Croatia Airlines has requested for Zagreb Airport to offer fees and conditions similar to those provided to low cost carrier Ryanair, which will base two aircraft in the city from September through its subsidiary Lauda Europe. “Competing with a significant number of large carriers has been the reality of the market since Croatia Airlines’ foundation and there is nothing problematic in that regard. However, it is unacceptable that the national carrier is financing the arrival of new carriers on the market”, Croatia Airlines said. The company noted that were it offered the same conditions as the low cost giant, its fees at Zagreb Airport would be lower by 17.8 million euros in 2019, which would see the airline post a profit instead of a loss that year.
The carrier also touched upon Ryanair’s plans to serve a number of secondary airports in cities it already operates to from the Croatian capital, thus qualifying the low cost airline for additional incentives as these destinations are considered brand new routes. “This camouflages Zagreb Airport’s intention to bring in new carriers to serve the same markets while offering them better conditions”, Croatia Airlines said. It noted that the market is being distorted in favour of Ryanair, which it has communicated to Zagreb Airport, with which it plans to hold a number of meetings on the matter. The airline further argues that it had received less than 200.000 euros in incentives from the airport between 2016 and 2019 for the launch of ten new routes, while Ryanair will get thirty times more for its twelve new destinations.
“We appreciate Zagreb Airport’s efforts in securing new flights, however, this should only be done on the basis of impartiality and the same terms should be offered to all companies without favouritism. At the same time, we expect for Zagreb Airport to meet the needs of Croatia Airlines in the same way and that conditions will be harmonised with those offered to Ryanair, taking into account the number of routes we operate and passengers carried. Failure to secure the same incentives for Croatia Airlines, or even greater discounts, seriously endangers equal conditions for all and purposely causes damage to the national carrier, which is majority owned by the Republic of Croatia”, the company concluded.
This is the best indication of how worried they are by Ryanair's arrival.
ReplyDeleteI am pretty sure, W6 is coming soon too. Another shock for OU.
DeleteI think they are more worried by the fact that next year Ryanair is aiming to have 40 routes from ZAG which is huge. Then I truly think it will be the end of OU.
DeleteWe have to wonder what kind of market there will be. It will be rather limited and the little there is will move to FR. I mean AF suspended the second daily to ZAG even though it was operated by a regional jet.
DeleteWell they are right. Why should Ryanair get better terms than Croatia Airlines which has been flying from there for over 25 years and even flew during the pandemic when many airlines grounded all their planes.
ReplyDeleteThey are not right. Ryanair got better terms only for opening new routes this year.
DeleteThey can open new routes and get incentives for them, just like FR did.
Delete@9.06 so you consider Sandefjord and Charleroi new routes?
DeleteShould Ryanair get the same amount of subsidies per aircraft as OU does?
Delete@anon 09:07: Well, there weren't any flights to there before, so... yes?
DeleteWell in my opinion it's a wrong tactic by ZAG. They should have stimulated flights to regions that are not served at all rather than offer alternative airports at the same destinations. And that's 8 out of the 12 new routes. So I understand where OU is coming from.
DeleteI am sure both ZAG and FR did their homework. It could be that there is a good reason why some markets were unserved. Maybe FR's B738 would have been too much of an aircraft for those markets, especially now in covid. They probably went for the safest markets and those are usually the biggest.
Delete*grabs popcorn* waiting for ZAG to respond.
ReplyDeleteI don't think they should respond to these amateurish accusations.
DeleteEvery time some LCC comes to Zagreb they launch exactly the same campaign until they eventually drive them out.
ReplyDeleteTrue
DeleteYes I remember they did the same when easyJet launched flights. Lucky for them they left.
DeleteI think Ryanair is being offered more than what they are getting from the airport. Their CEO thanked Zagreb city authorities and tourism association numerous times at the press conference so I assume they may also be getting some incentives from them.
ReplyDeleteNormal if the city is going to have the benefit of getting more tourists. That's how it works in most Croatian cities with LCCs.
DeleteCTN can always transfer its ZAG operations to LJU and sell it as Ljubljana - Zagreb West. Fraport would be delighted and Slovenian travellers too.
ReplyDeleteOU failed in ZAG. What makes you think they would do better in a much smaller market like LJU?
DeleteFailed in ZAG with 50% market share? Yeah sure.
DeleteOf course they failed. They did not use the opportunity when there was maximum protectionism to reform themselves. Now they are paying the price for that.
