Tuesday, June 7, 2016

Ryanair close to Dubrovnik flight deal


Dubrovnik Airport and Ryanair are close to reaching a deal concerning the low cost airline's future operations from the city. Following talks with local authorities, the airport and Tourist Board, the budget carrier has requested for Dubrovnik Airport to reduce its fees and sign a multi-year agreement prior to it starting operations. Ryanair's Route Development Manager, Luis Fernandez-Mellado, said the budget carrier is willing to maintain year-round flights from Dubrovnik, describing it as an extremely interesting destination. He added there is already strong demand for the airline to introduce services to the coastal city, which would prove an excellent city-break option during the winter months. Mr Fernandez-Mellado also hinted at the possibility of Ryanair operating domestic flights within Croatia, noting that it runs a number of domestic services within European Union-member states.

Following talks with the airline, the Mayor of Dubrovnik, Andro Vlahušić, said the city is prepared to sign an agreement with Ryanair which would be applicable until 2024. Furthermore, the two sides will continue negotiating over the coming weeks, while a draft contract will be presented next month. In addition, the Tourist Board and local hoteliers will propose a number of desired destinations for the airline. Ryanair has so far avoided Dubrovnik due to high fees, allowing its competitors, most notably easyJet, greater access to the market.

Ryanair operates flights to a handful of cities in Croatia, including Osijek, Pula, Rijeka and Zadar, albeit on a seasonal summer basis only. The no frills carrier has selected Zadar as its seasonal base in the country, while Osijek is likely to become its first year-round destination. During the peak summer months, Ryanair will offer 10.584 seats per week from Croatia, making it the country's fifth busiest carrier in terms of capacity. One of the its main rivals, easyJet, has been successful in Dubrovnik, maintaining its position as the second busiest carrier operating out of the city in 2015, behind only Croatia Airlines. It handled 189.328 passengers on its services to and from the coastal city last year. Meanwhile, Dubrovnik Airport has seen a strong start to 2016, handling 387.898 travellers over the past five months, up 13.2% on the same period last year.

92 comments:

  1. Well done Dubrovnik. With Ryanair they will be close to 2 million passengers per year.

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  2. This is interesting. Seems like the city of Dubrovnik will finally get what they were after for so long- find a replacement for OU.

    If they do launch domestic flights, I guess one of the first ones would be DBV-ZAG. What kind of frequencies are we looking at? Could they operate daily flights in winter time? I do wonder if ZAG would be flexible when negotiating with FR. They've changed and they are a much better partner/customer than they were some years ago.

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  3. If FR starts domestic flights it will destroy OU.

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    1. Doesn't Croatia Airlines get state subsidies for Dubrovnik-Zagreb flights?

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    2. If I am not mistaken, if FR can operate DBV-ZAG without subsidies, then that would disqualify OU from getting them.

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    3. Oh I didn't know that. Wow that could really affect them.

      How has for example Aegean held up against Ryanair on domestic flights in Greece?

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    4. The regulation is clear, subsidies can only be assigned to routes that are currently unserved or that can't be operate regularly, it's a form of stimulation. If Ryanair steps in and says that they don't need it because they can operate the route without them then OU can not justify why they need it. If they can't operate the route without government subsidies then they are more than welcome to make room for those who can.
      That said, Ryanair can claim a year later that the route is commercially unsustainable and that they need these subsidies. Then again, it doesn't mean they will get them as OU can apply and even get them back.

      As for Aegean, that's where Olympic helped a lot with their Q400s. Of course, the Atr is far more suitable for island hopping but equally so the Q400 is far better than the A320 or the B738.
      Of course there are routes where the Q400 is too small (SKG, HER, RHO..) but Aegean managed to survive by charging for luggage and by reducing the quality of onboard service. Even if their service is not as good as it used to be, it's still light years ahead of FR.
      So affordable fares coupled with an ok product gave them a competitive advantage vs Ryanair.

      It's also worth mentioning that the Greek market is big enough to sustain a few airlines.

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    5. Interesting. Thanks. Yes, the comparison might not be in place since Greece is a massive market and Aegean a much bigger company.

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    6. Not sure if OU does it, but they may want to follow Aegean ( and others) and introduce fares w/o luggage.
      AirSerbia should do it as well.
      Operating models have been converging for some time.

