The Adria affect

Tough times for Adria
Over the weekend Adria Airways revealed it will cut high profile destinations such as Istanbul, Paris, London and Warsaw. It will also shed a part of its fleet and workforce. The airline’s management yesterday said that Adria’s survival is vital for the Slovenian economy and its demise would cause a domino effect across the country. A foreign financial advisor estimated that some 3.000 jobs would be affected if Adria were to file for bankruptcy, despite the fact that the Slovenian national carrier employs only 450 people. The airline’s CEO, Klemen Boštjančič, says that Adria’s bankruptcy would cause a crisis in the Slovenian tourism sector. "Even today, one of the main problems in Slovenia is that it has relatively weak air links", he explained. "If you need five hours from one European capital to come to Slovenia, it is quite unattractive for business". Boštančič also warned that Adria’s demise would heavily impact Ljubljana Airport as well as Slovenian Air Traffic Control.

Adria Airways is in serious financial trouble. The airline is in debt of up to 100 million Euros and is waiting for the European Commission to approve a state injection of 50 million Euros. Furthermore, it is also seeking a further 40 million Euros from the banks. Boštjančič says that Adria should find a strategic partner after the restructuring process is completed. He believes the Slovenia as a market wouldn’t be too attractive to a future partner, rather, the airline’s strong regional and South East European network.

Adria currently operates a fleet of 14 aircraft. This summer the airline leased 2 Airbus A320s for a 12 month period despite needing to rationalise its fleet. Other than Ljubljana, it also has a base in Priština and was considering opening a base in Skopje, however, its financial woes put an end to those plans.

Comments

  1. @ EXYU
    wll I said it a few time, but you do not get it.

    Adria will get 50M€ from the goverment as a new capital of the company.
    Banks will convert 40M€ of loans Adria has at them ALREADY into capital!!!!!!!!!

    So no NEW loans, just conversion of the old ones into the capital of the company.

    Well, this is the plan =)

    I am still asking for the source so that I can watch it myself. Thanks!

    ReplyDelete
  2. Peter from Sydney09:39

    Who the hell leases 2 planes when the company is falling apart!? Someone was obviously doing someone a favour with that move! If these sort of business decisions are being made, the company needs to fold. You cannot keep propping up incompetency and corruption forever!

    ReplyDelete
  3. Anonymous10:08

    I blame the previous management team for the mess JP is in although most of our companies are in absolute mess. Adria needs to be privatised but as the CEO said no one will buy it. The market is too small which is visible by the small amount of airlines flying to LJU. I think Adria’s flights from PRN are more valuable then its entire network out of LJU. They should have gone ahead and based a plane in Skopje as well.

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  4. @Peter
    They leased 2 A320 because:

    1 A319 is based in PRN in the summer
    1 A319 is in LJU for scheduled flts
    you need another A32s for the schedule flts as well + A32s for charters.

    Let me say that last year, Adria was operting with 3 A32s from LJU so this year it is the same =)
    The problem why they leased it in this state of the company, becase previous CEO signed contracts for the summer charters without having planes.
    Plus it was first thought to lease B734 for PRN base for the summer months, but Ukrain than did not had a plane ready so...
    So they did not had really a choice. And planes are quite cheap to lease if I am honest, so no big problem here. BUT what to do with 4 A32s after September is a BIG question.

    ReplyDelete
  5. Anonymous10:40

    I have never understood Adria fleet policy. Their regional fleet is based of very expensive CRJ's and much bigger Airbus fleet. Obvious they try to make regional hub in LJU but without success.

    Same as ailing JAT I think their future is in much smaller and inexpensive prop fleet with high frequency connections in SEE region.

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  6. Anonymous11:07

    well Adria thank you for your expensive 50 years! it is time to close down! lufthansa will show you how to make profit out of LJU-LON route flights! and slots will be just given.....

    bye bye

    ReplyDelete
  7. Anonymous11:15

    The biggest difference between Adria and all the other ex-YU airlines is that the Slovenian government will do anything for Adria to survive while the others couldn’t give a crap and will do everything to make the position of their national carriers even worse.

