Ryanair has reiterated that Croatia must abolish its passenger departure tax and reduce Public Service Obligation (PSO) spending in order to secure further growth from the low cost carrier. The airline’s Chief Commercial Office, Jason McGuiness, said, “The market is extremely competitive, and Croatia must remain competitive if it wants to continue growing. There are concrete steps the government can take, such as abolishing the 1.8-euro tax per departing passenger, which is not imposed by any other country. Significant funds are also being allocated to PSO routes with very low load factors, indicating that they do not correspond to the real needs of passengers”.
Mr McGuinness has said there are no plans for the low cost airline to commence domestic flights. “We are not ruling out that possibility, although it is not currently planned. However, we remain open to discussions should there be interest. In Italy, for example, we operate around 130 domestic routes, while we also run domestic flights in Spain and Morocco”, the CCO said. He added, “Croatia must remain competitive because Ryanair operates in forty countries, most of which are actively reducing costs in order to attract additional traffic. Competition is intense and Croatia must continue working to strengthen its position. We clearly reward countries and airports that reduce costs, while reducing capacity in markets where costs rise or additional taxes are introduced”.
Commenting on its operations out of Zagreb and the lack of new routes from the Croatian capital this year, Mr McGuinness noted, “There are no issues. This season we are focused on increasing frequencies on existing routes. One example is London Stansted, which now has twelve weekly flights. Over the past five years we have increased the number of routes from around forty to 118, and we are now further strengthening frequencies to provide passengers with greater flexibility and choice”. He added, “Zagreb had high fares for a long time, whereas today passengers can fly to London for as little as 29.99 euros. Greater connectivity benefits passengers, tourism and the wider economy. People want more routes and more choice throughout the year, and we are ready to work with Croatian airports to help make that happen”.
It seems fairytale between FR and ZAG is coming to an end.
ReplyDeleteBased on what?
DeleteYup, they are putting pressure on 4sure
DeleteWhat fairytale and why is it over? What are you on about
DeleteCroatia posts record loss -> trigger for Ryanair to start extorting for a better deal.
DeleteAnd they will surely do it.
DeleteNo new routes from ZAG in this year, 4 destinations canceled, complaining about taxes...Already proven way of putting some airport under the pressure.
Without WizzAir or if OU goes bankrupt Zagreb Airport is in huge problem. Ryanair is well known for its predatory tactics
Delete@Anon 10:28 OU will not go bankrupt no matter how heavy the losses get the government will always Save them
DeleteI'm not sure OU's bankrupt would be bigger problem for ZAG than OU staying like this... With pure PSO and LH focus, OU is limiting ZAG's growth.
DeleteCroatia must... Tu sam stao...
DeleteRyanair always says the same thing in every country
ReplyDeleteTrue dat.
DeleteExactly, really sounds like a broken record...
DeleteThey tried the same trick in Greece and in Spain. Neither of them bowed, Ryanair eventually gave in and returned after losing a significant market share to other LCCs
DeleteSwindling airports is their specialty, but it doesn't always work
Nonsense. Greece has lost significant Ryanair connectivity including many inter-island routes. Spain also lost out because the small airports and niche routes don't have the Ryanair flights that they used to have.
DeleteRyanair didn't "return", it just reallocated capacity to the big airports and big routes. Small airports lost out.
Greece has most definitely not lost anything. While Ryanair was throwing tantrums, Sky Express went from a small ATR operator to running 10+ jet aircraft on top of its turboprops, taking a huge chunk of Ryanair's market share. Not to mention that ATH didn't cave at all and Ryanair not only failed to secure extra discounts, but also lost the volume-based discounts it previously had at the airport. All in all, an absolute botched job.
DeleteCroatia is obviously next on the list.
DeleteRyanair left ATH and returned after when they saw Aegean huge expansion and sky express booming
DeleteThe 1.8-euro tax really isn’t that high. Many countries have much higher passenger taxes. Ryanair just uses these arguments everywhere to negotiate better deals with airports and governments.
ReplyDeleteWhat do you mean it isn't high? It's about 5% of Ryanair's average fare. That's a HUGE cost for a profit-orientated airline.
