Croatia in talks with several carriers over domestic PSO flights
The Croatian Ministry for Sea, Transport and Infrastructure has defended a delay in awarding contracts for domestic Public Service Obligation (PSO) flights, noting there has been interest from a number of airlines, which has resulted in additional screening and reviews. The four-year contracts, which provide European Union funds for the upkeep of domestic services deemed commercially unprofitable, were to come into force on May 1. However, the state has not even selected the operating carriers for the twelve routes despite holding a tender back in December of last year. As a result, Croatia’s Trade Air, which has maintained a considerable number of PSO flights, suspended all of its domestic operations at the start of the month. Croatia Airlines, which is also the beneficiary of PSO subsidies, has continued its domestic services, albeit without EU funding.
Commenting on the matter, the Ministry said, “Consultations have been held with a number of interested bidders. While processing each offer, the need arised for a more detailed analysis of some of the bids received, especially due to supply chain difficulties in the industry caused by the Covid-19 pandemic (such as a lack of crew and capacity, variable costs, etc.)”. It added, “Bearing in mind the additional screening and consultations, as well as the extra time required to prepare the necessary documentation, there have been adjustments made to the planned dynamic of the tender. All bidders have been informed of these circumstances and we do not expect for this delay to have a significant impact on the reduction of existing domestic operations until the selection process is completed”. The Ministry gave no hint as to when the process may be finalised, although it is believed the contracts could be signed by the end of the month.
Croatia Airlines and Trade Air are the only two carriers to have previously won contracts to operate subsidised domestic flights in Croatia, although any airline registered within the European Union that meets the tender criteria can apply. It is unknown whether other carriers had previously taken part in the tenders. Due to the Covid-19 pandemic, a number of smaller airlines have started applying for PSO contracts across the continent. Furthermore, low cost carrier Ryanair said last year it would consider taking part in tender procedures in Croatia after evaluating the terms and conditions. Due to Trade Air’s domestic service suspensions, Rijeka Airport no longer has any domestic flights.
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