Sunday, July 5, 2015

State invites expressions of interest for Adria

Slovenia formally puts Adria Airways stake up for sale

The sale of national flag carrier Adria Airways has entered the next stage, as its privatisation advisor, KPMG, has issued a call for expressions of interest for a 91.6% stake in the company. "Adria Airways is a unique investment opportunity being a European national flag carrier with a global reach and a recognisable brand name", KPMG said as it published the call in the “Finance” business newspaper. Nearly 70% of the company is directly controlled by the state, while the Bank Asset Management Agency holds an almost 20% stake and the Slovenian Sovereign Holding a 2% share. The owners signed an agreement on the joint sale of a combined 91.58% stake at the beginning of January, while KPMG was selected as the financial advisor in the sale in March.

This is the second attempt at selling Adria, after an international call for bids published in August 2012 failed. Back then, the government offered 74.8% of the airline’s shares and interested parties had until September that year to submit non-binding bids. The Assets Management Agency confirmed that ten parties submitted offers but declined to give out their names. The CEO of Adria Airways, Mark Anžur, previously said it would be best to offer the carrier to small airlines or financial investors, as big European players have "problems of their own". During the first half of the year, Adria Airways handled 549.272 passengers, an increase of 15% compared to the same period last year.



POTENTIAL AND NONPOTENTIAL INTEREST

Air India

In 2011, Air India and Adria Airways signed a Memorandum of Understanding which was to see Air India codeshare on Adria’s regional flights, while, in return, the Indian national carrier would have operated some of its services to the United States via the Slovenian capital. Plans were set for flights to be launched either during the 2012 summer season or the 2012/2013 winter season. However, Air India requested lower fuel prices at Ljubljana Jože Pučnik Airport and an exemption from paying fees in order to launch services to the Slovenian capital, all of which were denied. In 2012, the Slovenian government, together with the petrol provider, Ljubljana Airport, Adria and Air India announced their willingness to get back to the negotiating table and discuss possible cooperation. In 2012, India and Slovenia signed a Scheduled Air Services Protocol. On March 2, 2015, Adria and Air India entered a free flow codeshare agreement. The two Star Alliance members currently codeshare on each other’s flights, with Adria adding its code and flight numbers onto Air India’s services between New Delhi and Frankfurt, while the Indian carrier has placed its flight numbers and codes onto Adria’s services between Frankfurt and Ljubljana.

China Southern Airlines

During 2013, China Southern Airlines was said to have been close to purchasing shares in both Adria and Ljubljana Airport, which was ultimately sold to Germany’s Fraport last year. The Chinese carrier was also interested in purchasing Adria’s Flight Academy, as the Asian carrier trains up to 3.900 pilots per year. At the time, the Managing Director of Ljubljana Airport, Zmago Skobir, said, “Big European airlines have no interest in small markets such as Slovenia but perspective and growing Asian airlines do. Ljubljana Airport and Adria could operate soundly if a deal is reached with the Chinese airline and traffic would grow”. However, Mr Skobir warned that a potential difficulty to the deal could surface in the form of political problems between China and the European Union.

Intro Aviation

German based Intro Aviation is believed to have had put in the strongest bid during Adria’s last privatisation attempt in 2012. Intro Aviation is a consultancy firm which has turned around several loss making airlines, including NFD (presently known as Eurowings) as well as dBa and LTU International Airlines, which have since been integrated into Air Berlin. It is believed that Intro Aviation would weave its magic again and build up Adria which would then be handed over to Air Berlin, Germany’s second largest airline.

Qatar Airways

Slovenian President Borut Pahor urged Qatar Airways to purchase a stake in the carrier in January, following talks with the Emir of Qatar, Sheikh Tamim bin Hamad al-Thani. Slovenia’s former President, Danilo Turk, initially proposed for Qatar Airways to invest in Adria back in 2009. A year later the CEO of the Qatari carrier, Akbar Al Baker, ruled out a possible acquisition following talks with Adria’s management, noting that Qatar will instead focus on organic growth. However, last year, Mr Baker said the airline is again pursuing acquisitions in foreign airlines.