DeleteIt's not that simple, not every ticket is sold for 35-40 EUR. My guess is it's an average of at least 55-60 EUR. And if the tax is say 2-2,5% of the ticket price, it's still significant for a narrow profit margin industry. And FR of course knows how to make drama.
DeleteYou calculate profit margin after the taxes, it's pure cost for a company same as fuel.
DeleteThese prices are one way prices.
DeleteSo, it ends up to in average more than 100 EUR for return ticket.
@09:46
Delete"...it's still significant for a narrow profit margin industry..."
You are just repeating the Ryanair narrative, but the actual facts are different. If it is such a "narrow profit" situation, how come Ryanair keep having billions in profits?
"Ryanair profits rose 42 per cent to €2.54 billion in the six months to the end of September [2025], the airline said on Monday, after a record performance in its second quarter."
But divide it with their income and you'll see it is a narrow profit margin industry
Delete1.8 euro tax is tiny compared to Germany with 15 euro tax, or more for farther destinations.
Delete@annon 10:41 - exactly, that's tiny. Some people here would give everything for free to Ryanair. Stupid strategy.
DeleteRegardless of what people think about Ryanair’s tactics, the facts are clear. Since they expanded in Croatia the number of routes and passengers has exploded. Zagreb especially.
ReplyDeleteI am Croatian and I am fully behind them and everything they said. The PSO is useless, Croatia Airlines is a national disgrace, and the government should stop spending millions on failing OU and lower taxes and fees for everyone instead of
Delete+1, Ryanair has done more for connectivity and enabling widespread affordable air travel, especially in Zagreb, than anyone ever hoped for. People who never stepped foot on an airport are now taking Ryanair for their holidays and to visit family and friends.
DeleteThe cost of that is some 100 million for OU trying to cope with market and several millions for incentives. I don't say it's too much, maybe it's peanuts for Croatia, but it's fair to say that at the end your vacation at Paphos comes with a price bigger than stated at Ryan's website and paid by every citizen...
DeleteI really don't think the 25 euros every citizen of Croatia paid into OU would be any smaller if the 40 euro flights to Paphos didn't exist.
DeleteIt would be smaller. There is a great article here from couple of days ago regarding OU financial results through the years. But again, could be that it's fine for Croatia to spend this money when compared to benefits. Just don't call it free or cheap...
DeleteThe Citizens aren't paying for OU. The government makes much more tax out of tourists to cover the tiny amount it invests in OU.
DeleteTourists are in the country few months ina year while citizens pay for taxes whole year.
Delete1244, it's about the amount, not the duration.
DeleteI’m afraid tourists leave mess which is then sorted from their taxes. Who’s paying daily cleaning of every seaside city?
DeleteIf Ryanair takes off some other airline fills inn. No worries for the croatian gov.
ReplyDeleteTbh i might even think gov would be happy if they leave zagreb. Croatia airlines would breathe easier
DeleteIf Ryanair takes off, NO ONE will fill the gap in Zagreb. No one. Croatia Airlines doesn't even fly to Rome non-stop. Zagreb would lose Spanish destinations, Greek islands, Italian cities, Basel, Manchester etc. There are zero airlines that would jump in here.
DeleteProbably we would see again Vueling for flights to Spain.
DeleteAgree with anon 09:24, not that radical dough. Some routs would be covered but vast majority wouldn't. And with legacies and a legacy airline prices. ZAG talks with Wizz is just a B/S.
DeletePSO routes exist for connectivity, not profitability. Of course load factors are lower. These flights are meant to connect smaller regions. Ryanair comparing them to commercial routes doesn’t make much sense.
ReplyDeleteAnd routes like Rijeka Zadar, or Split Dubrovnik, or Osijek Zagreb are needed?! To whom and why as barely anyone uses them?!
DeleteThe PSO criticism might also be aimed indirectly at Croatia Airlines. If the government spends less on PSO subsidies then they would redirect those funds into airport incentives that Ryanair could benefit from.
Delete"PSO routes exist for connectivity, not profitability. "
DeleteDo you even understand your own comment? These PSO routes are literally being used to help Trade Air and Croatia Airlines be more profitable and they are totally useless for connectivity.
