The Slovenian government will launch tender procedures to support carriers flying to Ljubljana Airport in an attempt to mitigate and remedy the consequences of the Covid-19 pandemic. The state will offer a lump sum of six million euros, which will be divided amongst airlines that apply for the incentives. The beneficiaries of the subsidy will be chosen based on several factors. "We are planning to offer non-refundable aid in the form of a lump sum, which is expected to take into account the number of scheduled flights to Slovenia, the number of passengers carried and any other decisive factors", the country’s Ministry of Economy said. According to the daily “Delo”, the terms and conditions of the public call are yet to be finalised.
The funds will be provided as part of Slovenia’s fifth coronavirus stimulus package. “It has been proposed for the subsidies to cover part of the costs incurred by airlines flying to Slovenia. The funds are expected to be made available in 2020 and 2021. By subsidising routes, we intend to improve Slovenia’s air connectivity, which was first impacted by the collapse of Adria Airways and then by the Covid-19 pandemic. Tourism has been growing year on year until the pandemic, and Slovenia will be a popular destination in 2021 based on a number of forecasts. We must ensure that people who want to visit our country can do so other than by car”, the Ministry said.
Ljubljana Airport’s operator, Fraport Slovenija, has been advocating for the state to offer incentives to airlines, including a ten-euro subsidy per passenger flown. The airport’s General Manager, Zmago Skobir, previously said, “It’s of paramount importance to keep existing routes so they're here when passengers regain their trust in travel. There is fierce competition for air carriers among airports. Good connections will be key next year, when Slovenia presides over the Council of the European Union during the second half of 2021”. The Slovenian government considered offering incentives to airlines following the collapse of Adria Airways last September, however, the initiative was struck down in committee hearings in parliament.
Good decision.
ReplyDeleteDesperate times require desperate measures.
Is this only for airlines that currently fly to LJU or will it be open for anyone?
ReplyDelete"the terms and conditions of the public call are yet to be finalised. "
DeleteJust another way to give money to Lufrhansa.
ReplyDeleteYep, they will probably get the most money.
DeleteTo be fair, they operate the most flights.
DeleteGood decision.
ReplyDeleteThey finally came to their senses.
ReplyDeleteAfter reading yesterday's article, I realise why this is necessary.
ReplyDeleteCan't come soon enough by the looks of it.
DeleteFirst Sarajevo, now Ljubljana.
ReplyDeleteSarajevo one is for a base. This tender is for airines to keep flying to LJU.
DeleteIn my opinion LJU should do what SJJ is doing.
DeleteI agree. It's a smarter use of subsidies.
DeleteNe vidim smisao subvencionisanja prodatih karata jer cena karte neće uticati na povećanje potražnje.U današnje vreme leti samo onaj ko mora. Bolje je da su dali 9E po praznom sedištu što bi sigurno doprinelo pokretanju novih linija.
ReplyDeleteIsn't it a bit late to offer subsidies for 2020?
ReplyDeleteWizz will jump like a vulture in no time. They love those sweet subsidies.
ReplyDeletewhich airline does not?
DeleteThem more than others.
DeleteThen they cry about 'unfair state aid'.
DeleteWell this sort of aid is open to everyone, unlike state aid.
DeleteStill hoping OU have not given up plans basing an aircraft in LJU.
ReplyDeleteThey've gone quiet about it...
DeleteThis could be a beginning of a new chapter for LJU.
ReplyDeleteSeriously?
Delete@anon 09:23
Deleteyou are so pessimistic, next week we will have Wizz, Easy and Ryanair based in LJU :)
And new carrier. Seriously? Three airlines to base aircraft in the, sadly but it is now, village airport. Bigger airports couldn't do that, not LJU with just 4 airlines
DeleteJatovac, you did not catch my sarcasm in previous post? :)
DeleteSorry, I have not read it like that. I am happy to hear that it was sarcasm
DeleteSmart move finally
ReplyDeleteShouldn't the airport operator provide incentives for airlines???
ReplyDeleteYes they should, I don't know why we (taxpayers) should pay for their mistakes!
DeleteCorona is not Fraport's fault.
DeleteAgree, Covid is not Fraport's fault but Covid is everywhere and still LJU has highest decline in all possible KPIs among ex-yu airports. And that's Fraport fault!
DeleteBut that has not changed for more than a decade, they bought LJU when situation was the same (good road conx, very limited diaspora and tourism possibilities). So they knew what they have and they didn't do anything. On contrary when there was interest to establish new national carrier they were the loudest that Slovenia does not need that and that market will take of itself. Who in their right mind would do something like that? So it is their fault..
