Zagreb Airport has refuted claims made by Croatia Airlines that it is playing favourites with low cost carrier Ryanair by offering it better terms and conditions, which will result in the budget carrier stationing two aircraft in the city this September. The two sides are set to hold talks on the matter together with the Ministry of Sea, Transport and Infrastructure next week. In a statement, Zagreb Airport said, “From the very beginning of the concession period, more precisely since 2013, Zagreb Airport has been in constant communication with various airlines around the world in order to assess market conditions, understand the needs of airlines, expand the destination network, as well as increase traffic and passenger numbers in Zagreb. The Covid-19 pandemic has had an extremely negative impact on air transport on a global scale, and Zagreb Airport is no exception. The airport ended 2020 with a 73% decline in passenger numbers compared to 2019, which was reflected in total revenue as well. Different scenarios for dealing with the problem caused by "force majeure", were implemented at the very beginning of the pandemic in March 2020”.
Some of the measures Zagreb Airport rolled out was the suspension of aircraft parking fees during the months there was barely any traffic. In the summer of 2020, the airport introduced a recovery incentive model, which provided free landing to airlines that met the criteria prescribed in the incentive model, which lasted until the second half of 2020. Furthermore, all aircraft parking fees were subsequently reduced during the winter of 2020 as well. Zagreb Airport launched its growth incentive model at the end of 2020 in order to encourage airlines to launch new routes. The incentive model was presented to the Airport User Committee and the Civil Aviation Agency. Following their approval, it was published on Zagreb Airport’s official website. “The traffic growth incentive model is designed to reduce the cannibalisation of existing routes (and airlines operating on these routes), while providing maximum market flexibility and ensuring increased traffic in Zagreb”, the airport said.
Zagreb Airport noted that its incentive scheme is available to all carriers, which includes Croatia Airlines. “Zagreb Airport is subject to strict regulations defined by the European Commission and the Croatian Civil Aviation Agency. All incentive programs implemented by the incentive model are transparent and non-discriminatory and can be used by all airlines under equal conditions. We welcome the initiative by the Ministry for Sea, Transport and Infrastructure to support efforts to increase traffic at Zagreb Airport, which will be discussed at a meeting scheduled for the next week”, the airport concluded.
Why is the government getting involved?
ReplyDeleteWell the airline is owned by the government and they just invested almost 100 million in it last year.
DeleteCalling that "investment" is quite far-fetched.
DeleteSoap opera:)
ReplyDeleteYep. Gossip time.
DeleteRidiculous, obnoxious .
DeleteThis idiotic blame game will probably smolder on this blog for a lot of time ...
I really see no issue in the incentive program. Croatia Airlines just can't deal with the extra competition.
ReplyDeleteCan't COPE.
DeleteWhy didn't the airport launch this earlier?
ReplyDeleteBecause their revenue was good, which is obviously not the case anymore.
DeleteHas ZAG published a single financial report for the past few years? It would be really interesting too see how their finances are doing.
DeleteVery kind and elegant way of saying "Croatia Airlines lies publicly and disinforms Minister too."
ReplyDeleteI wonder what will happen to OU when Wizz announce their arrival to ZAG.
ReplyDeleteIt will be funny :)
I don't understand that OU didn't see this coming. I mean in general, it must have known that some LCC would sooner or later start flights or base a plane.
ReplyDeleteIt seems they thought they would be protected for life.
DeleteI doubt they have issue with competition, but OU should get at least same condition (in my opinion even better for having more flights,more transfered pax, being loyal for many years etc..) than new airline.
DeleteAgree with last comment
DeleteOU can open new routes and receive incentives. Nothing stops them
DeleteAnd that's exactly what I would do. Move all aircrafts to coast and some to LJU and leave ZAG with those 2 FR's aircrafts. And if you think that other airlines would jump in and fill the gap then you are the same as those who believed that will happen in Slovenia.
DeleteDoes not even compare - slovenia is much smaller and less relevant market.
DeleteOU can't operate without socialist subsidies and market regulation.
"The incentive model was presented to the Airport User Committee"
ReplyDeleteIronically Croatia Airlines executive is the head of the committee.
lol
DeleteIt looks like this information is intentionally inserted into the press release, to give a message
DeleteSo they should
DeleteI would hope this incentive program results in attracting more new airlines and not just Ryanair. Has any new airline announced flights to ZAG other than them?
