Croatia Airlines has renewed a public service obligation (PSO) with the Croatian government to operate a 3x-weekly service between Zagreb Franjo Tuđman (ZAG) – Croatia’s main international airport – and Mostar (OMO), a historic city in Bosnia and Herzegovina. This PSO was renewed to enable Croatia Airlines to maintain air services on vital routes.
A Little About Croatia Airlines
Croatia Airlines was established in 1989 and is the flag carrier of Croatia, based in Zagreb. It is a Star Alliance member and connects Croatian cities to major European destinations, operating a fleet currently undergoing a full renewal to Airbus A220 aircraft.
It initially operated cargo flights for UPS as “Zagal” (Zagreb Airlines) before rebranding and launching its first passenger flight in May 1991. As of 2024, the airline had flown over 46 million passengers. Across both 2024 and 2025, using the DHC-8-Q400 – a high-speed 70- to 90-seat twin-turboprop regional airliner – Croatia Airlines transported a total of 21,915 passengers between Zagreb and Mostar.
The main hub is Zagreb Airport (ZAG), with strong summer seasonal bases in Split (SPU) and Dubrovnik (DBV). They also connect to over 25 international destinations, including London, Frankfurt, Paris, and Rome.
What is a PSO?
A public service obligation, or PSO, is a legal requirement imposed by authorities on service providers to maintain essential, non-profitable services. The contract ensures that necessary services, such as air transport, remain affordable, safe, and accessible, particularly for remote communities. These contracts allow carriers like Croatia Airlines to operate routes that are not profitable but crucial for connectivity and economic development.
PSOs in Croatia include domestic flights, such as those linking Zagreb to Split, Dubrovnik, Zadar, Pula, and Osijek. The purpose is to ensure year-round transportation for residents and tourists, overcoming the low population density and unique geography that make these routes unprofitable in a free market.
A PSO cost varies significantly, as it represents the net financial loss. The Ministry of Sea, Transport, and Infrastructure allocated a total of 1.75 million euros ($2.07 million) for the route in 2026, with 950,000 euros ($1.13 million) dedicated to financing the PSO route.
Overall, the contract enables a smaller city, potentially an isolated coastal or inland town such as those in Croatia, to ensure essential, non-profitable transport links. It also guarantees year-round connectivity to major hubs, boosting tourism, economic growth, and social inclusion.
Have you ever flown with Croatia Airlines? What do you think of PSOs? Let us know your thoughts in the comments!
