Serbia to launch PSO tender for Niš, Kraljevo flights
The Serbian government will launch an international public call for the provision of Public Service Obligation (PSO) flights from Niš Constantine the Great Airport and Kraljevo’s Morava Airport shortly. The existing two-year contract, which was awarded to Air Serbia, runs until December 31, after which the carrier has no tickets on sale from the two cities. Similar to two years ago, the tender process is expected to be swift. After the contract is awarded, the winning airline will have ten days to put tickets on sale and will be required to launch operations from January 1, 2024.
The Serbian Ministry for Construction, Transport and Infrastructure said, “Contracts for the provision of flights on routes declared to be of public interest by the Government of Serbia expire on December 31, 2023. Currently, tender documentation is being prepared for the initiation of an international public procurement procedure. The new contracts can only be signed after the 2024 Budget Law is adopted, from which funds will be provided. Similarly, existing contracts were signed in December 2021. After the new contracts are signed, the selected bidder can commence ticket sales for the routes in question”. Last year, the Serbian parliament adopted its Budget Law on December 9. However, Serbia is expected to hold early parliamentary elections in mid-December, and the country's Prime Minister has said the Budget Law will be adopted before the parliament’s dissolution. If elections are held on December 17, as floated by the authorities, parliament must be dissolved by law at least 45 days prior to election day, which would be in early November. Last week, the Serbian government adopted a draft of the Budget Law which allocates 5.2 million euros in subsidies for air transport for 2024.
Under its existing PSO contracts, Air Serbia operates year-round services from Niš to Belgrade, Cologne, Hahn, Istanbul and Ljubljana, as well as seasonal services to Athens and Tivat. From Kraljevo, it maintains year-round flights to Istanbul and seasonal operations to Thessaloniki and Tivat. The total value of the contracts awarded to the Serbian carrier over the two-year period amounts to around 23.8 million euros. In 2021, the Serbian carrier was the only one to apply for the tender. PSOs make funds available for unprofitable routes which are deemed to be of public importance and vital for the economic development of the region they serve. As a result, fares for the abovementioned routes from Niš and Kraljevo are significantly cheaper than those from Belgrade.
Niš Airport has benefited from the PSO flights with 2023 being its busiest year on record so far. It handled 355.518 passengers during the first three quarters of the year, up 20.3% on the pre-pandemic 2019, while its counterpart in Kraljevo welcomed 11.882 travellers. A new 11-million-euro passenger terminal is currently under construction in Niš and is expected to open during the 2024 summer season. Following its completion, the airport will have the capacity to handle 1.5 million passengers per year. Air Serbia has also expanded its operations in Niš by opening a call centre in the city, as well an aircraft balancing service. Earlier this year, it announced it would open a business lounge at Niš Airport’s new terminal upon its completion.
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