Sunday, May 1, 2011

Adria falls on hard times

Eurocontrol trouble for Adria
According to sources close to Adria Airways, the Slovenian national carrier owes millions to Eurocontrol, the European Organization for the Safety of Air Navigation, responsible for the management of air traffic across Europe. The airline has failed to make payments to the European body for months despite numerous warnings. MAT Macedonian Airlines, the now defunct national carrier of Macedonia, had similar problems prior to its demise and was forced to suspend certain routes as a result of its late payments.

However, Adria will soon receive government aid to the tune of 6.1 million Euros. Since the European Union forbids direct government assistance, the Ministry of Economy has proposed for the Slovenian Government to issue loan guarantees to banks. The European Commission has allowed for such arrangements to be made. The Ministry further concluded that Adria Airways is a company with a high bankruptcy risk but that its demise would have serious negative consequences in the region. Furthermore, the Ministry believes that Adria has the basis for recovery and restructuring.

The cash strapped carrier recently announced it would be slashing employee wages by 20% and cutting down on its workforce. In the first quarter of 2011 the airline carried 218.384 passengers, a small passenger increase of only 2% compared to the same period last year. April is set to see double digit growth for Adria as this time last year the airline was first forced to cut down on services due to runway work at Ljubljana Airport and then had to deal with air space closure due to the volcanic ash cloud from Iceland.

10 comments:

  1. Has anyone heard of what's going on with the Nis-Ljubljana route?

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  2. Nothing by the looks of it. INI airport management seems to have stuffed everything up and are now saying they are planning on getting routes NEXT YEAR! Maybe they will blame JU. It seems that it’s the only thing they are good at to compensate for all of their failures over the years.

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  3. I heard that, but it was only with one airline who wanted to commence next summer? I'm not sure if we're talking about the same article but the one I read also mentioned another two airlines (not including the one starting next year) who INI were having talks with

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  4. How are the routes from Pristina doing?

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  5. PRN routes are quite well, though the problem is that a plane is there for just few flights per week, which is the biggest concern now. Planes must fly 10 hours per day to be profitable, not just 5.

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  6. Hmmm..The plane in PRN has only 5 operational hours per day and Adria is going to lease 2 other
    A320 for charters.That is a pure definition of missmanagement.
    No wonder they are in danger.
    I have written 100 times-I dont know any airline that went bankruptcy because of undercapacity but I know quite few that went bally up cause of overcapacity!!

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  7. and againm Balkan:) just try to compare with LCC od other small companies especially in US, planes form Pinnacle airlines, Spirit airlines, Fly BE, and lot other are flying more than 12 h, a day. A Spirit Airline's A319 is flying from 6:00 to 23:20, i know that it is a different market but serouisly why not just to try to do that.
    Instead of flying with 15 planes in the same time, they need to fly with only 6-7 planes in different time.
    And one more thing, Adria and all the others, JAT, Montenegro, Croatia, BH, are regional airlines, maybe they are flying to big European cities but with a range of 1500 nm max thye are regional, so they need to Fly with regional jets with capacity up to 100 pass. Not With 737 or 320.

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  8. @ ^ Anonymous

    Righting fleet with aircraft is not easy. Many many airlines throughout the years have got this wrong, with dire consequences.

    What is most interesting is the SI govt's acknowledgement that without the airline's operations, there will be a significant hit to business and the economy. Speaks wonders, a shame other governments don't take the same approach.

    As for all being 'regional' airlines, if that is their role then they need to be filling gaps in their scheduling pretty quickly! OUs right-sizing of a 164-seat A320 into two 76-seat Q400s shows that capacity is maintained with different fleet, and turning a profit...

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  9. (edit above)

    Sorry, first sentence should read:
    Righting fleet capacity with aircraft size is not easy. Many many airlines throughout the years have got this wrong, with dire consequences

    ReplyDelete
  10. The Ministry further concluded that Adria Airways is a company with a high bankruptcy risk but that its demise would have serious negative consequences in the region.

    NEGATIVE CONSEQUENCES? CONSEQUENCES WILL BE POSITIVE. THE PROFITABLE PART CAN BE EASILY FILLED UP BY ANOTHER "GOOD WORKING" OPERATOR NOT ADRIA.

    Furthermore, the Ministry believes that Adria has the basis for recovery and restructuring.

    PROVEN AND REPROVEN IS NOT POSSIBLE. MINDSET OF PEOPLE IN ADRIA IS THE REASON (AMONG OTHERS).

    ReplyDelete

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