    ReplyDelete
  8. Anonymous12:08

    @Anonymous...

    Biggest difference among Slovenia and other ex-Yu countries is that Slovenia still can afford to took part in rescuing their flag carrier and other don't. I still have appreciation for that measure because this is a small market with little interest of big carriers.

    ReplyDelete
  9. Anonymous12:45

    Aren't you a bit presumptuous and a bit supercilious? Slovenia, a lovely little country is no Switzerland my friend!
    OU is beating all ex Yu airlines in the quality of its fleet and a number of passengers, it leaves both Jat and Adria far behind. And yes, Cro government will always protect if need be. You all keep forgetting that Cro air marker it is by far the biggest, in excess of 5 mill passengers/year.

    ReplyDelete
  10. Anonymous14:08

    i dont care about non of airliners. OU is still not good at the catering lever anyhow... but close down JP!!!

    ReplyDelete
  11. Slowly but surely, all Ex-YU airlines will either disappear or come to a realization that only working together will enable them to successfully compete against others. As I mentioned many times before, the market is too fragmented and each airline separately can only grow so much.

    While I don't consider B&H and MAT as national carriers any longer (they are a big joke to me), Adria, Croatia, JAT and Montenegro still have potential. None of those airlines has been privatized yet, which makes it easier for the 4 governments to make a deal and put resources together to create a strong regional airline with 1 or 2 hubs through which they can connect the region with the rest of Europe. I don't care what you call the new airline, just offer me a reasonable price to major European hubs and I will be fine.

    ReplyDelete
  12. Anonymous16:00

    I think it is too early to write off BH Airlines. Towards East they are strong and Bosnia's potential is still untapped. While there is a problem of over-investment in many Ex-Yu airlines, Bosnia is still under under-utilized.

    ReplyDelete
  13. I also forgot to mention that combined, ex YU cities:

    BEG - 3.0 mil
    ZAG - 2.5 mil
    LJU - 1.5 mil
    SPU - 1.0 mil
    DBV - 1.0 mil
    PRN - 1.5 mil
    SKP - 1.0 mil
    Others 2.5 mil

    total around 14 mil. passengers annually. To me, the 14. mil is a pretty impressive number and keep in mind that those number will keep increasing, especially one Croatia joins the EU. With combined resources and competent management an airline could do very well in this region.

    ReplyDelete
  14. @ last Anonymous

    I agree with you that Bosnia still has a lot of potential but being connected only to IST is not going to help a lot. Compared to other Ex Yu states, Bosnia needs first to bring its house in order. Internal disagreements and issues need to be settled before the country can function normally. I am hoping that with more stable Croatia and Serbia, there is more stability and prosperity for Bosnia as well.

    ReplyDelete
  15. Anonymous16:25

    adria please leave slovenia !
    make prishtina your mainbase.
    become national airline of kosovo and never come back.
    let kosovo taxpayers pay for the 90 million euro debt mess !
    please dont waste our money ..
    we worked so hard for it .
    our slovenian politicians are a bunch of incompetent losers !

    ReplyDelete
  16. Potem pa zaprimo vse firme k majo kredite pa zgube pa bodmo srečni ko bomo vsi na cesti.
    Ni velika številka družb, ki dobro poslujejo.
    Če pa misliš da bojo nove zrasle kot gobe po dežju, se pa motiš.
    Najlažji je pluvat...
    Slovenčki pač, pohojamo se sami, če nas že drugi ne.

    ReplyDelete
  17. Anonymous17:25

    @Sam: you PAX numbers are incorrect.

    beg 2.6
    Zag 2.1
    Dub 1.27
    Spu 1.25


    etc....

