Croatia Airlines seeks €248 million recapitalization as financial challenges persist

The Croatian government has approved a capital increase for Croatia Airlines that will raise its share capital from €92.38 million to €248.38 million between 2025 and 2027.

The recapitalization aims to guarantee the long-term stability of the state-owned airline, according to the government, but analysts see the decision as a way to cover financial losses amid fleet renewal.

“The increase in share capital will be implemented through an investment of €70 million in cash and approximately €78.8 million by converting existing loan credits into company equity,” said Oleg Butković, Minister of the Sea, Transport, and Infrastructure.

The government has already secured the 2025 funding through budget reallocations. Financing for 2026 and 2027 is incorporated into the state budget projections.

 A €43 million recapitalization is scheduled for 2025, resulting in the issuance of 43 million new shares. In 2026, Croatia Airlines will undergo another €43 million recapitalization, converting key outstanding loans and accrued interest into equity, alongside an additional €35 million cash investment.

A final €35 million cash injection is planned for 2027, bringing the total increase in share capital to approximately €156 million over the three-year period.

Croatia Airlines’ finances deteriorated after the decision to migrate to a fleet composed exclusively of A220 aircraft by 2027, resulting in increased costs and losses.

Currently, there are seven of these aircraft in the fleet, six A220-300s and one A220-100. The carrier also operates six A320 family jets and four Dash 8-400 turboprops.

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