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    7. It would be great for Ryan to start domestic but I'm not sure that this will happen. Dubrovnik and Croatia Airlines are in a dispute over ticket prices on the route and I think Dubrovnik mayor just wanted to put additional pressure on them. Eventually they will cave in.

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    8. Don't think it's a bluff. They signed on Vueling to compete against Croatia Airlines to Rome year round. I think we can see OU bid farewell to this route soon.

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    9. But the real question is what will all this mean for OU? If Ryanair sets up an operational base in DBV then OU will become obsolete. What competitive advantage does OU bring? What do they offer that others don't?

      It's no secret that DBV is the best run airport in the wider region and this deal with Vueling and Ryanair are further proof of it.

      The fact that FR mentioned domestic flying can only mean that DBV is after it and that they brought it up during the meeting.

      So in the end OU will be pushed out of the coastal market to its home base in Zagreb which is becoming increasingly more competitive.

      Unless something drastic changes, OU will keep on flying straight into a major crisis. All this reminds me of Cyprus Airways about ten years ago.

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    10. OU offers connecting flights on it's network via ZAG.

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    11. Yes but if they lose the subsidies how many flights will they have to cut? Also, OU's network is rather limited.

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    12. Croatia airlines can not loose subsidies till 2020, as contract is signed till than, for routes ZAG-DBV and OSI-DBV. It was signed in 2016 so Ryanair could also apply on that tender, and they did not. Of course after 2020 Ryanair or some other companies can fight for that PSO, or can even prove that route is profitable and don't need PSO. Till than Croatia will get money for PSO. The same way Trade air will get money for PSO routes DBV-SPU-RJK and DBV-PUY, also till 2020.

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    13. Unless the contract signed has a cancellation clause.

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    14. Regarding subsidies: it is to be assumed that FR will get massive subsidies in whatever way from DBV airport and/or region and/or city - otherwise they would not start DBV services now! Therefore also any potential future domestic service would be subsidised.

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    15. Nemjee: Contract is signed till 2020. Non of companies would not invest in planes, crew, system... for one or two years or if contract can be cancel just like that. There is no rule that one company can ask for cancellation the contract just because they "find" route profitable. It would be juridical nonsense.

      Of course Ryanair will get huge subsidies. Even city of Dubrovnik said so. I just hope other airlines (easyJet, Eurowings, Lufthansa, Austrian, Croatia, Turkish, British...) will ask for legal protection because of nonlegal financial help by local government. Let me just remind you how Ryanair was yelling about Air Serbia subsidies.

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    16. Unless they sue the Croatian government like they sued the Slovenian one regarding Adria or the Cypriot one regarding Cyprus Airways. They can always argue that subsidies are illegal because they can operate without them. If they can prove that that's the case then the subsidies can be declared illegal.

      I am curious to see if the city of Dubrovnik will keep on paying that subsidy per passenger that they have been paying to OU or if they will redirect those funds to Ryanair and maybe even Vueling.

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    17. Let me also add that I wouldn't be surprised if Ryanair will aim at totally destroying OU, after all, it's in their interest. Especially since it will make ZAG more willing to 'cooperate.'

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    18. Nemjee again it is not true:

      1. It is PSO, not subsidies. PSO is defined, tender was opened for any company (Ryan included), contract is signed. That does not have anything with financial help Slovenia, Cyprus, Estonia or Hungary gave to their companies.

      2. Dubrovnik pays nothing to Croatia airlines. They pay money to passengers. So, passenger pays ticket to Croatia, and than with ticket gets to Dubrovnik administration which give them some money back. If someone else fly on that route passengers will also get some money back from city for their tickets.

      3. Dubrovnik pays almost million EUR subsidies to airlines but not a cent of that was ever pay to Croatia airlines, just to foreign carriers for seasonal routes.

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    19. Let us presume that ZAG-DBV flights "will become" profitable in meantime (Ryan to show this) you still have contract that was sign while route "was not profitable". You can say that it becomes profitable because of your arrangement in route. But for sure even if that happens you sign contract when route "was not profitable" and you have legal security that someone can not change contract in meantime. That is why people sign contracts. Contract was made legally, by PSO rules of EU, and third party can not change it while it exist. Even if conditions of route change (profitability, competition...).

