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Croatia prepares PSO tender as foreign airlines eye domestic routes

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The Croatian government is preparing to launch a new Public Service Obligation (PSO) tender to secure funding for domestic air routes once the current contracts, running from July 2022 until March 28, 2026, expire. The previous tender, issued in November 2021, awarded the multi-million-euro contracts for the upkeep of twelve domestic routes to Croatia Airlines and Trade Air, which have historically been the only beneficiaries of state funds for domestic flights. Ryanair has expressed interest in partaking in the tender. European Union-based carriers are eligible to participate in the call. PSOs make European funds available for unprofitable, primarily domestic routes which are considered vital for the economic development of the region they serve. A tender is expected in late 2025 or early 2026, ahead of the contract end date.

Routes which are currently compensated and maintained as PSO 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. There have been calls to reform the list of PSO routes, with Rijeka Airport arguing that its limited inclusion in the current scheme undermines regional connectivity and limits its potential to develop year-round air services. On the other hand, questions have been raised as to whether flights from Zagreb to Split and Dubrovnik are unprofitable and meet PSO guidelines.

Ryanair, with bases in Zagreb, Dubrovnik and Zadar, has expressed interest in participating in the Croatian PSO tender and potentially commencing domestic flights within the country. “We will undertake a serious analysis of the terms and conditions. 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”, the airline said. During the previous PSO tender in 2022, the Croatian government noted there was “significant” interest from foreign airlines. Croatia Airlines, which is transitioning to an all Airbus A220 fleet, is expected to conclude a wet-lease arrangement for turboprop aircraft next year, some of which are expected to serve on PSO routes.


July 03, 2025
croatia croatia airlines Dubrovnik Feature Osijek Pula Rijeka Split Trade Air Zadar zagreb
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Comments

Anonymous said…
If this happens then OU is done.
09:01
Anonymous said…
Bravo!
09:01
Anonymous said…
I think the same.
09:02
Anonymous said…
Bravo to incompetent OU leadership for being so inactive that foreigners have to come to fulfill domestic demand.
09:03
Anonymous said…
Bravo Hrvatska
09:05
Anonymous said…
I could see Sky Alps applying for these too. There are now a lot of these smaller European carrier that are going after PSOs everywhere in Europe.
09:07
Anonymous said…
The government will never pick a foreign carrier. This PSO funding is vital for OU. Some routes are compensated up to 600 euros per passenger.
09:09
Anonymous said…
Last time the government made such a mess of this tender that Trade air had to suspend domestic flights for months.
09:10
Anonymous said…
PSO for DBV is really not needed especially in the summer.
09:11
Anonymous said…
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
09:16
Anonymous said…
Good luck to OU, they should be awarded the whole lot. Keep Ryanair away!
09:16
Anonymous said…
Some of these routes are so useless. They really need to overhaul the whole thing.
09:17
Anonymous said…
Agree. Wasted opportunities. Some route are unnecessary while others not included would be really beneficial.
09:18
Anonymous said…
It's a shame that not more routes are included, especially from Rijeka.
09:18
Anonymous said…
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?
09:23
Anonymous said…
Zagreb-Split and Zagreb-Dubrovnik shouldn't be under PSO having in fact that Croatia always has full planes on these lines, even in winter months. I think PSO for DBV and SPU is just an excuse to give some money to Croatia Airlines.
09:24
Anonymous said…
Good luck Croatia Airlines and Trade Air. Hope they get those 4 year contacts again.
09:24
Anonymous said…
The sole idea of PSO is not bad, it may however be misused, if the public entity announcing PSO happens to be owner of an airline. Then you may see strange routes or excessive funding.
09:25
Anonymous said…
OSI-ZAG route is ridiculous.
09:33
Anonymous said…
Ryanair's A320s and B737s are too large for these routes.
09:34
Vlad said…
Weird to see so many people cheering for planned economy in 2025.
09:34
Anonymous said…
Ryanair is full of plan economy
09:37
Anonymous said…
And OU's A220s are not?
09:39
Anonymous said…
It’s about time the Croatian PSO scheme opened up to real competition. For years it’s been a closed shop between Croatia Airlines and Trade Air. Let’s see if Ryanair can shake things up and finally bring some value for taxpayers.
09:43
Anonymous said…
The current list of PSO routes needs a major overhaul. Rijeka is completely underserved, and routes like Zagreb–Split or Zagreb–Dubrovnik are probably profitable during peak season without subsidies.
09:43
Anonymous said…
Why are we still subsidising routes that have multiple daily services and high loads? PSO funds should support underserved regions, not help Croatia Airlines on routes where there’s already strong demand.
09:44
Anonymous said…
Good to hear Ryanair is at least considering entering the domestic market. But I wouldn’t hold my breath.
09:44
Anonymous said…
I wonder if the EU will push for greater oversight on how Croatia allocates these PSO funds. Some of the current routes seem questionable under EU guidelines.
09:45
Anonymous said…
Believe it or not I think Croatia Airlines makes a loss on this route year-round.
09:50
Anonymous said…
There is 0 chance Ryanair will fly any of these routes.
09:51
Anonymous said…
The idea of Ryanair operating Osijek–Dubrovnik or Rijeka–Split routes sounds nice in theory, but I can’t see them committing to year-round service with a 737. PSO flying is a different business model entirely.
09:51
Anonymous said…
Because Croatia Airlines is a failed company that needs to be propped up by government cash to survive.
09:51
Anonymous said…
Why no Brač in PSO tender?
09:52
Anonymous said…
It's always been open to real competition. Why are you writing this nonsense?

