STA, 8 November - The state-owned bad bank has rejected reports that it had presented to former Adria Airways pilots a plan for a potential new flag carrier, while confirming for the STA that it would present to the finance and economy ministries next week calculations on the feasibility of establishment of such a company.
Responding on Friday to yesterday's unofficial report by Radio Slovenija, Bank Assets Management Company (BAMC) chief executive director Matej Pirc rejected it, while saying he had indeed met with a representative of former Adria pilots.
Pirc said that he had recently met with pilot Primož Jovanović, who has been calling for a state intervention, but added that the meetings had been requested by the latter as he wanted to present his calculations related to feasibility of the idea to establish a new flag carrier.
He said that, given that the bad bank was preparing calculations of its own, which included several scenarios with different assumptions, he was interested in what pilots had to say.
Radio Slovenija said that the new carrier would have five Canadair aircraft and 200 employees, and that a EUR 20 million loss was expected in the first year after incorporation, which Pirc labelled as excessive numbers.
He said that BAMC was advocating a "slimmer organisation", and not a company with 200 employees, but admitted that it would be hard for the company to function without making a loss.
The national radio also said yesterday that the government was expected to decide by the end of the month whether it will establish a new flag carrier, which, according to some accounts, would be called Air Slovenia.
Radio Slovenija added it would be easiest to establish the new company by purchasing Adria Airways, which went into receivership in early October, as a whole. A call for bids issued by Adria receiver will close on 11 November.
Economy Minister Zdravko Počivalšek told the weekly Mladina last week that a regional air carrier could become a partner of the company, while refusing to reveal any details.
In the wake of the collapse of Adria Airways, which at one point cut 60% of Slovenia’s international seat capacity, Ljubljana Jože Pučnik Airport has sets out its priorities when it comes to rebuilding its network. As reported on Ex-Yu Aviation, the airport’s General Manager, Zmago Skobir, said that efforts are now focused on those routes that are more important to the Slovenian economy and tourism industry, namely Frankfurt, Zurich, Munich, and Brussels, with Vienna seen as important but more difficult to arrange. Destinations in the former Yugoslavia are less likely to be resumed.
Looking to new markets, Mr Skobir continued to express hopes that direct flights to the Arabian Peninsula would be launched, although noted that efforts in this regard have already lasted six years.
Today saw a new arrival at the airport
Dobrodošli v Sloveniji! Lufthansa’s first time ever to fly to Ljubljana. With @FlySWISS & @FlyingBrussels we open 34 weekly connections to the beautiful capital of Slovenia. Discover unspoiled landscapes with mountains, lakes & Adriatic coast. ⛰? @visitljubljana @SloveniaVisit pic.twitter.com/T9sSehP564— Lufthansa News (@lufthansaNews) October 28, 2019
All our stories on Adria are here
STA, 23 October 2019 - The receiver of the company operating the Adria Airways flight school published on Wednesday a call for bids for what is a subsidiary of the German-owned Slovenian flag carrier Adria Airways, which was sent into receivership along with its flight school on 2 October.
According to the business daily Finance, the main asset of Adria Airways Flight School is a valid ATO (Approved training organisations) licence, which would enable a potential buyer to continue training candidates for pilots.
Until 25 November, receiver Blaž Poljanšek will be collecting bids for the entire company, for the leasing of two PS-28 Cruiser aircraft by Czech Sport Aircraft and for the use of the FNPT II flight simulator.
Poljanšek told Finance that several candidates had shown interest in buying the licence and that he was checking how much interest existed officially through the call for bids.
He explained that the receivership had interrupted the training of around 30 pilot candidates.
Adria Airways Flight School recorded EUR 315,000 in sales revenue in 2018, down roughly 20% on 2017. The net loss amounted to EUR 339,000 in 2018 and to EUR 171,000 in 2017.
All our stories on Adria are here
Ex-Yu Aviation reports that Lufthansa is not interested in working with the Slovenian government to develop a new national carrier. It’s understood that the German firm expressed its lack of interest several weeks ago, leading to a visit to Frankfurt last week by the Slovenian Minister for Economic Development and Technology, Zdravko Počivalšek. While the minister obviously failed to make a case for Lufthansa setting up a new carrier – which, under the Slovenian plans would have launched in early 2020 – Lufthansa is among several airlines now adding new services to Ljubljana is the wake of Adria Airway’s collapse.
