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.


Comments
Anyone can apply for the PSO tender and Ryanair could even start flying these routes without any PSO agreement.
599 euros per passenger on Osijek-Zagreb.
234 euros for Osijek Rijeka
etc
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.
Zagreb - Brač - Zagreb,
Split and dubrovnik dont neeed to be in Pso tender with flight to zagreb
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.
599 euros per pax on OSI-ZAG? You can fly to Japan for that price.
In winter time 2 flight,in somer they neeed 1flight to osijek
This is what I call a Get rich and keep pumpin" 😂
How will government forbid Rya to attend tender?