STA, 26 September 2019 - Prime Minister Marjan Šarec has expressed regret about the developments at Adria Airways, sympathising with the passengers and the employees' families, but also noted that the air carrier is no longer state-owned and that the outlook for its rescue is not good.

Šarec instructed the relevant ministers on Thursday to weigh all the possibilities of potential aid to the German-owned airline, which is facing the treat of losing its operational licence due to a lack of liquidity.

"However, people need to be told clearly that the options are not good. I wouldn't like to paint an unrealistic picture so that the public opinion would be more favourable," Šarec said in New York on Thursday.

He noted that Adria Airways was sold by the state to the German turnaround fund 4K Invest in 2016 because the company was not doing well and needed a strategic owner.

"The owner is bad. It turned out Adria didn't come into good hands, and this fund which owns Adria then failed to present a financial plan requested by the ministry. In short, they behave completely frivolously."

He noted that a potential salvage of the company should be within the scope of the law. "To try a new variant, but I must say that like the passengers I don't trust Adria any more. I'm sorry to say this. I won't go into reasons from the past, but you know how it is. Those who cannot handle money, you can give them two millions today and they won't have them tomorrow."

The government cannot grant a loan guarantee to Adria Airways because it does not own it, Šarec said, adding that like in the case of retailer Mercator and some other companies "everything would be different today is a better owner was found for them when they were sold.

"As it is, throwing money while we don't know where the money will go and what comes of it, it is a bit risky."

Asked whether the government would help the carrier in case of a change in ownership, Šarec said that it would be a different story with a serious owner. Then we wouldn't have come into the present situation."

BAMC examines Adria’s finances

STA, 26 September 2019 - The Bank Assets Management Company (BAMC) has been looking into the financial situation in Adria Airways since Thursday morning to ascertain how long the money demanded by the air carrier's German owner would last, the business daily Finance has reported. The paper has also released the company's report for 2018,

The aim of BAMC's scrutiny, which comes under instructions from the government, is to establish how long the EUR 4 million that the company's German owner 4K Invest, demanded from the state as the condition not to file for receivership would last.

BAMC told Finance that it would not provide the money if it turned out the sum was not sufficient to rescue the company. BAMC also demanded of the Adria owner to submit proof of debt write-offs agreed with creditors.

Estimates by Finance's sources are that Adria would need about EUR 50 million merely to avoid a bankruptcy, and as much for sustainable operations.

Finance also cites estimates by experts that creating a new airline, which is another potential scenario offered by politicians, would cost some EUR 70 million.

Citing unofficial sources, the commercial broadcaster POP TV reported that BAMC suggested the government invest between EUR 15 million and 20 million in Adria on condition the company pay out on Friday the reminder of August pay to employees and settle its International Air Transport Association membership fee.

Economy Minister Zdravko Počivalšek told the STA today that the situation at Adria Airways was being examined by several institutions so that the government will take a decision on Friday or Saturday how to rescue the company to preserve Slovenia's air links with the rest of the world.

"We don't want to take decisions by heart, we don't want populist solutions, the figures will tell us what we need to do," he said.

It is in the government's interest to have a carrier that would link Slovenia well internationally. "If we come in a situation when we don't have such a carrier, the market will do its job, but I don't think we'll ever be linked with the world again as we are now," said the minister.

Adria Airways's audited 2018 report, released by Finance, puts its net loss for last year at EUR 18.95 million, up from EUR 5.44 million the year before, as revenue rose by 12.5% to EUR 179.08 million.

According to the report, Adria had EUR 2.63 million in capital in 2017, but last year its capital turned EUR 14.19 million negative.

The company's long-term debt amounted to EUR 21.5 million and short-term liabilities to EUR 54.6 million.

The auditor issued a qualified opinion on the report, for one thing because it established that Adria did not in fact lose control of its brand in December 2016, so the accounting treatment of the company from that year on did not lead to a fair value of events.