Adria’s bankruptcy came after having been bought by 4K Invest, a Munich-based, Luxembourg-registered investment fund. 4k Invest’s only previous experience in owning an airline was gained with Switzerland’s Darwin Airline, which the fund rebranded as Adria Airways Switzerland before the carrier entered bankruptcy proceedings. The Swiss authorities are currently investigating 4K Invest’s role in the collapse, with accusations bankruptcy fraud and mismanagement.
All our stories on Adria Airways are here
STA, 15 October 2019 - Economy Ministry State Secretary Eva Štravs Podlogar, accompanied by the top executives of Slovenia's bad bank, met with representatives of Lufthansa in Frankfurt to analyse the aviation market in the wake of the receivership of the German-owned Slovenian flag carrier Adria Airways, the Economy Ministry said on Tuesday.
The ministry said the visit by Štravs Podlogar and by Bank Assets Management Company (BAMC) CEO Matej Pirc and the chairman of BAMC's board of directors Tomaž Besek was part of the market analysis.
It added that any potential decisions on the part of the government would also need to consider the plans of Lufthansa, which has already established a few new links with the Ljubljana airport through its subsidiaries.
No detailed information about the outcome of today's meeting with the representatives of the Germany airline that was Adria's key partner is expected before Thursday.
Štravs Podlogar, who is in Frankfurt as part of the Frankfurt Book Fair, said in parliament last Friday that the ministry was examining legal and organisational alternatives that would help fill the void created by Adria's bankruptcy. She said talks with different stakeholders were under way.
The efforts also include BAMC representatives, who have already provided explanations regarding the implications of a potential decision to set up a state airline company.
Another alternative, a bill that would allow the government to subsidise air links vital to Slovenia, was defeated by the parliamentary Infrastructure Committee last Thursday.
All our stories on Adria are here
If you’re not a frequent flier maybe the Adria Airways collapse feels rather abstract, but a study by ForwardKeys, a travel analytics firm, claims that it cut 59.7% of international seat capacity to and from Slovenia, and the loss of direct flight connections with 24 countries, figures that make the disruption easy to imagine.
The study noted the loss of regular flights from Slovenia to Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Czech Republic, Denmark, Egypt, Iceland, Ireland, Italy, Macedonia, Norway, Spain, Sweden, and Switzerland. Season flights to and from Estonia, Georgia and Greece are also unavailable, while Adria’s collapse cut the irregular services to and from Cyprus, Hungary, Italy, Jordan, Latvia, Romania and Ukraine.
The report, which can be found here, also states that key source markets like Austria, Germany and France has also been affected, as Adria Airways accounted for 99.6%, 87.3% and 50.8% of seat capacity on flights for these countries.
STA, 12 October 2019 - The CEO of the company operating Ljubljana airport cannot say yet how its business will be affected by the collapse of the air carrier Adria Airways, but he did say in an interview run by the newspaper Dnevnik on Saturday that the airport would definitely bear consequences.
"It's hard to say how business will go until the end of the year. But there will certainly be consequences," Zmago Skobir, the CEO of Fraport Slovenija, told Dnevnik.
Adria Airways's collapse is affecting the airport in two ways; one through the carrier's past operations and the debts it left behind, and the other through the current loss of income.
Until the end of September this year the airport had been seeing 2% growth in passenger numbers; the throughput by foreign carriers was up by 18%, while Adria Airways's was down by 10%.
Out of the 29 links under the summer schedule, including Adria Airways's, eight have been lost. Slovenia currently does not have links to Sarajevo, Tirana, Prishtina, Sofia, Skopje, Prague, Copenhagen and Vienna. "I don't think this is a critical situation, we still have 21 links," said Skobir.
In the long run, he finds it unlikely that links will be re-established with Tirana and Prishtina because these do not affect Slovenia's economy or tourism.
Out of those vital to Slovenian business and tourism Skobir mentioned Skopje for which efforts will be made to re-establish a link.
Flights to Prague will likely be resumed by Czech Airlines, and a service to Copenhagen will be re-established sooner or later, said Skobir.
Commenting on the impact of Adria Airways's failure on the country, Skobir said the important thing "is that we are linked with the world in quality and competitive ways and that as many tourists as possible leave their money in the country".
The essential thing is not by whom but how much the country gets by way of investment and tourism, he said, adding that taxes and social contributions were of secondary importance.
It will transpire by June or July 2020 what interest foreign carriers have in Slovenia, only then would it make sense to look for alternative solutions.
