Croatia’s Trade Air suspends domestic flights


Trade Air has suspended its domestic flights operating under Public Service Obligation (PSO) contracts after the Croatian government failed to conclude new ones with operators. The new agreements, involving twelve routes, were due to come into effect on May 1 and run until March 28, 2026. The Croatian government began tender procedures to select operating carriers back in November of last year. PSOs make European funds available for unprofitable, primarily domestic routes, which are considered vital for the economic development of the region they serve. The previous four-year contracts, held by Trade Air and Croatia Airlines, expired back in March 2020 but were extended until this May due to the coronavirus pandemic.

The tendering process for the new PSO routes closed in late December 2021. The Croatian government has given no explanation for the delay nor when the contracts could be awarded. Trade Air has returned a Turbolet L-410 aircraft it has been wet-leasing for the short domestic routes. The value of the new PSO contracts has not been disclosed either. Under the previous deal, Croatia Airlines received roughly 11.4 million euros in annual compensation, while Trade Air approximately 2.5 million euros per year according to the European Commission. The routes which are subject to PSO funding are: Dubrovnik - Zagreb – Dubrovnik, Split - Zagreb - Split, Zagreb - Zadar - Pula - Zadar - Zagreb, Zagreb - Brač - Zagreb, Osijek - Dubrovnik - Osijek, Osijek - Split - Osijek, Osijek - Zagreb - Osijek, Rijeka - Split - Dubrovnik - Split - Rijeka, Osijek - Pula - Split - Pula - Osijek, Rijeka - Zadar - Rijeka and Osijek - Zadar - Osijek.

The airlines that took part in the latest PSO tender have not been disclosed, however, Trade Air and Croatia Airlines are both believed to have applied. Ryanair, which has a base in Zagreb and Zadar, previously said it would seriously consider taking part in the tender. Commenting on the potential of operating domestic flights in Croatia, Ryanair said last year, “We are waiting for the tender call for the PSO routes to be published. We will undertake a serious analysis of the terms and conditions. At this point, we can’t say definitively if we will take part in the procedure or not. Our decision will primarily depend on the proposed requirements. However, we would have to look into whether our aircraft, which have almost 200 seats, would be cost-effective on domestic flights within Croatia”. In 2019, the former Slovenian national carrier, Adria Airways, was preparing to take part in Croatia’s 2020 PSO tender process. However, the airline went bankrupt in late September that year. PSO routes are restricted to a single operating carrier.



Comments

  1. Anonymous09:02

    Can Croatian government get anything right?

    ReplyDelete
    Replies
    1. Anonymous09:43

      Irresponsible.

      Delete
    2. Anonymous09:44

      But why???? Why hasn't the government awarded the PSO contract? It's not like the money would come from their pockets.

      Delete
    3. Anonymous09:46

      I don't understand it too. Not sure what they are doing.

      Delete
    4. Anonymous10:47

      maybe they couldnt get their cut this time, if you know what I mean..

      Delete
    5. Anonymous16:59

      Most likely

      Delete
  2. Anonymous09:03

    What is the government doing?

    ReplyDelete
    Replies
    1. Anonymous09:23

      They had one job...

      Delete
    2. Anonymous09:45

      pure ignorance

      Delete
    3. Anonymous21:50

      C'mon guys, there is a war in UA. No time to deal with domestic unimportant contracts.

      Delete
  3. Anonymous09:03

    It isn't the first time this has happened but this is very embarrassing for the state and can do a lot of damage to airlines that are planning to operate these flights.

    ReplyDelete
    Replies
    1. Anonymous09:43

      I'm starting to think they tied Croatia Airlines' capital injection to PSO. Maybe they promised EU they wouldn't apply for PSO funding.

      Delete
    2. Anonymous09:46

      True @ anon 9.03. Domestic routes are extremely important for a country and contribute heavily to its economy.

      Delete
  4. Anonymous09:04

    The fact that Croatia Airlines has not suspended its PSO flights goes to show that most of their PSO should not be covered by this funding.

    ReplyDelete
    Replies
    1. Anonymous09:06

      No, it's just that they know the government will cover their losses retroactively if need be.

      Delete
    2. Anonymous09:10

      Or Croatia Airlines knows it will be awarded all PSO contracts including the one from Trade Air :D

      Delete
    3. Anonymous09:15

      PSO for DBV is really not needed especially in the summer.

      Delete
    4. Anonymous09:23

      Or it shows that Trade Air maybe knows it's not going to get the contracts this time around. Who knows.

      Delete
  5. Anonymous09:06

    Fingers crossed this means Ryanair is coming on domestic routes although it's a long shot

    ReplyDelete
  6. Anonymous09:06

    Is it possible that Ryanair has submitted better deal for main domestic routes such as ZAG-DBV and ZAG-SPU, hence the government stopped the tender process?

    ReplyDelete
    Replies
    1. Anonymous09:09

      Would not be surprised at all although it might not be Ryanair. I know first hand there were worries that several foreign airlines were waiting to apply for PSO because since Covid several airlines have started applying to all PSOs across Europe.

