The Slovenian Minister for Infrastructure, Alenka Bratušek, has said the government has developed contingency plans in case Adria Airways ceases operations. The comments came following a horror week for the national carrier during which it has been in the media spotlight for cancelled, delayed and merged flights, as well as financial mismanagement by its owners, lack of staff, unpaid compensation claims, the alleged involvement of its former managers in the collapse of Switzerland's Darwin Airline, and suspicions its yet-to-be-published financial report for 2018 does not reflect the company's actual financial state. Commenting on the situation, Ms Bratušek said the government has no means to aid Adria until 2021, as the company was a recipient of state funds in 2011. Under European Union regulation, the government is barred from providing further financial assistance to the airline until a ten-year deadline has passed.
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The regional aviation website Ex-Yu Aviation reports that Air France’s winter schedule for 2019/2020 will more than double the number of weekly flights between Paris and Ljubljana, rising from six to thirteen. This will see two flights a day, except for Saturdays, with the route being served by the Air France HOP! brand. Visitors to and from the French capital will also have more choice from Adria Airways, which is planning to increase its scheduled service from five days a week to seven.
STA, 5 April 2019 - The boss of Slovenian air carrier Adria Airways, Holger Kowarsch, has told the STA the failed deal with Russia's Sukhoi Civil Aircraft Company (SCAC) to lease Russian planes would also have involved an around 10-million-euro capital injection. Adria is thus still looking for a strategic partner.
Kowarsch, general manager of the Slovenian company in German ownership which had some liquidity problems recently, said it had been Adria that exited the deal.
After preliminary contracts were signed, SCAC did not deliver when the payment deadline was due in end February, for which reason Adria quit the deal, he explained in an interview for the STA on Friday.
Earlier this week, Adria announced it would not expand its fleet with 15 Sukhoi Superjet SSJ100 planes, as it had failed to agree on the terms of the long-term lease.
It said on Tuesday it doubted SCAC's interest in a fair and stable long-term partnership and was worried about its lack of a common vision of further strategic development.
Meanwhile, SCAC said in a release on Wednesday it had opted against entering the deal due to Adria's poor financial standing, in which way it avoided potential losses.
According to Kowarsch, Adria was in talks with SCAC for almost ten months, the Russians had access to all business information and carried out an extensive due diligence.
He also noted Adria had never denied it would post a loss for 2018, which he said will amount to a two-digit figure in terms of millions of euro.
Despite a planned recapitalisation of around 10 million euro, Kowarsch said it had not been agreed yet what stake SCAC would get in the Slovenian air carrier.
However, EU law limits the stake of investors from third countries in air carriers to 49%, he explained.
Kowarsch said Adria had been at first disappointed as it considered the Russian company a good opportunity for the air carrier.
But he also said that in recent meetings with Adria's partners in Europe and the US, he received information which put SCAC in a bad light as business partners.
"We need a partner we can rely on and with which we can find common ground on Adria Airways's future development," he said.
Adria's owners, among them German fund 4K Investments, believe Adria still needs a strategic partner, and is already in talks with potential investors, but Kowarsch said there was no hurry.
He noted that after it was supplied with four million euro at the end of 2018, Adria is fit in terms of capital so there is no need for a new capital injection.
This is why he does not expect any more problems with the Civil Aviation Agency, which periodically checks their financial standing and had ordered K4 Investments to recapitalise Adria last year.
Kowarsch also said that contrary to some media reports, the recapitalisation was carried out in cash.
While there were still some liquidity problems last winter, the prospects for the summer season are good so Adria expects a two-digit growth in passengers.
The plan for this year is to get out of the red, Kowarsch stressed.
Last year's loss is a result of several factors, among then damages Adria had to pay for cancelled flights and delays, dearer fuel, problems with staff and a slow introduction of Saab's 2000 planes.
Kowarsch stressed that despite all the problems, the safety of passengers on board Adria planes has never been at risk. He noted that negative publicity in some media outlets has caused the company quite some business damage.
Adria will most probably lease Canada's Bombardier's planes, Kowarsch announced, saying the 2020 summer season was now being planned so they would see what fleet they needed.
He also expects the number of passengers to rise in 2021, when Slovenia takes over the EU presidency for six months.
STA, 19 March 2019 - Air carrier Adria Airways is cutting a number of regular routes this summer, Ex-Yu Aviation portal has reported. The company said on Tuesday that it would fly to 16 destinations and increase the frequency of flights to some of them. Meanwhile, passengers will still be able to reach the abolished destinations via other Star Alliance carriers.
It will bump up the number of weekly flights from Ljubljana to Munich, Prishtina, Skopje and Tirana, as well as flights from Prishtina to Frankfurt and Munich, the Slovenian-based air carrier said in a press release.
During the summer season, between 31 March and 26 October, Adria will fly to 16 destinations from Ljubljana: Amsterdam, Brussels, Copenhagen, Frankfurt, Manchester, Munich, Paris, Podgorica, Prague, Prishtina, Sarajevo, Skopje, Sofia, Tirana, Vienna and Zürich.
In total, the carrier will be flying 194 times a week on 20 different routes, the company said.
On the other hand, Adria is abolishing flights to Belgrade, Berlin, Delhi, Düsseldorf, Göteborg, Hamburg, Helsinki, Istanbul, Kyiv, Moscow, Oslo, Singapore, Stockholm, Stuttgart, Warsaw, and Geneva, Ex Yu Aviation says.
According to Adria Airways, all of the abolished destinations, except Kyiv, can be reached by direct or indirect flights operated by other Star Alliance carriers.
