Monday, 16 August 2021

Ryanair Zagreb Base Will Destabilize Croatia Airlines, Says Air Transport Expert Tonči Peović

August 16, 2021 - Air transport expert Tonči Peović discusses the Ryanair Zagreb base, the fate of Croatia Airlines, and when Croatian airports will see pre-pandemic figures again. 

While the number of tourists arriving by road in Croatia in recent weeks is the same as in the record 2019, aircraft and passengers at Croatian airports are still significantly less than pre-epidemic times. Tonči Peović, director of Brač Airport and the Air Transport Association president, which brings together all Croatian airports and airlines, talks about the challenges facing civil aviation with Jutarnji List.

What is the traffic like at Croatian airports?

"Traffic is returning, but we are not even close to the figures from 2019. In the first six months, we achieved 16 percent of the traffic of 2019, but July brought a dose of optimism with about 30 percent of passengers compared to 2019. In the first seven months, we are at 25 percent of 2019, and if there are no major disruptions with the measures, I believe that this trend will continue in August and September and that in the whole of 2021, we will have 35 to 37 percent of passengers compared to 2019. The biggest drop in the number of flights are from North and South America, as much as 60 percent, and toward other markets about 40 percent. The drop in the number of passengers is somewhat bigger because the planes are less crowded. Purchasing power seems to have fallen, and epidemiological measures are often not clear enough."

British Jet2 has recently established numerous routes to Split and Dubrovnik; Ryanair has started flying to Zagreb and is announcing many new routes. Is there a reason for optimism?

"Of course there is. Ryanair is the first operator in the European sky in terms of the number of flights."

Is the low-cost model the future?

"I wouldn't say. Low cost is rising, but all models must be represented. Traditional carriers that adapt to the new conditions will survive. Currently, 39 percent of traffic in Europe is held by low-cost carriers, 44 percent by traditional companies, and 12 percent by charter companies. Air traffic has become more accessible than ever. Before the crisis, the annual number of passengers in the world was seven billion. Low-cost airlines bring in less revenue to airports. Therefore, I am not sure how good the Ryanair base is being established in Zagreb. This will bring great uncertainty to Croatia Airlines. In Split and Dubrovnik, Ryanair pays the same price for airport services as all other companies."

Last year, only 2.2 million passengers were transported through all Croatian airports, and in 2019 there were 11.5 million.

"Last year is better to forget. We are at least twice as good now. Dubrovnik, for example, had 60,000 passengers in June and only 10,000 last year. So I hope this season will be quite long. If the weather is good and the epidemic doesn’t go wild, we could have the season until the end of October."

Why does air passenger transport recover more slowly than road transport?

"The companies offered flights, but they fill up less. Passengers prefer to come by personal vehicles because they have the freedom to return whenever they want. We didn’t even have guests from Scandinavia, the UK, and the US in the first half of the year. Now that the measures have eased, it will take time for the traffic to start. People usually buy tickets a month before the flight. And many passengers were unable to return from distant destinations last year due to the measures. Fearing this will happen again, people are less willing to travel by plane. Today, even guests from Sweden come to Croatia by car, which is a two-day trip."

If the epidemic calms down, how long will it take to reach the number of passengers from 2019?

"There are estimates that it will take three to four years. I estimate that many weaker airlines will go bankrupt in the fall, mostly those with a smaller fleet that will not pay for aircraft leasing. This year, the price of kerosene is also very high, about $75 per barrel, and last year it was $15. On the other hand, new companies that do not have losses from previous years are being established, so they are attractive to investors. For example, Croatian Trade Air recently acquired a new aircraft with four Airbus 320s and several more Fokkers with about 100 seats. In contrast, another small Croatian company, EasyFly, already has three aircraft. Regarding the number of seats, the two companies together are almost as big as Croatia Airlines."

How do Croatian airports operate in these times of crisis?

"It is easier for airports than for airlines because they have a larger share capital than income. Croatian airports will be on the verge of covering workers' salaries with their revenues this year. We asked the Government to continue with the support measure of HRK 4,000 per worker. We want no one to lose their jobs because our workers are specially educated, and we want to keep them for the future. We get support from the state if we prove that our turnover drop is greater than 70 percent compared to 2019. Without that, we would have to borrow from banks."

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Sunday, 14 February 2021

Brač Airport Director Tonči Peović: Air Traffic Recovery will Depend on Dynamics of Vaccination

February 14, 2021 - Brač Airport Director Tonči Peović comments on what Croatian airports can expect this year.

HRTurizam reports that airlines from all over the world are announcing the return of seasonal flights to Croatian airports. Thankfully, as well, after Croatia experienced a devastating loss last year. In 2020, slightly more than 2 million passengers passed through Croatia's seven airports, while a year before, there were almost 11 and a half million.

