Slovenian regulator launches Adria review
The Civil Aviation Agency of Slovenia has begun a review of Adria Airways' business after obligating the carrier to submit proof of its liquidity by January 1, 2019. The airline submitted necessary documentation on December 31 of last year, after its owner, 4K Invest, injected four million euros into the carrier and promised a further ten million euros in funding during the first quarter of 2019. In a statement, the Agency said, "This extensive material will be thoroughly reviewed and the evaluation is expected to be completed within a month". If the regulator finds that Adria is unable to prove its future liquidity and financial stability, it could face penalties, which may include the revocation of its Air Operator's Certificate (AOC), although such extreme measures are hihgly unlikely.
Following a review of the airline's 2017 financial report, the Agency established that Adria met one of the conditions for declaring insolvency. "By the end of 2017, insolvency was not disclosed, as a result of which the Agency issued a decision ordering the airline to regulate its finances", the head of the Civil Aviation Agency, Rok Marolt, said. Adria recently noted that its finances are in good shape. "All supervisions conducted by the Civil Aviation Agency are determined by official regulations and the agency is obliged to carry out regular assessments of the carrier's financial state in relation to fulfilling conditions for maintaining its operating licence. Adria Airways regularly informs the Agency about its financial performance and the Agency regularly issues resolutions and findings which we follow", the airline said. It added, "The Agency’s resolution that Adria Airways must provide evidence it has received funds either through recapitalisation or any other way by the end of 2018 is not of an extraordinary nature and does not mean that Adria Airways is in any worse shape than before or is being threatened with the grounding of its fleet, as implied by some media. These are regular measures which Adria Airways needs to constantly perform and fulfil".
Adria Airways' CEO, Holger Kowarsch, previously said the airline's financial loss in 2018 would be "significant" but added that the company would be restructured and placed on "firm foundations". "Slovenia needs its airline, because it is very important for Slovenian society, tourism and economy that a national carrier operates from Ljubljana Airport", Mr Kowarsch said. He added that the company would not file for bankruptcy, "contrary to what many wish for". 4K Invest has said that the upcoming ten million euros it will use to recapitalise the airline willl "make a significant contribution to the continued successful development of the Slovenian airline".
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