According to the auditor's calculations, unconsolidated receivables as of the end of 2018 should be reduced by EUR 5.6 million, and by EUR 5.4 million at the end of 2017, while the liabilities as of the end of 2018 should be reduced by EUR 0.8 million and the accumulated loss increased by EUR 4.8 million.

All our stories on Adria are here

STA, 26 September 2019 - The Slovenian tourism sector is scrambling to find alternatives after Adria Airways suspended operations, leading to hundreds of immediate cancellations and raising the prospect of significant long-term damage.

A meeting was held in Ljubljana Wednesday featuring hoteliers, shuttle operators, major convention venues, the Slovenian Tourist Board and the Economy Ministry.

"The goal was to find solutions in the given situation, with drastically reduced air access putting guest arrivals at risk and jeopardising even finalised business events," said Visit Ljubljana, the capital's tourism office.

Media reports suggest there have been dozens of cancellations daily in Ljubljana hotels since Adria grounded its flights on Tuesday.

Foreign guests account for over 95% of all hotel nights in Ljubljana, with roughly two-thirds coming to the city by air, according to Visit Ljubljana figures.

While many do come through airports in neighbouring countries, Ljubljana is the main entry point and Adria accounted for about half of all passengers there.

Ljubljana is also a major convention tourism destination and the lack of direct air links could hurt the sector. "In the first half of 2020 alone this could have a negative impact on three major international conventions with over a thousand participants each," Visit Ljubljana said.

Adria's woes could prove to be a boon for nearby airports in neighbouring countries, which expect passenger numbers to rise.

Zagreb Airport told the STA it expected the number of business guests to increase, while Trieste Airport said it had seen an uptick in the number of guests flying to Munich and Frankfurt.

Munich and Frankfurt were two of the most lucrative destinations for Adria.

Adria's grounding left roughly 3,700 passengers stranded on Tuesday and Wednesday, when 158 flights were cancelled.

Today and tomorrow almost 200 flights have been cancelled, affecting about 10,000 passengers.

All out stories in Adria are here

STA, 25 September 2019 - Slovenian carrier Adria Airways has extended its suspension of operations at least until Friday. All flights except one daily flight to and from Frankfurt will remain grounded.

"Adria Airways continues active talks with potential new owners and principal creditors and it remains committed to achieving a positive outcome for all," reads a press release circulated on Wednesday.

The continuation of suspension adds to the woes of the company, which is teetering on the brink of bankruptcy after months of delays, cancellations and questionable management decisions.

On Monday evening it abruptly announced it was grounding all of its flights for two days, which was followed by news that creditors are stepping up to seize aircraft it is currently leasing.

Adria given a week to present restructuring plan

STA, 25 September 2019 - The Civil Aviation Agency (CAA) has given the struggling Slovenian airline Adria Airways a week to submit a confirmed financial restructuring plan or otherwise its operational licence will be revoked, CAA director Rok Marolt told the press after meeting Adria management on Wednesday.

The restructuring plan must be supported among other things with signed lease contracts for aircraft and an air operator's certificate (AOC), according to him.

The ultimatum comes after the German-owned airline suspended almost all of its operations yesterday due to financial issues, with all companies leasing the aircraft to the company reportedly threatening with withdrawals.

The decision was made at an oral hearing at the agency's seat involving representatives of Adria Airways, including officers responsible for safety and the financial director.

If Adria fails to provide the required documentation in a week, it will no longer be permitted to operate commercial flights, and if it does, the CAA will make a quick decision about whether the proof is solid enough for the licence to be preserved.

Marolt told the press conference in Ljubljana that the agency would no longer approve recapitalisations of Adria with "various merger manoeuvres, transfers of brands and similar. Even guarantees from a potential strategic partner would need to be solid."

Asked how much fresh capital Adria would need, he said that it was a "high amount of money, tens of millions of euro", adding that he would not comment on the 2018 annual report as it had not been published yet.

