Sunday, July 17, 2016

CEO: Adria's finances stable


The CEO of Adria Airways, Arno Schuster, has said the carrier is consolidating its business and faces no immediate risk of bankruptcy. The comments came after Slovenian media reported that the carrier could be insolvent by November. "Bankruptcy, which is being speculated by some, is not in sight. We did suspend some routes, such as Stockholm and Berlin, as well as Istanbul, but we have introduced new flights from various Polish cities, as well as from Pristina and Tirana", Mr Schuster said. Despite handling 381.300 passengers during the first five months of the year, which is down 8.8% on the same period in 2015, the carrier saw its revenue per passenger improve. Furthermore, Mr Schuster notes that Adria plans to boost frequencies on several routes out of Ljubljana this coming winter season, including Amsterdam, Paris, Sarajevo, Warsaw and Zurich, but will not launch any new destinations by year's end.

Over the week, Slovenian media reported that Adria has accumulated debt and that the airline is unable to pay for its current liabilities. According to media reports, the carrier has offered to renegotiate contracts with suppliers and is requesting hefty discounts in order for it to repay its existing liabilities. Main service suppliers include energy company Petrol, Ljubljana Airport, maintenance firm Adria Airways Tehnika and Air Traffic Control. One of Slovenia's most popular multi-media web portals, "Siol", claims that Adria's unions have been informed that salaries will have to be slashed in order for the airline to stay afloat.

The Slovenian carrier is in the midst of a restructuring process, following its recent acquisition by German turnaround fund 4K Invest, through its subsidiary AA International Aviation Holding. The new owners plan to swing the airline back into profitability. As a result, the number of employees will be reduced. There have been some layoffs and replacements already, although no large-scale redundancies are planned. The new owners have not given a timeframe as to when the carrier could turn profitable. Last year's financial results are expected to be published soon, with the airline tipped to post a 6.9 million euro net loss, revenues of 152.7 million euros and equity amounting to 3.3 million euros.

41 comments:

  1. It's amazing how big the loss was in 2015 taking into account they went through years and years of restructuring. That would be acceptable prior to restructuring not after. It means the previous management did a terrible job.

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    1. The past management posted small profit in 2014 only because they sold everything Adria owned - planes, amadeus, property... in 2015 there was nothing left to sell. Hence the loss.

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    2. Still better tham Montenegro Airlines results :D

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    3. If MGX is your benchmark, you have a problem :D

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  2. The jury is still out on the new owners. It's still early to judge. I will give them till next summer season.

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  3. OT:THY banned from flying to USA/all flight from Turkey to USA are gone.Probably ASL will take those which were traveling via IST from BEG what do you think?

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    1. Are flights between BEG and IST operate normally?

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    2. The only issue here is that IST doesn't have convenient times for JFK connections. My guess is that most of these flights will be funneled via Star Alliance hubs like Athens, Zurich, Munich...

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    3. I mean passengers, not flights.

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    4. Probably,but if i have booked flight via IST i would try to refund it.

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    5. Guess Whoo if you try to book a new flight at this time of the year you would be paying way too much money. You are better off getting rescheduled via another hub.

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    6. Oh irony ....

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    7. I was not talking in that direction,of course if you have flight via IST in a few day and you refund it you will really be screwed because fare would be brutal high,but if you have flight in September/October and you have refund option of course i will refund,and most people will do that.

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    8. True but don't forget that a great number of TK passengers originate from politically unstable countries. For them this story of an attempted coup is not a big deal.

      The real issue for TK will be Europe and the US. Especially markets where they can't rely on O&D passengers as is the case with Germany, the Netherlands or France.

      My guess is that the reason why the US decided to ban flights is probably because the Turks shut off the electricity at their military air base and forbade anyone from leaving it.

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    9. I think AF-KLM and IAG are celebrating today,and LH is too,IST was stealing lot of pax even from their own hub MAD,FRA,LHR,AMS,CDG and making IST in media "unsafe" will really make pax change their minds about transit in IST,

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    10. I think Lufthansa is the one celebrating the most today given TK's German network. This is a great and unique opportunity for all these airlines to recapture some of the lost market.

      I was going through Aegean's winter timetable and they seem to be cautiously adding more frequencies to the Middle East. The most notable change is Tehran that will have five frequencies this winter. Mind you, they launched it last summer with (initially) two flights.

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    11. Yup,Aegean and LH is biggest winner here(if we go realistic they even said that THY is their biggest enemy),on the other side i think that IST will be fourth again in Europe FRA will probably overtake it this year.And only low price was making IST huge hub,because its really small and crowed place.

