Slovenia has issued a third tender call for airlines to introduce new routes to the country in return for subsidies lasting over a period of three years. The previous two public calls garnered mixed results, which the government has labelled as “disappointing”. Luxair and airBaltic were the only two to apply. The national carrier of Luxembourg has since launched operations to the Slovenian capital, with airBaltic to follow suit with services from Riga in May of next year. Only airlines registered and based in the European Common Aviation Area (ECAA) are eligible for the subsidies. The ECAA is made up of states that are part of the European Union, as well as Albania, Bosnia and Herzegovina, Serbia, Iceland, Macedonia, Norway and Montenegro. The Slovenian government is primarily targeting the introduction of flights from Vienna, Copenhagen, Madrid, Prague, Berlin, Rome, Stockholm, Oslo, Barcelona and Lisbon, although all unserved destinations within the ECAA are eligible.
The state has allocated 16.8 million euros in subsidies divided over three years, or 5.6 million euros per year. The subsidies are designed to cover 50% of the airline’s airport costs in Slovenia. If funds are left over following the completion of the ongoing public call, the state will launch a new one. Interested carriers have until November 27, just before midnight, to submit their applications. Their opening will not be public and will be carried out by the Aid Granting Commission within fifteen days of the tender deadline.
Commenting on the subsidies, the Slovenian Ministry for Infrastructure said, “The purpose of the call is to improve Slovenia's air connectivity, with the aim of promoting the establishment of new nonstop scheduled air routes to and from Slovenia. The consequences of the Covid-19 pandemic severely reduced the level of air passenger traffic in Slovenia, together with the negative effects of the pre-pandemic bankruptcy of Adria Airways. The recovery of air traffic in Slovenia has been very slow, and the aim of the call is to increase the mobility of people in Slovenia”.
Ljubljana Airport recently noted it was in discussions with almost thirty airlines over the potential introduction of flights. “In the last month we've been in extensive discussions with 28 airlines, both legacy and low cost carriers, about more than 30 destinations. One recurring reason emerged for some airlines opting out. Market size matters: legacy carriers often find their economic viability in feeding hub airports. These hubs are already well-served, making them less interested in new destinations. Additionally, the demand for "non-hub" routes might not be substantial enough to justify the investment”, the General Manager of Ljubljana Airport’s operator, Fraport Slovenija, Babett Stapel, said.
And by that ladies and gentleman, here we go again
ReplyDeleteThe saga continues.
DeleteI mean this tender is launched at the best time out of all three, becouse now the aurlines are planning for the summer 24 season. But still I don’t see much happening maybe one or two airlines to apply like Iberia to Madrid or Vueling to Barcelona and that will be it
ReplyDeleteIberia coming back would be nice.
DeleteI think that they will be one of the very few who will apply. I’m pretty sure we will se them at LJU next year
DeleteBoth Iberia and Vueling used to fly to Ljubljana.
DeleteIB to MAD with 3 weekly flights and good connectivity to South America flights would be perfect.
DeleteAirlines have already finished Summer 2024. Airport slots had to be applied for a few weeks ago.
DeleteThere is still more than enough time to negotiate flights for 2024. The IATA slot conference (for summer 2024) is next month in Dubai.
Deleteits not like this third round was a secret... if interested they could plan it
DeleteGood luck. I hope they manage to attract someone
ReplyDeleteIronic that these subsidies didn't attract any LCCs
ReplyDeleteYou need to read the last paragraph to understand why. Flying to/from Slovenia will never be dirt cheap simply because of the economy of scale. Subsidizing half of the ground handling/landing fee costs is almost a neglible amount compared to the fuel costs and low passenger yields.
DeleteA LJU based fleet with 5 e170/e175 would solve the issue of market size.
DeleteYes but which airline would provide that?
DeleteI can see like ITA Airways with Rome flights and Iberia with Madrid but not much more. Maybe Austrian or SAS but I doubt it.
ReplyDeleteThe question is how many airlines know about these subsidies.