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    20. Just because a contract is signed it doesn't mean it can't be cancelled by a superior authority.
      If Ryanair sues them and says that the route is unprofitable because OU is operating it while they can do it without the subsidies, then the EU Commission can force Zagreb to suspend the agreement. PSO is just a different name for subventions. I don't think they would ask OU to give back the money, they would most likely suspend the agreement.

      There are legal bodies which are superior to the ones in Croatia and they can usually overrule these things.

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    21. When you sign contract you are legally safe. One part can not cancel the contract without consequences and without financial compensation. That is how it is done in civilized world. Contract is document which give you legal safety!

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    22. I hope Ryanair do a yearly flight from Dublin.Currently Aer Lingus have the entire Dubrovnik / Dublin market so the prices are high and a large number of passengers are Medjugore bound.
      Ryanair would be good for Dubrovnik tourism,better than the cruise liners.

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  4. Smart planning and strategically expanding. They waited until they built a new terminal to call Ryan.

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  5. I wonder which destinations could they suggest.

    DBV - ZAG would be fantastic!

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    Replies
    1. Germany, Scandinavia and UK probably.

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  6. I won't be surprised if they open a base.

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  7. Very smart move if they can get them to fly all year.

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  8. A Croatian airport finally finding an alternative to Croatia Airlines. Good.

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  9. FR is finally paying more attention to ex-Yu.

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    Replies
    1. I will agree when FR opens some route from MBX.

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  10. I seriously doubt B738 will be economical on domestic flights (given the expected pax numbers).

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    Replies
    1. 30ak jura do Agrama ce i poslednjeg skutora oduciti da se vozi svojim mercedesom.

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    2. Twice daily morning and evening services with 738 could be viable. There are also every day lots of business pax travelling. Viable especially with lower apt fees charged to FR plus "marketing" support paid by the city.

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  11. I really hope this happens. This would be great news for Dubrovnik and Dubrovnik Airport. :)

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  12. Croatia Airlines will never leave Dubrovnik. They cannot allow such a prestigious destination not to be on their scheduled network.

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    Replies
    1. Not leave but reduce

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  13. Ryanair should also make another announcement about Serbia this week :)

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    Replies
    1. Is this for real or wishful thinking?

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    2. Soon to be reality bro.

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    3. There will be a Ryanair media get-together in Niš on Thursday.

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    4. Oh wow.. this is surreal. For years now they avoided Serbia like the plague and now they have a press conference every other week.

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    5. That is bad news for ASL.

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    6. Read between the lines people. It's not a press conference, it's some media event. They probably won't announce anything

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    7. Go Niš! Next year it will be by far the fastest growing ex-yu airport.

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    8. I suppose media get together is another way to promote the two announced lines. I don't think it means announcing new ones

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    9. Maybe an increase of frequencies to Berlin? They did mention that sales have exceeded their expectations.

      ARGH it would be great if they flew from Belgrade. :(

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  14. OT: Another Emirati investment in the Serbian aviation sector. Serta buys 50% stake in Aerodrom Ketering, for US$2,72 million.

    http://www.b92.net/biz/vesti/srbija.php?yyyy=2016&mm=06&dd=06&nav_id=1140468

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  15. When Ryanair comes there will be no space left for Wizz Air. In the end they will loose out from avoiding Croatia.

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    1. Their loss. But if Ryanair starts year-long Easy Jet will also be impacted. They fly so many passengers from DBV yet have not considered a single year-long flight.

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    2. What is more than strange. They have so many routes and frequencies but not a single flight during winter.

      EasyJet has weekly flights during summer

      Amsterdam 3x (OU 1X, HV 4X)
      Berlin 3x (AB 1x, 4U 1x)
      Bristol 2x (TOM 1x)
      Edinburg 2x (LS 2x)
      Geneva 4x
      London 14x - LGW 9x LTN 2x, STN 3x (BA 6x, TOM 2x, D6 2x, ZB 2x)
      Milan 3x
      Paris 5x (OU 4x, TC 2x)
      Toulouse 2x

      So during winter there should be at least
      - 3x weeky London (out of 14x easy and 12x others weekly)
      - 2x weekly Paris (out of 5x easy and 8x others weekly
      - 1x Amsterdam (out of 3x easy and 5x others weekly)
      - 1x Berlin (out of 3x easy and 2x others weekly)
      - 1x Geneva (out of 1x easy weekly)

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    3. *-1x Geneva (out of 4x easy weekly during summer)

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  16. Bravo Harvatska!