    ReplyDelete
  18. @ Sky,

    Ne me narobe razumet. Rad imam Adrio in vsakic, ko letim v LJU, rajsi letim z njo kot s kaksnim EasyJet. Letos nazalost nisem imel izbire. Let iz Londona z Adrio enosmerna je bila cez 300 EUR. Ko sem poklical na predstavnistvo Adrie, so mi povedali da je let (klical sem Aprila za let v Avgustu) skoraj popolnoma razprodan. Potem danes zvem, da Adria ukinja lete za London. Kako je mogoce da imas sedeze skoraj cist zapolnjene, cene gromozanske, izgube pa se vecje? Vedno rajsi kupujem domace pa tudi ce je cena nekoliko visja, ampak ce Adria, SZ in podbni mislijo da lahko nategujejo drzavo do neskoncnosti in prosijo za posojila za placanje nespobnega vodstva, potem so slovenski davkoplacevalci se vecji bebci kot mi na jugu.

    ReplyDelete
  19. @ last Anonymous

    My figures were approximates for the 2011. 14 mil passengers for all ex YU is a reasonable number to predict.

    ReplyDelete
  20. Anonymous18:48

    http://en.wikipedia.org/wiki/List_of_the_largest_airports_in_the_Former_Yugoslavia

    ReplyDelete
  21. Anonymous18:51

    off the topic from one of Adria`s profitable destinations (however if they keep on cancelling routes this one will suffer as well)

    http://www.sarajevo-airport.ba/vijest.php?id=91

    ReplyDelete
  22. Anonymous20:04

    If JP scrap Gatwick will they still fly to Manchester? Seems weird.

    ReplyDelete
  23. Anonymous20:55

    OT: Aeroflot increased ZAG to daily

    ReplyDelete
  24. @ Sam
    enosmerne so skoraj tako drage kot povratne.
    Zakaj je bila takrat cena tako visoka ti je že bilo povedano.
    Mogoče je letel CRJ2 ker drugega pač za tisti dan ne moreš planirati ker so na drugih letih. Poln CRJ2 pa pač dela izgubo na tako dolgih letih, ker verjemi da niso bile vse karte tako drage.
    Večinoma kupijo to trasfer potniki ki plačajo celotno povratno karto cca 500€ in gredo potem naprej. Tako da ne jemlji tvojo ceno za okvir vseh cen.
    Semm pa tudi sam mnenja da pač manjka ljudi ki bi znali voditi firmo, in to gre od tistih ki skrbijo za linije (jih polnijo, dodelujejo tipe letal) navzgor. Tvoj primer je pač eden takih, ki ni za dober zgled.
    Za kater datum si to kupoval?
    Glede sposobnega vodstva pa ne vem, za vodenje letalske družbe, po mojem mnenju v Sloveniji nimamo potrebnega kadra - ta bi se moral izšolati v tujini, medtem pa bi moral nekdo iz tujine tukaj voditi.

    Problem, ki ni tako poudarjen je, da je Adria veliko naredila leta 1997-> ko je povezala Ljubljano z Evropo, povečala je frekvence ker je bilo to možno z CRJ2.
    Zdaj leta 2010 pa CRJ2 ni več rentabilen, letal pa se ne moreš znebiti, težko oziroma nemogoče jih je prodati, vrednost na trgu je skoraj nična, saj so naredili preko 1000 teh letal, na trgu za odkup jih je pa sedaj na voljo več 100.
    Tukaj tiči večji problem - zakaj tako velika dokapitalizacija.
    Drug problem so pa zgube preteklih 3 let, tudi to je veliko naneslo, ker so se prepočasi odzvali na spremembe na trgu.
    Pa še enkrat, meni ni jasno od kje LGW neprofitabilna, mislim mogoče je še 5x na teden preveč ampak da bi jo čisto ukinil je brez veze. Najman 3x od oka bi se pa že dalo letet s CRJ900 z neko polnostjo ki bi zadoščala za nek minimalen profit.
    CDG pa isto, zdajšnjih 10 letov na teden je "od oka" preveč saj bi spet morala leteti 900tka z nekim dobrim LF da bi se to splačalo torej 5x na teden ali manj do 3x kot LGW. Te leti so pomembni za transfer potnike proti Balkanu, saj če ukinijo te, potem bodo kmalu na vrsti SJJ, TGD,....