Anyone can apply for the PSO tender and Ryanair could even start flying these routes without any PSO agreement.
09:52
Anonymous said…
Zagreb-Dubrovnik on an A320 twice daily would work without any problem at all for Ryanair.
09:52
Anonymous said…
Instead of subsidising flights from the capital to the coast, why not use that money to develop rail or bus links? Air travel isn’t always the answer, especially on short distances.
09:52
Anonymous said…
I hope they don't. They charge extraordinarily high prices and offer very bad schedules.
09:53
Anonymous said…
You have no idea what you're talking about if that's what you believe.
09:53
Anonymous said…
@09:24 Croatia Airlines does not fill these planes.
09:54
Anonymous said…
Routes are not compensated per passenger. Stop with this ridiculous framing. PSO does not get paid out for passengers flown.
09:55
Anonymous said…
+1
09:55
Anonymous said…
I believe it's negotiated directly with the government but the metrics you listed are taken into consideration.
09:55
Anonymous said…
I am talking about how much the airlines received in previous tender based on passenger carried and the amount of money received per route (this is published on the EU's website)
599 euros per passenger on Osijek-Zagreb.
234 euros for Osijek Rijeka
etc
10:01
Anonymous said…
More lucrative than Mostar flights.
10:02
Anonymous said…
Ryanair need to be shut down by the EU. They are a company full of Irish criminals, destroying Aviation in Europe with their pretence low fares and dangerous Boeing 737 Max Aircraft which they try and disguise.
10:02
Anonymous said…
Some PSO rules:

Transparency-1: All awards, modifications and any
abolition of PSO routes, as well as the corresponding
calls for tenders, must be announced in the Official
Journal of the European Union (OJ EU).

Transparency-2: Air fares and conditions can be
quoted to users (in most cases maximum fares
are imposed)

Market failure: Market forces alone have failed to
create incentives for air carriers to provide scheduled
air services on the route.

No obstacle to market functioning: A PSO should
not limit the possibility for air carriers to provide
a higher level of service in terms of capacity and
frequency than minimum obligations required
under the PSO award. National authorities should
not interfere with the way the market fulfils these
obligations. In any case where more than one carrier
is interested to operate a route as an open PSO,
national authorities should not distribute frequencies
or capacities between those air carriers concerned.

Necessity: Routes are considered vital for the
economic and social development of the region
served (routes to an airport serving a peripheral or
development region or thin routes to any airport).

Proportionality & non-discrimination: PSOs are a
useful tool to enhance the contribution of aviation to
the overall competitiveness of the regions concerned.
They must be imposed in a non-discriminatory and
proportionate manner (e.g. no restrictions based on
passenger’s nationality or on the air carrier’s state of
origin, no selective promotion of specific air carriers/
airports).

No alternative: Inadequacy of alternative transport
modes connecting the route(s) under PSO.

EU law: Full compliance with EU Regulation 1008/2008
(compliance with national law only is insufficient).

Route-by-route basis: Necessity of PSO award
must be assessed for each route separately (no
network routes). A PSO cannot link two cities or
two regions, routes must be defined from airport to
airport. States may not make the award to one route

Geographic scope: A PSO route between an EU
airport and a non-EU (except EEA members) country
is not allowed. Intra-EU routes (not exclusively
domestic) are however allowed.
10:03
Anonymous said…
From my experience it they do, in summer flights departing split at whatever hour are full while morning and evening winter flights are fuelled by connections
10:06
Anonymous said…
What do you think airport subsidies and tax avoidance practices are? Free enterprise? Tax avoidance practices are only possible thanks to the dominance of corporations, which have long since taken control of the Western world. Or do you think that politics still serves the interests of individual citizens?