Royal Jordanian Airlines

In 2014, Adria and Royal Jordanian Airlines signed a cooperation agreement under which the Slovenian carrier provides connecting flights to passengers between Ljubljana and Amman via Amsterdam, Frankfurt, Istanbul, Munich, Paris, Vienna and Zurich. In 2008, Jordanian was one of three companies to submit a bid for a 49% stake in B&H Airlines. The airline’s bid was ranked second with a mark of 32.2 out of 100, behind Turkish Airlines which subsequently won the tender procedure.

Turkish Airlines

In 2014, Turkish Airlines ruled out any interest in acquiring stakes in carriers in the former Yugoslavia following its experience with B&H Airlines several years ago. Mehmet Baspinar, Turkish Airlines’ Vice President for Marketing and Sales in Eastern Europe and the Balkans, said at the time that strict European Union laws and regulations, which are enforced across the region, forbid the Turkish carrier from becoming a majority shareholder. As a result, it cannot effectively enforce its strategy, as was the case with B&H Airlines.

57 comments:

  1. It would be great to get a big airline invest in Adria. Unfortunately, I fear it will be someone like Intro Aviation or some other consultancy or investment firm.

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    Replies
    1. Why Intro Aviation bid for Adria failed in 2012 if they had the best offer?

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  2. Hopefully now that they have bases around Europe they can attract more interest.

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  3. A massive opportunity was missed with China Southern. They were actually keen to buy adria and the airport and even adria tehnika. But sucking up to the EU was the government's number 1 priority especially when we were on the brink of default.

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  4. Eurokoha from Kosovo which have KosovaAirlines and Mabetex chairman Behgjet Pacolli are interesting to buy Adria

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    1. If its true and happens, Adria will cease to exist and all the healthy assets will be forwarded to a new national airline of Albania or Kosovo.

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  5. Only hope to sell it: Albanians

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    1. Could you please explain this? Why do you believe that only Albanians could by Adria? I would like to hear your arguments.

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    2. Adria is anyway their servant, with so many flights to Tirana and Priština.

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    3. I was asking for arguments, not for your childish reasoning.

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    4. I'm the original Anonymous mot the second one.

      They are various reasons:
      - they know pretty well how Adria is operating,
      -they have a concept (with strong focus on Kosovo and a little less Albania) that can work out well for them,
      - they are willing to fork out cash! (hope)

      It's not completely a walk in the dark for them
      For others it is: Adria is a minefield with reports that you can't trust. Bullshit.
      But if you have "yours" on the ground and direct info you have a better picture and can take a wiser decision.

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    5. I would say it will be either Qatar or some Albanian company which is in aviation business/some businessman
      1) QR: Qatar is a small country with limited oil reserves and they are already looking into future by starting to buy stakes in airlines, art work, properties in Europe, etc. Recently they acquired 10% of IAG which is BIG since it incorporate British Airways and Iberia. (possibly more companies). By end of this year they will def buy something since a number of companies on sale such as Tarom, Croatian Airlines, Adria, Lot, Montenegro, and I think also Czech Airlines. I could be wrong with this list and they are other companies I missed, but you get the idea.
      2) Albanian company/businessman: 1) Adria is already present in Kosovo and Albania and the company is not something new for them 2) It is expected that more Albanians would fly with a company when they find out that Adria is partially or fully theirs or somebody Albanian 3) Albanians like to spread their horizons when possible both in terms of investing and people ( btw no hate intended here as some might think)

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  6. Had no idea they had a cooperation agreement with Royal Jordanian. Good on them.

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  7. Ja mislim da bi najbolje za JP bilo da ih kupi RJ zato sto bi sa njima najverovatnije imali najboljhi razvoj.
    I letovi za JFK nebi vise isli preko VIE nego bi isli preko LJU.
    INN-NS

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    1. Now you are talking. The LJU can become the hub of ex yu. What perfect place would it be to have JFK-LJU and then JP can have flights to all the ex yu destinations therefore leaving LJU as a major hub. Adria can expand then rapidly serving Southern and Eastern Europe and even the middle east. Direct competition with ASL. This could happen.

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    2. kad stize novi ATR ?

