Croatian domestic flights face funding shortfall
The Croatian government is yet to begin tender procedures for awarding Public Service Obligation (PSO) flight contracts to airlines despite the existing four-year agreement with Croatia Airlines and Trade Air expiring in just two weeks. PSOs make European funds available for unprofitable, primarily domestic, routes which are vital for the economic development of the region they serve. The call for tender for a renewed PSO contract period and the information notice, which must be published in the EU’s official journal, is six months before the projected start of any new concession. The current PSO contracts in Croatia cover the national carrier's routes from Zagreb to Dubrovnik, Split, Zadar, Pula and Brač, as well as from Dubrovnik and Split to Osijek. It also includes Trade Air's services from Osijek to Dubrovnik, Split, Pula, Zagreb and Rijeka, as well as from Rijeka to Dubrovnik and Split.
Croatia Airlines plans to maintain all of its domestic routes this summer, despite a lack of PSO funding, with the understanding the cost will be retroactively covered. However, Trade Air, which wetleases a turboprop aircraft for its inter-Croatian routes, has no tickets on sale for any of its existing scheduled services, which link six cities in the country, past March 29. Despite warnings from local politicians that certain airports, most notably Osijek, will suffer from the government’s lack of initiative, the Minister for Sea, Transport and Infrastructure, Oleg Butković, has refused to directly respond to the claims, noting that politicians from the country’s largest opposition party are stoking unnecessary fear.
The Croatian national carrier receives 11.4 million euros in annual compensation for the domestic services. The largest amount, 4.2 million euros per year, goes towards maintaining flights between Split and Zagreb, where the airline is remunerated some 22 euros per passenger carried, although the largest compensation per traveller is on the Zagreb – Pula - Zadar service, totalling 177 euros. The value of Trade Air's PSO contracts amount to 2.5 million euros per year. The largest share of the subsidies goes towards the upkeep of the Osijek - Zagreb service (1.3 million euros per year), where the airline is compensated approximately 599 euros per passenger.
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