Authorities eye EX-YU airport growth through airline subsidies

Several airports in the former Yugoslavia are set to benefit from subsidies provided by state or local authorities to airlines that are willing to establish operations. There are currently three public calls taking place related to Sarajevo, Ljubljana and Tuzla, with tender procedures for the upkeep of flights from Niš and Kraljevo to begin later this month.

The public call for airlines to launch operations or establish a base in Sarajevo closed yesterday, with funds to be made available to carriers that either introduce flights from a destination that has not been served in the past twelve months, start services to one of 26 destinations deemed to be of strategic importance, station an aircraft in Bosnia and Herzegovina’s capital or commence flights longer than six hours. The value of the subsidies has not been made public. During a similar tender earlier this year, three airlines applied - Wizz Air for its London Luton service, Jordan Aviation with plans to establish a base, and Bosnia Airlines, which does not have an Air Operator’s Certificate. Only Wizz Air met the tender conditions.

Slovenia has issued a third tender call for airlines to introduce new routes to the country in return for subsidies lasting over a period of three years. Although the public call includes all three of Slovenia’s commercial airports, only services to Ljubljana have garnered interest. The ongoing tender, for which the state has allocated 16.8 million euros in subsidies divided over three years, or 5.6 million euros per year, will close on November 27. The previous two public calls generated mixed results, which the government has labelled as “disappointing”. Luxair and airBaltic were the only two to apply. The national carrier of Luxembourg has since launched operations to the Slovenian capital, with airBaltic to follow suit with services from Riga in May of next year. Only airlines registered and based in the European Common Aviation Area (ECAA) are eligible for the subsidies. The ECAA is made up of states that are part of the European Union, as well as Albania, Bosnia and Herzegovina, Serbia, Iceland, Macedonia, Norway and Montenegro. The Slovenian government is primarily targeting the introduction of flights from Vienna, Copenhagen, Madrid, Prague, Berlin, Rome, Stockholm, Oslo, Barcelona and Lisbon to Ljubljana, although all unserved destinations within the ECAA are eligible.

Tuzla Airport launched tender procedures to subsidise flights to the airport last Friday, with the deadline for the submission of bids expiring next Monday, November 20. The terms and conditions of the tender have not been made public and can only be obtained by interested airlines. The funds will be provided by the Tuzla Canton government. It has allocated roughly 1.27 million euros in subsidies. On the other hand, during the second half of November, the Serbian government will launch tender procedures for the upkeep of existing Public Service Obligation flights from Niš and Kraljevo from January 1, 2024 until December 31, 2027. Subsidies will be provided for year-round services from Niš to Belgrade, Cologne, Hahn, Istanbul and Ljubljana, as well as seasonal flights to Athens and Tivat. From Kraljevo, year-round operations to Istanbul will be subsidised, as well as seasonal services to Athens and Tivat.