The management of Adria Airways has meanwhile given the owner, the German turnaround fund 4K Invest, until Monday to decide whether it will embark on financial restructuring of the company which unofficially owes up to EUR 60 million in debt.

If they decide for financial restructuring, they will have 30 days to implement it, and in the opposite case the company is likely to end up in receivership, which means automatic revocation of operational licence.

In order to regain licence, Adria would need to submit proof that it has enough funds to secure safe flight operations in the next 12 months.

The carrier is insolvent under two criteria and the only remaining criteria it meets is that it has paid out a majority of outstanding wages to employees.

A quarter of wages for August has not been paid and proof that this was done in the meantime is what the agency will expect to be on its table in a week.

The CAA also ordered Adria today to formally ground two Bombardier CRJ 900 and three Airbus A319 aircraft based on requests from the companies which have leased them to the airline.

The company's AOC currently features ten aircraft - six Bombardier CRJ 900s and four Saab 2000s, but Marolt revealed that the agency had already received requests from owners for deletion of six aircraft from the certificate.

As for safety, he said that the aircraft operated by Adria Airways were safe and added that the company's management had assured him that there were enough funds to provide safety of flights scheduled to be carried out in the coming days.

"If there were any doubt about safety, Adria would not be flying even a minute," Marolt said, adding that immediate measures would be taken if any signs of safety risks were detected by the deadline for the restructuring plan.

All our stories on Adria are here

STA, 24 September 2019 - Flight cancellations by carrier Adria Airways have caused a lot of frustration for passengers at the Ljubljana Jože Pučnik Airport on Tuesday. Long lines have formed in front of Adria's information desks, as many passengers learnt about the cancellations only after they arrived at the airport.

Adria Airways has cancelled all of its flights scheduled for today and tomorrow, with the exception of flights to Frankfurt. The airline seems to be at a dead end, having ran out of money. The fate of what used to be Slovenia's flag carrier will expectedly be known in the coming days.

Meanwhile, at Slovenia's biggest airport passengers are frustrated about being stranded and receiving little help from the airline.

Two Americans who are supposed to fly to Texas and California via Munich later today were angered by the fact that they had not been informed about their flight being cancelled before arriving at the airport this morning.

"We've received no phone message, no email, no message whatsoever," one of them told the STA, adding that they booked their flights without any problems a week ago.

Adria personnel advised them to turn to the agency that booked their flights, but the agency sent them back to Adria. "They can't offer us a hotel, or transportation, they can't offer anything. At the same time, they can't put us on another flight because all flights are full."

They do not know what to do. They intend to contact Lufthansa once again. They flew to Europe with Lufthansa and the carrier also booked their flights with Adria. "I don't know where we'll end up. We're trying to stay calm, but we are far from happy."

A Massachusetts couple, who were supposed to return home today via Frankfurt, said they had not received any help. "They've given us information about EU rules that say carriers need to help passengers in case of flight cancellations or delays, but they don't follow the rules."

They were instructed by Adria to send them receipts proving additional cost incurred and do not know yet what they will do. They intend to go back to Ljubljana and probably stay another couple of days.

A man from Rijeka, Croatia, who has booked a flight to Tirana was very critical about being stuck at Brnik airport. "This is a disaster." He was given the passenger rights leaflet but was not offered a different flight to Tirana. But even that would not have helped him. "I need to be in Tirana today. But I won't be."

A couple from Australia, who visited family in Velenje and was supposed to return today through Frankfurt, arrived at the airport hours early after hearing about Adria's troubles on the news. Adria helped them get a different flight from Zagreb.

They said that their family had visited Slovenia at least 40 times in over six decades and had never faced anything like this.

Another passenger, who booked a seat to Stockholm, said Adria got her on a different flight, but ten hours later than scheduled.

Adria pilots hoping for state bailout

STA, 24 September 2019 - The pilots of Adria Airways have asked the state for a bailout after the carrier temporarily suspended operations due to lack of cash, making bankruptcy an imminent prospect.

