The Croatian government has finally adopted a decision to declare Croatia Airlines and Trade Air as the two carriers that will operate subsidised Public Service Obligation (PSO) domestic flights for a period of four years. The two carriers will share 78.7 million euros in funding between them to cover the losses the flights are expected to generate, with Croatia Airlines being the beneficiary of 54 million euros for the upkeep of six routes, while Trade Air has been granted 24 million euros for the same number of routes. The funding has been notably increased compared to the previous PSO contracts held by the two airlines, which amounted to 45.6 million euros for Croatia Airlines and ten million euros for Trade Air.
The process to select the PSO flight operators has been severely delayed by the Croatian government. After initially pushing back the tender by a year and a half due to the Coronavirus pandemic, contracts were set to be finalised at the end of last year, however, this did not materialise. A total of five airlines acquired the tender documentation but only the two Croatian carriers applied. Trade Air suspended its domestic flights in late April after its previous contract with the Croatian government expired. On the other hand, Croatia Airlines has continued to maintain its PSO services, irrespective of the lack of funding. The new PSO contracts run until March 28, 2026.
Croatia Airlines’ routes that are subject to the latest PSO funding are: Dubrovnik - Zagreb -Dubrovnik, Split - Zagreb - Split, Zagreb - Zadar - Pula - Zadar - Zagreb, Zagreb - Brač - Zagreb, Osijek - Dubrovnik - Osijek and Osijek - Split - Osijek. Trade Air will operate the following PSO routes: Osijek - Zagreb - Osijek, Osijek - Pula - Split - Pula - Osijek, Osijek - Rijeka - Osijek, Rijeka - Split - Dubrovnik - Split - Rijeka, Rijeka - Zadar - Rijeka and Osijek - Zadar - Osijek. Trade Air has previously said it will wet-lease a Saab 340 turboprop aircraft for the domestic services.
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I still think ZAG-DBV and ZAG-SPU should not be subject to these.
ReplyDeleteWell, 120-140.000 passengers per year sounds a lot, but apparently even that is just the seasonal traffic which makes the routes unprofitable year around. Someone on the forum said that road infrastructure is good enough for locals, which is maybe the true, but then it means whose routes will forever stay PSO.
Delete@09,04
DeleteI agree. Plus for OU to charge 600 HRK (80€) in the middle of November for a subsidised route (ZAG-DBV), one way without luggage is a scandal on its own! 591,25 kn to be exact.
the whole point of PSO routes has been lost.
DeletePSO doesn't mean you fly for free. Airline sell their tickets like for any other route and PSO gives support to stimulate the offer and to secure it.
DeleteNobody is suggesting that tickets be free, but 600 kn tickets one way, without luggage for a subsidised route is not ok.
DeleteJust another excuse to pump more unearned money into this festering pit...
DeleteJATBEGMEL, FYI The cheapest ticket UEASY is 791,25HRK. Fare is 230,00HRK, YQ tax is 164,00HRK. That makes 394,00HRK for OU. The rest is: HR TAX (ZAG): 231,00HRK and VAT: 156,25HRK. MI TAX in the amount of 10,00HRK is exempt from VAT. It looks like more money goes to airports and state.
DeleteFinally
ReplyDeleteFinally what? Finally more taxpayer's money being poured into the Potemkin village for ex secret servce coworkers and their sons? Finally economicaly unsound routes being flown? Subsidising the 1% that flyes on these routes? Finally WHAT?
DeleteHopefully Trade Air can now begin domestic flights this month. They really screwed them around.
ReplyDeleteWonder if they are still going to get the Saab
DeleteNot just Trade Air but also airports that rely on PSO.
DeleteNo you got it wrong - they 'screwed' us... Took our money and gave it to them to fly routes that would never be flown in this fashion ... Ever
DeleteBig surprise to see Croatia and Trade Air got PSO!
ReplyDeleteJust another way to pump money into OU.
ReplyDeleteAbout time.
ReplyDeleteWasted opportunities. Some routes are unnecessary while others not included would be really beneficial.
ReplyDeleteName the not included one. I have impression that every airport is linked with the others if more then 200km away (which is already too close).
DeleteAnyone knows if someone else has right to launch the routes now on commercial bases? Let's say Ryanair wants to launch ZAG-DBV seasonally (or year around), can they do that till March 2026?
ReplyDeleteAlso, if another carrier launch it commercially, will the routes be blocked for PSO and for how long?
I think Ryanair may actually do Thais just to screw up Croatia airlines.
That would be great news for domestic travelers, but I fear Ryanair is done with Zagreb expansion.
DeleteRyanair wouldn't be able to make a big enough profit on ZAG- DBV route to make it viable for them.
DeleteI agree that those routes are not profitable for anyone and will forever stay PSO just because of seasonality. My question is hypothetical, so what if anyone does that? Is it possible? What would happen to existing or future PSO subsidies?
DeleteNothing would happen, PSO is concluded for the period given. PSO doesnt get void only because a route is established on commercial basis.
DeleteOK, but then in the next cycle routes are off from PSO? Once commercial, route cannot be PSO for some time at least, right?
DeletePSO = exclusivity. No other airline is allowed to operate a route covered by a PSO.
DeleteYesterday I bought a bus ticket from split to Rijeka. Didn’t want to wait anymore for the sale of PSO flights. And now, they confirmed the PSO flights 🤦🏻♂️…..
ReplyDeleteBravo OU!
