Croatia’s largest passenger shipping company is preparing for competition.
Croatian passenger shipping companies will soon be confronted with international competition. After the expiry of the transitional period agreed with the European Union, on 1 January 2017 Croatia’s market will be fully liberalized and that will enable foreign companies to transport passengers on the Adriatic Sea, reports tportal.hr on October 17, 2016.
This means that new tenders will be announced for all lines connecting Croatian seaports, and shipping companies from all countries of the European Union will be able to send their bids. Currently, the majority of shipping lines are covered by the state-owned Jadrolinija, which last year transported 10.7 million passengers on 34 lines and held 85.6 percent of the market.
Jadrolinija has been preparing for the new regime for years, with fleet renewal and modernization of services. “The modernized fleet, safety, experience, efficiency of operations, human resources, with emphasis on the experience of the crews, are our main competitive advantages”, says Jadrolinija, convinced that it will retain its leading position in the Adriatic after a new round of tenders.
The busiest ferry route according to the number of passengers is Split-Supetar (1,745,929), followed by Zadar/Gaženica-Preko (1,068,266). By the number of vehicles, the busiest line is Valbiska-Merag (422,546), followed by Split-Supetar (343,332).
In the last 11 years, Jadrolinija’s fleet has acquired 18 new ships, and by 2027 the biggest Croatian passenger shipping company plans to invest as much as 281 million euros in the renewal of its fleet and acquire additional 26 new ships. As part of the e-Jadrolinija service, the company enables online purchase of tickets for all lines. Also, the company has introduced the Jadrolinija2Go card, which brings additional saving to regular customers.
When it comes to foreign competition, Jadrolinija emphasizes that at the beginning of 2017 nothing “revolutionary” will happen, since even now foreign shipping companies can transport passengers, they just need to do it under the Croatian flag. However, they warn that further liberalization will allow ships with lower safety standards.
Jadrolinija’s revenues have stagnated in recent years, but its profitability is growing. Last year, Jadrolinija had 846.6 million kuna in revenues, which was 0.7 percent more than in 2014. At the same time, profits increased by 29.3 percent, to 8.3 million kuna. It should be noted that a significant portion of Jadrolinija’s revenues comes from the state budget as subsidies for unprofitable lines. Last year, the state aid has reached 208.2 million kuna, which was 5.3 percent more than in 2014.
In addition to Jadrolinija, there are a number of smaller companies which cover some of the more popular lines. Among them are Kapetan Luka and Rapska Plovidba. Kapetan Luka owns three high speed catamarans which connect Split and Dubrovnik with Dalmatian islands, as well as Mali Lošinj and Rijeka. Last year, the shipping company had revenues of 48.7 million kuna, and profits of 5.9 million kuna. Rapska Plovidba is a local shipping company which connects the island of Rab with the mainland and the island of Pag. It has four ferries, and last year it had revenues of 39.5 million kuna and profits of 1.3 million kuna.
Small shipping companies often complain that Jadrolinija has a privileged position when it comes to granting concessions and that it is destroying competition with unrealistically low prices, enabled by state subsidies.
