Saturday, September 3, 2011

The EU affect

Croatian aviation set to benefit from EU membership
Croatia is set to join the European Union in July of 2013, a move which will impact both its national airline Croatia Airlines and its aviation industry in general.

As a result of European Union accession, Croatia Airlines will have more freedom to operate within different EU markets. According to legislation, all EU airlines may operate air services on any route within the EU. Adria Airways exercises this right on flights from Vienna to Frankfurt. However, this move is often too costly for legacy carriers to undertake. It is this legislation that could also harm Croatia Airlines. Low cost airlines registered in EU member states will be able to easily set up bases in the country. Furthermore, airlines will receive permits to fly to Croatia much more easily. Croatia Airlines already experiences strong competition at its coastal bases throughout the summer but has a relatively strong hold over the country’s busiest airport, Zagreb. It has already complained to authorities that other, primarily low cost airlines, are receiving special treatment at Pleso.

The European Commission strongly sanctions state aid to national airlines meaning that the Croatian flag carrier will have to take more responsibility for its own finances. However, exceptions can be made. The European Commission is currently debating whether to allow the Slovenian government to provide 50 million Euros in aid to Adria.

Croatian airports will be the big winners from the country’s European Union membership. EU accession naturally brings with it more investment, tourism and business. In January 2007 Bulgaria and Romania joined the European Union thanks to which the airports in Sofia and Bucharest flourished. In 2006, Sofia Airport handled 2.2 million passengers. This number jumped to 2.7 million in 2007, an increase of 24%. Wizz Air created its Wizz Air Bulgaria subsidiary in 2006, a year before the country joined the EU. At Bucharest’s Henri Coanda Airport, the EU impact was even greater with numbers jumping from 3.5 million in 2006 to 4.9 in 2007, a 40% increase.

6 comments:

  1. wow those were big increases in Sofia and Bucharest. Hope Zagreb has a similar fate but it is in desperate need of a new terminal.

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  2. True about Sofia and Bucharest - Otopeni airport, also we shouldn't forget Bucharest's second airport,
    Băneasa Airport or Bucharest City Airport, similarly like Ciampino in Rome, it is a secondary airport, but much closer to the city centre, where number of passengers went from 673 000 in 2006 to over 2 million in 2010. Totally agree with Stefan, ZAG needs a new terminal, urgently.

    Greetings from London,

    Alex

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  3. Could we see any new companies in Zagreb this winter?
    anyway zagreb needs a new terminal,which of course everbody knows.

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  4. Zagreb will soon have a new terminal and more passengers. The EU may not give Croatia a single euro but the free market and new business rules may yet turn positive for the aviation market there. Croatia has come a long way in realizing their tourism mecca of the balkans status, the only competition is Greece. If Skopje can have a brand new terminal, Zagreb ought to find motivation and with a bit of luck build an even larger airport. Good luck and many great landings.

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  5. You can see here what the new terinal will look like:

    http://www.youtube.com/watch?v=hh5aDnUEK7U

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  6. Upon current agreement between Croatia and EU almost everything written in this article is allowed already, it means that currently airline registred in EU can open any flight from EU to Croatia without any regulation. Also EU company can open its base in Croatia already, probably no interest. Only routes that remained in Croatia and they are rectricted from EU competitors is that domestic routes within Croatia must get special rights and almost nobody got them so far except Croatia Airlines ... so nothing more new will get EU companies in Croatia, but Croatia Airlines could get much with flights within EU out of CRO, but I don't think they will use this possibility ...

    ReplyDelete

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