Franjo Tuđman Airport Zagreb is venturing into new territory. Following an 81% fall in passenger traffic in 2020, the airport serving Croatia's capital city of Zagreb is launching a subsidy program to attract new airlines and new routes. The discounts are significant, and, as a result, they might finally attract a low-cost airline to base an aircraft in Zagreb.

Zagreb Airport had limited success attracting legacy airlines up to now

Following several years of unsubstantial growth in passenger traffic and a major drop in figures of 81% in 2020, Franjo Tuđman Airport Zagreb is on the look for new airlines that will launch new routes from there. To make this happen, the airport is finally going to start reducing its fees.

When Zagreb opened its modern new terminal in 2017, it attracted several large legacy airlines through a similar program of discounts. However, the discount arrangement at the time was short-lived. Within two years, almost all new routes were discontinued. This included airlines converting their year-round routes to summer seasonal, cutting some routes permanently, scaling back capacity on others, or pulling out of the airport altogether. This was all before coronavirus.

Emirates, Korean Air, and CSA Czech Airlines have left Zagreb Airport permanently. Eurowings canceled flights from Zagreb to Berlin, Hamburg, and Dusseldorf. flydubai keeps cutting frequencies. Croatia Airlines, which is based at Zagreb Airport and dominates the seat capacity, is growing very slowly.

Zagreb Airport currently has very high fees

As things stand, the airport serving the capital of Croatia has one of the highest fees in Europe. The Passenger Service Charge at Zagreb is as high as €17,50 ($21). On top of this, there is an additional €1,5 ($2) surcharge for each departing passenger. This is a highly off-putting cost structure for Europe's low-cost carriers, especially in a market like Zagreb that is not as affluent as other EU capitals.

For comparison, the Croatian coastal airport of Pula, where easyJet is the biggest airline, has a Passenger Service Charge of just €10. The same is true for Zadar, where Ryanair was going to base three aircraft last year.

So what is on offer?

To counter this trend, Zagreb Airport has launched a program titled "The Model of Stimulating Traffic Growth" with which it hopes to attract new airlines and new routes for a longer time period.

To be eligible, airlines must launch routes that had not been on offer in either 2019 or 2020. The total passenger traffic generated in a year from these new routes must be at least 75,000. At this figure and above, the airline will receive an 80% discount on the Passenger Service Charge. Additionally, 20% of the traffic must take place during the winter schedule. The program has a five-year horizon.

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The discount is sufficiently high and lasts long enough to attract any LCC airline to Zagreb. Wizz Air, which is opening a base in Sarajevo, might be interested. Ryanair, which is using the pandemic to expand operations, might be interested too. The same applies to Volotea, Transavia, or perhaps even Norwegian. All of these airlines fly to Croatia, but to its coastal airports, and not to Zagreb.

Among airlines likely to be most interested is also easyJet. The airline served Zagreb between November 2010 and October 2014. It used to operate flights to Paris CDG, Dortmund, and London Gatwick, but it pulled out of the Croatian capital after intense pressure from Croatia Airlines. Will the new discounts prompt it to return?

Which airlines do you think will be attracted to Zagreb Airport? Let us know what you think of this story in the comments below.