Last ditch attempt to save Adria Airways
Adria Airways’ fate will be known in some 48 hours when the Slovenian Civil Aviation Agency announces whether the carrier’s owners have provided a sustainable long-term restructuring model for the debt-stricken company. If they fail to do so, the airline’s Air Operator’s Certificate will be suspended. Members of an employee committee established to look into rescue initiatives met with the Slovenian Minister for Economic Development and Technology, Zdravko Počivalšek, late last week to present possible options. The Minister noted, "We have to assess how feasible and durable are the solutions we have on the table and take immediate action. This is a challenge for the entire government, which we are taking seriously”.
Mr Počivalšek did not elaborate on the details of the proposals but said the company needs a complete restructuring of its ownership, finances, and business strategy. He warned that Adria’s collapse would have short-term economic effects, but that other airlines would eventually step in to pick up demand. “Slovenia has tremendous tourist potential and carriers can take advantage of the country's need for air connectivity”, he said. The Minister previously noted that the state would not “invest even a single euro” into the company under its existing ownership structure, as he believes the turn-around fund 4K Invest are to blame for the airline’s woes. “It is imperative to look at the destination network, act quickly, make a financial restructuring, reach an agreement with creditors and use the potential of employees to start the company anew", he added.
In a Facebook post on Sunday, the Slovenian Prime Minister, Marjan Šarec, said, “Adria Airways was sold because it was in a poor state. It was mismanaged long ago, even by some who today, in the media, suggest some miracle solutions. The state will not give financial assistance to the company under its present ownership in any circumstance because they would throw money away, and the law forbids it. In the past, a lot of money was thrown into the company by the state and eventually it was sold. I dare say that if everyone who managed the company on behalf of the state did their job well, we would not have any problems today”. He added, “Some time ago, I held talks both with the company’s management and pilots. I have to say that I do not trust the management because they would like to make money based on nothing. They obviously see the country as a cash cow, from which they want to milk the last cent and take it to somewhere unknown. Notwithstanding the above, the Government of the Republic of Slovenia and the competent ministries are preparing for the coming period. Either by setting up a new company or by providing connectivity through other carriers. Although we expect difficulties, the goal is certainly to maintain Slovenia's connection to the world, especially for tourism, but we must not neglect the fact that Slovenia will preside over the EU Council in 2021”.
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| Adria's repossessed aircraft have received new registrations |
Adding to Adria’s woes, the Slovenian market inspectorate, which oversees compliance with consumer-protection regulations, has fined the company for advertising and selling tickets for services which were subsequently suspended on September 24. It concluded that the sales amounted to misleading business practice. In her findings, the Slovenian Chief Market Inspector, Andrejka Grlić, said, “Adria Airways‘ management was fully aware that the company would be unable to operate planned flights since they had all available information on the firm’s financial state and available capacities”. Ms Grlić added that the inspectorate was monitoring and investigating other issues at Adria Airways as well.
Adria operated the first service with its own aircraft and crew last night since September 24. The chartered flight pick-upped the Slovenian Men’s Volleyball Team in Paris who were runners-up at the European Volleyball Championships. However, the flight was fully paid for by a local Slovenian tour operator Palma, while the crew provided their services free of charge.
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