DeleteHit ZAG where it hurts the most, start focusing on the coast while cutting back on your flights out of Zagreb. Copy what Dubrovnik Airline used to do and you will be fine. After all, even though there will be limited demand this summer, there is still going to be more of it from the seaside airports.
ReplyDeleteThen again, come to think of it, OU's network out of ZAG is already so modest (even before covid) that I don't know what would be cut. Maybe some of those FRA flights?
"Copy what Dubrovnik Airline used to do and you will be fine."
DeleteThey are bankrupt. I'm not sure how copying their model would make them successful.
From what I recall they did not go bankrupt because of a flawed business model but rather because of their fleet modernization plan going bad. Their troubles started when they switched from the MDs to the A320s.
DeleteNo. Both Dubrovnik Airline and Air Adriatic lost their AOC couple of months after announcing scheduled services from ZAG. They were both shut down in order to protect OU. I am not saying they were perfectly managed, I am not saying they didn't have fleet renewal issues (320 in case of DBK and 737-700 in case of AHR) but ultimate reason of AOC revoking for both was they dared to touch prohibited area-OU in ZAG. The same reason why Trade Air, with fleet of 5 jets is not operating, even today, even 2019, not one single scheduled service out of ZAG. That's why they still have their Croatian AOC.
Delete^That's sad and a shame to hear.
DeleteInteresting, do you know what kind of routes they planned from ZAG? Charters or scheduled?
DeleteI already wrote it. Scheduled. Moscow, Stockholm, Gothenburg, Skopje, Pristina, Hamburg, Dusseldorf, Madrid, Tel Aviv, more of course, these are ones I remembered
DeleteOh, poor Croatia Airlines! I almost started crying!
ReplyDeleteI love how in the end they mention they are owned by the government :D just to remind ZAG who they are messing with.
ReplyDeleteCry me a river Croatia Airlines
ReplyDeleteAnd what exactly are they going to do if ZAG does not give them the same conditions, which I doubt they will? Nothing.
ReplyDeleteOh their majority owner can do plenty. There is a reason they mentioned them.
DeleteWhat can they do? Take over the airport?
DeleteI believe that major airports like ZAG should (although not necessarily by all means) support their national airlines and give them more favorable terms and conditions than to foreign/low cost carriers.
ReplyDeleteCroatia Airlines will not fail. The funny thing here is that Ryan Air will be good for both Zagreb Airport and Croatia Airlines. They are famous for 'developing' routes and instead of taking pax away from OU they will create their own market and in effect grow OU's as well as low cost carriers have done in so many parts of the world.
ReplyDeleteYes like in BUD with MA.
Delete+1
DeleteOU won't fail because there is a constant stream of government money coming in.
DeleteShould they have to operate on the free market, the story would be very different.
OU has (through incompetency, lack of leadership and vision, and political wrangling) limped along in recent times, and suddenly the threat of real competition scares them. OU needs to run more flights (especially from the Adriatic coast given Croatia's tourism economy) and at greater profitability.
ReplyDeleteEasier said than done.
DeleteSo basically they are crying and screaming but on the other hand willing to do nothing for Zag.
ReplyDeleteThey provide them with over 50% of passengers.
DeleteFor now...
DeleteComplaining about market distortion after you've just received tens of millions of Euros from the government is a bit rich even for OU.
ReplyDeleteExactly what I am thinking. If they want "fair conditions", why did they take millions from the state? For like n-th time in history.
DeleteDidn't they first say they would adapt to market conditions?
ReplyDeleteThat was still while they were in schock. Now the reality has kicked in.
DeleteAs far as I can see, ZAG has published its incentive program on its web page and Croatia Airlines is free to apply for it too. I'm having difficulties in understanding why they cry, it doesn't say Ryanair anywhere in the document. Basically they can stop flying to BRU and fly to CRL like Ryanair announced, and they will receive the same support/incentive given by the airport. Nothing prevents them.
ReplyDeleteOh sorry, Lufthansa lobby doesn't like that, now we understand why they cry.
their only currently logical move would be to move CTN operations to Ljubljana - Zagreb West airport and keep limited flights to and from the coast. Both Slovenian citizens and Fraport desperately need an airline and regular flights.