    ReplyDelete
  25. MAN is not flown during winter, only during summer.

    ReplyDelete
  26. Anonymous21:22

    Off topic but is Air Berlin canceling flights to pristina in November?

    ReplyDelete
  27. Anonymous21:49

    MAN might only be a summer route, but JP state all four routes will be cancelled full stop, not just for winter. Would be strange if MAN was the only UK route next summer.

    ReplyDelete
  28. @ Sky

    Takrat sem se zanimal za let LGW-LJU 5. Avgusta. Verjamem, da je letalo verjetno bilo ze zapolnjeno, ampak otkod potem taka novica da se jim ne splaca vec leteti v London? V cem je logika, da ukines destinacijo za ketere so poleti skoraj 4 mesece vnaprej ze razprodani?
    Jaz ponavadi kupim karto direkt iz USA do LJU, ampak to poletje se nameravam ustaviti za nekaj casa v Londonu in mi pac ni zneslo nadaljevati z Adrio. Sem rezerviral s Croatia Airlines za 100 USD do ZAG.

    Pozdrav

    ReplyDelete
  29. @Sam

    LGW-LJU AUG05 je sedaj na A320 AAT in je 147/162 PAX
    verjetno je v aprilu bil še na A319
    ker takrat se še nobenmu ni sanjal o floti A32s.
    Za rentabilnost linije moraš gledat skozi celo leto saj Adria leti 5x na tedn to je 260x v letu
    Zdaj poletje je samo četrtina teh letov, drugo je pa bolj bogo, ampak še vseeno mislim da ni za odpovedati linije v eno izmed največjih evropskih prestolnic in pa zaradi razlogov od zgoraj.

    ReplyDelete
  30. @ Sky

    Hvala za informacije. Ko sem iskal karto Aprila so v sporedu za let 5. Avgusta imeli CRJ9. Mal prepozno zame. Upam da bo naslednjic boljs (ce bodo se sploh leteli za London).

    Pozz v LJU. Komaj cakam da pridem spet :)

    ReplyDelete
  31. @ Sam
    A se celo tako je bilo. Potem v juniju se je veliko spremenil, ko je prisel AAT.

    Pozdrav nazaj =)

    ReplyDelete
  32. Anonymous23:35

    nice chatting with you too.

    ReplyDelete
  33. Anonymous23:50

    Exact figures for 2011 :

    BEG 3.15 mil.
    ZAG 2.3 mil.
    LJU 1.45 mil.

    ReplyDelete
  34. Anonymous00:17

    @Anonymous above: are you psychic? You already know 'exact' figures for 2011?
    Are you from Serbia?

    ReplyDelete
  35. Anonymous01:18

    lol

    nice chatting to you indeed

    ReplyDelete
  36. Anonymous03:06

    Belgrade will only scrape 3 Million
    ....not more

    ReplyDelete
  37. Anonymous06:17

    Statistic data coming from Serbia are crap, as usual. Last case was with reporting wrong GDP % to IMF.

    ReplyDelete
  38. Anonymous10:33

    Adria is just too expensive.
    2-7 JUL
    LJU-BRU-LJU 480 euros Adria
    VCE-CRL-VCE Ryanair 110 euros with luggage + 70 euros petrol and parking at VCE

    12-26JUL connecting to charter Condor
    LJU-MUC-LJU 280 euros Adria
    LJU-MUC-LJU train couchette 60 euros

    Sorry - too much.
    CRJ-200 must be changed for turboprop, so that prices can go down.

    ReplyDelete
  39. expedia 02AUG11 10:49CET

    LJU-BRU-LJU 15/22AUG Adria 299,46€
    CRJs
    Adria has the cheapest offer.

    ZAG-BRU-ZAG 15/22AUG Croatia 325,16€
    DH84
    Austrian has the cheapest offer with 256,94 via VIE of course

    LJU-MUC-LJU 15/22AUG Adria 228,87€
    CRJs
    Adria has the cheapest offer.

