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.
If this happens then OU is done.
ReplyDeleteI think the same.
DeleteThe government will never pick a foreign carrier. This PSO funding is vital for OU. Some routes are compensated up to 600 euros per passenger.
DeleteRoutes are not compensated per passenger. Stop with this ridiculous framing. PSO does not get paid out for passengers flown.
DeleteI 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)
Delete599 euros per passenger on Osijek-Zagreb.
234 euros for Osijek Rijeka
etc
You may think you are talking about that but your original comment said "Some routes are compensated up to 600 euros per passenger."
DeleteIt is clear what he meant.
Delete599 euros per pax on OSI-ZAG? You can fly to Japan for that price.
Croatia Airlines is THE BEST airline in the EU. tačka
DeleteBest RUPA BEZ DNA in the EU for sure.
DeleteGood Lord 599EUR per pax 🤡
DeleteThis is what I call a Get rich and keep pumpin" 😂
How will government forbid Rya to attend tender?
https://blogger.googleusercontent.com/img/a/AVvXsEgziE1Y-k-ayVUaLJKP2GuFssRZqu52shwR_kVwzNdIRTVUJn4U1Q15U83oQwMnRJd8dRMMzbYhAoDzecFL-1qnZ7LUtRF_AEE_Abf_5ibNa7L6CZW-zvHkaatbBRfPHUwXaf24RO29mjTpp7HljZ07eX9w_sLIzL23AGPmQ1vkCwAIcf-Jil3xg1Sv6w=s670
DeleteBravo!
ReplyDeleteBravo to incompetent OU leadership for being so inactive that foreigners have to come to fulfill domestic demand.
DeleteCan you give me an example of any EU country where foreign airlines are not fulfilling domestic demand please?
DeleteBravo Hrvatska
ReplyDeleteAre 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
DeleteI 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.
ReplyDelete+1
DeleteMore lucrative than Mostar flights.
DeleteSky alps is great for Brac so i think he will aplly for this flights
DeleteYes, if they survive.
DeleteTheir Mostar adventure does not seem to be doing so well.
DeleteLast time the government made such a mess of this tender that Trade air had to suspend domestic flights for months.
ReplyDeleteAnd the government delayed it by 2 years. Original PSO tender ended in early 2020.
DeleteWell there was covid
DeleteNo 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.
DeletePSO for DBV is really not needed especially in the summer.
ReplyDeleteDubrovnik/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
DeleteZagreb-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.
DeleteBelieve it or not I think Croatia Airlines makes a loss on this route year-round.
Delete@09:24 Croatia Airlines does not fill these planes.
DeleteFrom 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
DeleteYes thats is true,
DeleteSplit and dubrovnik dont neeed to be in Pso tender with flight to zagreb
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.
DeleteHow 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
DeleteGood luck to OU, they should be awarded the whole lot. Keep Ryanair away!
ReplyDeleteWeird to see so many people cheering for planned economy in 2025.
DeleteRyanair is full of plan economy
DeleteYou have no idea what you're talking about if that's what you believe.
DeleteWhat 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?
DeleteWhat 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.
DeleteSome of these routes are so useless. They really need to overhaul the whole thing.
ReplyDeleteAgree. Wasted opportunities. Some route are unnecessary while others not included would be really beneficial.
DeleteIt's a shame that not more routes are included, especially from Rijeka.
ReplyDeleteHow 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?
ReplyDeleteI believe it's negotiated directly with the government but the metrics you listed are taken into consideration.
DeleteSome PSO rules:
DeleteTransparency-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.
Interesting. Thank you
DeleteGood luck Croatia Airlines and Trade Air. Hope they get those 4 year contacts again.
ReplyDeleteI hope they don't. They charge extraordinarily high prices and offer very bad schedules.
DeleteThe 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.
ReplyDeleteOSI-ZAG route is ridiculous.
ReplyDeleteOSI-ZAG is necessary because Osijek has barely any flights.
DeleteIt'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.
DeleteRyanair's A320s and B737s are too large for these routes.
ReplyDeleteAnd OU's A220s are not?
DeleteZagreb-Dubrovnik on an A320 twice daily would work without any problem at all for Ryanair.
DeleteIt’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.
ReplyDeleteIt's always been open to real competition. Why are you writing this nonsense?
DeleteAnyone can apply for the PSO tender and Ryanair could even start flying these routes without any PSO agreement.
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.
ReplyDeleteI 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.
DeleteWhat makes them questionable?
DeleteWhy 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.
ReplyDeleteBecause Croatia Airlines is a failed company that needs to be propped up by government cash to survive.
DeleteBecause these routes are that profitable
DeleteAnd 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.
DeleteGood to hear Ryanair is at least considering entering the domestic market. But I wouldn’t hold my breath.
ReplyDeleteThere is 0 chance Ryanair will fly any of these routes.
DeleteThe 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.
DeleteWhy no Brač in PSO tender?
ReplyDeleteThere is. It says in the article
DeleteZagreb - Brač - Zagreb,
Brac neeed in sommer minimum 4 weakly flight to zagreb,
DeleteIn winter time 2 flight,in somer they neeed 1flight to osijek
Who goes to Brac in winter?
DeleteInstead 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.
ReplyDeleteThe 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.
DeleteBus 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.
Will be great to have Pula Brac ,and Brac Dubrovnik..
DeleteRyanair 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.
ReplyDeleteLOL! Welcome to Soviet Union 1950!
DeleteWhy so much hate for Ryanair?
DeleteRyanair 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.
DeleteWow. There is general hate towards lowcost airlines in Balkan/ ex-yu.
DeleteJudging 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.
DeleteCould Slovenia opt for such a PSO tender?
ReplyDeleteYes, it is expected that conditions will be created for it once the new aviation law is adopted in October.
DeleteFingers crossed
Deletecan't believe it has already been 4 years since the last tender.
ReplyDeleteTime flies...
DeleteCan gurantee the list of routes will be just a copy and paste of 4 years ago. That's the easiset way.
ReplyDeleteWithout doubt.
DeleteOf 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...
DeleteThis 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.
ReplyDeleteCroatia 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.
DeleteAgree 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...
DeleteUnless Croatia Airlines or Trade Air press them to make some changes to these tenders, nothing will change.
ReplyDeleteTrue. Oleg certianly does not care.
DeleteIs there a possibiltiy of introducing PSO to some other EU destinations?
ReplyDeleteTo where from Croatia to where in the EU would a route be vital for it to be subsidised by European taxpayers?
Delete