"We're aware of the unenviable position, but we are confident the situation can be resolved in agreement with the state," Luka Radovic, the head of the Trade Union of Commercial Pilots, said in a press release on Tuesday.

Everyone stands to lose, not only Adria staff but also the economy in general, said the head of the union, which just recently signed a new collective bargaining agreement with Adria.

"By selling [the carrier] to incompetent owners, the state has brought us to this situation ... we expect the state will assist in the resolution of the situation," according to the union.

The union thus called on the government to extend a loan guarantee, but in doing that it should also appoint a temporary management and squeeze out the current owners.

"Adria has operated successfully before and we believe that a competent management can return it to the right path, making the search for a new strategic owner much easier," he said.

The appeal comes after Adria grounded almost all planes and temporarily suspended operations, a move widely interpreted as the end of the troubled carrier.

The company has been beset by delays and cancellations for months and has long been bleeding passengers and has apparently unsuccessfully attempted to sell itself to several potential strategic owners.

Media reports suggest Adria representatives have even asked the state and state-owned funds for money outright, going as far as giving the government an ultimatum until yesterday evening to provide a EUR 4 million loan guarantee or risk the airline collapsing.

But the government has made it clear on several occasions it cannot help Adria, which had received ample state aid less than ten years ago, without running afoul of EU competition rules.

Adria was sold to 4K Invest, a German turnaround fund, for a mere EUR 100,000 in 2016, having before that struggled for years.

It received several rounds of state-sponsored capital injections between 2007 and 2011, including a EUR 50 million cash infusion in 2011 and a EUR 38.4 million debt-to-equity conversion the same year.

All our stories on Adria Airways are here

STA, 21 September 2019 – The newspaper Večer accuses Adria Airway's German owners, 4K Invest, of making good money out of the former Slovenian flag carrier, saying the German "vultures" have squeezed every cent out of the company since they bought it in 2016.

The Miro Cerar government sold flag carrier Adria Airways in January 2016 after the Alenka Bratušek government put it on a list of 15 companies to be privatised in 2013.

For the German financial fund, which has absolutely no experience in aviation industry, to buy it, the state had injected Adria with EUR 3 million in taxpayer money.

Then the "experienced" German rescuers of troubled companies, skilled in creative accounting, squeezed from Adria a few million euros, and nobody knows where they have ended up.

In the same way, it took over Switzerland's Darwin Airline only to send it into receivership six months later, a case the Swiss law enforcement is still investigating.

But eventually the inevitable happened: passenger numbers started to fall, bank accounts have been blocked and part of its fleet grounded.

The last attempt by the German financial magicians to get a capital injection from the Slovenian state to keep Adria alive has fallen through, which is good news.

"If Adria's vital routes had to be temporarily kept alive, the German vultures should not be part of this story anymore," Večer says in the commentary Aviation Vultures.

Both pilots and Slovenian aviation experts have been warning the Adria owners do not know what they are doing, and it seems they are right.

4K Invest's business record shows the fund has sent into receivership at least four companies under the guise of restructuring. And when the rescuers left, several thousand workers have been left jobless.

"Adria is now in a similar position, a shell with negative capital, without assets and with an unmanageable debt," Večer says on Saturday.

Note: Updated 20:30, 20/09/19

STA, 20 September 2019 - The Civil Aviation Agency has grounded two Adria Airways Bombardier CRJ900 planes, after lessors have terminated lease contracts for the two planes due to payment default. Adria has already cancelled several flights scheduled for today and several were rescheduled.

According to Adria, the Civil Aviation Agency issued an oral ban for the two planes that Adria leased from Trident Aviation Leasing Service on Thursday afternoon.

A written decree is to be issued within the next five days.

Adria management met the agency's supervisors on Thursday evening to discuss the current situation. Adria asserted in a written statement that their flight operations with the remaining planes were safe, which the agency's head Rok Marolt confirmed for the STA today.

