The Croatian government is set to distribute aid to the country’s aviation sector in the coming days after the European Commission gave its approval for the state to provide 45.4 million euros in the form of subsidised interest rates on loans. Both airports and airlines can benefit from the measure, but the funds will be limited to those located in Northern Croatia and the city of Zagreb. Final loan agreements must be concluded between the government and relevant stakeholders by the end of the month at the latest. “The measure is aimed at supporting the companies operating in the civil aviation sector so that they can preserve the continuity of their economic activity. The beneficiaries of the measure are large enterprises active in the civil aviation sector impacted by the Covid-19 pandemic. These include parties registered in Croatia to perform activities in the following sectors: passenger air transport, freight air transport and support activities for transport”, the Commission said.
Croatian authorities noted that the loan agreements will be accompanied by a security package which could include pledges on movable and fixed assets, company promissory notes and debenture bonds. “The objective of the measure is to provide immediate liquidity in the form of loans to undertakings operating in the civil aviation sector”, it noted. Under the terms of the financial assistance, a beneficiary may benefit in parallel from multiple support schemes, paving the way for Croatia Airlines, which had already received state aid to mitigate the impacts of the pandemic, to receive additional funds. Ryanair is still challenging an earlier eleven-million-euro cash injection into Croatia Airlines, which was approved by the Commission. The Croatian carrier’s Supervisory Board will today approve to carryforward the company’s 38-million-euro loss from 2021 into future years.
Once the contracts are finalised, the Croatian government must publish relevant information on each individual aid granted within twelve months from the moment of granting. In its conclusions on the matter, the European Commission noted, “The Commission therefore considers that the measure is necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a Member State since it meets all the relevant conditions. The Commission has accordingly decided not to raise objections to the aid on the grounds that it is compatible with the internal market of the Treaty on the Functioning of the European Union”.
Can someone explain to me as to why they only companies from North Croatia and Zagreb can get the aid? How odd.
ReplyDeleteI guess so they wouldn't have to give funds to coastal airports?
DeleteBut why??
DeleteMakes no sense
DeleteBecause they want to secure maximum funding for Croatia Airlines.
DeleteBecause coastal airports in Dalmacia usually report profit, even last year (imagine their accounting practices).
Delete99% of this money will be going to one company.
ReplyDeleteIndeed
DeleteGood. They need all the help they can get.
DeleteIt will be interesting to see if Trade Air gets any money.
DeleteAnd other airlines like ETF and Fly Air41.
DeleteIs ETF registered in Zagreb or Dubrovnik?
DeleteHeadquartered in Zagreb.
DeleteDoes this have to be paid back?
ReplyDeleteYes it's a loan. It says so in the first sentence.
DeleteWithin 6 years.
DeleteGood luck with that.
DeleteWhat happened to 33 mil EUR given as "loan" to OU before pandemic?
ReplyDeleteThey have to pay it back next year I believe.
DeleteThis won't be enough.
ReplyDeleteIt never is
DeleteAdd to that new PSO funding which will be larger than the previous one.
ReplyDeleteWhere did you get an info that it will be larger?
DeleteWell there is an additional route in the PSO so it will certainly be bigger than before.
DeleteOU has received quite a lot of cash over the years, either from direct injection by the government (€100 million was the first post-EU one) and then there was the income that came from selling family valuables such as Pleso prevoz or LHR slots. None of these were used to make OU more competitive, just to maintain status quo and that's the biggest problem here.
ReplyDelete+100
DeleteSo pretty much they will get around 75mio in 2 years? Where will the money go?
ReplyDeleteThat's the problem. It goes on daily liquidity matters like wages. Not into development.
DeleteI really hope that this money will be strictly monitored like it says in the article. The last restructuring was an absolute failure and those 106 million were obviously not used in the way they were supposed to.
ReplyDeleteThe state owns the company and wants to invest. Seems normal to me.
ReplyDeleteThat's not how it works.
Delete^ what do you mean?
DeleteThe problem is that airlines operate in a free European market, and you can expect that a privately owned airlines, that need to cover their expenses on their own (and make profit in the long term), aren't very happy about governments financing loss-making competition who is trying to undercut them.
DeleteInvesting in healthy subject, yes, by all means. But this is not investing. This is wasting of tax payers money to cover huuuuge losses made by unhealthy, politically driven and apparatchik run impotent insignificant regional feeder full of Uhljebs, incompetence, crime and corruption
DeleteLetting OU go bust would cost the government much more.
ReplyDelete+1
DeleteNobody here wants OU to go bust. We want results for billions already wasted. The sad part is those accusing others to want OU go bust are not aware it will go bust this way, sooner or later, same as Adria did
DeleteVery interested to see who gets the money.
ReplyDeleteOU.
DeleteWill ZAG also get money from this aid?
ReplyDeleteThey really shouldn't. They made the decision to go to bed with Ryanair which isn't paying for half of the services all other airline's are paying for and are hurting OU.
DeleteBravo EU
ReplyDeleteCroatian Government knows what they're doing.
ReplyDeletecut the BS. You're not even funny as poster before said, you are pathetic and annoying
DeleteActing like a baby when things don't go your way, people have different opinions, be respectful.
DeleteRijeka, in that field you are the absolute champion!
DeleteI will not be respectful. Fully convicted criminal organization, absolute Champion in crime and corruption, deserves no respect. And those advocating them need propper word for their advocating. BS.