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    Replies
    1. I love this guy.
      Don't change man, don't change.

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  17. Odlicne vesti za DBV .
    Zato se izgleda otvaraju baze izvan svoje zemlje .
    INN-NS

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  18. Im quite sure OU will suspend ZAG-DBV-ROME during winter season. I dnt know who uses OU anymore now when u can reach Rome with 50eur tnx to Vueling. I am also quite sure that Montenegrins will use this line a lot.

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  19. Does this mean Dubrovnik is becoming a low cost destination? I always thought they should go after the upscale tourist market. And for this you need legacy carriers.

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    1. Not at all. If Ryan is coming to DBV it doesn't mean that 5 star hotels will charge 50 instead 250 € per night. Dubrovnik is only city in SE Europe with more than 15 5* hotels.

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    2. 'Dubrovnik is only city in SE Europe with more than 15 5* hotels.'

      Absolute nonsense.

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    3. Ia am pretty sure Athens has at least 15 5* hotels.

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    4. Exactly.

      How many does SPU have? Also can't Italy and Venice be considered south-eastern Europe?

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    5. Split have two 5* Hotels :)

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    6. Hilarious. All those stupid students looking for cheap flights for a holiday - they find FR for 60 eur return, book - and then only afterwards realise there is no hotel for less than 1000 eur a week in summer. Already looking forward to the unavoidable following swearing by them - wish I could hear them.

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    7. Geographically Italy is not south east Europe, it's south Europe. But I agree, Athens has for sure more then 15 5 star hotels.

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    8. Istanbul is also SEE, actually its capital for centuries.

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    9. Much more than 15 5***** hotels:
      - Athens
      - Istanbul
      - Santorini
      - Thesaloniki
      - Mykonos
      - Rhodes
      - Crete
      - Burgas
      - Varna

      Typical Dubrovnik arrogance in which Dubrovnik is the only tourist place in World. There is nothing else. But when you find real data, you can see they don't have the best results by number of tourists even in Croatia.

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    10. I think the dude above was referring to "Balkan" instead of SE Europe.

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    11. And Greece, Romania and European part of Turkey are not in Balkans?

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  20. Ryanair will fly to Pristina so there really much to gain especially in summer

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  21. ZAG maj 2016 +5%

    246961 (235311)

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    1. 100 flights less than in 2015, so greater LF! Good job, Zagreb!

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    2. ... and bigger airliners...

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  22. OT: YU-ARA as JU1051 is on the way back to BEG!

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    1. Sad ce moci kao sto bi trebalo i regionalni EX YU Aerodromi da ga vide i nekoliko Evropskih.
      INN-NS

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    2. It is over Turkey now. Probably 2 more hours to touchdown.

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    3. Interesting to see where it's gonna be deployed next.

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    4. Za 10 dana leti oba dnevna leta za ZAG

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    5. Dejan MilinkovicJune 7, 2016 at 11:28 PM

      Just saw at Beg.aero, for morning flight to ZAG on Friday 10.06. A330-200 is scheduled! Atr72 still in some reservation systems, so we will see...

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    6. Great news, aviation fans can experience A330 by flying to ZAG and other nearby destinations (TGD, TIV?) much cheaper than by going to New York.

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    7. So only ZAG? That would be stupid.

      OTP is a much bigger market in the region, or IST for that matter.

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    8. Dejan, any photos soon? :)

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    9. Dejan MilinkovicJune 8, 2016 at 12:23 AM

      There will be some night photos at A.net soon. And of course, some daylight ones when it starts to fly to some destinations like ZAG.

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  23. Which destinations will they use?
    They could fly every day up to 6 legs as LX does with their B777.
    For my opinion destionations up to 1:30 would make sense.
    Regards from LX

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  24. OT

    More fantastic news for INI! Numbers will boom once Ryanair starts flying from there as well!

    https://flyfromnis.blogspot.rs/2016/06/skoro-6000-putnika-tokom-maja-letelo-iz-Nisa.html

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  25. OT: Emirates Sky Cargo visiting BEG on 23/06 from DWC. EK9372, equipment TBA.

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