Ex-Yu Aviation reports that events surrounding last year’s collapse of Adria Airways are now under investigation by the Slovenian police, who are looking into suspected abuse of office and fraud. Adria was last owned by a Luxembourg based German fund, 4K Invest, which liquidated a number of affiliated companies after the carrier’s collapse, making investigations of the circumstances more complicated. What’s more, 4K itself has closed its website and cut off its phone lines, as well as disappearing from business registries in a number of companies
The whole story is worth a read, and although no specific allegations are being made yet by the police, there are enough odd facts and suspect actions to raise questions as to whether 4K was ever sincere in its wish to run Adria Airways, and why the Slovenian government did not choose to find a strategic partner within the aviation industry.
All our stories on Adria Airways are here
STA, 4 February 2020 - The bankruptcy estate of air carrier Adria Airways is worth EUR 6.23 million, of which EUR 3.15 million is the title to its office building at Ljubljana airport. Official receiver Janez Pustatičnik believes that due to its complexity, the receivership procedure is unlikely to be completed before the end of 2024.
The assets also include Adria's brand, the liquidation value of which is EUR 100,000, a flight simulator (EUR 93,000) and Adria's 100% stake in its flight school (EUR 133,500), according to an opening report Pustatičnik published on the website of the AJPES agency for legal records on Tuesday.
Among its assets are also the operating licences, foremost the air operator's certificate (AOC), but have already been sold; last month they were bought by Air Adriatic, a company owned by Slovenian entrepreneur Izet Rastoder, for EUR 45,000.
Inventories are estimated at over EUR 1 million, but since they have not yet been fully documented, their estimated value could still change.
The bankruptcy estate also features operating receivables to the tune of EUR 1.44 million, which have however already been recovered.
Pustatičnik assesses the receivership procedure as very complex and demanding, so it could be completed only at the end of 2024.
He sees litigations, numerous recoveries and other procedures expected to be launched in Slovenia and abroad as the main hurdle to bringing it to a close earlier.
Adria also has EUR 543,000 on a bank account, but it is kept there to pay a creditor, an issue currently subject to litigation, so it is not included into the bankruptcy estate.
It is not yet know how much exactly Adria owns creditors, since the deadline to report them has been extended until 2 March.
The opening report was also published today by Blaž Poljanšek, the official receiver of company Adria Airways Flight School, which puts the assets of the flight school at EUR 172,000.
The biggest assets are four sport planes, estimated at a total of EUR 109,000.
The flight school, which is eyed by the Pipistrel ultra-light plane manufacturer, also has a licence for training professional and sport pilots.
Creditors of Adria Airways Flight School have reported EUR 448,000 in claims, with Adria Airways being the biggest creditor with some EUR 111,000 in claims.
The state sold Slovenia's flag carrier Adria Airways to Germany's turnaround fund 4K Invest in 2016 for EUR 100,000 after recapitalising it with EUR 3.1 million.
The new owner was unable to give it a fresh impetus, so Adria was grounded last September after almost 60 years since establishment and filed for receivership.
STA, 23 January 2020 - Adria Airways operating licences were auctioned off on Thursday to Air Adriatic, a newly established company owned by Slovenian produce importer Izet Rastoder, at the asking price of EUR 45,000.
"The auction was successful, the licences were sold at the asking price. There were three bidders. The asking price was accepted and there was no bidding," Adria receiver Janez Pustatičnik told the press.
Apart from Air Adriatic, the registration deposit was paid by Croatian company Komforia, and Dedal Aero, owned by former Adria pilot Dejan Slodej.
The buyer has three days to sign the contract and then pay the agreed sum within a month in order to acquire the rights that come with the licences.
However, in order to be able to use the licences the buyer will have to take certain steps to meet the criteria Adria met before its licence was revoked and the receivership launched, Pustatičnik explained.
Adria has some other assets, including its registered brand and some buildings, but the operating licences were considered some of the most valuable assets.
"This had to be sold as soon as possible, so the buyer can take all the necessary steps to be able to use the licences. The Civil Aviation Agency has extended this deadline until the end of September."
The buyer will be able to use all the benefits of Adria's membership in various organisations, and rent the remaining infrastructure of the former flag carrier until it is sold. This includes the brand name, building and equipment.