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    3. Ahahah, jesu to mokri snovi INN-NS ?
      Jesi kad bio u LJU?
      Mislim, ono nije u redu da se sprdas sa Slovenicma na takav nacin. Ja zivim u Sloveniji i kristalno mi je jasna situacija u AA, posto mi je tamo zaposlena i djevojka. LJU da postane Hub za Exyu :())))? jao nasmijao sam se danas stvarno :) Svaka cast.
      ASL ce da ima novi EU hub u LJU, za letove JFK - LJU (do EU) da ne ide preko VIE, a dalje cepa ATR do Beograda.

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  8. RJ leti za JFK preko VIE ??!! šta ti baljezgaš!

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    1. Ne baljezgam nego je planirano da se leti za LAX . MIA ili JFK preko VIE jos jedan dokaz da znate samo da vredjate i pljujete.
      INN-NS

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    2. Pa ti si napisao NEBI VIŠE IŠLI PREKO VIE - po tebi oni sad lete znači sadašnje vreme... nauči gramatiku umesto da se nakon svake svoje provale izvlačiš.

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  9. The picture was taken on MBX airport.

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  10. What's the status of Air Croatia? Are they officially a dead project?

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    1. They have been taken over by germans/turkish company and will do balkan countries under different names and domains as

      Air Croatia
      Air Bosna
      Air Albania
      Air Macedonia

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    2. Very good idea. A new Yugoslav Air with different names for each country. Air Bosna=new flights from Sarajevo. :)

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  11. Flydubai će u augustu letjeti za Sarajevo čak 6 puta tjedno...odustali su od četvrtog leta tjedna za Beograd koji trebao biti uveden u oktobru a za Zagreb su ostavili četvrti let tjedno.

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  12. OT: when Wizzair cancelled some routes from Belgrade last year a lot of nasty comments blamed Air Serbia for kicking them out, for dumping prices and playing games. Now that Air Serbia is suspending flights to Larnaca while Wizzair continues, I did not see a single comment accusing Wizzair of dumping prices or playing games. Are nasty comments allowed for Air Serbia only?

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    1. E sad će biti komentara kako ASL propada ;)

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    2. Wizz Air is not funded by taxpayers so it's slightly bit different. Their dumping doesn't cost us anything.

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    3. My view on this topic: 1) Wizz did receive discounts from the airport before ASL came into the game, and Wizz was pretty much expected to replace Jat as national carrier when and if Jat collapses. Once ASL started operations discounts were cut back to Wizz and that is why they cut some routes and complained about how expensive the airport is. 2) At the same time Wizz discounts were literally transferred to ASL. Also it is true that till the end of 2015 or 16 ASL will be partially funded by Serbian tax payers! People who are saying this is not true, go read the contract plus I am sure ex yu admin mentioned this in few articles on here. Of course this does not mean that ASL "propada", this is just part of the deal. We will see whether ASL is success story or not once subsidies cease.

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    4. Dumping cost us all in lost jobs and is sanctioned in regulated markets like airline industry. Otherwise you would have Air Asia or similar airline hub in Budapest offering ultra low cost within Europe while more expensive Wizz crew is out of work.

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    5. I dont understand the reason on this blog to provoke/instigate trouble on a daily basis. Distastefull comments on a daily basis instead of a proper discussion on ex-YU aviation.

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  13. OT : According to company's website, Air Serbia is going to cut frequencies to German cities next winter, they will fly 6 times weekly to Berlin and Frankfurt and 4 weekly to Stuttgart. Also, they may fly only one daily to Moscow. Can someone from Air Serbia confirm these plans ? Ex-yu, do you have any inside information ?

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    1. So much disinformation going through, two days ago somebody said Berlin and Stuttgart will be increased to 12 weekly

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    2. this is so expected behavior. they are facing with serious lack of planes and state budget can not support their debt any more.

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    3. Sta drugo reci nego ahahahahahha.
      INN-NS

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    4. Ahahaha? - Sta drugo reci, a ne zaplakati?...Decje igračke - plačke....

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    5. Pa ne treba da se place nego da se smeje vasim nebulozno zlobnih komentara.
      INN-NS

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    6. Admin, would you join this discussion or you are ignoring it, we suppose you are close to ASL plans ?

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    7. He is probably not allowed to share that info with us so early. Remember last time somebody was posting passenger numbers for each flight during the day and then after 3-4 days somebody from ASL contacted ex yu admin and warned him to delete these comments or site will be taken down.

