Croatia approves €78.7 million in domestic flight subsidies
The Croatian government has finally adopted a decision to declare Croatia Airlines and Trade Air as the two carriers that will operate subsidised Public Service Obligation (PSO) domestic flights for a period of four years. The two carriers will share 78.7 million euros in funding between them to cover the losses the flights are expected to generate, with Croatia Airlines being the beneficiary of 54 million euros for the upkeep of six routes, while Trade Air has been granted 24 million euros for the same number of routes. The funding has been notably increased compared to the previous PSO contracts held by the two airlines, which amounted to 45.6 million euros for Croatia Airlines and ten million euros for Trade Air.
The process to select the PSO flight operators has been severely delayed by the Croatian government. After initially pushing back the tender by a year and a half due to the Coronavirus pandemic, contracts were set to be finalised at the end of last year, however, this did not materialise. A total of five airlines acquired the tender documentation but only the two Croatian carriers applied. Trade Air suspended its domestic flights in late April after its previous contract with the Croatian government expired. On the other hand, Croatia Airlines has continued to maintain its PSO services, irrespective of the lack of funding. The new PSO contracts run until March 28, 2026.
Croatia Airlines’ routes that are subject to the latest PSO funding are: Dubrovnik - Zagreb -Dubrovnik, Split - Zagreb - Split, Zagreb - Zadar - Pula - Zadar - Zagreb, Zagreb - Brač - Zagreb, Osijek - Dubrovnik - Osijek and Osijek - Split - Osijek. Trade Air will operate the following PSO routes: Osijek - Zagreb - Osijek, Osijek - Pula - Split - Pula - Osijek, Osijek - Rijeka - Osijek, Rijeka - Split - Dubrovnik - Split - Rijeka, Rijeka - Zadar - Rijeka and Osijek - Zadar - Osijek. Trade Air has previously said it will wet-lease a Saab 340 turboprop aircraft for the domestic services.
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