ReplyDeleteApart from Ryanair no one has announced new flights to ZAG this year.
DeleteAnd considering FR will launch so many routes this year and probably the same next, I doubt we will see many new airlines.
DeleteI would love to see Pegasus start SAW-ZAG. It would end the Turkish Airlines monopoly on the route and would offer some great transfer options.
DeleteDidn't they fly to Zagreb before?
Deleteno
DeleteGood luck to OU. They will need it
ReplyDeleteGreat years ahead of Zagreb
ReplyDeleteBad years ahead of OU
DeleteCan someone post the incentive program?
ReplyDeleteLCCs in ZAG will kill OU
ReplyDeleteI always thought Eurowings would be the one to open a base in ZAG.
ReplyDeleteEurowings had the opportunity, it operated 5 destinations out of ZAG until 2 years ago. Then its financials collapsed and the company shrank.
DeleteHow many routes do they have now?
DeleteFrom ZAG I mean.
DeleteThey have two routes, I think. Cologne and Düsseldorf.
DeleteThis is bad news for OU
ReplyDeleteI don't think it's just bad news for Croatia Airlines. It's also bad news for Ljubljana Airport.
DeleteOn first place terrible news for OU.
DeleteLet's not forget that at the time when JP went belly up ZAG did not see so big traffic increase as they expected. It practically means that these 2 airports do not affect each other so much as some might believe.
It didnt get much increase because slovenians were already travelling from ZAG before adria was gone
DeleteExpectations were much much different at that time.
DeleteYears ago Croatia Airlines used to push the argument that low cost airlines should not fly to Zagreb because it would not make it a world class airport and would reduce its value LOL.
ReplyDeleteDon't forget word "prestige" :-)
DeleteIt wasn't just Croatia Airlines. Many commentators here claimed the same.
DeleteAnd still do .
DeleteJust wait ...
Traffic will boom with Ryanair. Passenger numbers will grow by at least 300.000 within a year.
ReplyDeleteOf course, because they operate on 8 routes which are already covered. They will just shift traffic from one airline to another...
DeleteExactly anon 10:15
DeleteNot exactly. As we have seen elsewhere, LCCs stimulate a completely new category of passengers who did not fly in the past, or did not fly as often.
DeleteAlso you will see more tourists because weekend visits will become more affordable. Some wouldn't even consider going to ZAG if they had to pay OU's fare.
This mess was made by the government. They should have focused on selling Croatia Airlines years ago. Instead now they are going to have an even bigger loss making airline competing against Europe's largest airline on at its home base.
ReplyDelete+1
DeleteAnon@9.44 is absolutely right. The Govt had the opportunity to privatise (or part privatise) OU during better times - especially when the airline had much greater value than it will now have going forward. It is loss making and will remain so for many years ahead - which means that it will not make for an attractive investment prospect for any airline - especially now with FR (and probably W6) to fly from ZAG.
DeleteWhat a mess ! And don't blame OU management - it is all created by the Govt who own the airline.
As I see it, the only way forward, is to offer the airline on a concession or management contract basis, for a professional management team to come in on a 3 -5 incentive based deal to take it forward. The current team is incapable of moving things forward, given the heavy competitive environment that awaits. They were unable to do much in the good days - they will sink with the new circumstances, taking with them what is left of OU, unless the Govt acts decisively
I agree with above. This seems to be the only option now. Privatization is out of the question purely because there is no interest. Unless they offload the company for free to some Chinese airline as they are only ones still interested in investing in airlines (see KLM for example).
DeleteAnon 10:56 I know a good professional management team from Germany. I think they're called 4K Invest or something like that. Could be a solution for OU.
DeleteAnd here I was told that ZAG does not need ultra LCCs and that the general travel public will never fly these airlines from Zagreb
ReplyDeleteI wonder in which hole these "experts" are hidden now...
DeleteWhat I find unfortunate is that both easy jet and Wizz Air used to fly to Zagreb but not anymore. Hope they come back with these incentives.
ReplyDeleteI wonder at what cost Ryanair's arrival is coming. Not just for Croatia Airlines but for the airport too.
ReplyDeleteMaybe for Croatia as a country as well...
DeleteI don't understand why deals between LCCs and airports/national tourism authorities are considered a "business secret" but aid to national carriers is publicized.
DeleteLCCs will be generating growth in the next couple of years all over Europe.