ReplyDeleteVery logical indeed
DeleteThat is the only thing Croatia Airlines is doing, mourning how everyone else is responsible for their situation. As I heard all employees with some potential are trying to leave company because they are expecting bankruptcy in near future and are more then disgusted with top management. There were some expectations that Žabo (as no.1. manager in company right now) will come with some new ideas, new people in sales and trying to upgrade obsolete company policy but he become new Jasmin Bajić with old manners doing nothing but mourning in media how everyone else but OU management is responsible for their huge losses even when air traffic was in great conditions. Unfortunately there is no future for OU because all competent employees left company and it is only a question for how long they will steal Croatian tax payers money. I hope that European Union won't allow more money pumping in company and then let's see how OU will cope without goverment help (almost 250 million euros in last 9 years). For the Croatian tax payes, bankruptcy is the best option.
ReplyDelete100% true. If you can't run a company without millions of dollars from the state every now and then to save you, then why are you asking for some market conditions?
DeleteHahahaha, they even had loss in best year of aviation and tourism in Croatia 2019... Zag airport would be very irresponsible if they would base their business on a company like that
ReplyDeleteWhy do they complain?
ReplyDeleteIn my opinion they should get even better conditions as they have more aircrafts based at ZAG, they will transfer more passengers in/out of ZAG. Or on other hand provide same conditions to FR as OU has and let's see how many aircrafts they will base at ZAG.
ReplyDeleteHow many aircraft would OU have based at ZAG without all the millions from the government?
DeleteWasn't this piece of news yesterday here as well?
ReplyDeleteHow is it possible to see today at 09:47 comments placed today at 09:54?
The article was taken down yesterday and reposted today. Not the first time that's happened after breaking news that's more urgent to publish.
DeleteZAG management is not stupid. Should they wait for LJU scenario to happen, no! This is wise business move that will give them advantage once OU is grounded.
ReplyDeleteCompletely agree. It seems that ZAG is not going to make the same mistake LJU did. Besides, it already has a large portfolio of legacy carriers operating on most of the Croatia Airlines' routes, so a potential bankruptcy of based carrier will not damage the airport too much.
DeleteThey’re still stuck in the socialism mentality despite being an EU member for quite some time now.
ReplyDeleteNo, OU, you can’t keep launching stunts like this all the time and expect to come out unscathed, the game has changed a long time ago. You either face the competition and do what needs to be done or you go out of business.
It’s what all the cool kids are doing under EU rules for competition and you should not be an exception.
Slaven Zabo - perfect example of the kind of employee NOT to have as a leader. Started in OU, and spent all his career being mentored by the socialist superiors.
DeleteAre we surprised?
It is easier to complain, than to actually do something.
ReplyDeleteBingo!
DeleteTime to quit whining. I don't know a European airline that has been so well protected at their main base for so long.
ReplyDeleteActing as a Lufthansa feeder and avoiding numerous markets while more than half of your network is seasonal will come back to bite. Can't routes like Milan and Stockholm and Oslo not work year round? Maybe they couldn't but if the airline stimulates the market, tour operators, advertises in those countries it may actually work.
ReplyDelete+100
DeleteAnd not only European markets. Far away markets as well. USA, Canada, China, Korea, Thailand, India, all those could have worked, even helping reducing seasonality, of course providing regional markets were extended as well and feed enabled from much more destinations at hub base and codeshares established on the other sides. Geographical location, MA disappearing, JU and BEG down on the knees, tourism booming, EU membership close and/or realised, ethnic traffic, from entire Balkans, all those were prerequisites to double the fleet, destinations and numbers every two to three years. But no, they decided to stay small, feed LH, feed uhljebs and do nothing. Results can be seen and the future will probably be similar to Adria's or Montenegro's.
DeleteYes! Daily ZAG-DEL and BKK fed by 3x daily from TGD. That would save OU surely.
Delete@Pozdrav iz Rijeke
DeleteI would just like to remind that starting from this century BEG was never "down on the knees" comparing to any ex-yu airport.
No matter how bad Jat Airways was, BEG was standing as airport nr. 1 in ex-yu constantly increasing the gap with airport nr. 2.
@An.17.16
DeleteI never said BEG was the second biggest in ex-yu, because it always was number one. However, today, and when I say today I mean pre-pandemic today, BEG has, and it has always had, about double more passengers then the second biggest ZAG, except for the period 2002-2005 when BEG failed to only some 200.000-300.000 difference, in total numbers, or some 20-30% more compared to ZAG, which I do consider "being on the knees". That was the time I talk about, when synergy of ZAG and OU should have led to these two airports becoming real competitors, with approximately equal numbers, which ZAG and OU failed to do, thanking to uhljebs who constantly react to my posts justifying today's miserable positions of both ZAG and OU.