    ZAG-MUC-ZAG 15/22AUG Croatia 236,42€
    DH84
    Croatia has the cheapest offer.

    LJU-FRA-LJU 15/22AUG Adria 188,58€
    Adria has the cheapest offer.

    So this are FACTS at the moment which can be seen by ALL
    your 480€ ticket CAN NOT be checked.
    Btw, how much do you expect the price should be on LJU-MUC-LJU route?

    ReplyDelete
  40. to add:

    GRZ-MUC-GRZ 15/22AUG LH 319,54€

    ReplyDelete
  41. Anonymous11:08

    LJU-MUC is shorter flight than LJU-BEG which is 155 euros. Something in that range

    ReplyDelete
  42. Anonymous11:09

    P.S. return flight of course

    ReplyDelete
  43. Anonymous12:20

    15th august (plus minus a day or two) is a low season day
    in central and southern Europe air industry.
    YOu travel before or later not on these festive day.
    Apart from tourists (few of the 15th) very few are travelling the week around mid August for business too.
    So prices lower.
    It's same like from FRA o MUC to south east Asia e.g. Bangkok you find great deals at certain time flying out from Europe December 24th. But 29th is expensive again.

    ReplyDelete
  44. expedia again checked just few minutes ago and the price is cheaper than for 15-22 combination
    LJU-MUC-LJU AUG22/29 210,87€
    so what is this time the reason for this price?

    LJU-BEG-LJU AUG22/29 165,00€

    BEG has lower airport taxes, just one flight per day with rather good LF

    ReplyDelete
  45. BNX-LGW-BNX JP 21/26AUG 324,34€ via LJU

    ZAG-LGW-ZAG EZY 21/26AUG 305,70€ nonstop

    ZAG-LGW-ZAG OU 21/26AUG 452,22€
    nonstop

    Comments?
    Check via expedia if you like.

    ReplyDelete
  46. Anonymous13:23

    If Adria sinks 100 million € this a disaster for Slovenian economy. Talking about 3000 "dependent" jobs is someone from JP lobby. How many new jobs could be created with 100 million €. Just for comparison keep Slovenias size in mind. 100 million € in Slovenia would correspond with a loss of more than 4 billion € in Germany (if LH would produce equivalent losses).

    ReplyDelete
  47. Anonymous14:16

    @Sky
    if you change the dates just a bit you can fly Zag-Lon for as low as 250€...
    I flew to Paris in February for only 135€, it was cheaper on OU than EasyJet

    ReplyDelete
  48. @ last Anonymous

    I used for all flights the same date, for searching the cheapest price for every route, than it does not make sense to compare??
    But I agree, I just picked one date nothing speculating.
    Give me your date and I will compare other prices here as I am not here to prove OU is costy, just putting numbers out as others point 400€ + prices for JP and than they say Adria is costy - as well I can put the cheap prices out and than the dates are wrong etc
    maybe the date was wrong on 400€ ticket too, maybe it was on Friday when all EU employed are returning to LJU and there was very small amount of seats free, do not know.
    But saying on few prices Adria is costy is just - not correct.
    If that was true, just compare incomes (from PAX) of Adria and PAX numbers and you will get the ticket price per flight of 122€ - 244€ return than.
    Note that Adria has average flight time of 1:40.
    So costy? I do not think so. Like I started, if that was true, Adria would not had 16M loss in 2010.

    The problem is LF which should be higher for aprox. 15 points, so less flights, specially the empty ones (poor load destination), would cover that at least majority.

    ReplyDelete
  49. Anonymous17:23

    Thanks for your answer. I did not try to say that Adria was expensive, I wouldn't know since I never flew on it or even researched its prices. I am sorry you thought I was trying to undervalue Adria in any way.
    I was actually comparing regular airline with LCC. Personally, I will always prefer regulars.
    Also, I higly recommend Skyscanner.com for air tickets...

    ReplyDelete
  50. Hey,

    I was more pointing on the posts form the beginning.

    Thanks for the link, it is a great web too!

    ReplyDelete

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