"The buyer cannot land anywhere for the time being because it does not fly. First, it must take all the necessary steps. The deadline for reporting to Germany whether the summer season will be carried out is 31 January."
After Pustatičnik examines the 2,800 claims reported, Adria's brand name will be put up for sale as well.
Following Adria's receivership in October, several potential buyers expressed interest in the group's licences, including its air operator's certificate (AOC), as well as its flight school.
Only a week ago, it was reported that investors linked to the Russian state-owned aircraft manufacturer Sukhoi had also confirmed their interest, but they did not show up for the auction.
Slovenia's former flag carrier Adria Airways, which was sold to the German financial fund 4K in 2016, went into receivership last autumn after years of financial difficulties.
After its collapse, the government considered founding a new carrier to preserve Slovenia's connectivity with the world but this option was ultimately dismissed as economically unfeasible.
However, the government is reportedly still looking for a way to have Slovenia better connected with four major European hubs - Frankfurt, Munich, Zurich and Brussels - through regional air carriers.
A solution is being draw up by the Bank Asset Management Company (BAMC) and is expected to be presented at the beginning of this year.
Pustatičnik refused to speculate on why the state did not bid for the licences today, noting only that BAMC officials had been collecting information about Adria in October and November.
The representative of Air Adriatic would not comment on the auction, while Adria's former pilot Slodej, who also took part in the auction, said Slovenia could have a profitable airline. "I hope the buyers know enough about the business that a success story will now unfold," he said.
He thinks the market is big enough but that the airline should have a different business model than Adria had.
Ex-Yu Aviation, always on top of the region’s air travel news, has added more details to an earlier report that Russian investors are interested in reviving the name Adria Airways, with the collapsed carrier’s remaining assets – its name, some training manuals and the all-important air operator's certificate (AOC) – due to be auctioned this Thursday, with a starting price of €45,000, although this is expected to be exceeded since the average price of an AOC in Europe is €300,000.
According to the report, the group of investors from Russian and the United Arab Emirates are, linked to Sukhoi, the Russian aircraft manufacturer, and would be using a fleet of Superjet 100. As Oleg Evdokimov, a representative of the Russian investors, told RTV SLO: "Adria Airways’ certificates allow us to operate not only out of Ljubljana but from any airport in Europe. The Slovenian market is very interesting. There is no real competition. Currently, it is only possible to fly to just ten destinations and the fares are very expensive.”
Mr Evdokimov went on to say “We plan to start in the summer with the primary task of providing flights for Slovenians and Austrians (from Villach and Klagenfurt) to primary vacation destinations. We plan to serve these routes with SSJ aircraft. The second goal is to compete with "weak" competitors such as Lufthansa and Swiss on three important destinations from Ljubljana: Zurich, Munich and Frankfurt.”
More details can be found at Ex-Yu Aviation.
With Adria Airways assets due to be auctioned next week, at 11:00 on Thursday 23 January, Ex-Yu Aviation reports that a group of unnamed Russian investors are interested in purchasing the collapsed airline’s Air Operators Certificate (AOC) and reviving the name to run services within Europe, using Sukhoi Superjet 100 aircraft. As reported earlier on TSN, the starting price for Adria’s assets, which include various training manuals in addition to the AOC, has been set at €45,000. However, a new owner would need to take on a number of obligations that remain after the carrier’s bankruptcy.
The airline’s previous owner, the Luxembourg-based German fund 4k Invest, purchased Adria from the Slovenian government in 2016 for €100,000. Since Adria’s collapse in 2019 an investigation into the role of 4K Invest and possible mismanagement has been launched, although the fund’s decision to liquidate its assets is complicating this.
While the closure of the national carrier lead to a 60% fall in Slovenia’s international seat capacity, a number of airlines have stepped in to fill the more profitable gaps in the schedule, while the Slovenian government is said to be in talks with regard to subsidising some other routes.
Adria Airways finally collapsed in 2019, with investigations as to the role of its owner, 4K Invest, in the affair still ongoing. Since the closure of the erstwhile national carrier a number of airlines have stepped in to fill the more profitable gaps in the schedule, while the Slovenian government is said to be in talks with regard to subsidising some other routes.
Meanwhile, what remains of Adria is being auctioned off, with the sale of its various licenses and permits expected in the coming weeks. Ex-Yu Aviation reports that the firm’s Air Operator Certificate (AOC) – which allows the holder to run commercial flights – is being offered at a starting price of €45,000. Purchasing the AOC would enable the new owner to restart Adria’s previous services from Slovenia and other EU Member States.