DeleteFrom their point of view it makes a lot of sense. A new national carrier would likely end up the same as Adria, with millions of EUR in unpaid debts, to Fraport themselves among others. This way the government foots the bill and the airport collects its fees.
DeleteI would not say that it makes sense. Most of Fraport's debt is secured, they have only around 250k € opened receivables so in comparison how much they received from JP this is peanuts. Because of JP they are able to build new terminal, without JP (or any other carrier base in LJU) we can see actual situation.
DeleteFraport cannot manage number of cases in Slovenia and travel restrictions imposed by the goverment. When you are restricting entry from most of the european countries of course a lot of carrier will go.
Delete@anon Plane Mad
DeleteAnd what would you do? simply close airport? There is always demand, it's not the same as ZAG or BEG but at least airport should provide decent connectivity.
@anon 13:38
that's happening all around the world and they do not have such decline as LJU. Incompetent managers..
You did not even try to read my comment to the end at 13:38.
DeleteLet the market sort it out, no incentives
ReplyDeleteWe've seen how well the market sorted itself out. We will have 4 airiness flying from next week.
DeleteIf you let the market sort itself out, I fear there will be no airlines left in LJU
DeleteThat's the consequence of "we don't need national carrier" and "let the market sort it out" mentality...
Deletebut the airport management has said always dont Save Adria let the market sort it self out, now the same should be done about the airport.
Deleteagree this 'saying' was started by Fraport Slovenia management
DeleteActually, a lot of commentators on ex-yu were saying 6 months ago how they would be better off without Adria. A lot of cheap flights to all sorts of destinations.
DeleteThey knew why they were doing, guess who will get most of that incentives? Any company related to Fraport? Just asking..
DeleteHope it works out
ReplyDeleteDepends on when these subsidies are for. If they are for airlines operating to LJU in 2020, forget it and save your money. If, however, these are subsidies designed to entice airlines in 2021 (when the recovery will start), then quite a wise decision - certainly more so than opening a new airline. Timing is key!
ReplyDeleteAny arguments why is this better than opening new airline? If foreign carriers will not place aircraft in LJU, than connectivity will not get any better. And in current conditions this incentives are only to keep flying to LJU, not to base aircraft there. That's not good at all..
DeleteWhat benefits do actually having aircraft based somewhere provide? As long as they are able to provide the same level of service, such as early departures and late arrivals, transfers and so on, that's what matters. Why is it so important to open an AOC, lease aircraft, hire crew and so on, when no matter how efficient the operation, it will never be as competitive as larger more established carriers, and hence just begin a slow march to insolvency from the very start. It's simple economies of scale, the days of setting up a national carrier for every country are long gone. Name one stand-alone airline that has been set up in Europe in the past decade that has become successful.
DeleteActually it can provide one of the most important thing when we are talking about aviation, it's called connectivity. In aviation even 5 min means a lot in terms of connectivity possibilities, that's why it's important to arrive at EU hubs as early as possible to catch good connections. Without aircraft based at LJU you will not get good product, same happened with LH before they changed their schedule.
DeleteAnd how many successful airlines do you have in exyu? or even around the world? Probably less than 1% of all operating. Does that mean that all of those which are not profitable have to go bust?
@anon 10:54: yes, but you forgot this forum's favourite (with regards to SLO): nieces and nephews and other ex JP staff need low-work, decent pay jobs! :)
DeleteFor you it seems it's better to give your money to foreigners than to own nieces and nephews. Ko ce kome ako ne svoj svome..
Delete"Probably less than 1% of all operating. Does that mean that all of those which are not profitable have to go bust?"
DeleteIs this guy sarcastic or he really thinks less then 1 % of airlines in 2019?
*were profitabile?
Delete"Name one stand-alone airline that has been set up in Europe in the past decade that has become successful."
DeleteActually, in the past 20 years you had them. Wizz Air, Volotea, Sky Express....
@anon 17:06
DeleteI was sarcastic with 1% but truth is not far away from that. It is obvious that airline business is really difficult and that there are only few airlines profitable in this business (mostly big ones). Unfortunately those big players will not even check on LJU, we are simply to small!
@anon 17:16
what about regular airlines? I somehow don't see an option for LCC to open a base in LJU.
If only big players were profitabile, no one would be interested in investing in aviation. Trade Air, Sky Up So you are wrong again.
