Slovenia has been given the green light by the European Commission to distribute seven million euros ($7.7 million) to airlines in the form of incentive grants that are aimed at stimulating the recovery of air traffic. The country’s aviation sector remains one of Europe’s worst affected by the pandemic.
Aviation in Slovenia is doing very poorly
Aviation in Slovenia experienced a double whammy in the last three years. First, its flag carrier, Adria Airways, went bankrupt in late 2019. Despite this bankruptcy becoming an inevitable outcome about three months before it actually happened, Slovenia’s Government did not put into place any mechanism to safeguard the country’s aviation sector.
Then, the pandemic hit just several months later. As a result, foreign airlines did not replace almost any capacity previously offered by Adria Airways. Ljubljana Airport’s traffic remains a mere fraction of its pre-2020 levels.
Since Adria Airways’ bankruptcy, the Slovenian Government has toyed with the idea of setting up a new national airline continuously. However, the Government remains uncommitted to the idea because there is no strong political appetite in Slovenia to set up Adria Airways number 2.
The demise of Adria Airways has left Slovenian air connectivity in dire straits. Photo: Getty Images
Another tender to the rescue
To resolve this problem, the Government of Slovenia has proposed yet another tender for existing and potential airlines to apply for. However, only seven million euros ($7.7 million) are up for grabs, so it remains unclear what the Government is trying to achieve. This is the total budget for all airlines.
The explicit purpose of the tender is to ensure that the existing basic network of links between Slovenia and European hubs is maintained and that more destinations in Europe and the rest of the world are added. The Slovenian Government will distribute the money to the airlines that apply following a specific method. This will likely see the money divided up between at least six airlines, and the maximum amount that any single airline can get is 2.5 million euros ($2.7 million).
The European Commission has now approved the scheme, according to a press release by the Slovenian Government. It has been found to be in line with the state aid framework that was produced specifically for the pandemic two years ago.
Following the last tender, SWISS somehow received funding by Slovenia even though it was not flying to the country at the time. Photo: Getty Images
The last tender was not a success
When this whole process was launched the first time around, in November 2020, it did not yield a meaningful result as it did not produce a meaningful difference to Slovenia’s air connectivity. It remains unclear how the Government expects this new tender to be more successful when it is almost identical to the old one.
As Simple Flying reported at the time, the last tender was an unusual method of state funding in the sense that it was actually a retrospective subsidy.
For that tender, the Slovenian Ministry for Economic Development and Technology had formed a commission that decided how much money the Government would give to airlines that operated flights to Ljubljana Airport in 2020. The money was awarded a scorecard which was used to rank the applicant airlines , but this was criticized for its strange points system.
For example, one of the criteria that carried 20 points was that the applicant had to perform business activity in both EU and non-EU countries, but both in Europe. Similarly, the applicant had to fly to Slovenia at least five times a week, but one of the airlines that received funding in the end (SWISS of Lufthansa Group) did not actually do so. Furthermore, easyJet did not receive any funding after it was reportedly disqualified for undisclosed reasons.
The biggest oddity with the tender remains the fact that it is a retrospective subsidy that functions as a reward system for airlines that have been maintaining flights to Slovenia.
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