What connectivity benefit is there to a flight between Zagreb and Osijek that is taken by 2 people per day??
It is nothing but additional and quite obvious way to subsidize airlines in Croatia.
DeletePSO can't be profitable by design. The company gets money which is difference between the actual sales (mainly tickets) and the cost of operation. It could be a lot of money for OSI-ZAG service but it covers not so small costs, doesn't go to profit directly. There's profit margin allowed, up to 5% I believe. They get a lot of cash and a little of profit of this PSO. Unless they pump the costs through some invoices which would be a crime.
DeleteInteresting that Ryanair says there are no issues in Zagreb yet they are not launching any new routes this year. Increasing frequencies is good but the airport probably expected more growth considering how aggressively Ryanair expanded in the past few years.
ReplyDeleteOn the contrary, the airport doesn't want any growth because it would mean a fixed cost increase, a massive capital investment into expending the terminal, and the need to hire and train and supervise extra staff. It's much easier for the status quo to continue.
DeleteI do not think Ryanair cares at all about Zagreb Airport's contract obligations.
DeleteIf Ryanair ever launched domestic flights in Croatia it would completely change the market. Zagreb–Dubrovnik or Zagreb–Split with Ryanair fares would destroy the current pricing.
ReplyDeleteNo it wouldn't. Croatia Airlines would keep prices the same and fly empty planes, just like it does now from Zagreb to Sarajevo or Zadar/Pula (where it even sends an A319 sometimes despite there being almost no passengers)
DeleteCroatia already gives plenty of incentives to airlines. If anything, the government should focus more on developing Croatia Airlines instead of constantly negotiating with LCCs.
ReplyDeleteCroatia gives precisely ZERO incentives to airlines. The only thing that Croatia gives is PSO funding but they are incompetent even to make that successful.
Delete^ What are you talking about? All airports give incentives and all airports except Zagreb are government run. The country also gives incentives through udruzeno oglasavanje.
DeleteOU is also getting huge incentives to stay irrelevant LH feeder.
DeleteAnd what is "Udruzeno oglasavanje" in Croatia?
DeleteEven United is getting that money to fly to DBV.
For example, United gets money for Split ads in their magazine and social media... A clean way to incentivize the companies, and when done smart it can be even rational. I remember one cool and maybe effective program with JU and Spanish national tourist organization 3-4 years ago...
Delete"precisely ZERO"
DeleteRyan dobiva prilične novce od Zagreba i ostalih aerodroma u Hrvatskoj!
The comment about Zagreb fares is true. Five or six years ago flying from Zagreb was extremely expensive compared to nearby airports. Competition forced prices down and passengers are the biggest winners.
ReplyDeleteThat would be great achivement if the airports were designed as non-profit organizations.
DeleteI’m curious whether Ryanair is pushing this because they want even bigger expansion in Zagreb. 118 routes across Croatia is already impressive, but clearly they think there is still room for growth.
ReplyDeleteThere is always room for growth of fees are lower because low ticket prices will always attract new passengers.
DeleteToo many people think they have right to order someone what to do. "Croatia must" this guy said 3 times in very short statement...
ReplyDelete0930, agree. No way to talk to decision makers. Arrogance will cost them.
DeleteLie down with dogs, get fleas. Zagreb should work on inviting another low cost carrier for negotiating leverage.
ReplyDelete+1
DeleteZAG needs Wizz. Then they'll zip their mouth.
ReplyDeleteZAG does not have 2 of 3 biggest LCC's in Europe.
DeleteIt is a disaster.
What sillyness
DeleteIt is interesting to carefully read what Jason McGuiness is saying.
ReplyDelete"The market is extremely competitive, and Croatia must remain competitive if it wants to continue growing..."
Well, if market is extremely competitive, then it demonstrates that there is a high interest for operating those routes, which in turns means that there is little reason for Croatia to subsidise those routes. How can this be an argument for reducing taxes? Quite the oposite. The market is there and if they don't want to fly, there are others that will. At least, if it is true that it is "such a competitive market" as he claims.
