Bosnia and Herzegovina’s aviation sector is facing a significant challenge after the European Organisation for the Safety of Air Navigation, commonly known as Eurocontrol, froze all payments to Bosnia and Herzegovina's Air Navigation Services Agency (BHANSA), following a court-ordered enforcement action. This decision stems from an arbitration ruling in favour of the Slovenian company Viadukt, which had sued Bosnia and Herzegovina over the unilateral termination of a concession agreement related to a hydropower project on the Vrbas River. The arbitration tribunal awarded Viadukt approximately 56 million euros, with the amount increasing due to accruing interest.
Although BHANSA was not a party to the dispute, the enforcement action has led to the freezing of its funds by Eurocontrol for the provision of air services across Bosnia and Herzegovina. The agency has warned it is now facing a dire state and has been forced to cut employee wages. The situation has sparked political debate within Bosnia and Herzegovina. The country’s Fiscal Council is considering a plan to settle the debt using state funds, but this proposal faces strong opposition from the Prime Minister of the Federation of Bosnia and Herzegovina, who has indicated a willingness to veto the plan. The Prime Minister argues that the debt, originating from the Republika Srpska entity, should not be covered by federal funds.
The union representing air traffic controllers in Bosnia and Herzegovina, said, “The Eurocontrol blockade has created a scenario in which BHANSA may soon be unable to cover even basic operating costs such as fuel, maintenance, utilities and the servicing of critical equipment. Air traffic controllers hold one of the most demanding and high-responsibility professions in society - where even a single mistake can have tragic consequences. Today, they are working under a cloud of uncertainty, stress, and concern for their livelihoods, which directly affects their focus and overall flight safety".
The Air Traffic Controllers European Unions Coordination (ATCEUC), representing over 14.000 air traffic controllers across Europe has written to Eurocontrol and the Belgian government, urging them to unblock funds for BHANSA. “We address you with strong concern regarding the legal and financial risks currently threatening BHANSA and, by extension, the stability of air navigation services across Europe. The enforcement order issued to Eurocontrol on March 21, 2025, has precipitated an immediate financial crisis for BHANSA, mandating the complete suspension of all route charge payments destined for Bosnia and Herzegovina’s air navigation services. Given that these payments constitute 90% of BHANSA’s funding, the agency is now at the brink of operational collapse”, the letter reads.
The ATCEUC has warned that without urgent intervention, the situation will lead to the total shutdown of air traffic control services in Bosnian airspace, closure of Sarajevo, Banja Luka, Mostar and Tuzla airports, disruption to military, humanitarian and medical flights and mass layoffs of highly skilled personnel. Failure to pay Viadukt could further lead to the seizure of Central Bank properties in Banja Luka, Mostar and Brčko District, as well as further disruptions to BHANSA's funding from Eurocontrol.
What a mess
ReplyDeleteI'm sure they will resolve it in the end.
DeleteWill they? It has been 24 days since EUROCONTROL froze payments to BHAANSA and no one seems to care.
DeletePeople don’t realise how fast things can fall apart. No fuel, no maintenance, no radar. Flights can’t run without these, and corners are already being cut.
DeleteDisputes in BIH can sometimes take many years to sort out.
DeleteSo until when can things continue like this before there is an impact on air traffic?
DeleteProbably there is already an impact but everyone is turning a blind eye to it.
DeleteIf employee wages have been cut, the impact is already there when it comes to safety. But no one is taking notice until a crash happens.
Delete^^^ Exactly, the situation is a lot more serious than what they wants to believe.
DeleteThis is an issue that needs to be resolved immediately.
Lol, they already planned a government meeting where they'll approve the central bank involvement in exchange for more VAT funds to the Federation
Delete^ I don't know what you are talking about. Fiscal Council today suggested two solutions and Federation government has rejected both.
DeleteI don't understand why they are going after BHANSA for an unrelated case
ReplyDeleteBecause it’s a state-owned agency and the state of Bosnia and Herzegovina lost the arbitration case, the court allowed enforcement against state assets. Since Eurocontrol collects and distributes route charges on behalf of BHANSA, the court ordered them to freeze those payments as a way to enforce the ruling. It's a legal loophole, but unfortunately, it’s having serious unintended consequences on aviation safety and operations.