It took them 2 weeks just to compose a written response to the expansion so I'm not optimistic of their market response.
ReplyDeleteIt was too early to react before :D
DeleteYou snooze you loose
ReplyDeleteNo more easy money for Croatia Airlines, ZAG's protection seems to be over.
ReplyDeleteI'm interested to see how the government will respond. It has always come to Croatia Airlines' rescue and I'm sure it will be the case again.
ReplyDeleteI don't know what more they can do. They gave OU a lot of aid in the past and I don't think the EU would let it happen again. Also Ryanair would be quick to launch court proceedings and would complain to the EU.
DeleteWhy protect Croatia Airlines? Isn't this illegal in the EU? Let the low-costs in: more flights, lower fares, more destinations...
DeleteIt is only illegal for certain countries and companies. Otherwise, Alitalia would have been long gone.
DeleteWhat else to say then: uhljebljeni kmečavci :)
ReplyDeleteplus millions :) :) :)
DeleteWhere are now comments saying "no matter what OU will survive as it is in Croatian DNK".
ReplyDeleteQuite soon OU will be nothing but a interesting memory.
I still think they will survive. The government will always help them.
DeleteI don't know if I should laugh or cry...
ReplyDeleteFor Croatia Airlines just to start to think of surviving they must send the Managment away incl.CEO .stop the politics .They way this management is running Croatia Airlines in 6 month's time there won't be an airline over
ReplyDeleteI agree. OU actually has an acting CEO for the last few years.
DeleteIn few years there won't be any distinction between so called full-service and low-cost airlines. Legroom in Lufthansa's planes is starting to look like that of Ryanair, hot meals have become cold snacks, etc. As in any other business, all that matters is value for money. Ryanair delivers value for money, which is reflected in their financials, while the likes of Croatia Airlines DON'T.
ReplyDeleteWhat does this have to do with Croatia Airlines accusing Zagreb Airport of favoritism towards Ryanair?
DeleteLCCs are a fact of life now in every part of the world, and their contribution cannot be underestimated. Time for OU to get used to that.
ReplyDeleteCroatia Airlines isn't actually making an issue that Ryanair will be flying from Zagreb. What they have an issue with is that it is getting much better terms at the airport than they are and Croatia Airlines is by far the biggest airline in Zagreb.
DeleteCroatia Airlines would have exactly the same discounts if they decided to start new routes. So I don't understand what they are complaining about.
ReplyDeleteThey should have started some new regional routes like Podgorica, Tirana and Pristina.
DeleteOU = stupid
ReplyDeleteThis irrational behavior will only hurt them in the end.
1- According to EU directives and Croatian regulations, all changes to the airport charges, including incentives, have to be consulted to the Airport Users Committee (AUC) and have to be approved by the Civil Aviation Agency. Can Mr. Zabo, being head of the mentioned committee, inform us if he was aware of this incentive model proposal months ago or not? If so, what was AUC's reaction and response at that time?
2- Croatia Airlines publicly requested to be provided the same conditions Ryanair will benefit through this new incentive model. Let's imagine Zagreb Airport accepted that and published the same incentive model for existing routes. Same thresholds triggering same discounts, same period. Only difference would be that one was for new routes, and what Croatia Airlines asks is for existing routes. If that happens, can't they foresee that due to the respective EU directives and Croatian laws regulating air traffic, the incentive model has to be open for all airlines' application, cannot discriminate specific airlines, hence will provide the same financial support to Ryanair and/or other carriers to start flights on Croatia Airlines' existing network, including domestic destinations? Are they seriously not able to calculate the consequences of their public requests or are they willing to compete with Ryanair on destinations such ad ZAG-DBV, ZAG-SPU, ZAG-SJJ, ZAG-SKP, ZAG-AMS, ZAG-BCN, ZAG-FRA etc..?
+1
DeleteWhat are they smoking?
ReplyDeleteGood luck to OU
ReplyDeleteAny pressure on OU to force 'proper' aviation business practice can only be a good thing..
ReplyDeleteZAIC is finally applying pressure on OU management, logical move (and expected).
ReplyDeleteGreat tactic by ZAG concessionaires. In their concession contract it says if OU goes bankrupt they get a load of money from the government in damages.
ReplyDelete