"At the global level, there has been a decline in passenger traffic of 64%, in Europe, this percentage is 70%, and in Croatia, it rises to 78%. Large countries such as Russia or China, which due to their size have stronger domestic traffic, have not had such a decline, mostly because they recorded an increase in the segment of domestic passengers," explains Tonči Peović, President of the Air Transport Association at the Croatian Chamber of Commerce and the director of Brač Airport. He adds that one of the reasons for such results is the lack of harmonization and agreement at the international level.

Namely, after the attack on New York in 2001, the International Civil Aviation Organization and the United Nations agreed in the shortest possible time on counter-terrorism, which airlines and world governments began to implement soon after. Such cooperation was lacking during the coronavirus pandemic. The difference in applying epidemiological measures from country to country has negatively affected and still affects air transport.

"When the epidemiological measures subside, and when air traffic is re-established to a greater extent, I expect that the biggest downtime will occur in intercontinental flights and in business class. In intercontinental flights, the delay could be due to passengers' fear of coronavirus outbreaks, which makes it difficult to get back to your destination, and in business class, because companies around the world have started using all the benefits of online remote meeting tools while there are travel restrictions, so I believe that business people will not fly like they used to," emphasizes Peović.

Croatian airports are hoping for some traffic recovery in 2021. Optimism is mostly based on the announcements of airlines, which will operate seasonal flights to and from Croatia. Namely, in 2019, a significant increase in passenger traffic at airports was achieved in April, and similar results were recorded in previous years.

"The first lockdown in Croatia, in April last year, reduced air traffic in Croatia to almost zero. This year, we can hardly expect an "awakening" in early April, at Easter time. In the current situation, we may be able to expect a slight recovery in early May, but this will depend on the dynamics of the split. The lack of vaccines is already playing a big role, so everything will probably continue. Recovery also depends on the situation in the countries from which most of our tourists come, and in most of them, there is a lockdown. All previous optimistic announcements are based on good wishes, but we have to talk about the facts," said Peović.

Airlines worldwide are eagerly awaiting the recovery of air traffic and have been actively involved in solving the problem. The introduction of so-called "Covid passports," i.e., passports for safe travel, would greatly facilitate business. However, such passports also open up a handful of new questions. One of the largest is the type of vaccine. Namely, the vaccine given in some countries is not accepted in others. Therefore, people who have received a vaccine will not be able to travel to destinations where the same vaccine is not accepted.

Therefore, the International Air Transport Association has recently launched a travel pass initiative, which allows the integration of multiple passports or applications and determines which tests for COVID-19 and vaccines are allowed.

"The desire is to introduce standard software, for example for smartphones, with which it will be immediately visible whether passengers have the necessary documents and permits for the destination they are traveling to. Airlines worldwide can’t wait to start flying because even though their current costs are minimal, they want to make a profit, even a minimal one. But the question is how many airlines will survive after the measures are relaxed because, with the start of flights, the costs become much higher. If there is no interest of people in travel and the planes are not filled, I believe that the companies will make big losses, some of which will not recover," says Peović.

And what are the predictions for Brač Airport, which last year achieved only 17% of the traffic from 2019? Well, according to the airline’s announcements, the year could be quite successful. Namely, Brač Airport expects to maintain two Croatia Airlines' flights between Zagreb and Brač this year, which operates twice a week during the summer flight schedule, on Tuesdays and Saturdays.

On its long-term charter line Graz - Brač, Croatia Airlines plans to resume traffic from mid-May to early October. German Sundair plans charter flights from Dusseldorf on Saturdays and from Berlin on Sundays from the beginning of May to the end of October, and ticket sales have already started. Charter flights from Bern and Graz will be operated by Great Dane Airlines in the off-season, from September to October.

"Negotiations are currently underway with Luxair, which connected Brač with Luxembourg two years ago, so I hope that Luxair will decide on reintroducing the line this summer. There is also LOT, the largest Polish airline with which we are in negotiations. We have sent them all the requested documents, and we are waiting for a response."

While the recovery of air traffic is expected, Brač Airport is not sitting idly by but is working to improve conditions. Namely, the airport upgrade project is in progress, where they are extending and widening the runway and reconstructing the passenger terminal. A construction permit for the passenger terminal and a location permit for the runway is pending. After that, the passenger terminal reconstruction project will apply for the EU energy efficiency project, as part of the initiative that arose in response to the impact of COVID-19. 

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Monday, 7 August 2017

Tonći Peović: Croatian Airports Will See 10% Increase in Passengers this Year

Croatian airports are having a rather busy year...

Wednesday, 24 May 2017

A Historic Night: First Flight Lands at New Brač Airport!

What a historic night for the "new" Brač Airport!

Friday, 10 March 2017

VIDEO: Want to Take a Look at the New Brač Airport?

As most of us already know, Brač airport is undergoing a transformation - so what does it look like?

Thursday, 27 October 2016

Jako Andabak Invests 5 Million for Brač Airport

Over the next few weeks, work on the construction of the runway at Brač airport will begin, allowing this small island airport to bring in an increase of traffic, reports