September 10 sale deadline loomingJust over ten days are left until the tender for the sale of 74.9% of Adria Airways comes to a close. Non binding bids are to be submitted by September 10. There has been no information as to whether any company has bought the tender documentation or made an offer. If interest is low, tender procedures could be extended. The Republic of Slovenia and four banks own a 99.9% stake in the airline. Adria’s strengths are its well developed regional network, vast local market share and its mini hub in Priština. On the other hand, its weaknesses include high debt and a relatively small market.
In the past, it has been rumoured that the likes of Lufthansa, Turkish Airlines and Qatar Airways were interested in the Slovenian carrier. However, since then Qatar Airways has ruled out interest in Adria. The Slovenian airline has strong ties with the German national carrier, although Lufthansa’s recent airline spree in Europe has proved as a headache. Its subsidiaries Austrian Airlines, Swiss International Airlines and Brussels Airlines have posted big losses. Lufthansa recently sold British Midland Airlines, closed Lufthansa Italia and withdrew from Jade Cargo. The amount of shares the Slovenian government has put up for sale indicates that Adria’s potential new owners will be from the European Union. EU regulation 2407/92 requires that, in order to obtain and retain an operating license, an EU air carrier must be majority owned and effectively controlled by EU nationals. Companies and nationals from non EU countries can hold up to a maximum of 49.9% of shares in a European Union airline.
Several months ago, Adria Airways CEO, Klemen Boštjančič, indicated that Adria would move to strengthen regional cooperation with the national carriers of the former Yugoslavia if the airline’s privatisation process failed. Furthermore, he indicated the airline would have to make changes to its fleet and attain an additional loan from the banks as early as next month.