DeleteIt's everyone's fault but our own
DeleteThe system allows enforcement through state-linked institutions like BHANSA. Unfair? Maybe. But legally allowed.
DeleteHow does a private company like Viadukt end up shaking down an entire country’s aviation system? What kind of contract did Bosnia even sign?
Delete@09:43 They probably were able to sign a contract that would be enforceable by the other party in the rest of Europe and not just in Bosnia.
DeleteSo the government can not just tear up the contract and not expect to pay penalties.
The courts have spoken, the government still refused to apply the decision and pay what it owes to Viadukt so this is the result.
Yes, it's quite straight forward.
DeleteIt's not a loophole, it's perfectly simple and straightforward.
DeleteDoes anyone know which government signed the contract with Viadukt? If this was signed by the RS entity government, why don't they go after their assets?
DeleteIt's not the first time something like this has happened. Same thing happened in Albania, their agency ''Albcontrol'' hasn't collected money from Eurocontrol since 2021 at least.
DeleteIt is a single country. You can not have it both ways, whether it is convenient or not the whole country is responsible.
DeleteEven the foreign court said so.
@14.53
DeleteThat's interesting. Where do they get their funding from now?
From the state
Delete^^^ Apparently the Albanians owe Italian businessman Francesco Becchetti 130 million that Eurocontrol has kept from Albcontrol since 2021.
DeleteThe Court of First Instance in Brussels has ordered the Eurocontrol agency to execute the decision by transferring the blocked funds to the account of Becchetti's executor despite strong protestations and promises by the Rama government.
Interesting. I can imagine the amount of money are loosing out on considering the traffic volume in Albania.
DeleteEurocontrol’s hands are tied by the court ruling, but freezing all funds to BHANSA seems disproportionate.
ReplyDeleteIf the government of BnH refuse to pay their debt what can Eurocontrol do differently.
DeleteThey were ordered by the court to withhold funds. End of story.
It's not disproportionate. It's one of the only ways to claim back the money. It's called the rule of law. You can't sign a contract and then back out without paying.
DeleteHow is it possible that an unrelated agency like BHANSA ends up bearing the cost of a hydropower dispute?
ReplyDeleteSee above
DeletePeople here do not understand even the basics of law. It's all explained in the article.
DeleteAviation is a national service. If BHANSA shuts down, it affects all citizens, not just one entity. Time to act in the national interest for once.
ReplyDelete+100
DeleteClassic Balkan politics.
Delete@09:17 +10000000
DeleteCroatian and Serbian ATC will take control like before.
DeleteThis is a textbook example of why international arbitration decisions must be taken seriously. Non-compliance leads to chain reactions like this where state institutions being held financially hostage.
ReplyDelete+1
DeleteUpper airspace can be taken over by Croatiacontrol and SMATSA. The issue is lower airspace which can't, which would really mean closure of airports.
ReplyDeleteIt would not be so easy to take over upper airspace just like that.
DeleteSerbia and Croatia controlled upper airspace until 2019, and lower until 2014.
DeleteI am aware. But you can't just phone them and tell them to take over the airspace today. Both Serbia and Croatia are stretched for new air controllers. Their workload is already huge due to planes avoiding Ukrainian airspace. The transition process last time lasted several months.
DeleteWell, if they don’t take over the upper airspace, then planes will divert to their airspace anyway. So workload will increase one way or another.
DeleteThe EU and Eurocontrol need to step in with mediation. Letting an entire airspace shut down over this will ripple across Europe. This isn't a local issue anymore.
ReplyDeleteWhy? There is no more to arbitrate, it's been done. The problem is BiH isn't following it.
DeleteHow will it ripple across Europe? Bosnia is not France.
Delete^ Dilutions of grandeur is one of our strongest characteristics.
DeleteIf this leads to airport closures the impact on tourism and business will be severe.
ReplyDeleteExactly, the price will be much larger than if they don't pay the fine.
Delete+1
DeleteWe won't let anybody to take over of airspace!!!We will be black hole
ReplyDeleteYou know that secretly that is what they are saying to each other in order to feel good about themselves.
DeleteJust pay the money... it's that simple.
ReplyDeleteExactly. And: "The Prime Minister argues that the debt, originating from the Republika Srpska entity, should not be covered by federal funds."