ReplyDeleteBravo INA! No diferrence. At how much they both cost us, and at zero results they both achieve.
DeleteBoring...
DeleteCroatia might copy the Greek system because its strikingly similar to Greece with small turboprop only island airports. So a domestic agent like SkyExpress only employs turboprops along eith letting Ryanair connect main cities.
ReplyDeleteThey need smaller turboprops.. Like the Dash8-100 or ATR42.. Or even smaller like BE1900s...
DeleteBtw. What happened to that seaplane operator few years ago who fly Twin Otters??
About SkyExpress it is not true. They started withrirboprops but they also bought few brand new A320 Neo.
DeleteWhy not Pipers? Or even better - ultralights? Let us subsidise someone flying a parachute with a propeller mounted to his back?
DeleteGoodness. And then some local patriJots still bring up how much JU gets from GoS. OU is definitely the biggest and greater airline in the region, but in terms of taxpayer money it gobbles up on an annual basis. 😂
ReplyDeleteJU - gets €20-25 mil per year, grows from 30 to 70 destinations, introduces three long-haul routes, has 50%+ market share in Serbia.
ReplyDeleteOU - gets €20-25 mil per year, 12 international destinations from their hub this winter, CEO complains about liquidity, has less than 15% market share in Croatia.
The problem is not how much money you get from the state, the problem is what you do with it.
And what makes you sure that all these routes of JU are going to be profitable ?? Because something's telling that the current JU management relies on the fact that the governement will cover the loses ! Tianjin , Havana....realy ??!!!
Delete@An.11.02
Delete+1.000.000
@An.11.19
DeleteNo, better to feed Cartel in FRA and MUC at triple costs
I'm not scandalized about the amount of subsidies, I'm scandalized by how poorly this has been managed by the Croatian government. Endless delays. They forced Trade Air to end flights and airports to loose passengers. And instead of being angry with that some people here are calculating if another airline in the region gets more.
Delete@11,19
DeleteSince 2017, JU's losses had significantly reduced. JU has had alot of changes that have had a positive impact on their finances, including on long haul where YU-ARA was replaced with YU-ARB, significantly reducing operating costs (cheaper ac lease). JFK has become one of the airlines most profitable routes in their network, which is why they are going for additional long haul routes. They are also trying to reduce issues with seasonality, which is why they will attempt HAV (instead of parking the aircraft in front of the Jat Tehnika hangars 5 days a week), as well as launch ORD over YYZ.
China is definitely a political route, however JU has done ALOT of cargo flights out to China the past 2 years. They have a good understanding to the potentials of the route. JU wanted PEK and PVG but is restricted to Tianjin because of the Covid restrictions imposed by the Chinese government (which is why Hainan is operating BEG-Dailan). Cargo I believe will be a very important factor on this route as Tianjin is an important cargo hub in China. JU will not be the only European carrier as well flying into Tianjin, as LOT flies there as well.
Overall, JU isn't profitable, but they are definitely growing into profitability. Its losses are lower than OU for example.
@Anon 11:02
DeleteBravo!!!
So in other words what you are stating here is that both airlines and airports loose out big time if there are no one subidises them?
DeleteGreat logic!!
Good luck Croatia Airlines and Trade Air!
ReplyDeleteWith subsidies this big for short domestic sectors, they really don't need it.
DeleteDoes anyone use OSI-ZAG?
ReplyDeleteYes, about 5 passengers per flight. And RJK-ZAD will probably be even less
DeleteIt's worse than if FR would introduce a LJU-MBX flight
DeleteIt remains to be seen if this is going to be implemented at all. Ri to Zd by bus is abt 4hrs, by catamaran in season even longer. If they added RJK-ZAD-DBV it would make more sense. Possibly.
DeletePUY - ZAG - PUY 1390 kn ... Really? Not even luggage included ... insane
ReplyDeleteThat's a very good price for a roundtrip.
DeletePula-Zagreb is four hours by bus, three hours or less by car. Air service not even nonstop, but via ZAD. Both PUY and ZAD have potentials in tourism and diaspora. Both having hundreds of thousands up to million passengers yearly, operated by foreign airlines. In order to attract them, you need to offer them convenient connections and affordable prices. If OU had managed to become real airline with real network, they could have and should have operated 3-4 daily PUY and ZAD to ZAG each, to feed its network. And they could have used PSO funds as an 'excuse' for regional connectivity, and actually use it to offer acceptable prices and increase LF on its entire network. And it's not case with ZAD and PUY, it's the case with SPU, DBV and others. Without being real airline but money laundring machine, ticket prices must be high, because PSO cover empty planes which do not feed their own hub, and ticket prices cover hundreds of Uhljebs in the offices and corruptive deals, the latest being BCG. Very simple
DeleteYawn, so boring, but so predictable.
DeleteSo boring indeed...
DeleteCome in Ryanair. Hit CROATIAN domestic routes with €9.99 tickets and wipe this waste of rations and tax payers money OU once and for all. This is a political scandal of wasted funds and personal investment.... politicians holiday homes on the coast....joke
ReplyDeleteRenal it to INAAIR
ReplyDelete😃
DeleteGerman dominated European Comission didn't object to this subsidy increase that far exceeds inflation growth. Germany is allowing Croatian taxpayers to spend 42% more money than the last time on this subsidy.
ReplyDeleteThey are going to explain the hike in subsidies in there being more PSO flights than before, even though it's just 1 extra route.
DeleteEU tax payers.
Delete