CEO Holger Korwatsch was quoted as saying in the press release that the situation in the industry was demanding and that the company could not allow a repeat of last summer. In December 2018, Adria had to be recapitalised or else face losing its flight licence.
STA, 5 February 2019 - STBE, a company which is said to own the airline Adria Airways brand, has been absorbed by Adria Airways, Slovenia's flag carrier in German ownership. The move increases the airline's share capital and changes its ownership, the business newspaper Finance reported on Tuesday, citing publicly available documents.
Adria's share capital has thus increased by EUR 1.5m to EUR 3.28m and its majority ownership has passed to Stefan Beulertz, until now the sole owner of STBE.
According to news portal Siol, STBE had bought Adria's brand from Adria a while ago for EUR 8m.
Before Beulertz became its majority owner, Adria was in sole ownership of AA International Aviation Holding, a company within the German turnaround fund 4K Invest, which bought Adria from the Slovenian state in 2016.
The airline said its strategy and day-to-day operations would not change under the new ownership. "The merger by acquisition of STBE is one of the measures to improve the company's financial strength and performance," Adria told the STA.
Struggling with liquidity issues, Adria was supplied with EUR 4m in fresh capital at the end of 2018.
Its owners announced another EUR 10m capital hike in the first quarter of this year and the move is believed to be a part of this operation.
Last year, Adria was scrutinised by the Civil Aviation Agency for speculation of insolvency, but the agency said last month the airline was able to secure long-term solvency, so it kept the air operator certificate.
Meanwhile, Finance cited an unofficial source saying the company had generated an operating loss of EUR 14-15m last year.
Adria neither confirmed nor denied the report, reiterating it would inject the airline with EUR 10m in fresh capital by the end of March.
Adria will phase out flights to Moscow and Düsseldorf this week and terminate cooperation with German airport Paderborn-Lippstadt.
"We have not managed to agree further conditions for air services under which we could carry on the cooperation [with Paderborn]... All the other operations of Adria Airways remain unchanged," the company told the STA.
The website Ex-Yu Aviation reports that Adria Airways is planning a reduced schedule for summer 2019, with at least nine fewer routes than 2018. In addition to the recently suspended Moscow and Dusseldorf services, the carrier currently has no plans to reintroduce connections to Warsaw, Kiev, Brač, Bucharest, Dubrovnik, Geneva or Hamburg, cutting at least 32 flights per week. Adria also announced that this summer will see just one weekly flight to Paris and Copenhagen, while as yet there’s no news as to whether the two weekly flights to Tel Aviv that were on the books for 2018 will return
However, in a move that some see as making Ljubljana a feeder airport for German hubs the carrier is set to increase the number of summer flights to Munich and Frankfurt. There will also be more seasonal flights to Pristina and Zurich.
The news comes a week after the Civil Aviation Agency stated that Adria Airways current plans mean that it will be able to meet it’s financial liabilities and remain solvent, and thus keep its operating licence.
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STA, 22 January 2019 - The Civil Aviation Agency has found that the Slovenian carrier Adria Airways is able to secure long-term solvency, which means that it will keep its operating licence.
The agency has found that the planned and implemented measures presented by Adria show that the carrier is able to settle all of its liabilities in the long term and meet all the legal requirement, demands and criteria for keeping the operative licence, according to a press release from Adria.
The agency reportedly also confirmed in several different procedures that Adria met the required technical demands for ensuring adequate air safety.
Adria CEO Holger Kowarsch said he had expected no other decision given that Adria had been meeting all the demands for the operating licence all along.
"I regret that so many false and misleading reports were published about the state and operations of our company in recent months, and at the same time I look forward to being able to continue to implement our strategic plan undisturbed ..." he said.
Adria plans to additionally optimise its network of flights and add new flights while preserving all of its key connections to the main European hubs, Kowarsch announced.
After a thorough inspection last summer, the Civil Aviation Agency established that Adria Airways was no longer capable of settling its liabilities, so it ordered the German turnaround fund 4K Invest, which acquired the former flag carrier three years ago, to recapitalise the company in order to secure long-term financial sustainability.
The German fund injected EUR 4m in Adria Airways at the end of 2018, while announcing that an additional EUR 10m capital hike was in the pipeline for the first quarter of 2019.
Adria had until the end of last year to submit documentation assuring that it can secure long-term solvency.
The carrier posted a net loss of EUR 5.4m in 2017 after finishing in the black the year before due to the sale of its brand. The negative result was attributed to rising fuel prices as well as to the termination of cooperation with two European carriers.
The company announced in October it would not manage to get out of the red in 2018 either, mostly due to high fuel prices.
The regional aviation website Eu-Yu Aviation reports that Adria Airways has quietly ended services connecting Ljubljana and Bucharest, Kiev and Warsaw. While no formal announcement was made, the airline omitted these cities in a recent press release, despite having advertised all three routes just two weeks ago in a seasonal promotion. Ljubljana Airport now has no direct flights to Bucharest or Kiev, although it’s still possible to fly to and from Warsaw using LOT Polish Airlines, which runs a daily service.
As reported by STA, Adria Airways is likely to end a second year in the red, after posting a net loss of €5.4m in 2017, with the company blaming the poor results on fuel prices. However, despite a number of cancellations in recent weeks, the carrier is still planning to operate 171 weekly flights to a total of 21 destinations this winter, as detailed in the company’s latest schedule, which runs from October28 to March 30.
The website Ex-Yu Aviation has just published a good overview of the changes to Adria Airways schedule for the winter 2018/2019 season, which starts on October 28 and ends March 31.