10:08
Anonymous said…
Could Slovenia opt for such a PSO tender?
10:21
Anonymous said…
LOL! Welcome to Soviet Union 1950!
10:29
Anonymous said…
can't believe it has already been 4 years since the last tender.
10:41
Anonymous said…
Can gurantee the list of routes will be just a copy and paste of 4 years ago. That's the easiset way.
10:43
Anonymous said…
Interesting. Thank you
10:48
Anonymous said…
Yes, it is expected that conditions will be created for it once the new aviation law is adopted in October.
10:49
Anonymous said…
This is a real opportunity to rethink domestic connectivity in Croatia. More competition, more accountability and hopefully better service for the regions that need it most.
11:24
Anonymous said…
Without doubt.
11:24
Anonymous said…
Time flies...
11:24
Anonymous said…
Fingers crossed
11:25
Anonymous said…
Why so much hate for Ryanair?
11:25
Anonymous said…
There is. It says in the article

Zagreb - Brač - Zagreb,
11:25
Anonymous said…
Because these routes are that profitable
11:33
Anonymous said…
Sky alps is great for Brac so i think he will aplly for this flights
11:44
Anonymous said…
You may think you are talking about that but your original comment said "Some routes are compensated up to 600 euros per passenger."
11:44
Anonymous said…
Can you give me an example of any EU country where foreign airlines are not fulfilling domestic demand please?
11:45
Anonymous said…
Yes thats is true,
Split and dubrovnik dont neeed to be in Pso tender with flight to zagreb
11:45
Anonymous said…
Your experience is not a very good indicator. Today is 3 July and none of the Split-Zagreb flights are full. In fact, OU 653 at 14:10 and OU 655 at 13:25 are nowhere near full and are selling in one of the lowest Economy fare classes even now on the day of the flight.
11:48
Anonymous said…
What airport subsidies are you talking about? Not a single airport in Ex-Yu gives "airport subsidies". And what "tax avoidance practices" are you talking about, please enlighten me.
11:50
Anonymous said…
What makes them questionable?
11:52
Anonymous said…
Croatia Airlines is useless, the government is corrupt, the airports wanna make money from the foreign airlines and do not want to bother with 3 passengers per day flying from Split to Pula or Osijek to Dubrovnik.
11:53
Anonymous said…
Ryanair hate is a symptom. All the Balkan conspiracy theorists hate it until it arrives in their local airport and they see with their own eyes that it is a perfectly normal company.
11:54
Anonymous said…
The shape of Croatia does not allow for good rail links. It is also a country with a very low population density so rail travel does not make sense.

Bus links are a problem because the government protects the big players and refuses to liberalise the market. FlixBus would start a million bus routes across the country if only it was allowed to.
11:56
Anonymous said…
Wow. There is general hate towards lowcost airlines in Balkan/ ex-yu.
12:25
Anonymous said…
Are you for real?or what, concerning PSO? Croatian PSO is useless and designed just to pour public money in OU. Slavonia, Istra/Kvarner and Dalmatia are NOT connected each with which other at all. Twice weekly one-direction flights are ridiculous and senseless. Each of the three regions should be connected minimum twice daily, every day, morning and evening, year-round, in order to have meaningful regional connectivity according to original PSO idea. Instead, Split and Dubrovnik are PSO to Zagreb, which won't be needed if ZAG was real hub, OU had decent network which strong coastal airports could feed, and if OU had competent management and Croatia competent government, not performing for interests and benefits of foreign countries and their carriers. Hailing Bravo for idiotism we currently have in aviation in Croatia is not only pathetic but equally idiotic. PIR
12:47
Anonymous said…
Of course. Uhljebs in the Ministery have much more important things to do. Singing Danke Deutschland for example. Or writing Bravo Hrvatska on every article. Or drinking coffee and gossip. Or some private things to do...
12:55
Anonymous said…
Agree with absolutely everything 11.53, except there are much much more passengers on routes you mentioned, and with propper PSO, they could be +100 daily. But as you said, useless OU and corrupt government is killing us softly...
12:58
Anonymous said…
It is clear what he meant.

