Suspicions Over Accuracy of Adria Airways’ Upcoming Financial Report

By , 20 Jun 2019, 12:07 PM Business
Suspicions Over Accuracy of Adria Airways’ Upcoming Financial Report Wikimedia - Konstantin von Wedelstaedt, CC-by-0

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STA, 17 June 2019 - The auditing firm which checked the financials of Slovenian carrier Adria Airways for last year is in the spotlight on suspicion that Adria's financial statements do not accurately reflect its financial state, news portal Siol reported on Monday.

 

The Slovenian Agency for Public Oversight of Auditing is looking into the work of the Slovenian branch of PricewaterhouseCoopers (PwC), which audited Adria, to determine whether it has done its job, according to Siol.

The credibility of Adria's balance sheet is one of the preconditions for its air operator certificate. If Adria were to lose it, it would have to ground its aircraft, Siol says.

"We've been informed about the audit and we do not see any problems. We're convinced our auditors have conducted a fair and professional audit of our financial statements," Adria said.

Siol speculates the check will look into several transactions involving the Adria brand, which was first sold to a mailbox company and later bought back as a capital injection to shore up the firm's capital base.

The company the brand was sold to is believed to be tightly connected with 4K Invest, the private equity fund which owns Adria.

The Agency for Public Oversight of Auditing has initiated proceedings at the request of the Civil Aviation Authority.

The news is the latest sign of problems at the beleaguered carrier, which has been in the media spotlight for months due to numerous cancellations and mergers of flights that have extended short-haul flights by hours.

Adria has claimed the ongoing disruptions are a result of technical and operational reasons and pledged to stabilise operations by the beginning of July.

Siol claims the cancellations are a result of technical issues with aircraft and lack of flight crews exacerbated by the airline's financial problems.

The airline had similar problems last summer and pledged to sort things out by this summer.

Adria's woes and the possibility of it going bust have raised concerns about Slovenia's air traffic connections and even given rise to calls that a renationalisation should be undertaken.

Infrastructure Minister Alenka Bratušek said today state aid was out of the question since the carrier had received aid less than ten years ago, but she indicated the government was working on a contingency plan.

In the event Adria can no longer connect Ljubljana with European capitals, the government is exploring incentives for certain routes that are key for the state. "This is all the state can currently do," according to Bratušek.

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