DeleteIs Republika Srpska not in BiH anymore? It's a rhetorical question, of course.
Honestly the sum is not that huge for a country to pay.
ReplyDeleteIf BHANSA shuts down, airlines will avoid Bosnian airspace, insurance costs will rise, and Bosnia’s entire aviation credibility will suffer. The long term damage could be worse than the 56 million.
Delete+1
DeleteBiH is a state. As long as you're together, it really doesn't matter "whose entity's" problem it is.
ReplyDeleteAgree. Whether it’s fair or not, Bosnia needs to settle this debt fast. Aviation is too important to let fall apart over bureaucracy and politics.
DeleteRegardless of which entity caused the issue, aviation safety must be above politics. Settle the dispute first, then argue later. Lives could be at stake.
DeleteThat is true. But you have SNSD working against the country, and they don’t want to clean up their mess. Now there are billions of euros that will need to be paid by Republika Srpska (RS), and they want to pass that burden onto all citizens. If they want all citizens to pay this debt, they should consider the idea of shutting down both RS and the Federation, and then we can all share the cost.
DeleteOnly in the Balkans can a dam dispute lead to the collapse of air traffic control. You couldn’t make this stuff up.
ReplyDeleteIt’s unbelievable that flights could be disrupted over a hydroelectric project.
ReplyDeleteIt's not because of a hydroelectric project. It's because of the state not meeting its financial obligations.
DeleteFeel really sorry for the air traffic controllers.
ReplyDeleteYou can’t expect people to maintain safety standards when they don’t know if they’ll be paid next month. This is a huge risk to passengers.
Delete+1
DeleteAnd BHANSA does not have 1.5 euro tax as source of income which was blocked for a year until a few weeks ago.
ReplyDeleteWhen 90% of an agency’s funding is cut overnight, collapse is inevitable.
DeleteBHANSA never had this income. This tax was paid to BHDCA. It has nothing to do with BHANSA.
DeleteGood luck!
ReplyDeleteEurocontrol is simply obeying a court order, but the broader legal question is whether essential services like ATC should ever be subject to full asset freezes. Needs reform.
ReplyDeleteWhat other option is there? If the only entities subject to asset freezes are non-essential services then no one would care about asset freezes because they would not matter.
DeleteI've seen a lot in my 30 years in aviation, but shutting down an entire airspace over a hydro project dispute? That’s a first.
ReplyDeleteIt's a first because you don't understand what's going on. It's not about the hydroelectric plant, it's about a state not meeting its financial obligations.
DeleteIt's one way of getting rid of Ryanair from your country!
ReplyDeleteThis along with the new tax... Ryanair won't like it.
DeleteAll rules should be enforced then including Interpol warrants
ReplyDeleteIf only
DeleteAnother case of poor governance coming back to bite.
ReplyDeleteit’s fixable.
ReplyDeleteYes, if they pay
DeleteWonder what the interest rate is on that sum
ReplyDeleteCurrently around 9.000 EUR per day.
DeleteDangerous
ReplyDeleteI doubt EU will allow this.
ReplyDeleteEurocontrol is EU lol
Delete@11:18
DeleteEurocontrol is NOT EU. It is pan-European organization. Please stop overesimate EU like some "expert" do.
Most people don't understand anything about the EU but that doesn't stop them commenting here.
DeleteAll hail Mile Ronhill and his shenanigans
ReplyDeleteB&H PM is blocking payments and endangering air traffic, defacto supporting (for now just financial) separation of Srpska and Federation.
DeleteYou know what makes this thing even better? Almost 10 years ago, Viadukt offered the gov. of Republika Srpska a chance to settle this by RS paying them 1000000 euros in compensation. You probably could tell what happened next when this is today's main news.
ReplyDeleteAbsolute madness.
Deleteproperties like the Central Bank building in Mostar are already subject to confiscation. Other properties, including buildings in Sarajevo and Banja Luka, could soon follow.
ReplyDeleteSMFH
DeleteAll because some politicians do not want to hurt their ego...
Sad
DeleteI can't believe they have allowed this to go on for over 20 days already.
ReplyDeleteI hope they manage to resolve this situation as soon as possible.
ReplyDelete