599 euros per pax on OSI-ZAG? You can fly to Japan for that price.
13:07
Anonymous said…
Yes, if they survive.
13:07
Anonymous said…
Croatia Airlines is THE BEST airline in the EU. tačka
13:12
Anonymous said…
Brac neeed in sommer minimum 4 weakly flight to zagreb,
In winter time 2 flight,in somer they neeed 1flight to osijek

14:23
Anonymous said…
Will be great to have Pula Brac ,and Brac Dubrovnik..
14:23
Anonymous said…
OSI-ZAG is necessary because Osijek has barely any flights.
14:24
Anonymous said…
How do u see loads, don't look at seat maps as they only show pax that are checked in. I've been surprised many times
14:40
Anonymous said…
Best RUPA BEZ DNA in the EU for sure.
17:29
Anonymous said…
Good Lord 599EUR per pax 🤡
This is what I call a Get rich and keep pumpin" 😂
How will government forbid Rya to attend tender?
20:46
Mario said…
It's a national airline and I don't see nothing ridiculous in connecting the biggest city in East Croatia via plane. Tourists and business people connect via Zagreb to get to Osijek.
21:39
Anonymous said…
https://blogger.googleusercontent.com/img/a/AVvXsEgziE1Y-k-ayVUaLJKP2GuFssRZqu52shwR_kVwzNdIRTVUJn4U1Q15U83oQwMnRJd8dRMMzbYhAoDzecFL-1qnZ7LUtRF_AEE_Abf_5ibNa7L6CZW-zvHkaatbBRfPHUwXaf24RO29mjTpp7HljZ07eX9w_sLIzL23AGPmQ1vkCwAIcf-Jil3xg1Sv6w=s670
23:52
Anonymous said…
Unless Croatia Airlines or Trade Air press them to make some changes to these tenders, nothing will change.
23:52
Anonymous said…
Judging by the fact that theat LCCs rule the ex-Yu market, I would say it is mostly just keyboard worriors that are loud about it.
23:53
Anonymous said…
Who goes to Brac in winter?
23:54
Anonymous said…
And just a note Dubrovnik City Council also pays Croatia Airlines for the ZAG-DBV flights. So on top of the PSO money, Dubrovnik buys a certain amount of tickets on each flight. Nuts.
23:55
Anonymous said…
Their Mostar adventure does not seem to be doing so well.
00:07
Anonymous said…
And the government delayed it by 2 years. Original PSO tender ended in early 2020.
00:07
Anonymous said…
Is there a possibiltiy of introducing PSO to some other EU destinations?
00:08
Anonymous said…
To where from Croatia to where in the EU would a route be vital for it to be subsidised by European taxpayers?
00:12
Anonymous said…
True. Oleg certianly does not care.
00:12
Anonymous said…
Well there was covid
00:33
Anonymous said…
No there wasn't. Covid started in March 2020 while the new contracts were supposed to come into effect from march 2020. They hadn't even started tender procuedures at that point.
00:46
Anonymous said…
It seems like its the only way for LJU to get flights to some remaining key Europen destinations.
08:53
Anonymous said…
No one, but maybe locals want to get to the mainland.
08:54
Anonymous said…
I also don't see FR applying for any PSO routes.
08:54
Anonymous said…
Mario, unfortunately it is NOT national airline. They work for interests and benefits of Germany and their national airline, aircraft they operate are owned by Irish lessors, they don't connect properly all parts of Croatia with which other and even this OSI ZAG service is useless and with very very few passengers because they don't have network that the service could feed plus their prices are ridiculous. So, no, they are definitely not "national airline" and entire PSO is senseless, useless, and serves only to pump additional money in OU
13:21
Anonymous said…
That's not true. Dubrovnik subsidizes part of the ticket cost to its citizens, not to OU. Not by paying money nor buying tickets.
13:25
Anonymous said…
I suggest Vrankvurt and Minken 🤣🤣🤣
13:26
Anonymous said…
From all cro airports 🤣
13:27
Anonymous said…
0953, one way ticket DUB to ZAG on 3/9 costs eur44. Stop trolling!
13:28
Anonymous said…
You are being hysterical, pozz iz Čačka!
13:30
Anonymous said…
People who own properties on Brač, their family members and friends. Quite a sizeable group in Zagreb area actually!
13:33
Anonymous said…
I hope Ryanair wins ZAG - DBV and also launches ZAG -SJJ where they could sell tickets for €30 and fill two planes a day considering the strong demand, crazy OU prices and how long it takes to travel between the two cities by car or bus.
15:43
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