Adria looks to the future as it secures state aidThree parliamentary committees have given the government the all clear to take part in the bailout of flag carrier Adria Airways, which requires a 50 million Euro cash injection to stay in the air. Opposition MPs argued against the aid saying that Adria’s agony would only be prolonged by granting the aid and that the national carrier should look for a strategic partner which would lead to privatisation. Despite the fact that the European Union does not look kindly upon government bailouts for state owned companies, emergency support is allowed under EU rules for the rescue and restructuring of firms in difficulty. The government warned that this was a “one off” and further aid wouldn’t be granted. Adria has also announced it will take a further 40 million Euro credit from the banks. The airline is currently struggling to pay off debt of up to 100 million Euros.
The airline’s management touted their recent visit to India as major success. Thanks to a deal with Adria, Air India is expected to begin flights to the United States via Ljubljana as well as codeshare on Adria’s regional services. The airline’s CEO, Klemen Boštjančič, says that Adria is looking at signing similar deals with other airlines. He blamed high oil prices at Ljubljana Airport, amongst other things, for the airline’s ever increasing losses. Adria will also introduce an additional service to Banja Luka from July 14, increasing the number of weekly subsidised services to 5.
The airline says it is talking to 10 potential strategic partners but says that the airline must first improve its financial state before it can be sold as no one wants to take over a debt ridden company.