Croatian Private Aviation: Small in Fleet, Serious in Revenue

In the Croatian register of civil aircraft, there are just over 760 aircraft recorded, but only a small portion belongs to companies that truly live off aviation. Behind this colorful ownership structure lies a handful of private operators who have built their businesses over the years without fanfare, in markets that know no borders or seasons. Trade Air, ETF Airways, Jung Sky, and Air Pannonia are four different stories about how a serious aviation business can be built in a small country, provided that one fights daily with regulations, fuel costs, and global competition for pilots.

Easy for jets, challenging for personnel

ETF Airways has quickly grown into one of the more interesting regional ACMI operators. Stjepan Bedić, the CEO, does not shy away from expressing ambitions or challenges.

– Currently, we have 3 B737-800 aircraft and one ATR72-600 coming soon. We operate ACMI, flying in Europe during the summer and South America in the winter. Our partners include JET2.com, Nesma, FlyBondi, TUI, Transavia, Neos, and others – emphasizes Bedić.

Opening the winter market in South America was a strategic move that solved the seasonality problem that plagues almost all European operators. However, Bedić is more troubled by the issue of personnel, specifically their departure.

– The challenge is staffing, the disconnect between what is taught in universities and the needs in our work processes. Labor costs are a huge problem, especially for flight personnel, where a person receives net less than half of the total salary costs. The competition for labor is global, and many pilots are leaving for Gulf countries, Turkey, China, and so on, where they receive higher net salaries, and the cost for those companies is lower than for us. This is especially tragic for pilots whose education was funded by the state at a cost of over 100,000 euros, only for them to now live and work abroad. By reducing contributions, the state could attract thousands of foreign pilots, and perhaps it is better for 3,000 people to pay 1,000 euros in taxes instead of 200 people paying 3,000 euros in taxes – emphasizes Bedić.

ETF Airways’ vision is not to be overlooked and lacks ambition. It aims to become a company with about ten aircraft, short, medium, and long-haul routes, a maintenance center, and its own tourism product, all with a plan to involve children in this chain, from school to well-paid jobs. *Continuation of the text after the table…

Sixteen Years in Business Aviation

Jung Sky is one of the longest-standing domestic business aviation operators. With two Cessna CJ2 jets, they conduct between 1,300 and 1,500 flights annually, and in three years, they have accumulated around 6,000 flight hours. Krešimir Vlašić, the Director of Operations, explains what this means in practice.

– When we calculate all the factors affecting flight frequency, including crew duty and regular aircraft maintenance cycles, which come up more quickly due to such a volume of flights – we conclude that the fleet is currently maximally utilized, meaning we cannot fly more than what we are currently achieving – emphasizes Vlašić.

They are most active in Italy, France, and Germany, while their strongest market by brokers is London, followed by Switzerland. Geopolitics, as Vlašić emphasizes, hits aviation ‘suddenly and without warning.’

– The problem in aviation is that any disturbances in the world reflect immediately on the aviation industry and to a considerable extent. One example from our operations is the loss of previously very potent markets in Ukraine, Russia, and Belarus after the outbreak of war in 2022, and the most recent is the current escalation of conflict in the Middle East, which has already resulted in cases where the price of fuel at some airports has jumped by almost 80 percent – adds Vlašić.

Business aviation is often viewed as an industry of huge profits, but Vlašić corrects this perception with a concrete example. The French luxury tax of 420 euros per passenger for a flight with five passengers automatically means an increased price of over 2,000 euros, which needs to be sold and justified to a market that does not consider the cost structure of operators.

A Family Story with a Fleet of Seven Aircraft

Air Pannonia and Air Tractor are family-owned companies where Miroslav Vlašić, the founder and pilot, along with his wife Jasna and son Krešimir and the rest of the family, is building one of the most diversified portfolios in domestic private aviation. Seven aircraft of different types, from business jets to Antonov 2 and Air Tractor intended for aerial services, speak to the Vlašić family’s intention not to remain in one niche.

In addition to VIP transport, the company covers medical and emergency flights, fire surveillance, aerial treatment, pilot training, and testing pilots’ language skills, and has its own aircraft service. Staffing issues and rising operational costs are also daily challenges for them, and in the upcoming period, they plan to further expand their fleet and strengthen their presence in the international market.

The Largest Fleet, the Highest Revenues

Trade Air is the oldest and, in terms of revenue, the strongest private airline operator in Croatia. Marko Cvijin, the CEO, briefly and precisely describes where they are and where they are headed.

– Our fleet currently consists of five Airbus 320 aircraft. The plan is to try to add one more aircraft to the fleet by 2026 – says Cvijin.

The rapidly changing EU regulations that introduce innovations without a real impact on safety or environmental protection is one of the challenges. Another is geopolitics, from which they had to withdraw from the Middle East. However, Cvijin goes deeper and explains a serious competitiveness problem.

– Looking through the lens of Croatian commercial air carriers, our competitors are foreign airlines that have larger fleets and with whom we compete for the same jobs. Certain EU countries also have tax incentives for aviation, such as Lithuania, Malta, and Cyprus, which creates a problem for our business competitiveness – concludes Cvijin.