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    8. Like in North Korea.

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    9. So passenger numbers, LF, new planned routes are top secret in ASL, what !? "Somebody from ASL contacted admin and threatened him", is that true ? Admin, you'd better deny this or there is no purpose of this blog !

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    10. Pa sta da se mesa u raspravu kad su to notorne lazi .
      I naravno da je obrisano kad je bila cista laz i stetila je ugledu ASL kao sto i sad cesto pisete lazne LF.
      INN-NS

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    11. As far as I’m aware, and this is not official by any means, Etihad has proposed several changes to Air Serbia’s route network, which includes destination cuts and frequency reductions. These were proposed several months and among them were Budapest, Larnaca and Warsaw, the latter obviously kept after LOT’s decision to suspend the route. Under that proposal, flights to Germany should be boosted. However, these plans seem to change from week to week and, at the moment, the winter schedule is not final and won’t be before September. Once it is, it will be published here. Etihad’s Belgrade flights are the next to be watched. The airline has gone on record just to say that it does not wish to comment on rumours whether the service will be suspended.

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    12. "among them were Budapest, Larnaca and Warsaw,"
      If I remember correctly it was the 3 routes you mentioned plus BNX that would be cut. Also AUH would be reduced to daily, IST to 5p/w although mentioned yesterday it will remain daily, SVO to daily from double daily, ZAG and LJU to 12 p/w from double daily, and so on. With all this possible cuts it makes me wonder what will ASL do with 20 aircraft? There was also rumors that ASL will return 2 A319 to EY. With all this reductions I would not be surprised.
      btw this is not a doomsday scenario like some people make off it, but I was not expecting that many cuts/reductions to be honest.

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    13. How can ASL dictate what will be or won't be published on this blog????

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    14. ATR 72-500
      Izvinite na nekulturom pitanju dali vi stvarno verujete u te ne bulozne price ?
      Samo ce biti smanjene linije a nemacka se povecava a to proverite u ASL slobodno i neverujte sta pisu zaposleni JAT Tehnike ovde.
      INN-NS

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    15. AUH needs something bigger than the A319, possibly even A320 if it is to reduce to 1 x daily. JU800/801 is highly seasonal and BEG isnt some kind of hub nor is AUH any kind of an O&D destination. Maybe that would of worked if it was EK and DXB in question. A scenario I see is that when the A330 ac do join the fleet, it will operate to AUH. It will be interesting to see if JU will operate any flights on behalf of EY again this winter.

      As for the schedules, remember the previous years and that nothing is as of yet final. It seems that is a tradition left over from Jat, leaving changes to the last minute. Sadly.

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    16. Anonymous July 5, 2015 at 9:50 it doesen't. If it did I doubt you would be seeing news reports about limited charter operations, complaints by the pilot's union and so on...

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    17. during winter season fleet will be reduced to 14 aircraft

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    18. JATBEGMEL
      Kako smete da potvrdjujete moguc dolazak A330 u flotu ASL .
      INN-NS

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    19. @INN-SNS

      1) nisam nista potvrdio.
      2) ne lupetam o glupostima svaki dan radi paznje.
      3) nemoj da me perseriras, ili jos bolje, nemoj da mi se obracas uopste.

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    20. Nobody claimed here anything regarding possible reduction of ASL flights to Germany, just if you enter airserbia.com/timetable you could find out that there were fewer flights to STR, TXL and FRA during next winter weeks. Everyone could check that.

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    21. 1) Ja sam rekao moguc dolazak mozda se nisam najbolje izrazio.
      2) Ja ne lupam stvari niti mi je potrebna paznja ovde.
      3) Kad vi prvi prestanete meni da se obracate onda cu i ja vama , ja vas ne poznajem tako da vam persiram.
      INN-NS

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  14. Does somebody know if Adria cancelled its charter flights from MBX for this season? There are any.

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  15. Is Etihad flying to Belgrade or are both flights to AUH operated by Air Serbia?
    And if one daily flight gets suspended then the question is which of the both.
    Any idea?

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  16. After reading the comment regarding AUH I just started wondering if DBX work better for Jat compared to how AUH is working for Air Serbia?

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