Transport Minister Sinisa Hajdas Doncic announced the capital injection on Tuesday as CA said it would cut its 1,130-strong workforce by 10 percent within two years and consider reducing the number of destinations it serves.

CA HRAR.ZA is Croatia's only airline, largely catering to holidaymakers and businessmen heading for the Adriatic coast, and is a member of the Star Alliance global airline network.

The government will make its payment in two stages, Doncic said. It will first provide 652 million kuna to cover CA's debts and a further 150 million kuna to help the airline to become more competitive.

CA suffered a net loss of 9.9 million kuna in the first nine months of this year, down from a 39 million kuna loss in the corresponding period last year.

(Reporting by Igor Ilic; Editing by Zoran Radosavljevic and David Goodman)

• A Permanent Economic Emergency