Zagreb Airport Incentive Program: Capital City Airport After More Routes
February 17, 2021 - The Zagreb Airport incentive program encourages the arrival of new airlines and enables them to open new routes to and from the capital city.
Croatian Aviation reports that from December 1, 2020, to June 30, 2021, Zagreb International Airport offers airlines the opportunity to apply for incentives called the "Traffic Growth Incentive Model," which aims to achieve the arrival of new airlines at Zagreb Airport or encourage them to open new routes to and from Franjo Tuđman Airport.
Airlines can apply for this model in the specified period by offering the airport only routes that Zagreb did not have in 2019 and 2020, thus disqualifying certain routes given that regular traffic has existed in the past two years (such as Toronto, Seoul, Tel Aviv, Prague, Bucharest, Berlin, etc.).
Airlines must achieve a certain annual increase in passenger traffic on the new routes for airlines to be eligible for the incentive. Also, airlines must achieve at least 20% of passenger traffic in the winter schedule, aiming to reduce seasonality, which is one of the basic problems of all Croatian airports, especially those on the coast.
An airline that introduces one or more new incentive routes may use it for up to 5 years.
Therefore, if the airline transports more than 75 thousand passengers from Zagreb in the first year of introducing the new line, it will receive an 80% discount on PSC (Passenger service charge). If it manages to transport more than 150 thousand passengers, it is approved for an additional 3% discount on the same item.
The passenger service fee in international traffic per departing passenger in Zagreb is 17.50 euro per passenger (in Rijeka and Brač 12 euro, in Split and Dubrovnik 11 euro Pula and Zadar 10 euro, in Osijek 9 euro per passenger). Zagreb also has an additional 1.85 euro for each departing passenger that airlines pay through the landing and take-off fee.
Airlines can also get a discount on the passenger service fee in the following years. Still, every year it is necessary to ensure an increase in the number of passengers, which motivates carriers to open new routes, which is really only interesting for low-cost airlines given that they generally operate to a range of destinations.
Namely, British Airways will fly to Zagreb only from London, Lufthansa from Munich and Frankfurt, Air France from Paris, KLM from Amsterdam, etc., so classic carriers connect Zagreb mainly with their hubs, which is why this discount is certainly motivating for low-cost airlines.
Zagreb Airport offers a classic incentive program consisting of as many as seven different models in its price list. The 7th model refers to airlines that perform at least 300 scheduled operations in 6 months or 500 in 12 months with a Zagreb-based aircraft. Therefore, the aircraft would have to perform a minimum of 2 flights a day in a year, which should not be a problem for an airline that opens a base in Zagreb (based aircraft of low-cost airlines generally perform 3 to 4 flights a day). In this case, the airline is granted a 100% discount on the centralized infrastructure fee (ramp and terminal).
This part of the incentive program is obviously aimed at low-cost airlines, which fit perfectly into the business model (Wizz Air, EasyJet, Eurowings, Ryanair, Volotea). The question remains whether one of the above low-cost companies will decide to launch a new international line to and from Zagreb in this difficult year (i.e., by the end of June).
Zagreb International Airport said on the matter:
"The Zagreb International Airport Incentive Program has been prepared in cooperation with several airlines to open new destinations and increase the number of passengers and routes. Although there is airline interest in this new incentive program, the development of the epidemiological situation and related measures by state governments will influence airlines' decisions to apply for the program."
Given that we are in a crisis year and that air traffic recovery will be significantly slower than initially expected, it is not clear why Zagreb Airport has announced this incentive program with a short application deadline.
Also, to obligate the transport of a certain percentage of passengers in the winter flight schedule when traffic at all Croatian airports is significantly lower than in the summer months would be logical in 2019, but not now when carriers are unsure of the scope of regular operations for two weeks in advance, which primarily depends on epidemiological measures and last-minute passenger reservations.
Croatian Aviation adds that it would be commendable if such an incentive program was limited, for example, exclusively to the summer flight schedule this year, which would stimulate carriers to come to Zagreb Airport as early as 2021, in a year in which airlines will try to reduce costs and reduce risk to a minimum.
We will know soon whether this part of the incentive program will bear fruit. Companies that decide to launch lines to Zagreb must make the first flight on the new line by June 30, or in just over 4 months.
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