Adria Crisis: Airline’s Fate Should Be Clear By Tuesday

By , 30 Sep 2019, 11:54 AM Business
Adria Crisis: Airline’s Fate Should Be Clear By Tuesday Wikipedia - Anna Zvereva CC-by-SA-0

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STA, 30 September 2019 - The government will examine today reports on troubled flag carrier Adria Airways compiled by several state institutions and discuss potential steps to keep Slovenia connected with relevant destinations via Ljubljana airport. Adria's management also expects the owner, the German fund K4 Invest, to say whether it will pursue financial restructuring.

With several of its planes grounded and the bulk of flights cancelled, the Economy Ministry called on the relevant state institutions last week to examine Adria's financial situation.

According to unofficial media reports, the probe showed Adria having around EUR 90 million in debt and needing EUR 30 million to continue with operations, substantially more than the carrier's representatives allegedly claimed in recent days.

It is still not clear how the government will proceed, but the Infrastructure Ministry has already prepared changes to the aviation act to keep Slovenia connected to the world in case of Adria's bankruptcy. There has also been speculation the government could let Adria go into receivership and then found a new company.

PM Marjan Šared said on Sunday that Šarec government was getting ready for the next period, be it through a new company or by securing links needed by Slovenia via other carriers. He repeated he did not trust Adria's leadership, saying it obviously perceives the state as a dairy cow "that needs to be milked for every cent that can be squeezed out and then taken nobody knows where".

Adria's management meanwhile expects K4 Invest, which bough the carrier from the state in 2016, to say today whether it plans to pursue financial restructuring. A confirmed restructuring plan is a condition for Adria to preserve its license and the deadline for it set by the Civil Aviation Agency is Wednesday.

Should K4 fail to present a plan, this would very likely mean receivership and thereby an automatic license loss for the carrier.

Adria was already hit this weekend by a fine for the sale of tickets for flights scheduled for last Thursday and Friday, which the management must have known will not be carried out. The Market Inspectorate said the air carrier had been misleading customers.

Adria, which was only flying to Frankfurt in recent days, announced it would execute 11 flights today: to Frankfurt, Munich, Brussels, Zurich and Vienna. Return flights should be carried out for all these destinations as well, while Adria also plans to fly from Ljubljana to Tirana.

All our stories on Adria are here

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