Ryanair’s new Zagreb base gives hope to Croatia’s struggling market

Croatia Airlines has had a troubled financial record.

Croatia so far has been one of the last air transport markets in Europe to show signs of recovery from the COVID-19 crisis, not surprising for a country that generally has very limited airline coverage outside of the peak summer season.

However, Irish LCC Ryanair has opened a base in the capital Zagreb (ZAG), which could change market dynamics and potentially spell trouble for loss-making Croatia Airlines. 

Croatia is one of the major tourist hotspots in Europe in the summer. Surprisingly, major LCC activity was relatively small or non-existent, even before the COVID-19 pandemic hit.

“We see an enormous seasonality in air traffic in Croatia, which is very unique,” Boris Padovan, a Travel in Motion principal consultant, told Routes Digest. Business traffic to/from Croatia remains relatively weak and state-owned Star Alliance member Croatia Airlines has had several loss-making years since its inauguration 30 years ago. 

“The economic situation at Croatia Airlines has always been challenging,” Padovan said. 

In 2020, Croatia Airlines recorded a €47.3 million ($57.5 million) loss. 

Croatia Airlines has strong ties with the Lufthansa Group (both are Star Alliance members), including operating feeder service to major Lufthansa hubs Zurich (ZRH), Munich (MUC) and Frankfurt (FRA). 

David O´Brien, CEO of Ryanair subsidiaries Lauda Europe and Malta Air, told Routes Digest in an exclusive interview that the weakness of Croatia Airlines did not play a role in Ryanair’s decision to open a base in Zagreb. “Croatia Airlines is irrelevant for our decision making,” he said. “It is not a factor.”  

O´Brien said as many as 10 737-800s could eventually be based at ZAG: “We started with two aircraft. Zagreb is the capital city … and remember, when we arrive in certain cities, they become [passenger] destinations.“ 
 
This summer, SkyTeam member Delta Air Lines and Star Alliance member United Airlines will be operating seasonal 
service to Dubrovnik, Croatia (DBV) from the US. 
 
European startup Pragusa One will offer flights from DBV to Newark, New Jersey (EWR) and Los Angeles (LAX) starting June 21 and June 22, respectively. 

Photo credit: joepriesaviation.net