Wednesday, September 7, 2016

Adria Airways outlines future growth plans


Adria Airways has outlined its future plans after publishing its 2015 financial report this Monday, revealing a 9.2 million euro net loss. Under its new owners, the Slovenian carrier plans to become a leading regional airline by growing in three segments and connecting southeast Europe to the world. The airline will increase scheduled services by expanding its network, which will include the development of secondary airports, as well as growth in charter traffic and ad hoc charter services. It comes after the company initially downsized its operations this year. Furthermore, the carrier intends on putting a greater focus on Ljubljana as a transfer hub for passengers from the Balkans and eastern Europe towards the continent's main airports in the west. Additional emphasis will be put on management costs and cost reduction, including cuts to unnecessary passenger services and aircraft handling services. 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.

Adria's CEO, Arno Schuster, says the carrier is on the road to recovery. "Under new ownership, the company enhanced its capital and launched intensive restructuring that will lead to an improvement in results in the business years to come". He added, "We cannot be happy with 2015's financial performance, however, good foundations have been laid through growth in some of the markets, fleet expansion, improved passenger services and new opportunities on the Estonian market, which opens up prospects for long-term relationships with regional carriers and the search for mutual synergies, which is crucial for the success and existence of regional companies in Europe".

So far this year, Adria has seen its passenger numbers decline as several unprofitable routes were discontinued. This has resulted in the airline's passenger share at Ljubljana Airport to decline to some 60%. In the coming years the Slovenian carrier will also have to address its fleet and renegotiate aircraft leasing terms. Next year, the lease for one of its Bombardier CRJ700 jets will expire, while leasing arrangements for six CRJ900s, which make up the bulk of Adria's fleet, will end in 2018, 2020 and 2022. Leases for three Airbus A319s run until 2021 and 2024.

74 comments:

  1. Sorry Adria. This plan might have worked 5 - 10 years ago. I think you are too late to the party now in trying to becoming a "leading regional airline".

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    1. Just need to introduce free biscuits to ALL our flights and the numbers will blossom.
      Already handing out free water, but it only makes them run to the bathroom, need something to soak it up

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    2. @anon 9.03. I agree. They are suggesting something Adria had around 10 years ago and at the time it was working. With other airlines from larger markets now developing quickly, this ship has sailed.

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  2. So they will try and do more of the same by flying from secondary airports like Kukes, which we saw yesterday. I thought the experiments they had in Banja Luka and more recently Olsztyn would have taught them otherwise.

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    1. In other words it means they will fly from cities where they are offered subsidies. Their entire Polish network is subsidised more or less.

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  3. 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. There was no real restructuring done. The only thing that was done was to sell off everything Adria owned so a profit could be shown at the end of the year. There is no longer anything to sell now.

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    2. And the management that ran that *successful* restructuring is now at Air Arann.

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  4. Interesting about the fleet. From what I hear plans are to get rid of the Airbuses and move to an all CRJ fleet.

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    1. Would be great if they purchased some C series planes.

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    2. Delta got a super-massive discout to only about 22-23 mil per plane, on that 75 plane order.
      If Adria orders 75 CSeries im sure they will go below 30 mil per plane

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  5. Ljubljana a transfer hub for people from East to West Europe ? Has this guy lost all hope for Adria and is only in it for the laugh ?

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  6. You've got to love this guy (CEO). He is so proud of himself for introducing new passenger fare and reintroducing free glass of water. I bet he is a turnaorund genious for coming up with the idea of reducing cost and increasing profit.

    Making LJU a transfer hub? Hmm, I'm pretty sure it's been like that for ages. Has it worked? Not really.

    Flying from secondary airports with airplanes that can carry up to 88 pax? Again, it's been done already (LCJ, SZY) but it doesn't seem to be working.

    No worries, as long as the passengers can enjoy free water and travel with carry-on luggage only, Adria's future seems brighter than ever.

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    1. What would you suggest they do?

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    2. To be honest, Adria would find it hard to survive with no state support. The market for them is very limited

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    3. @AnonymousSeptember 7, 2016 at 9:25 AM: I would liquidate the company. Alternatively, I would start reducing the operation out of LJU and start seeking business opportunities elsewhere (worldwide). However, that is difficult at best with CRJ. Back in 90s and to some extent last decade, Adria was wet leasing all over the world (Costa Rica, Egypt, Libya, Greece, Turkey, ...).

