Two carriers to be awarded Croatia domestic flight contracts

Following numerous delays in the selection process, Croatia Airlines and Trade Air will once again be awarded multi-million-euro contracts to operate domestic Public Service Obligation (PSO) flights for a period of four years. “During the implementation of the tender, the Ministry for Sea, Transport and Infrastructure communicated with a number of interested airlines and two official offers were received within the prescribed deadline, from Croatia Airlines and Trade Air. Contracts will be concluded with the carriers after a final decision is made”, the Ministry said in a statement. The four-year contracts, which provide European Union funds for the upkeep of domestic services deemed commercially unprofitable, were initially to come into force on May 1. As a result of the delay, Trade Air, which has maintained a considerable number of PSO flights, suspended all of its domestic operations at the start of last month. Croatia Airlines, which is also the beneficiary of PSO subsidies, has continued its domestic services, albeit without EU funding.

The new PSO contracts will now run from July 4, 2022, until March 28, 2026. A final decision on which flights will be operated by each of the carriers and the total value of the deals is yet to be made public, although both are expected to maintain the same routes held in the previous PSOs, which were extended by two years due to the coronavirus pandemic. The government has defended its tardiness by noting there was “significant” interest from foreign airlines which required additional screening and due diligence on behalf of the state. Croatia Airlines and Trade Air are the only two carriers to have previously won contracts to operate subsidised domestic flights in Croatia, although any airline registered within the European Union that meets the tender criteria can apply.

Under the previous deal, Croatia Airlines received roughly 11.4 million euros in annual compensation, while Trade Air approximately 2.5 million euros per year according to the European Commission. The routes which will be subject to the latest PSO funding are: Dubrovnik - Zagreb – Dubrovnik, Split - Zagreb - Split, Zagreb - Zadar - Pula - Zadar - Zagreb, Zagreb - Bra─Ź - Zagreb, Osijek - Dubrovnik - Osijek, Osijek - Split - Osijek, Osijek - Zagreb - Osijek, Rijeka - Split - Dubrovnik - Split - Rijeka, Osijek - Pula - Split - Pula - Osijek, Rijeka - Zadar - Rijeka and Osijek - Zadar - Osijek.

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