"Significant funds are also being allocated to PSO routes with very low load factors, indicating that they do not correspond to the real needs of passengers"
Another nonsense. PSO is a mechanism to increase connectivity where there is no sufficient demand for commercial operations. It is not a problem that PSO routes have very low load factors, it is a problem when the government pay PSO for routes that are full and can be flown commercially (like Zagreb-Dubrovnik in summer). I am sure that the choice of hardware can be optimised so that A220 doesn't fly around with 30 passengers on some routes, but that is a whole different story and a complete mess with OU.
So, what Ryanair is saying here is a pure, standard blackmail - give us more money or we are not expanding, and god forbid you think about any increase, we will pack up and leave immediately. And if you check what kind of profits Ryanair posted for the previous years, any discussion about "low profit margin" is absurd.
"The market is extremely competitive, and Croatia must remain competitive if it wants to continue growing..." He's talking about tourism market (Spain, Albania, Croatia...), I think. But yes, Ryan is talking Ryan things. For a market which is sure about its product, this is just a PR stunt. For those not so sure about their own strategy, it's a blackmail.
Delete@10:44
DeleteI agree. But, in that case, that is also not really correct. All these markets are already oversaturated with tourists and I don't see that there is any danger that Croatia's summer season might "fail" if Ryanair reduces flights. With the current situation in the Middle East, European summer markets are only going to see increase in volumes (if that is even physically possible :)
True that, ME and Cyprus issues (Crete too close also, has a military base) could move people to Adriatic and western Mediterranean, Ryan will follow. It is heavy saturated but still the markets grow each year. Mainly now due to prolonging the season before and after the summer but even in the peak months there's still an increase. Everyone loves southern Europe :)
DeleteGolub, you didn't really get what he's saying.
DeleteAlso, "The market is there and if they don't want to fly, there are others that will."
Only someone utterly clueless about the realities of aviation can write this. You think Zadar can replace Ryanair? It would lose 75% of its passengers. You think Zagreb can replace Ryanair? Who will fly to Malta, Kos, Corfu, Palma, Rome directly, Cyprus, Canaries?
In normal, non-corrupt societies, OU would be flying majority of those routes.
DeleteUnrelated to that, how big of a tragedy would it be if Ryan was to stop those routes? The economy would have collapsed? There wouldn't be enough tourists? If the market and demand is there, there would have been alternatives. If there is no demand and the route is important, a strong OU would get a subsidy and fly. If neither, then fine - are we just chasing numbers to see who has a bigger one?
So, what I am saying is, once you start making concessions to a bully, you are only going south from there. As if it is not enough that OU is kneeling in front of LHG and paying to be a servant, now you want to kneel before Ryan's blackmail? Fine. A couple of millions every year for Ryan, dozens of millions for dysfunctional OU, pay out of your own pocket to develop and maintain infrastructure, give your main airport in concession... Sounds peachy. Instead, you could have OU that is in black, carriers that pay their fair share and that is then used to develop and maintain infrastructure... But, why bother, we could lose 75% of Zadar and fall behind in the regional race to ever higher numbers.
Not sure how clueless I am about "realities of aviation", but my logic is not failing me yet.
I hate that there is no VAT or fuel tax on airlines, and they treat it as God given right. They should be taxed the same way as busses, trains and boats, not like special snowflakes.
ReplyDeleteIt's not on airlines, it's on us. The buyers are paying VAT, the seller is literally just transferring it to the state and then brag how much they paid to the budget.
DeleteOf course, all taxes are on customers in the end, but it gives unfair advantage to airlines compared to other modes of transport. And all these passenger taxes are silly replacements to VAT without it being VAT.
DeleteRyanair’s strategy is very simple: keep costs low or they move aircraft elsewhere. They have dozens of bases across Europe and can shift capacity quickly. Croatia should take this seriously because competition between countries for airline capacity is real.
ReplyDeleteZadar probably benefited the most from Ryanair in Croatia. Without them the airport would have a fraction of today’s traffic.
ReplyDeleteWithout doubt.
DeleteThey have something like 80% share there.
Delete