The agency is still deciding on Adria's operating licence. According to Adria, these are two separate procedures.

However, Marolt added that the procedure which is related to the financial situation of the company was "definitely related" to the licence procedure. "All this will definitely affect the final decision," he said.

Marolt said the agency was monitoring the situation at Adria by the hour. "If any deviations from flight security were detected, we will act immediately irrespective of the licence procedure."

So far, five morning flights have been cancelled, including the Skopje-Ljubljana, Ljubljana-Zürich, Munich-Ljubljana, Zürich-Ljubljana, and Vienna-Ljubljana flights.

According to Adria's web site, the flights scheduled for this afternoon will be carried out but most have been delayed by an hour and a half.

Delays were already reported on Thursday. Passengers going to Paris, Copenhagen and Amsterdam were stuck at the airport. Flights to Brussels, Tirana and Prague were also cancelled.

Adria has not commented on the matter yet. CEO Holger Kowarsch denied media reports that lessors have terminated lease contracts for the two planes in a comment for the STA last night, saying that talks with lessors were still under way.

News portal 24ur reported today that Adria employees had staged a spontaneous protest at noon. Pilots and cabin crew reportedly gathered to protest about the uncertainty and lack of information about the state of the company and their careers.

Trident Aviation Leasing Service is part of the Falko group, which owns the Irish low-budget carrier CityJet and is one of the biggest creditors of Adria, according to Siol.net.

Falko was also mentioned as a possible saviour of Slovenia's former flag carrier which has been in German ownership since 2016.

Adria's potential receivership would cause problems to the state administration, given the upcoming Slovenia's EU presidency in the second half of 2021. Kowarsch reportedly discussed this with Prime Minister Marjan Šarec in the spring.

The Infrastructure Ministry said today that it did not have means at its disposal to assist Adria; however it was sorry to hear about the airline's unfortunate situation.

"Our priority at the moment is that maximum safety of Adria's flight operations is ensured," reads the ministry's press release.

The state, which sold Adria in 2016, will be obliged to provide Slovenia's air connectivity with the world in case Adria's operating license is revoked.

The ministry has thus already prepared a proposal which would enable co-funding of certain flight routes in line with relevant regulations.

If Adria goes bankrupt and no other airlines step up to provide necessary services, then the state would have to set up a public airline enterprise - a long and complicated procedure which would have to be approved by the EU.

Meanwhile, Adria said today that the company was facing serious financial issues and was looking for solutions to tackle them.

Adria's fleet includes 16 planes at the moment, but the carrier is leasing many of them to other airlines together with flight crews.

All our stories on the troubled airline can be found here

STA, 17 September 2019 - Adria Airways has signed a new collective bargaining agreement with pilots, a move the airline says that "calms down the labour situation at the company".

The new agreement "allows management to remain focused on stability of operations and provision of services," the company said after signing the agreement on Tuesday.

The deal, valid through 2023, was signed a little over a week after a tentative deal was reached with pilots, helping the airline to avert a series of multi-day strikes that the pilots had announced for September and early October.

During that time the Trade Union of Pilots put the deal to a vote, which appears to have been successful.

Adria did not disclose the details of the deal, while Marko Kastelic, a member of the pilot union, told the STA the pilots were very satisfied with what had been achieved since work conditions would substantially improve.

Pilots had been complaining about the bad working conditions before and after the sale of this state-owned company to the German fund 4K Invest was completed in early 2016.

Since months beset by delays, flight cancellations and unannounced mergers of flights, the airline has had financial trouble for a while and is currently looking for a strategic partner.

Adding to its woes, it risks losing its operating licence due to what media reports suggest is a dismal financial state.

The Slovenian Civil Aviation Agency is expected to take a decision by the end of October. It can either decide to let things stands as they are, it may permanently or temporarily revoke its licence, or it may issue a temporary licence.

