Friday, November 23, 2012

EU investigates Adria over state aid

The past comes back to haunt Adria

The European Commission has opened an in depth investigation to verify whether a number of public support measures in favour of the Slovenian national carrier, Adria Airways, are in line with European Union state aid rules. These measures include four capital injections between 2007 and 2011 amounting to around 85.5 million euros. The Commission has doubts that they were granted on market terms. Adria has been facing financial difficulties for several years and has recorded annual losses since 2008. The most recent aid injection came last year when Adria was granted fifty million euros. In addition, the Commission found that state owned holding company PDP and the majority state owned Ljubljana Airport acquired 52.3% and 47.7% of Adria Airways’ maintenance subsidiary Adria Airways Tehnika between October 2010 and March 2011.

The Commission will now investigate whether one or more of the capital injections within the past four years have procured an economic advantage to Adria Airways over its competitors in the EU Single Market. Latvian flag carrier airBaltic is also under investigation by the European Commission for acquiring state aid. Following last year’s multi million euro aid package, Adria launched a restructuring program to cut down on costs which has so far been successful.

Following its investigation, the European Commission can order Adria to pay back the state aid it received if it considers the payments from the government to the national carrier was illegal. Earlier this year, both the Hungarian national carrier Malév and the Barcelona based Spanair went bankrupt after the Commission ordered the airlines to pay back state aid received by the Hungarian and regional Catalan governments respectively. Meanwhile, there hasn’t been a single word regarding Adria’s privatisation process, over two months since an open tender call for potential partners was closed.

17 comments:

  1. And there we have it, the first ex-Yugoslav airline to go bust in a long time.

    I wonder what implications this might have on the future of aviation in Slovenia.

    ReplyDelete
  2. The time has come to eliminate Adria - Mama Lufthansa has spoken

    ReplyDelete
    Replies
    1. I actually think it has nothing to do with Lufthansa.
      Malev went bust when Wizz Air reported it to the European Commission.
      Now, the European Commission announces an investigation the moment Wizz Air starts to fly into Ljubljana.

      Delete
    2. Interesting, I think you are right!

      Delete
    3. I think he is right too. I think it would be a shame for Adria to go belly up. So many people would lose their jobs and both the airport and the country would lose nice income.

      Delete
  3. Its amazing how everyone in the Balkans blames someone else, be it the Germans, Serbs, Turks etc... Hurry up smell the roses and get into the 21st century.

    ReplyDelete
    Replies
    1. You do understand that there is someone to be blamed here because the EC can not launch an investigation unless someone submits a report? In other words, someone must have writen to the EC about Adria for them to launch an investigation.

      Please, do not comment before checking the facts. Especially not when you are trying to be smart.

      Delete
    2. I think he/she was trying to say that if the investigation ends negatively for Adria, they only have themselves to blame, not the company reporting them.

      Delete
    3. Regardless, he was still out of context.

      Delete
  4. Yes it is really unfair to condemn national carriers. It is a shame for EU. They support low cost airlines and restrict national airlines. SHAME on EU.

    ReplyDelete
  5. This comment has been removed by a blog administrator.

    ReplyDelete
  6. Actually last year Slovenian goverment asked for their permission and it was granted by the EU or in the other word they have said it is not an aid they need to approve - at least that is what media reported back then.

    http://www.delo.si/gospodarstvo/podjetja/adria-se-evropske-preiskave-ne-boji.html
    http://www.delo.si/mnenja/komentarji/propad-letalske-politike.html

    A good comments about EU and stuff.

    ReplyDelete
  7. EU Comission
    Adria is corrupted 100% it's working like this many years already.
    See facts etc.
    Don't allow Slovenia specialists to investigate int this.
    They are all corrupted and if they are not they are silent.

    REMEMBER
    even cocain barons are left free in Slovenia
    Balkan Warrior.
    In Adria there is money it's corruption lampan!

    ReplyDelete
  8. Offtopic dont understand why people still want to join the EU offers nothing for a countries on the balkans and behaves likes communists towards them....

    ReplyDelete
    Replies
    1. "EU offers nothing for a countries on the balkans"...nobody never said EU offers something.for a smaller countries (that in fact all the balkan countries are!)it CAN mean a more secure economic enviroment, free market etc.of course, there are also funds, for projects (constructing new motorways, etc).yet it has also it's own ruls and laws, of course.that's why they can investigate its memebers help to their companies.here i would like to stress it's not only investigation of help to airline companies, like a man could think of, after reading these comments, but a help to any kinf of company, like the one Slovenia gave to Elan etc.sure, if a country decides to join EU it poses a certain risk, but what is better, to remain an isolated, underdeveloped country or to take a risk and move forward?all the countries in Europe are too dependant to remain isloted (exeption of norway-gas, switzerland-all the stolen money during 2ww, or russia-size of the country, gas etc).

      Delete

  9. Off topic



    To: EX-YU

    Vintage Zagreb Airport postcard was made in 1970. Note JAT's Convair AND a B707 in a photo.


    http://www.jat.com/active/sr-cyrillic/home/main_menu/about_us/history.html

    ReplyDelete
  10. In the past, national airlines were the domain of the state. The airline business is of course fickle and subject to economic conditions. Small regional airline can incure lossess in a very short time. This is why many sovereign countries subsidize their airlines. Under ex-yu JAT and Adria would have received financial help and every other guarantee of survival. It is because a large independent country stood behind its airline business that these airlines were in existence for such a long time. EU is completely different. You swim in a pool where the odds are in favour of large airlines such as Lufthansa. They do not need subsidies but they grew large in the same way, Germany stood by Lufthansa in the past. All I am saying is that ex-yu made a lot of sense in key transportation modes such as air and rail. We traded one federation for another one except we are all weak in the EU. Not nostalgic, just stating a fact. Can you imagine a crisis in ex-yu that would not be solved by a decision to bankroll an airline?

    ReplyDelete

Before posting a comment be mindful of other participants and readers. EX-YU Aviation News does not tolerate insults, excessive swearing, racist, homophobic or any other chauvinist remarks or provocative posts with the intention of creating further arguments. Such comments will be deleted as soon as possible. The opinions expressed by those providing comments are theirs alone, and do not reflect the opinions of EX-YU Aviation News. Thank you for your cooperation.