Zagreb International Airport, which holds the concession for Zagreb Airport, has requested a temporary postponement of the payment of the due concession fee from April 1 from the Croatian government. MZLZ, led by Huseyin Bahadir Bedir, cited force majeure as provided in the Concession Agreement due to the reduced number of flights at Zagreb Airport caused by the pandemic, but the company emphasizes that the state will not suffer any damage.
– In all these cases, there is no additional burden on the state budget; rather, the Republic of Croatia is temporarily waiving the collection of the concession fee, which the concessionaire is still obliged to pay after the stabilization of operations, and until it does so, it is not authorized to distribute profits. At this moment, it is difficult to say when that level of cash flow will be reached, considering that it depends on the recovery of the entire aviation industry, which has been severely affected by the crisis – they say at MZLZ.
The concession fee that MZLZ needs to pay this year to the state budget amounts to approximately 6.3 million euros, of which 1.5 million euros was paid on January 2. So far, a total of 31 million euros has been paid.
The concession agreement stipulates that even in the case of bankruptcy, liquidation, or a reduction in the number of flights of Croatia Airlines, the concessionaire can also request a temporary postponement of the concession payment, but MZLZ emphasizes that this situation, although it has occurred (a drastic reduction in the number of flights), is not cited as a reason for requesting a postponement. As they point out, the pandemic is the main cause of the decline in traffic, which means that it is not just about Croatia Airlines, but about the decline in traffic of all other airlines. In the period from March 15 to June 15, they say, a traffic decline of up to 95 percent was recorded. Finally, the decline in the number of flights raises the question of repaying the loan of 196 million euros that financed the construction of the new airport building. This year, MZLZ must repay 13.3 million euros in two annual installments, in June (5.1 million euros) and December (8.2 million euros), and in case of cash flow shortages, it will be able to utilize the Debt Service Reserve Facility mechanism (an undrawn and reserved additional tranche of credit specifically for situations where payment problems arise) up to 14 million euros.
