Four EX-YU markets forecast airline subsidies in 2022
The central governments of Slovenia, Macedonia, Serbia and Croatia will offer subsidies to airlines for the launch of new routes or the maintenance of existing services from 2022. The Slovenian government plans to extend the incentives to airlines serving the country. The Director of the Slovenian Chamber of Tourism and Hospitality, Fedja Pobegajlo, said: “We have taken the initiative to continue subsidizing carriers. We think this is very important if we want the airlines to continue returning to Ljubljana airport and to foreign markets. We have to compete with neighboring airports such as Venice and Zagreb. Lufthansa, Air France, Turkish Airlines, Air Serbia, Wizz Air, LOT Polish Airlines and Swiss have all so far benefited from the financial incentives.
The Macedonian government has allocated 1.1 million euros in its 2022 budget to subsidize airlines for the introduction of new routes. This will be the fourth time in a row that the state has offered grants for launching new destinations, with the previous three tenders having been won by Wizz Air, which was the only carrier to seek financial assistance. The current grant contract, which runs until next year, had to be halted in 2020 after Wizz Air was unable to honor the deal due to the coronavirus pandemic. Based on 2019 pre-pandemic data, Skopje Airport’s busiest unserved routes were New York, followed by Brussels, Amsterdam, Melbourne, Paris, Chicago, Düsseldorf and Ankara. Although Wizz Air flies to a number of European destinations from the Macedonian capital, the majority are to secondary airports.
The Serbian government has launched tendering procedures for ten public interest routes to be launched from January 1, 2022 and run until December 31, 2023, including seven from Niš Constantine the Great Airport and three from Kraljevo Morava Airport. Interested airlines will be able to operate the ten routes or a selection of destinations which have been divided into four distinct groups. The first group includes flights from Niš to destinations in the European Union – Hahn, Cologne, Ljubljana and Athens – as well as from Kraljevo to Thessaloniki. Group two includes flights from Niš and Kraljevo to Istanbul, group three includes operations of both to Tivat, and group four includes domestic flights between Belgrade and Niš. All connections will be maintained twice a week, with the exception of the Belgrade – Niš service which will have four weekly rotations. Four of the ten routes will be maintained on a seasonal summer basis between June and September, including those from Niš and Kraljevo to Tivat, from Niš to Athens and from Kraljevo to Thessaloniki. The contract for the ten roads is valued at around 23.8 million euros over a two-year period. Flights to destinations in the EU will be covered to the tune of 13.1 million euros, to Istanbul for 6.7 million euros, to Tivat 971,000 euros and the domestic service will be subsidized to the tune of three million euros. euros over two years.
The Croatian government has issued a much delayed tender for twelve Public Service Obligation (PSO) flight contracts for a period of four years, which will enter into force on May 1, 2022 and end on March 28, 2026. OSPs pay European funds available for unprofitable, mainly domestic routes considered vital for the economic development of the region they serve. Previous four-year contracts expired in March last year, but have since been extended due to the coronavirus pandemic. No other conditions were described in the latest tender, which runs until December 24, 2021. Previous contracts have been awarded to Croatia Airlines and Trade Air. The routes that will be compensated and maintained as PSO are: Dubrovnik – Zagreb – Dubrovnik, Split – Zagreb – Split, Zagreb – Zadar – Pula – Zadar – Zagreb, Zagreb – Brač – 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. The value of the new PSO contracts was not disclosed. Under the previous agreement, Croatia Airlines received around 11.4 million euros in annual compensation for domestic services, while Trade Air received 2.5 million euros per year.