation sector, Prime Minister Andrej Plenković explained.
Croatia needed a national flag carrier, Plenković stressed, adding that the airline had contributed significantly to Croatia's recognition around the world over the last 30 years. The news followed a 30th-anniversary celebration and uniform fashion extravaganza at Zagreb Franjo Tuđman Airport earlier in the week, an evening that was led by Plenković himself and other political and business leaders.
Croatia Airlines said previously that based on a cashflow forecast of the next two years, it would need HRK71 million (USD10.6 million) for fleet repairs and overhauls, HRK68 million (USD10.2 million) for domestic supplier debt repayments, HRK60 million (USD9 million) for essential investments over the next 12 months, and HRK26.3 million (USD3.9 million) for loan repayments.
A model for the coming recapitalisation will be presented to the government by the end of this year, so that the procedure, which will be open to private investors, can be launched by June 1, 2020.