ReplyDeleteThey have been generating growth for over a decade :D
DeleteWhat are the landing charges in ZAG?
ReplyDeleteYou have all the feed on their website.
DeleteI really hope that FR considers domestic flights. It'll be very beneficial for Croatia.
ReplyDeleteSame. I HOPE that one day we will have a European low cost airline flying domestic flights from Zagreb.
DeleteI'm surprised this hasn't happened already. Why?
DeleteBecause ZAG-SPU/DBV aren´t new routes and they wouldn´t get discount.
Deletewhere do you live lol soon all domestic flights in croatia will be banned (check Austria and France). due to ecological reasons they are banning short domestic flights. i would not be surprised if EU bans supporting short flight ... imagine what would that mean for Croatian Airlines.
DeleteThere's a reason why they're being banned in Austria and France and not in Croatia or Bulgaria.
DeleteLaudamotion (ie Ryanair) wanted to open a base in Zagreb 2 years ago. Croatia Airlines lobbied and blocked them.
ReplyDeleteof course they did...it's open market, everyone can do whatever they want. Probably ZAG did not meet their conditions as they did with FR.
DeleteYou are really naive to think that just because it's an open market on paper it always works that way. Government was involved in preventing them from starting up a base. It is quite well known.
DeleteFinally Croatia Airlines can go bankrupt .
ReplyDeleteAnd what would happen next ?
DeleteIf they go bankrupt ZAG gets money from the government. It's in their concession agreement.
DeleteIf they go bankrupt ZAG doesn't get any money from the government (what kind of a world you are living in?). Perhaps concession payment can be postponed for a short period.
DeleteI live in the world where I read the concession agreement which states that in case Croatia Airlines goes bankrupt or there is a serious decline in passenger numbers, ZAIC does not pay the concession fee and can use other methods to make up its losses.
DeleteIs there a link to the concession agreement?
DeleteOU has already been squeezed on the coast, now Zagreb.
ReplyDeleteThat's their problem. They had years to become competitive and offer decent prices. For the basic service they offer their fares are way too high.
DeleteRyanair is much needed in Zagreb. Hopefully it shakes things up and wakes Croatia Airlines up.
ReplyDeleteI doubt it will wake them up. It will just lead them to their grave.
DeleteInstead of complaining and being in denial mode, Croatia Airlines should start working on a market response to Ryanair.
ReplyDeleteYes. But like they always say its probably too early. Like they missed the opportunity with LJU when they had the chance to base a Q400 there.
DeleteSeems like a smart programme.
ReplyDeleteI think ZAG must follow the BUD model of having both legacy and LCC. BUD is home for W6 and FR. But you also have direct flights to China, EK, Egyptair, etc.
ReplyDeleteIngenious
DeleteNot any more.
DeleteThey may follow the model with no national carrier soon too...
DeleteI travel to BRU monthly for work, as do a lot of people that I repeatedly see on my flights - so I'll just use that route as an example. A lot of other people are transfer pax connecting mostly to Africa and N. America. I don't see how twice weekly Ryanair flight to CRL (1hr+ away from Brussels centre) is going to make a huge dent in OU's performance on that route. So instead of a Monday 6:30am flight to BRU, which is 15 mins from Schuman, I'll fly on a Sunday mid-day to save 100 eur? And instead of a Thursday or Friday eve 20:25 flight back, I'll fly... when exactly? Ryanair's route to CRL will be a nice addition for leisure travellers wanting to visit friends and family, or go for a short city break. But it should not have a major effect on OU's numbers to BRU. In my opinion, if OU ever does go bust, it will go bust because of bad management, not Ryanair's arrival in Zagreb.
ReplyDeleteSssst don't say things like that. You ruin Croatia Airlines' arguments to whine.
DeleteI'm interested to see the outcome of this meeting next week, especially since it will be attended by the minister.
ReplyDeleteMinister will come into meet8ng. Will probably say he will look into matter. Outcome will be nothing will happen.
DeleteWhen has Butkovic ever done anything for Croatian aviation?
DeleteHis predecessor was not much better.
DeleteWell great news for Zagreb. Who cares what OU thinks.
ReplyDeleteI'm glad Zagreb finally has a proactive management that has identified clearly what they have to do.
ReplyDeleteTranslation: Boo-effin'-hoo OU! Lol
ReplyDelete