Croatia Airlines has reacted angrily to the news that Zagreb Airport will provide financial incentives to Ryanair to launch new routes out of Croatia’s capital. The Croatian national airline claims that these incentives violate market competitiveness, and it is asking for a fee reduction for itself.
Croatia Airlines reacts to Ryanair’s arrival in Zagreb
Two weeks after Ryanair announced that it is opening a Lauda Europe base in Zagreb Airport, Croatia Airlines has issued a lengthy reaction seen by Simple Flying.
The Croatian flag carrier is asking Zagreb Airport to “harmonize” the conditions that it provides to it with the conditions it will provide to Ryanair. Croatia Airlines said it expects to be given more favorable terms on the basis that it is the largest user of the airport’s services: it accounts for over 50% of Zagreb’s traffic.
Perhaps most interestingly, Croatia Airlines stated that Zagreb Airport’s incentives program “camouflages” that Ryanair is making a direct attack on it. Commenting on Ryanair’s destinations list, Croatia Airlines stated (translated):
“It is interesting to note that the IATA codes refer to airports, not destinations and regions, which camouflages the intention of [Zagreb Airport] to introduce new airlines to existing markets under more favorable conditions.”
With this statement, the airline is making reference to the fact that Ryanair will be given a fee discount for opening a new route from, for example, Zagreb to Frankfurt Hahn, when Croatia Airlines already flies from Zagreb to Frankfurt International.
Not the first time that Croatia Airlines has reacted to LCCs
This is not the first time that Croatia Airlines has reacted aggressively to protect its position as a dominant airline in Zagreb Airport. The Croatian national airline launched the same media offensive ten years ago when easyJet arrived in Zagreb in 2010 to launch routes to Dortmund, Paris CDG, and London Gatwick. easyJet ended up leaving Zagreb Airport in 2014.
However, the situation is different now than it was in 2014. Zagreb Airport is no longer under government control. It is instead run by a consortium of companies under a 30-year concession agreement since 2012. Previously, under the management of the Croatian government, Zagreb Airport had more reason to protect the favorable position that Croatia Airlines enjoys in Zagreb. This is no longer the case, and so Croatia Airlines is hoping that it can cause a media storm to turn public opinion against Ryanair.
Still, Croatia Airlines is launching the same offensive once again. It said that the fee discounts provided to Ryanair by Zagreb Airport mean that its own payments to Zagreb would go toward subsidizing Ryanair.
“It is unacceptable that the national airline should finance the entry of new competitors into the Croatian market. (…) Passengers and the Croatian public have a right to competitive prices and complete and objective information.”
The Croatian flag carrier claims that it would not have made a loss of 80 million kuna ($12.5 million) but a profit of 55 million kuna ($8.66 million) in 2019 if it was given the same conditions as Ryanair will be given this year in Zagreb.
However, Croatia Airlines itself does not operate under strict market conditions. It receives extensive financing from the Croatian Government for PSO routes every year, even though it is not presently operating all of them due to COVID-19. Furthermore, the airline has received $250 million in government assistance in the last ten years, to cover its operational losses. The airline was loss-making before the pandemic.
It will be interesting to see how Zagreb Airport reacts to Croatia Airlines’ latest statement.
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