February the 2nd, 2021 - What can be done to help the Croatian bus industry recover and get back to the way it was in pre-pandemic times? Further liberalisation appears to be the key.

As Poslovni Dnevnik/Darko Bicak writes, the economic consequences of the ongoing coronavirus pandemic have been most strongly felt by companies in the services sector, especially passenger carriers, as there is neither interest in travelling at all, nor are many countries allowing anything but essential domestic or international travel.

As a result, many parts of Croatia, especially rural areas, are almost completely cut off from larger centres and the rest of the country.

In order to make the situation more bearable, let's not forget that in a few months there will be local elections in which new mayors and county prefects will be elected, and the Croatian Association of Counties (HZZ) has launched an initiative to help the Croatian bus industry and regular bus carriers maintain their intercity lines.

The Ministry of Maritime Affairs, Transport and Infrastructure is required to play a more proactive role and change the existing regulations in order to be able to pass more money through multiple models as an incentive to the Croatian busy industry and their regular carriers.

One of the loudest among them is Darko Koren, prefect of Koprivnica-Krizevci County, who says that the situation with transport in their area has heated up.

"We're in constant conversation with carriers who are going through difficult times due to the pandemic-dominated circumstances and have to cancel lines, especially those from rural areas due to economic unprofitability. Their sustainability is mostly based on the transport of students, which has now been reduced, and you know that, for example, Koprivnica-Krizevci County leads in Croatia in terms of co-financing transport with about four million kuna per year. It's time to finally resolve this issue,'' Koren said.

The problem of school transportation

A special problem lies with school transport because the contracts between the counties and the Croatian bus industry, ie their carriers for this school year were supposed to be signed by November the 30th last year, but due to the coronavirus pandemic it was all postponed.

"Concrete matters haven't yet been resolved. Carriers are now in difficult situations. They've been maintaining unprofitable lines for years, they're recording big losses, it's getting harder. I hope that we will have it resolved very soon,'' said Hrvoje Mestrovic, President of the Association of Public Bus Operators.

Perhaps the biggest problem lies with the previously wildly popular FlixBus platform, which is mainly focused on international travel - back in pre-pandemic 2019 they reported 62 million passengers, of which 1.4 million were in Croatia, and last year it was halved to just 30 million, mostly in Europe, with far greater decline seen in this country.

Now they say that as a vital part of the mobility sector, it is in their interest to provide all its users with an easily accessible, safe and sustainable mode of transport and therefore support all efforts of the Croatian Government and science to combat the pandemic and speed up economic recovery."As part of the transport industry, especially because our business model is based on a partnership with many Croatian carriers, we share the same challenges with them.

Accordingly, we support all initiatives in which, in addition to public health, the jobs of both employees in the transport industry and all employees in Croatia are protected. We welcome any action aimed at finding a quality solution to preserve vitality and enable the recovery of the Croatian bus industry. However, it's important to point out that this crisis has shown up all the shortcomings of the closed market and clearly indicated that for the recovery of the Croatian bus industry it's necessary to continue the liberalisation process and develop passenger transport so as to ensure equal conditions for all carriers,'' stated Ante Grbesa, director of the FlixBus CEE South region.

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As Novac/Gordana Grgas writes on the 6th of July, 2020, carriers have begun laying off their bus drivers en masse, as was confirmed by the Voice of the Entrepreneurs/Glas Poduzetnika association, recalling a series of unsuccessful meetings and protests to solve the plethora of problems faced by this business in relation to tourism, which arose due to the coronavirus crisis.

Calls from some of them, from Dalmatia, through Istria, to Varazdin, confirmed that owners and directors, faced with a dramatic drop in revenue and huge financial obligations owing to bus leasing contracts, are writing or announcing business-related cancellations, and bus drivers are applying to the Croatian Employment Service or are already packing their suitcases to drive a truck overseas.

Government measures

Rovinj's Črnja Tours once had 131 bus drivers employed before the outbreak of the coronavirus epidemic, and on Friday they began with about 70 dismissals because, as they stated from the company's administration, they can't afford to keep their bus drivers without state support for the payment of their salaries.

"This time last year we could hardly find people [to work], as many as 30 of our bus drivers were from abroad, from Bosnia and Herzegovina and Serbia, but now we can no longer keep our workers. We'd hoped that the Government's measures would be extended for another three months, but they weren't. We submitted a request for June, but we haven't even received an answer for that yet,'' they state from Črnja Tours, which deals with both regular and tourist transport.

Liabilities to a leasing company, during the agreed moratorium, have been settled from the loans they took out with their commercial bank, and they have applied for HAMAG's liquidity loan and are waiting for a response.

Some buses had to be returned to various leasing houses.

"We sought a solution, we negotiated, we attended the protest held in Zagreb, but we didn't achieve anything and now it's all over, I have no more comments to make about it," said the director of the Solin-based company Delminium travel, Ivona Jukic. Three of that company's buses now run for Flixbus. Tourism is going poorly, excursions and congresses are being cancelled, and Ivona is preparing the arrival of tourists by plane from Scandinavia, but she has so far failed to get an answer to the question of who will have to pay the quarantine costs if one of those tourists gets infected.

Vinko Darojkovic, the director of the transport company Darojkovic from Brckovljani, says that his turnover has dropped by 98 percent, and from starting out with 38 employees, his company has remained with just 14 bus drivers since July the 1st, and he says "we will not stop there".

Last May, he illustrated, his company had a turnover of 3.9 million kuna, and this May they earned about 90 thousand kuna.

"We'll remain working but with only about 10 buses, but last year we had 28 of them. We checked them out and now they're standing in a car park, and the market price is falling. I don't know what we'll do with the payment of the lease because the leasing companies charged us high interest rates even during the moratorium,'' explained Darojkovic, adding that he currently owes around 600 thousand kuna. They expected help from the state, but nothing happened. They fired bus drivers, mechanics, cleaners... When asked what would happen to these people, he said: ''Bus drivers are a sought-after profession, some will drive trucks to Germany or Austria. The others just cry with us and go to the employment office,'' he replied. He asked for a liquidity loan and is still waiting for it.

Vincek from Jelkovac now has 270 employees, and at the beginning of the epidemic, about 70 bus drivers were fired. At the moment, they're not firing anyone, says director Kresimir Cumbrek, in June they had an income of around three million kuna, but last June their income was 11 million kuna and without state support things will only go downhill. "There will be a collapse in July, everyone will go in the direction of layoffs, especially in the case of smaller carriers who only have a few buses. I can't believe that the state has treated us like this,'' he noted.

One of the smaller carriers, Tomislav Kovac from Kastela, stated that he had to fire two workers. Now he is the only bus driver in his company For Travel, but he doesn't really have a job: since March the 8th, he has had one ride, for which he charged 7,000 kuna with VAT. In extremely stark contrast, last year, he had a monthly income in the tourist season of up to 180 thousand kuna.

For more on working in Croatia during the coronavirus crisis, follow our business page.