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    12. If I remember correctly they already had a drop last month, I think it was almost 9%. This month will be bad and who knows what will happen in the coming months.

      They are really in a bad place but I suppose they will become even more aggressive now. Let's not forget that TK is a political, national project. If there is a need the government will just give them a cash injection. That said, I am sure TK has a lot of cash in its bank account.

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    13. Yeah,but people connecting from Pakistan,Lybia and etc,will probably continue flying THY,their real problem is Western Europe and i dont think they will be able to get those pax back.

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    14. Well, if the situation in Turkey calms down I think they will be back to flying with TK in about a year from today. Don't forget that Turkey was never a totally calm and stable place.

      TK will keep on dumping regardless of what happens. One thing that works for them is that they have a large p2p market which will help them stay afloat.

      As long as the government considers TK a national project, they will keep on growing. Don't forget that they are currently building a mega airport north of the city.

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    15. But when you have 50$ difference from transit via FRA or IST (i will always pick FRA)but i know people which will even fly 2 hours longer just to save 50$,that sort of people are flying with THY,and because of that ppl they will always have pax.

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    16. Ova informacija nije tacna. Turkish normalno leti iz Istanbula za USA i obratno.
      Da objasnim, americki FAA je zabranio americkim kompanijama da lete direktno, ali vec neko vreme nijedna takva kompanija ne leti direktno za IST tako da to nema neki efekat.

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    17. Svi letovi iz IST za SAD su danas otkazani.

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    18. Moja greska, evo sad videh, http://turkey.usembassy.gov/warden_information/security-message-for-u.s.-citizens-istanbuls-ataturk-airport-security-july-16-2016-july-16-2016

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    19. Just checked fr24, no flights today between USA and IST...turn the fliter on. Just one flight heading to YYZ in this very moment.

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  4. It's true what the media wrote. They are cutting pay and unsuccessfully trying to renegotiate contracts with suppliers.

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    1. It is normal that they would try to get better prices and conditions. What is wrong with this? Pure capitalism .... no mama State anymore. ☺

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    2. What is wrong is that they are trying to convince suppliers to forget 50% or even more of old debts.

      Not a sign of a healthy financial situation....

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  5. I am not at all happy that the company that bought Adria has no experience in managing airlines and even less happy that the airline is being run by a former liquidator.

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    1. * But we will see. Best of luck to them.

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    2. As u say ... best luck. This is not over_night buseiness. We will see as it is too soon to judge after few months being under the new owner

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  6. I hope they find a way to resolve all issues. Adria is too big of a brand to just let go bankrupt or close down.

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  7. Sorry, quick OT.

    Flew Split to Zagreb yesterday with OU. Split airport was very busy with an arrival and departure every 5 to 10 minutes but it all seemed to flow smoothly. Split airport highlight was when I asked that bag check in lady for a fragile tag (I have bottled olive oil) she responded in an very unenthusiastic was 'to te neće ništa pomoć'. I had to laugh!

    Q400 to Zagreb, I was surprised to find that they actually offer a selection of beverages and snacks for purchase, they just don't really tell you about it. There is a menu card in the pocket and when I asked the flight attendant if this was available while they were doing the water service they responded yes. So I purchased a drink to try it out plus some souverners they had for sale too like a Croatia Airlines remove before flight key ring and another little traditional Dalmatian framed little thing. Also payed by credit card.

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    1. Flight was about 70% full with 2 flights from split to Zagreb debarring within half an hour from each other.
      (To te neće ništa pimoć) for those who don't understand means, that won't help you at all.

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    2. I didn't know they had the buy on board option. Is it only on their domestic flights or is it throughout their entire network?

      My guess is that they did not inform the passengers since it's a rather short flight.

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    3. Sorry about the errors! Using my iPhone and the auto correct can be Annoying.

      No idea nemjee if its domestic only and you will only know of it if you look in the seat pocket and go through the menu. A few people did buy after me so more would use it if they new about it I guess???

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    4. By the way, who were most of the passengers onboard? Did they connect onward?

      Interesting that, as pointed by Anon below, this service is a regular thing on their flights. How were the prices?

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    5. Some did connect, did not really pay attention to how many. The guy sitting behind me and his group had a tight connection and were a bit nervous making a comment that maybe they will drive them to the connecting flight with a buggy... Not realising how small Zagreb airport is.

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  8. It is available across whole network on all flights.

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