Kastelic was hopeful the airline would be able to resolve its operational and financial problems.

All our stories about the ups and downs of Adria are here

Ex-Yu Aviation reports that Alenka Bratušek, Slovenia’s Deputy Prime Minister and Minister for Infrastructure, stated on Friday that a proposed new law on aviation “would allow some forms of subsidies on certain routes. But it would be four or five destinations, not all of Adria’s flights”.

Related: Govt. Developing Contingency Plans if Adria Airways Collapses

Adria Airways has had a difficult year, with cancellations, dropped flights, and suspicions over its financial health, and the carrier currently in breach of EU regulations as it has not yet submitted its 2018 financial report to the Slovenian Civil Aviation Agency. Moreover, the Slovenian government cannot offer direct aid to Adria until 2021, as the carried received state funds in 2011 and EU rules only permit this once every ten years.

All our stories on Adria Airways are here

STA, 6 September 2019 - Slovenian carrier Adria Airways has reached an agreement with pilots that averts a series of strikes that were due to begin on Sunday and threatened to severely disrupt air traffic in Slovenia.

"Adria Airways will carry out scheduled and charter flights according to the planned flight schedule," the company said in a brief press release on Friday without revealing the details of the agreement.

Marko Kastelic, a representative of the pilots' trade union, said that the reason the strike was called off was that they adopted a draft of a new collective bargaining agreement.

The draft will now be put to a vote to the trade union's membership. "Once it is endorsed, which is what we expect will happen, we'll also cancel the other two strikes," said Kastelic.

The trade union of pilots had threatened to start striking in order to force a change of the collective bargaining agreement, which formally expired on 1 September.

The pilots sought to improve what they said were "unbearable working conditions", urging the management to "stop violating the existent collective bargaining agreement".

Adria pilots complained about the bad working conditions before and after the sale of this state-owned company to the German fund 4K Invest was completed in early 2016.

Since months beset by delays, flight cancellations and unannounced mergers of flights, the airline has had financial trouble for a while and is currently looking for a strategic partner.

Despite its problems, Adria accounts for roughly half the traffic at the Jože Pučnik International Airport in Ljubljana.

Related: Adria Airways’ difficult 2019

UPDATE: On Friday, 6 September, a deal was reached and the strikes were cancelled (see more details here)

September 3, 2019

The possibility of a series of three-day strikes announced for September by the Traffic Pilots Union of Slovenia (SPPS) is becoming increasingly realistic following another round of unsuccessful contract negotiations between Adria Airways’ leadership and its pilots.

In a recent press release, the Pilots Union explains that a request for the start of negotiations for a new collective agreement has been submitted several times to Adria Airways’ management since the end of the summer 2018. The main reason for the request being made at the time was that the old contract expired at the end of August 2019 and the Union hoped to have enough time to negotiate a new ones. Negotiations, however, only began in May of 2019 and included the union’s demand for the Adria Airways leadership to cease all the violations of the previous work contract.

As the talks apparently proved unsuccessful, on August 15 the union declared a series of strikes for September.

With the end of the old collective agreement and without a new one in sight, the Traffic Pilots Union of Slovenia (SPPS) announced to the media that the series of 3-day strikes are about to begin this Sunday. The dates on which Adria’s pilots will not fly unless an agreement is suddenly reached are as follows:

Strike #1: from September 8, midnight (00:00) till midnight (23:59) September 10, also

Strike #2: from September 18, midnight (00:00) till midnight September 20

Strike #3: from September 30, midnight (00:00) till midnight October 2

Apart from the announced strikes, portal 24UR reports that Adria Airways also faces a growing number of angry passengers whose flights get cancelled or rescheduled.

Adria Airways was the only Slovenian airline with its base in the International Airport Jože Pučnik (also known as Brnik or Ljubljana Airport). The state sold the company in 2016 to 4K Invest, a Luxembourg-based restructuring fund, which has been running the company since.

All our stories about Adria Airways can be found here