ReplyDeleteWell it was said that there was plenty of interest in the previous tender so the airlines must know about it. But seems like all the interest vanished at the end
DeleteDon't see TAP launching flights
ReplyDeleteHope the subsidies will work and we get some new flights.
ReplyDeleteMarket taking care of itself...
ReplyDelete+1
DeleteLjubljana Airport needs to do more to attract new airlines.
ReplyDeleteLike what?
DeleteThese subsidies are so messed up. The government sold the airport to Fraport. Fraport has unrealistic fees that very few airlines want to pay in order to fly to Ljubljana. Then the government gives money so they can cut 50% of the airport fees, while Fraport looses no money and benefits from the extra passengers. Crazy!
ReplyDeleteLJU fees are lower than all airports in the region - TRS, KLU, GRZ and ZAG.
Deletehow come ryanair than flies to trieste?
Delete@11:12 Stapel is that you?
Delete@11:19 It's not just about the fees, don't be thick. Airport fees are a miniscule charge. Market size and fuel price play a larger role, not to mention the mentality of travellers. Slovenians are willing to drive hours with GoOpti to the next closest airport just to get 50€ cheaper flight ticket. Italians less so.
Delete@11:12 No, and see my reply to @11:19.
@ 11:45 I am sick of seeing this comments constantly. Yes I would rather drive to Venice for example if I will fly to Manchester which LJU doesn’t have a direct flight to or destinations like that. And yes I would rather choose that than 30 minute change at Frankfurt or Munich. Flights from LJU are full and the prices for those 5 or 6 seats that remained for a flight are 200€ and more more expensive than flights from ZAG or TSF. If it was for 50€ it would be a no brainer to fly from Lju
DeleteLatvia is a poorer and smaller country, yet they have an airline consisting of 48 aircraft! Ok, they are taking advantage of the rest of the Baltics which have a total size of population of entire Serbia but again, an impressive network. Slowenien can do the same including Kroatien i the game and creating 2 hubs in both LJU and ZAG instead of feeding the Lufti kartel. Not so difficult really and as anon 11:56h enough of the same "driving theory".
DeleteAlso, if a small country like Montenegro can afford its own airline, so can Slowenien!
Where does Latvia have three international hubs with plenty of connections within less than 4 hour drive from the capital? And yes, Air Baltic has so many aircraft, that they need to ACMI them out to Swiss, similar to what Adria did just before.. uhm.. you know what.
DeleteAlso, Montenegro is not a part of EU so most "financial aid" clauses and rules do not apply to them.
@11:56 Why would anyone open a scheduled line LJU-MAN instead of VCE-MAN if they have a bigger chance of success from the latter by having a bigger potential market behind?
I am not saying that Lju needs Manchester flights although we had them back in Adria days…but my point was that if I in example need to fly to a destination like Manchester or somewhere that Lju does not have a direct flight to, I would rather drive to Venice and fly from there directly, than take a 500€ flight from Lju to Man through Frankfurt or Munich
Delete@14:41 so why do airlines even fly to LJU if VCE is so close? And not to mention TRS..
DeleteLatvia, Lithuania, Croatia and Bulgaria all do ACMIs because maybe they are good at doing the job?! Nothing wrong with ACMIs. BT does this operating for LX on the ZRH routes for instance. Avion Express work with BT on the busier leisure routes because they have bigger A320s, Bulgaria Air operated for TAP Portugal during the whole summer season, ETF Airways being Croatian operate in Réunion and Martinique technically being in EU thus allowing them passporting rights. Clever!
DeleteThis is the beauty of EU that many fail to comprehend. Tomorrow OU can establish bases in both LJU and ZAG and become a second Air Baltic if they wish. They chose to be a LH feeder, which is also not bad. Each and every airline finds it way to generate cash. Thing is, we all have to agree that LJU definitely needs much more traffic and connections and especially restoring UK routes and more London airports. Literally, from Tallinn to Athens, most EU capitals are connected to at least 2-3 London airports. Vilnius is connected to London City airport! Yes, Brexit happened but London still remains one of the most important cities in Europe and Heathrow is expected to serve almost 79 million passengers in 2023. UK and Ireland are just vital markets. UK and Ireland have nearly 70 million people, which is a lot....