      Delete
    2. Anonymous09:15

      Dubrovnik/Split - Zagreb could easily be served by Ryanair, but then again CRO gov has the last word, and I think that there is no way of accepting Ryanairs application

      Delete
    3. Anonymous09:17

      Agree. Ryanair could compete for Zagreb to Dubrovnik and Split. For others they have too large aircraft.

      Delete
    4. Anonymous09:35

      It is cheaper to fly Zagreb-Podgorica with Ryanair than Zagreb-Dubrovnik with subsidized Croatia Airlines flights.

      Delete
    5. Anonymous09:40

      That's why I hope FR applied.

      Delete
    6. Anonymous19:49

      There's no need for Fr. 737/A320 is way too big for these flights.

      Delete
    7. Anonymous19:52

      And that is why OU operates its A319/320 from ZAG to DBV and SPU? ;)

      Delete
  7. Anonymous09:08

    Unbelievable that the government is being so reckless.

    ReplyDelete
    Replies
    1. Anonymous19:53

      Unbelievable? You don't know much about our government.

      Delete
  8. Anonymous09:11

    That's the end of that chapter.

    ReplyDelete
  9. Anonymous09:11

    Trade Air is doing so well with their mainline business, I don't think they need to worry much about this loss.

    ReplyDelete
    Replies
    1. Anonymous09:12

      It was easy money and good money.

      Delete
    2. Anonymous09:16

      These PSOs seems to have worked out quite well for Trade Air since they have been able to add 4 planes to their fleet since they got their first PSO contracts.

      Delete
  10. Anonymous09:15

    ETF Airways also will be interesting ;) Split and Dubrovnik for example.

    ReplyDelete
    Replies
    1. Anonymous09:24

      Do you think they applied?

      Delete
    2. Anonymous10:38

      Its possible . But the 737-800 is big for these routes. This can work only in Dubrovnik and Split.

      Delete
    3. Anonymous19:55

      Well airlines can apply for one or more routes. So it is possible that some applied for ZAG-DBV/SPU but the question is it wort it for ETF? Because it would mean they can not charter one plane anywhere. It would have to sit in ZAG (or DBV) and just fly this route. In summer that's fine but in winter I don't think utilization would be high.

      Delete
    4. Anonymous19:55

      And speaking of ETF, where are their planes now? Do they have clients?

      Delete
  11. Anonymous09:15

    Good luck to OU then, they should be awarded the whole lot. Keep Ryanair away!

    ReplyDelete
  12. Anonymous09:16

    Shame :(

    ReplyDelete
  13. Anonymous09:18

    I really don't get why there is PSO in summer for tourist destinations.

    ReplyDelete
    Replies
    1. Anonymous09:22

      Because I assume even in summer the majority of those routes can't turn a profit.

      Delete
    2. Anonymous09:25

      PSO for DBV and SPU is just an excuse to give some money to Croatia Airlines.

      Delete
    3. Anonymous09:36

      Of course

      Delete
  14. Anonymous09:19

    It took them more than 2 years to launch a tender and it seems it will take them another 2 to select a winner. Shambles.

    ReplyDelete
    Replies
    1. Anonymous09:22

      Disappointing...

      Delete
  15. Anonymous09:20

    Wasted opportunities. Some routes are unnecessary while others not included would be really beneficial.

    ReplyDelete
    Replies
    1. Anonymous09:22

      Such as?

      Delete
    2. Anonymous09:40

      OSI-ZAG route is ridiculous.

      Delete
    3. Anonymous13:08

      If the OSI-ZAG flights were properly timed, to make connections during the waves, it would work just fine.

      Delete
    4. Anonymous13:36

      There is a perfectly fine highway connecting both cities.

      Delete
    5. Anonymous14:29

      Yes there is a good highway, but why pay extra for fuel and parking costs in Zagreb.

      Delete
  16. Anonymous09:20

    How is the PSO budget set. I mean does the EU take in the size of the country, population, GDP? Or is it negotiated directly with the government?

    ReplyDelete
    Replies
    1. Anonymous09:24

      I believe it's negotiated directly with the government but the metrics you listed are taken into consideration.

      Delete
    2. Anonymous11:49

      I see. Thank you.

      Delete
  17. Anonymous09:31

    Interesting that Adria wanted to bid while they were still around. Makes sense though. Their Saabs would have been perfect for some routes.

    ReplyDelete
    Replies
    1. Anonymous09:35

      They were desperate for any money they could get.

      Delete
    2. Anonymous09:41

      True. But equipment for these flights was a good fit.

      Delete
  18. Anonymous09:36

    Watch OU get awarded all twelve routes

    ReplyDelete
  19. Anonymous09:42

    This is just crazy. I don't know what the government is playing here.

    ReplyDelete
  20. Anonymous09:44

    OSI could be particularly impacted by this.

    ReplyDelete
    Replies
    1. Anonymous19:48

      OSI isn't viable as an airport

      Delete
    2. Anonymous19:56

      The airport struggles both commercially and financially.

      Delete
    3. Anonymous19:57

      OSI is a cargo airport. It handles more cargo than Zagreb and Ljubljana.