However, before you reach for your wallet note that the AOC would only be useful to a buyer who purchased Adria’s entire estate, as well as agreed to take on a number of obligations that remain after the carrier’s bankruptcy.
Two prominent names from Slovenian business who have been mentioned in connection with purchasing Adria’s assets are Joc Pečečnik, the founder of Interblock Gaming, and the “banana tycoon” (and property developer) Izet Rastoder.
According to reports by the news portal Siol.net, the companies through which the German 4K Invest group controlled Adria Airways, the Slovenian air carrier which declared bankruptcy this September, are shutting down one by one.
The disappearance of companies which were in control of Adria Airways since its purchase in 2016 will make it difficult for the bankruptcy administrator Janez Pustatičnik and law enforcement agencies to search for documents and information on millions of euros of transfers to tax havens and other countries, and to track assets to pay back tens of millions of Adria debts to creditors, reports Siol, continuing that criminal investigations into the business of the German owners of Adria are now ongoing. The investigation would probably include a forensic audit of Adria’s transactions, which would, says Siol, serve as the basis for legal actions against those responsible.
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
Ex-Yu Aviation reports that Joc Pečečnik – the founder of Interblock Gaming, which manufactures products for lottery games – has plans to establish a new airline based in Ljubljana. The businessman has made a bid for what remains of Adria Airways, along with an unnamed foreign partner with experience in aviation.
Mr Pečečnik is quoted as saying: “We decided to do this because we would like to establish a successful business and because we would like to be able to fly to European cities again from Ljubljana, and not go to neighbouring airports three or four hours before our flights, which are typically [just] an hour long.”.
The report goes on to say that the new airline would draw on the expertise of Adria’s former CEO Mark Anžur, who ran the company from late 2012 until its privatisation in March 2016, going on to work as the CEO of the Irish regional carrier Stobart Air for eight months.
Moreover, the Slovenian banana and real estate tycoon Izet Rastoder has reportedly founded a new carrier called Air Adriatic and is currently looking to acquire two private jets. On the state side of things, the government is said to still be considering setting up a new national carrier with a foreign partner, although a decision on this is not expected until the end of the month.
All our stories on Adria can be found here
STA, 12 November 2019 - The ultralight electric aircraft maker Pipistrel confirmed on Tuesday that it had submitted a bid for the Adria Airways flight school, which is part of the bankruptcy estate of the former flag carrier. Pipistrel is bidding for the school as a whole, including all its assets, brand and licence.
A day after the call for bids for Adria assets came to a conclusion, Pipistrel owner Ivo Boscarol told the STA that the company wanted to keep the pilot school at Brnik airport and also expand it to Maribor airport.
"Pipistrel already has its own aviation academy but we would like to upgrade it with Adria's and merge them," said Boscarol.
The plan is to move Pipistrel's aviation academy, now based in Ajdovščina, to Brnik and in part to Maribor airport, with the latter being very suitable for pilot training, both at the beginners' level as well as advanced, according to Boscarol.
He said that Pipistrel had decided to bid because Adria's flight school had a very good reputation. "The Adria brand stood for high-quality training and we want it to stay in Slovenian hands," he said.
The merger with Pipistrel's aviation academy would also benefit the Adria flight school, which would get an on-line academy, allowing advanced training to pilots for large aircraft.
Moreover, some of Adria's students have already switched to Pipistrel after the receivership was launched in late September, and so did some of the Adria instructors, he added.
Adria Airways receiver Janez Pustatičnik announced today that five bids came in for the flag carrier's estate. He also said that he would meet with potential buyers on Thursday and Friday and that one bidder was from abroad.
According to public broadcaster TV Slovenija, bids have also been submitted by another two Slovenian entrepreneurs.
Joc Pečečnik, who owns a gaming products maker, has submitted a bid for the entire estate in cooperation with a partner from abroad.
The business newspaper Finance meanwhile said that Pečenik's plan was to build a new Adria with the help of the carrier's former CEO Mark Anžur.
Meanwhile, produce importer and real estate developer Izet Rastoder is bidding for the carrier's air operator's certificate (AOC), the licence that permits commercial flying.