Only issue is that OU does not generate cash. It generates losses, year after year.
DeleteLatvia and Ukraine are bordering Russia which means that Europeans and American will throw limitless amounts of money into it even if they never get any return of it.
Delete@15:35 Up until a certain point it makes financial sense but expecting Ryanair/Wizzair and the likes all of a sudden opening 20-30 routes from LJU is delusional.
Deletewow 16.8 mil
ReplyDeleteIn theory. There needs to be a lot of flying for 50% of the airport costs to reach that kind of amount.
Deleteis there a priority list again?
ReplyDeleteThe more they stir this shit, more it is obvious only national carrier is a solution to that goal
ReplyDeleteIf you want to understand someone’s motives, look at the outcomes of their actions. If someone’s motive is to set up a national carrier, they’ll set up a tender for state aid that will not attract anyone. Mrs. Bratušek is no stranger to arranged tenders, and while everyone complains about ‘low interest from the airlines’ no one has bothered to do any tender forensics.
DeleteI don't see the point of this scheme. If a route is new, Fraport already offers discounted fees, so 50% additional subsidy of airport costs isn't much money, but it comes with lots of admin and strings attached. The 16.8 million number is just a theoretical number that won't possibly be reached anyway. What's actually on offer is pocket money.
ReplyDeleteThe airlines that will go for this subsidy would likely have started those routes anyway. And, consequently, if no or few airlines start new routes, it's because this doesn't actually help change the new route business cases more than marginally. It won't change the fact that aircraft, fuel and crew are huge costs.
Will LJU-FCO be able to operate as there are several daily flights from Trieste? But the people of Ljubljana must drive to Trieste.
ReplyDeleteIn reality, many people travel from Trieste, a sort of second Slovenian airport. I think we will easily fill the A220 at ITA?
DeleteLJU-FCO will never work. There will always be a frequency and fare advantage at TRS. There will be more timetables to choose from there because demand is higher and fares there will be lower because larger aircraft with lower cost per seat are used.
DeleteAlitalia, ITA airways or any future incarnation of this abomination will never fly to LJU, not after they got so horribly stomped and shoved out of the Slovenian market roughly 15 years ago.
DeleteWhat is missing is Vienna, Berlin, Spain (obligatory, apparently there is interest), Italy and some Scandinavian destinations like ARN. AirBaltic is a very good add-on and actually gives you the possibility to transfer to all of Scandinavia.
ReplyDeleteI see quite interesting charters to Iceland and other destinations. Are there any charters to Zanzibar?
ReplyDeleteMaybe Wizz Air will applay for TIA-LJU.
ReplyDeleteBerlin would be great and idk why ryanair is not flying to at least Stansted.
DeleteWhy only European carriers included?
ReplyDeleteBecause it would not get EU approval otherwise as this has been categorized as state aid.
DeleteCan we please get someone from the concerned taxpayers brigade to explain how this will be much cheaper than keeping Adria Airways alive?
ReplyDeleteThats is what I am wondering as well…or atleast a new national carrier
Delete~5m per year is a lot less than the Adria burning money pit required. Also: LJU is recovering decently and there won’t be any need for a national carrier 2-3 years from now. Time to steal taxpayers’ money is now. Our current government is well aware of it.
DeleteI am so pleased to see that some people show humility and ask questions about things they don't understand.
DeleteLet me try to explain. Running a small airline in a competitive environment like Europe is a recipe for losses on an enormous scale.
This subsidy scheme costs next to nothing. You may have seen a sensationalist number in the headline. What's important to understand is that that number is not the cost. It is the maximum amount allocated, but if you read what the scheme actually is (50% off airport and ground handling charges in Slovenia), you will realise that it will cost next to nothing since the number of qualifying new routes that will launch because of this will be very low indeed and their qualifying cost will be a fraction of the allocated amount.
The number could just as well be €16.8 _billion_ and the cost would have been the same.
In summary:
Route subsidies: Little tax money
Running loss-making airline: So much tax money that it is illegal state aid
Little tax money < So much tax money that it is illegal state aid