"I wouldn't prioritise founding a new flag carrier. Especially, since no business scenario in Adria in the past fifteen years proved successful."
The links the government was willing to subsidise do not appear to be necessary at all. "But let's wait for the market to do its job first, before assessing, based on analysis, whether we need extra links."
The airport has been trying for years to attract carriers such as Qatar Airlines or Emirates, "and I believe we'll see the day when Qatar or Emirates arrive", Skobir said.
"The key question is whether Slovenia as a market is interesting for long, let's say trans-ocean links; my answer is probably not for a long while yet. The market size is essential," he added.
STA, 12 October 2019 - The parliamentary Finance Committee has decided to ask the Court of Audit to review the 2016 sale of Adria Airways to the German turnaround fund 4K, and to present its findings to parliament as soon as possible.
The decision was taken at a session late on Friday called by the opposition Left after the erstwhile Slovenian flag carrier declared insolvency and entered receivership at the start of the month.
Luka Mesec, the leader of the Left, noted that Slovenia Sovereign Holding (SSH) sold the airline to a fund whose capital, at EUR 25,000, equalled but a quarter of the symbolic sum it paid for Adria.
This was after more than EUR 90 million had been injected into the airline by the state in recapitalisations, plus EUR 3 million invested in the company upon privatisation.
"Given all that, you don't have to be a clairvoyant to predict a disaster," Mesec said, adding that he would like the institutions in charge to look into the sale and find answers for the present situation.
"As early as March pilots were warning of difficulties that would lead to the bankruptcy. However, the government didn't draw up any plan until September. Why did't you act," he challenged government officials.
He said that through the airline's bankruptcy Slovenia was losing not only its connections to the rest of the world and its competitive edge, but also a lot of expertise.
"I'm afraid dreams of a new airline are just a way for the government to throw sand in the eyes of the staff so they wouldn't have to face up to the fact that we've lost the air carrier."
SSH CEO Gabrijel Škof told MPs that Adria Airways had been on the brink of bankruptcy before the sale and that the buyer was supposed to make a turnaround.
He argued that the sale process was conducted in a professional and transparent way, and in adherence to international standards. All the bids were conditional on the seller being involved in recapitalisation.
"If we didn't sell it, Adria Airways would have likely gone into receivership at the time. The German fund submitted the best bid and recapitalised the company," Škof said.
He argued that the sale plus the EUR 3.2 million injection cost less than receivership would as the company had paid about EUR 10 million in the state budget a year in tax and social contributions.
Economy Ministry State Secretary Eva Štravs Podlogar said that alternatives were being studied how to fill the void created by the airline's bankruptcy, but could not present any details yet.
Andrej Šircelj, a deputy of the opposition Democrats (SDS), agreed that it should be scrutinised who was responsible for the company's demise, but disagreed with the idea the state should form a new airline.
He said that Adria Airways was clearly a company important for politics and its leverage in the economy. "The sale to such an owner was not a case of negligence but a premeditated act to bleed the company," fellow SDS member Franc Breznik commented.
Several MPs questioned the point of having a debate on the impact of privatisation after the company ended up in receivership. "Do you know what's this today? It's a wake," the Social Democrat (SD) Soniboj Knežak said, calling the session but a futile show for the public.
The problem of Adria Airways is economy of scale, which is an issue in Slovenia in other fields as well, said Jože Lenart of the Marjan Šarec List (LMŠ). "Add political interference in the economy, and we end up where we are."
STA, 12 October 2019 - The Hungarian low-cost carrier Wizzair will continue to fly between Ljubljana and Brussels in winter despite its initial decision to suspend flights for the 2019-20 winter season, Finance reports.
According to the online edition of the business newspaper, Wizzair will be operating flights between Ljubljana Jože Pučnik Airport and Brussels Charleroi Airport on Tuesdays, Thursdays and Saturdays from 19 December on.
Wizzair had initially planned suspending the link for the winter season because the route had not met its expectations. The carrier had planned to resume the flights on 31 March 2020.
Adria Airways, the German-owned Slovenian carrier which went into receivership on 2 October, had operated daily flights to Brussels.
In the wake of Adria's bankruptcy, the Belgian air carrier Brussels Airlines announced it would link Brussels and Ljubljana on six flights a week starting from 4 November.
Brussels Airlines, part of Lufthansa Group, had been flying between Brussels and Ljubljana a decade ago.
