Adria Collapse: Time Running Out for Govt to Decide on New National Carrier

By , 28 Nov 2019, 10:14 AM Business
Ljubljana Airport Ljubljana Airport Wikimedia, Dino Kužnik from San Francisco, USA, CC-by-2.0

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STA, 27 November 2019 - While the government has not decided yet whether to establish an airline in full or partial state ownership two months into the receivership of the former flag carrier Adria Airways, civil aviation analyst Alen Šćuric has assessed that it would be a strategic move by the state and that the time is running out.

While many in Slovenia are opposed to the idea, the Croatian analyst told the STA on Wednesday it was in strategic interest of the state.

It was the government who mentioned the possibility to establish a new airline, either in full state ownership or in cooperation with a strategic partner, as a way to secure connectivity between Slovenia and the rest of the world.

After the German-owned Adria Airways went bust in early October, the finance and economy ministries are still waiting for the Bank Assets Management Company (BAMC) to present calculations on the feasibility of establishing such a company.

According to unofficial information, Economy Minister Zdravko Počivalšek is practically the only one to promote the idea to establish such an airline, as the aviation circles have expressed doubt about the possibility to implement such a plan.

Asked to comment on what is going on with the plans, Prime Minister Marjan Šarec said that a decision was yet to be made, as experts were still "examining the matters". "If a company is to established in any form, it would not be possible without an external partner," he added.

Šarec also noted that the potential new airline would initially operate with a loss by default. "When final numbers are known, we will have to take a look and see whether we are prepared for going into it or not," he said, adding that airline business was very risky.

What is being questioned by experts is the ability of a Slovenian air carrier to compete with the established airlines which fly to Ljubljana's airport, with Adria's flights and connections being already almost fully replaced.

As the number is expected only to increase with the summer schedule, Šćuric is inclined to the idea to establish a national carrier, noting this is in Slovenia's strategic interest.

The needed financial investment is huge, but he believes that the matter should not be looked at from a short-term perspective, as airline transport services all the other sectors of the economy and brings benefits not only to tourism and the hospitality sector.

As an example, Šćuric pointed to business guests who could be distracted from coming to Slovenia by the expected longer times of travel and higher costs related to the use of other airports.

He is surprised that the Slovenian government had "no action plan", although it had been clear that Adria would end up in receivership, and he believes that the government should have established a "new company the day after the receivership".

All our stories on Adria are here

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