      Delete
    4. Anonymous22:17

      How is 13,460kg (OSI) more than 24,874t (LJU) and 12,881t (ZAG)? These are statistics for 2019.

      Delete
  21. Anonymous09:47

    What's more worrying that no one seems to care. Where are the airport to put preassure on the government?

    ReplyDelete
    Replies
    1. Anonymous09:53

      Because the people running the airports were appointed by the government and party. They don't want to complain and seem ungrateful.

      Delete
  22. Anonymous09:47

    Someone should be held responsible for this.

    ReplyDelete
    Replies
    1. Anonymous09:53

      Someone should be held responsible for a lot of things in Croatia.

      Delete
    2. Pravomocno presudjena zlocinacka organizacija mozda? Mali Ivica u prvom osnovne zna da ce Hrvatska tonuti sve dublje i dublje dok god ADEZE uz pomoc kupljenih zetoncica i pupovaca ostaje na vlasti i unistava sve oko sebe zbog osobnih koristi i povlastica

      Delete
    3. Anonymous00:20

      That is why that country is slowly having less and less people living there, people suffering injustice, and finding justice somewhere else. But I do believe in justice for those criminals that have been ruining everything for decades, and the worst is the fire likely awaiting all those you just mentioned who are enjoying their temporary lives. When their end comes, I would not want to be in their spot for sure.

      Delete
  23. Anonymous09:54

    Hopefully they work it out. These routes are important.

    ReplyDelete
  24. Anonymous09:56

    I understand but some routes are really unneeded

    ReplyDelete
    Replies
    1. Anonymous13:36

      Especially since the driving distance between some is short.

      Delete
  25. Anonymous10:00

    This has really become a mess.

    ReplyDelete
  26. Anonymous10:02

    Just another way to pump money into OU

    ReplyDelete
  27. Anonymous10:03

    Anyone know the real reason why the government hasn't selected anyone?

    ReplyDelete
    Replies
    1. Anonymous11:42

      No one knows. It's inexplicable.

      Delete
    2. Anonymous11:43

      Butkovic too busy to deal with this...

      Delete
    3. Anonymous11:49

      Fools in government.

      Delete
  28. Anonymous11:42

    What a disaster.

    ReplyDelete
  29. Anonymous11:42

    This could have a very negative effect on domestic air travel and passenger performance for some airports. Shame on the government.

    ReplyDelete
  30. Anonymous11:49

    Is OU selling tickets for the domestic PSO routes?

    ReplyDelete
  31. Anonymous11:49

    Love that Trade Air livery

    ReplyDelete
  32. Anonymous11:50

    We all don't know the real reason behind this but yes I do have a feeling it somehow has to do with OU.

    ReplyDelete
    Replies
    1. Anonymous11:53

      Me too. No other reason makes sense.

      Delete
    2. Anonymous12:05

      They are up to something, that's for sure.

      Delete
  33. Anonymous12:05

    This is not good

    ReplyDelete
  34. Anonymous12:06

    Select the operators ASAP.

    ReplyDelete
  35. Anonymous13:37

    At least the EU will be happy since it is part of their green policy :D

    ReplyDelete
  36. Anonymous13:37

    I hope they do revise the PSO contracts because I think some route are unnecessary while others not included would be really beneficial.

    ReplyDelete
    Replies
    1. Anonymous21:02

      If they start revising it, they won't adopt it for another 5 years.

      Delete
  37. Anonymous14:30

    What are generally the loads on these domestic Croatian flights? If they are marked as PSO it's probably not great outside of peak summer?

    ReplyDelete
    Replies
    1. Anonymous21:04

      Other than ZAG-DPU/SPU and ZAG-BWK loads are very light but the scenery on these flights is beautiful.

      Delete
  38. Anonymous19:48

    How transparent

    ReplyDelete
    Replies
    1. Anonymous21:03

      I'm honestly surprised at how non transparent this whole process is. You would expect that the EU would have some rules where you would have to show which airline applied, for what, what is the value of the contract...

      Delete
  39. Anonymous19:49

    This is just another way to keep this dinosaur alive.

    ReplyDelete
  40. Anonymous19:57

    Something tells me OU will get all the routes.

    ReplyDelete
  41. Anonymous19:57

    Well at least now we know why OU is going to lease an extra plane.

    ReplyDelete
  42. Anonymous20:02

    Bravo Hrvatska?

    ReplyDelete
  43. Anonymous10:36

    Hi. I am an Australian who will be visiting Croatia this summer. I wanted to fly Pula to Split with Trade Air in July. Do you think this will still be possible? Or should I look at an alternative such as Pula to Zadar with OU, and road transfer to Split?
    If it's any consolation to you, the Australian government is also inept and corrupt!

    ReplyDelete
    Replies
    1. Anonymous18:58

      Pula to Zadar is a connecting route to Zagreb, so generally pretty light. You can probably get away with waiting it out until June to see if PUY-SPU becomes available through Trade Air and then if not PUY-ZAD and then a road/bus transfer isn't awful (it adds another 2-2.5 hours).

      Delete
    2. Anonymous08:54

      Thanks!

      Delete

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