According to information on the website of Ljubljana Airport, the Lufthansa Group Airlines will be connecting the Zurich, Brussels, Munich and Frankfurt hubs with Ljubljana Airport as of mid-October.
SWISS will be operating five weekly services from Zurich to Ljubljana starting on 16 October. From October 27 onwards, the airline will be operating daily flights.
From its Frankfurt hub, Lufthansa will operate twice a day 14 weekly links to Ljubljana from 27 October when the winter schedule kicks in. Daily links to Lufthansa hub in Munich will follow as of 1 November.
Ex-Yu Aviation reports that former employees of Adria Airways are claiming that a foreign carrier, which cannot be named for confidentiality reasons, is planning to set up a new business based at Ljubljana Airport, one that will hire some of the staff who lost their jobs in the collapse of the Slovenian carrier. The new firm would lease aircraft and use the Air Operator’s Certificate of its foreign owner, making a rapid start to operations possible. More details can be found here, while all our stories on Adria are here
STA, 8 October 2019 - Adria Airways, a German-owned Slovenian airline in receivership since last week, ended 2018 with a net loss of EUR 18.6 million, up from EUR 5.4 million in 2017, shows the audited financial statement, which was released on Monday.
The air carrier's operating loss amounted to over EUR 16 million, up from EUR 3.3 million in 2017, with its negative working capital standing at EUR 14.2 million.
The airline's revenue, on the other hand, increased by 12.5% to EUR 179 million, of which the revenue from passengers rose by 1.5% to EUR 149 million.
By leasing its planes and flight crews to other airlines, Adria generated more than EUR 17 million in 2018, says the business report, which official receiver Janez Pustatičnik posted on the website of the AJPES agency yesterday.
The company attributed the loss to growing fuel prices (EUR 7.7 million) and to the cost of hiring planes with flight crews (EUR 5.5 million).
And while Adria carried 1.23 million passengers in 2018, up 1.5%, its occupancy seat rate dropped by 3.7 percentage points to 64%.
The financial statement also shows the company had 503 employees at the end of last year, a rise of almost 27% over the year before.
The auditor PwC gave the financial statement a qualified opinion because of Adria's manoeuvre with selling its brand in 2016 and then acquiring it back in 2018.
The auditor said Adria had actually never really lost control of its brand, so its sale was in fact presented in its books inappropriately.
The financial statement, which Adria had failed to release within the set deadline, was supposed to serve as the basis for Slovenia's Civil Aviation Agency to decide on whether the airline should keep its operating licence.
However, before the expiration of the deadline to submit it to the agency, Adria filed for receivership on 30 September, thus automatically losing the operating licence.
All our stories on Adria are here
STA, 7 October 2019 The official receiver of Adria Airways started serving notices of job termination to the airline's employees on Monday while pilots and cabin staff are reported to be interviewed with potential new employers.
The official receiver, Janez Pustatičnik told the STA on Monday that he started serving notices today, but he could not say when all of the 558 airline's employees would receive them.
Some of the staff are currently abroad, these will get termination notices by post, said Pustatičnik, who held first meetings with the employees on Wednesday, as the Kranj District Court ordered receivership for the company.
Those of the redundant workers who would like to claim unemployment benefit, need to register with the Employment Service and ask for the benefit within 30 days.
Those who register within three days after the expiry of the notice period, will be eligible for an allowance equalling 80% of the average of their salaries and the others to 60% of the average.
The receiver expects to be able to assess the scope and the duration of the receivership procedure by the time he compiles an opening report when the amount of registered claims, the size of the bankruptcy estate and a detailed state of the company's finances are clear.
The receivership was started at the request of the management of the German-owned carrier due to insolvency after the government declined its calls for aid. Unofficially, the company ran up EUR 90 million in debt.
Citing unofficial sources, the newspaper Finance reports that the Polish flag carrier LOT has conducted job interviews with Adria pilots, while cabin staff have received offers for jobs from Wizz Air, the Hungarian low-cost carrier.
According to Finance, LOT is looking for at least ten pilots for smaller aircraft, which suits Adria pilots well-being that they are licensed to fly Canadair aircraft, now rarely used planes worldwide.
Some of Adria Airways' major links have been taken over by foreign airlines, while the government has proposed legislative amendments that would make it possible to subsidise commercially unpopular links.
Speculation is also rife about potential incorporation of a new air carrier. Some media have been reporting that a foreign airline might step in and employ at least part of Adria staff.
All our stories on Adria are here