DeleteHope it works out
ReplyDeleteDon't worry. Croatia Airlines will be around for a loooong time.
DeleteMalev thought the same.
DeleteCroatia Airlines will get as much money as they want, and no EU will stop this, especially for the next 2 years since now COVID-19 aid is betting given to all airlines from all EU governments.
DeleteSto se babi tilo to joj se i snilo. Uhljebima pogotovo. But Croatia Airlines as it is today will not be around even for a short time, let alone loooong
DeleteGood news. OU gets aid and doesn't get punished for it.
ReplyDeleteUntil one day the EU pulls the plug like it did with many airlines that seemed untouchablle.
DeleteMaybe they can open a base in LJU now.
ReplyDeleteAre you serious? They got aid to cover covid losses and you expect them to open a base in Ljubljana??
DeleteHas they done it two years ago when Adria went bankrupt they would have ruled the Slovenian market by now.
DeleteThe question is would it have been profitable.
DeleteWhat sucks is that they are wasting taxpayer money for what? To get more of the same?
ReplyDeleteMuch more money would be lost if they went belly up
DeleteOne way or another it's the taxpayers who will foot the bill.
DeleteI'm really interested to see which direction OU takes in the future. The pre-Covid expansion with a lot of new routes has been wiped out over night. None of the routes launched in the last 5 years have returned expect for Barcelona. The A320neos are being cancelled and the privatization has been cancelled. So it will be interesting to see what the future holds for this company
ReplyDeleteAsk BCG
DeleteAgree, a lot of unknowns.
DeleteHope it won't take the full 12 months until they reveal who they gave the money too.
ReplyDeleteCroatia Airlines was in problems before this pandemic... The EU is throwing money down the toilet trying to help this national airline.. this airline is operated by thieves.
ReplyDelete+1
DeleteNonsense!
DeletePlus one million for An.10.05
DeleteWhat does it mean when you carry over your loss from previous year?
ReplyDeleteRupa bez dna.
ReplyDeleteAre there any conditions for all this aid for OU?
ReplyDeleteNo
DeleteMost countries have made certain requests from their airlines in return for aid.
DeleteThe amount of money OU needs just to cover their operations is getting bigger and bigger.
ReplyDeleteCorona is a nice excuse to continue with state control and pumping tax payers money in this airline. It's good Ryanair will now be monitoring everything.
ReplyDeleteLast time arounf OU was supposed to utilise the aid money they get to the last eurocent and try to get back to growth. Instead they spent it on external advisors to write them a report on how they are spending the money.
ReplyDelete*around
DeleteIs it true that OU will provide wetlease service to JU on "power by the hour terms " this summer? I heard a rummor only...
ReplyDeleteNo
DeleteCompared to what other airlines got around Europe, this is nothing.
ReplyDeleteOther airlines in Europe are operating fleets of hundred plus jets, widebody included, not half dozen turboprops and half dozen old 320f, plus are not run and controlled by top range thieves
DeleteMudrac!, you know everything, why don't you run for politics and make a change instead of hanging over this blog site night and day for YEARS, couch hercules, I can imagine how it is to live with you...get a life dude....
DeleteWell he said he is a former OU staff member so you cannot expect less stuff. Also, in a democratic world everyone has the right to criticise.
DeleteMudrac from Rijeka has been flooding this site with the same rhetoric EVERY single day for the past 3+ years..... so one is an opinion, and one is trolling.....
DeleteAll are going crazy that Cro gvmt' is sinking money into THEIR company, and EU is OK with this!!
The Croatian government will keep on doing this indefinitely, because to the dismay of the haters, Croatia Airlines will NEVER GO BANKRUPT, just like Alitalia, Air France, Iberia, it carries too much weight for Croatian tourism industry, 50m per year is peanuts, its just a Croatia thing, and live with it!
Kradeze botovi na aparatima, popljackali ste i unistili sve sto se moglo, raselili ste Hrvatsku i od nekada jedne od najbogatijih i najrazvijenijih regija Centralne i Juzne Europe napravili nakaradni Uhljebistan. Platit cete za zlocine, kad tad, zato se toliko i pjenite kad cujete istinu, jer vas je strah onoga sto dolazi. A ja cu vam istinu govoriti svakog dana, desetostruko, sto se vise pjenite
DeleteBle ble, mudrac again at work!
Delete@12.16
DeleteYou should also compare the aid proportionate to the size of the company.
And that many of those airlines were profitable before Covid...
Delete...unlike OU
DeleteWhat is the average fleet age?
ReplyDelete16.7 years
DeleteThe Airbuses are over 20
DeleteI see this as compensation for OU for doing their job in favor of Lufthansa
ReplyDeleteVery good observation. Kokosari in service of the Cartel
DeleteHow realistic is the option to take the necessary money away from every Croatian citizen and taxpayer and inject it into airline and to give every taxpayer share in airline? Then after the airline is stabilized the citizens would be allowed to sell or buy more of their shares to anyone interested and get at least part of their money back?
ReplyDeleteWith all due respect, you obviously have no clue about Kradeze's model of criminal "privatization" and the fact that Croatia had more elements of market economy during the last years of Yugoslavia than today
DeleteBring back Kucko
ReplyDeleteUrm, no thanks!
DeleteIt's not about which one of them to bring back, but which one of them to bring to the jail
Delete