STA, 18 December 2019 - The Bank Assets Management Company (BAMC – aka “the bad bank”) is in talks with potential partners to increase flight frequencies on routes connecting Ljubljana with Frankfurt, Munich, Zürich and Brussels following the bankruptcy of air carrier Adria Airways, its director Matej Pirc told the STA.
While Lufthansa and its affiliates quickly filled the gaps on these routes, which are considered key hubs for Slovenian business executives and for tourism, there have been complaints about schedules, in particular about the absence of morning flights to Brussels often used by public administration officials.
Pirc said the bad bank was in talks with "European regional carriers" to increase flight frequency on these routes. Up to three carriers, which he would not name, would operate the additional flights in exchange for government subsidies.
The scenario is in the works after the government abandoned plans to set up a new national carrier due to excessive risk. According to Pirc, calculations showed the new carrier would post an annual loss of roughly EUR 8 million in the long term.
The subsidies would achieve the same goal - improving connectivity with European airports - but their advantage is cost control. The period of subsidies would be limited as well, he said.
As a result, the annual cost to the state would be lower and "significantly easier to manage" than a capital injection that would be necessary to get a new carrier off the ground.
Pirc admitted, however, that subsidies are "not simple", otherwise other countries would use them more frequently as well. "We expect that all these issues will be known at the start of next year."