Croatia Airlines pilots on Monday ended a seven-day strike but cabin crew continued the walkout that the loss-making company said had cost it hundreds of thousands of euros (more than $1 million).
"Croatia Airlines management and pilots' union today reached a deal according to which pilots will immediately cease the strike and continue talks on new contracts," an airline spokesman told AFP.
"Direct financial damages (from the strike) are estimated at up to 6.5 million kunas (859,000 euros, $1.1 million)," spokesman Davor Janusic said.
But the company's flight attendants continued the strike as they failed to reach a deal with the management on new contracts to replace those which expired in March.
Their strike would still disrupt the company's flight schedule.
Since the strike began on May 14, about one third of Croatia Airlines flights -- about 20 -- had to be cancelled every day, Janusic added.
A total of 26 Croatia Airlines flights were cancelled on Monday including flights to major European hubs -- Brussels, Munich, Vienna and Zurich.
The unions staged the walkout in protest at the salary cuts and dismissals that state-owned Croatia Airlines has announced as part of its restructuring plan ahead of Croatia's accession to the European Union.
The plan includes dismissals of about 200 employees and salary cuts of up to 40 percent, according to the unions.
They insist such moves would not significantly contribute to the recovery of the company.
But the government warned that the airline could go bankrupt without cuts.
Once Croatia joins the EU on July 1, it will have to stop providing state subsidies to the airline.
The restructuring of public companies is among key moves undertaken by the former Yugoslav republic to revive its economy which has not registered growth since 2009.
In 2012, the airline accumulated loses of about 49 million euros, and it has debt of about 132 million euros.
The company, founded before Croatia proclaimed independence in 1991, has a fleet of 13 planes. It includes three Airbus A320-200, four Airbus A319-100 and six smaller Bombardier Dash 8.