DeleteRegular airlines? Sky Express is one of them. Bunch of domestic flights in Greece with 11
@ Anonymous 11:53
DeleteMaybe you should think twice before posting such an ignorant comment. You do realise that most of the flight crew will not be able to get a job anywhere else in the foreseeable future? And most of them have families to take care of. With no income, it's going to be pretty though. I find you comment utterly insensitive and stupid.
I sure hope you're not one of those people who received government help during the corona crisis. Now that would be a hypocritical.
Just for pure theoretical purposes but how expensive would be for JU to set Mickey Mouse company based in EU with 2-3 S5- planes?
ReplyDeleteinterestingly this comes only days after phone call between Merkel and Jansa
ReplyDeletei bet airlines left at LJU know there will be increased demand next year due EU precidency, therefore makes sense to use incentives and stay, at least until next winter. doubt it will result in better connectivity...
Interesting. This could work. The subsidies are not that high but it could be the push needed for airline to keep flying to LJU.
ReplyDeleteWhen the market cannot supply enough feed for their plane, a subsidy of this fraction of huge airline costs will not matter. LJU is simply too small for many big flights.
DeleteWe could finally see Ryanair!
ReplyDeleteDon't think so.
DeleteTogether with Wizz and Easy :)
DeleteWhich new airline could Ljubljana realistically get?
DeleteI fear these subsidize are way too low for what Ryanair, wizz or easy would ask for.
DeleteEurowings would be the most realistic LCC to launch new flights to LJU.
DeleteEW offer connections right? If yes this could work, otherwise only Easy and Transavia will return with LON/AMS flights. There is no P2P potential for other markets...
DeleteMore and more countries seem to be resorting to subsidies.
ReplyDeleteThere is a global crisis, so not a surprise.
DeleteThe thing is that this should have been done at LJU last year.
DeleteGood news for Ljubljana Airport.
ReplyDeleteIs Maribor included in the subsidy scheme?
ReplyDeleteNo one flies to Maribor.
DeleteBut maybe it could start if the good amount of money is offered
DeleteIt's unfortunate that these will be mostly used to keep airlines that are currently flying to Ljubljana and not actually attracting new airlines.
ReplyDeleteWell let's wait and see when they publish the rules of the tender.
DeleteIs it possiblle for CTN to fly (for example) ZAG-CDG-LJU-CDG-ZAG and/or ZAG-AMS-LJU-AMS-ZAG?
ReplyDeleteI don't understand open sky rules, EU rules etc.
It is because OU is the EU airline.
DeleteThey are not capable to do it
Delete"Slovenia will be a popular destination in 2021 based on a number of forecasts"
ReplyDeleteNot saying it won't be, but I am genuinely interested to see what are these forecasts and what are they based on.
Me too. It's like LJU airport management said in April they would retain all airiness flying to LJU pre pandemic.
DeleteAny chance Windrose can get something from it?
ReplyDeleteThey ain't even flying there. And even if they were, they planned on flying twice per week with a 45 seat plane. Don't think they would make the cut
DeleteLjubljana is the perfect getaway for a weekend, cozy, lively and stunningly beautiful !
ReplyDeletePerfect for the likes of Ryanair or Wizz .
What i hate is the sad fact that there is no damn continous highway down to Rijeka .
Those two cities are like twins - they perfectly complement each other .
Clearly a collateral damage from the breakdown of Yugoslavia ...
An absolutely wrong decision. Wealthy Slovenia subsidizes poor Germany, Austria, Great Britain ...
ReplyDeleteAnother proof that Slovenia needs a national airline.
A much more correct solution, from my point of view, would be to provide government guarantees for a targeted loan for a new private airline for the same 6 million.
Or, even better, insure such a loan. Of course, a list of mandatory routes and frequencies for this company must be added to this.
Then, firstly, a national airline will be created. It is much easier to get a loan under the state guarantee and the conditions will not be so strict. For this amount, it is quite possible to create a small company with 2-3 aircraft, which will provide the minimum necessary connectivity. Secondly, there is a chance that the company will not go bankrupt and the money will remain in the budget.
"Of course, a list of mandatory routes and frequencies for this company must be added to this."
DeleteWhy not just establish couple of PSO routes and award them via a tender?
"Secondly, there is a chance that the company will not go bankrupt and the money will remain in the budget."
OK, let's assume it wouldn't go bankrupt. How long do you think it would take for a small airline to pay back the initial loan of 6m EUR?
The loan will be provided by a commercial bank, but under state guarantees.
DeleteIf the loan is repaid, the state will not lose a cent at all, but will only receive taxes from the operating company and its employees. And also get the necessary routes
Again, how would such a small company repay 6m of debt?
DeleteWhat would be the business plan to achieve this? JP didn't make 6m profit in the last 25 years together.
Do you want to discuss a business plan here ????
DeleteSuppose a loan of 6 million at 4% for 5 years will be provided against government guarantees.
This means that the monthly payment will be about 110 thousand.
Or about 1200 euros per day for each of the 3 planes. If the plane carries 300 people per day (for example, 4 x 75), then we get 4 euros for 1 ticket. Let it be 5 euros for 1 ticket.
Sure, it's not high per ticket. But it still means an airline with 3 aircraft needs to make over 1m profit (before this loan) a year.
DeleteWhen was the last time you saw a 3-aircraft airline pull 1m+ profit for 5 years in a row?
A company doesn't have to make millions in profits. It is enough for her to pay her obligations on time, including the loans received.
DeleteSmall companies rarely make their reports publicly available. But we have many examples, many years of successfully operating companies with 1-2-3-6 aircraft.
For examples,
Alsie Express (Denmark, since 2013, 3 a/c)
Avanti Air (Germany, 1994, 2 a/c)
WDL Air (Germany, 5 a/c)
Chalair Aviation (France, 1986, 6 a/c)
and may-many more...
last anon: more exotic airlines can't be found? and all are ad-hoc charter and wet lease or business aviation companies. And chalair is in the code-share business wit AF (so basically in the end outsourced regional presence of AF). So not in the nearest comparable with JP 2.0 that would be a scheduled carrier with multiple tepartures to the same destinations per day (wet dreams of wannabee flyers).
DeleteNot to please you :))))
DeleteAt your request, I gave examples of several small companies that have been successfully operating in the market for many years. It would be strange to expect well-known "giants" among them - the "giants" have much more aircraft in their fleets... :)))
Regarding wet leasing - there is nothing wrong with exploiting some routes, for example FRA or MUC under a wet lease agreement. The main thing is to have your own national company.
The desire to give money to a stranger so that he would do you well is understandable, but in a critical situation it leads to the fact that this stranger leaves - he needs to solve his own problems, and you have no planes or money left... But, in any case - it's not for me to decide
first of all, we don't need hordes of chip tourism which is brought by likes of Ryanair and Wizzair. It is completely different situation if citizens can't afford non-LCC prices. Some people seem to forget on purpose, that "cheap" air fare is compensated by something. We know very well what is the price of having LCC in the house. Secondly, this is exactly same situation as with local bus companies. They were established in socialist times to provide accessable public transportation. Then people stopped using them as they rather used the cars, so suddenly "need" arised to "consolidate" the bussing in Slovenia. In reality that meant that smaller companies had to merge into larger, regional ones and then they were "privatised", or sold for peanuts. Only one remained in local hands. Needles to say, one those "privatised" companies is now owned by DB (Deutsche Bahn). Now, privatised companies started to close many lines, so state was "forced" to introduce subsidies in range of 26 mio € (on yearly basis). And where do we stand today? Majority of this money goes to foreign owners, who don't give a figue about Slovenia, they just want to suck out as much money as possible. Same is now happening to airport...
ReplyDeleteBut some people here will rather chew their feet to the bone as to admit, that there is a national (in socio-economic terms) need to have some sort of connectivity which would not follow only bussines goals, but some other too. If subsidies are needed, so be it.
And we are not talking only about corona and post-corona times here...Turkish has become what it is due to backing of the Turkish state, same goes for Lufthansa (and we see how much they give a f...k about other national airlines, part of LH group - i.e. Brussels, Swiss and Austrian), LOT and other important infrastructural companies. But we will again read neo-liberal yadayada on these pages over and over again.
"first of all, we don't need hordes of chip tourism which is brought by likes of Ryanair and Wizzair."
DeleteFor example? Italy has more than 100 based LCC aircraft and I don't see people complaining about "cheap tourism", whatever that means.
"Some people seem to forget on purpose, that "cheap" air fare is compensated by something. We know very well what is the price of having LCC in the house"
Do enlighten us please?
"Turkish has become what it is due to backing of the Turkish state"
You might want to check on the state of Turkish economy before giving it out as an example.
The best decision would be - to create a new national airline!! And the money/taxes from subsidies would "go back" to Slovenia and not to other countries!
ReplyDeletewith those 6 million ? or do you have another budget black hole in mind?
DeleteWill be interesting to see who applies.
ReplyDelete