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    4. @AnonymousSeptember 7, 2016 at 9:25 AM: I hope you aren't dr. Arno Schuster :).

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    5. Suggestion:
      All CRJ fleet ranging from 2×200, 3×700, 5×900, 4×1000 version to scrape fleet and maintenance costs. 100 seater sofa ARE enough for that market - at least for next few years.
      Solely operate from LJU - clear focus on it as hub to operate in SE Europe to destinations where OU does mainly not fly to. Must have USPs and differentiate yourself from other "regional" competitors.
      Offer 3 daily waves in LJU to daily (altogether) each 16 destinations NW and SE of SVN. Support this new hub strategy with high marketing invest during first 2 years.
      Get SVN government or Lju local authoriies to introduce "marketing support" for these routes from LJU and define them the way that practically only JP can make use of them (only for EU airlines, planes up to 100 seat, minimum 50 seats, served at least 3x pw and must have 2 Slovenian speaking flight attendents). We now know this is legal in EU thanks to W6 practice in BUD.
      Et voila. This would be a strong plan and sincere hope for the future. But they have to get the money for the start invest which is more than tough since they hardly have any capital left or to only take on new loans.

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    6. Adria can't afford hub and spoke model. JU might get away with it (with the introduction of long haul, bigger market, ...), but not Adria. Why would anyone transit through LJU if you can get a direct flight from TIA, SKP, SJJ, ...

      The competition is too fierce. Hub model only works as long as there are point to point connections. As soon as there are, you are in trouble. Think about it, can you really offer lower price for two flights instead of one (not to mention the time it takes you to get to your destination)?

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    7. *no point to point connections

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    8. Yes, it can work - but I am not saying that it will work since we all know how troubled they are financially.

      Reasons are that P2P routes from those destinations with LCC are aimed at leisure and ethnic pax. Frequencies are too low to attract major part of business passengers.
      Also business pax are willing to pay a lot more in average and don't mind changing a plane within 2 hours if they can avoid hours of sitting in a car in order to get from the airport to their actual final destination.

      Also, OU network leaves some empty spots in Europe which they could cover and connect it to both Ex-Yu areas in Balkan as well as HU, RO, BG, AL for ex.

      JU as competetion is not stronger because it has a single wide body plane, but often transfer times via BEG are too long and do cause passengers to search for other, even bit more pricier, alternatives.

      But their finances will most likely be a problem - plus the smaller local market compared to HR or SRB. Fully agree on that.

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  7. This plan is flimsy.

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    1. To be honest there is nothing else they can do. They can try and stick to their plan. The alternative is just to maintain the status quo and probably shut their doors in a year.

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  8. Hopefully this doesn't turn into the recent restructuring where a lot of lines were closed and in the end it did nothing for finances like we see with 2015 financial result.

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    1. I don't think they should fly to unprofitable routes just so they could boost their destination count.

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    2. Depends how much the route is unprofitable. If it is only a bit in the reds then it in the end is still on break even or slightly profitable if you count in the importance of it for transfer passengers making use of your network hence your airline. Hard to explain while driving but hope you get my point

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  9. U Zagrebu je 767 Omni Air Internationala.

    DHL je vec redovno, svakodnevno, u ZAG sa 757.


    ZAG-OSI-ZAG, 7.9. povratak isti dan.

    Karta kupljena dan prije 67 EUR

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    1. What exactly is your point today.

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  10. I hope they find a way to resolve all issues.

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  11. We are doing just fine and this will work.
    p.s. suggestion and ideas to: whydidwebuythis@gmail.com

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    1. Also
      Do you really need to pay the flight crew ? Like, every month ?
      And if anyone has any alternatives to jet fuel that doesnt cost more than peanut butter write to me at: ArnoSchusterliquidatingexpert@hotmail.com

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    2. Arno, I hope you won't steal my restructuring plan, posted above. Shame on you if you do!

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  12. "cuts to unnecessary passenger services"
    Like what? Everything that was there was already cut. What is left to take away? Even LCCs have some minimal basic services. If you go bellow that, there is a point where it becomes illegal.

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  13. I am following JP for a Long time and I am working in tourism for more than 20 years. We have destinations where russian Tourists are coming, why not MBX connecting with St.Peterburg and Moscow with Transfer flight to POZ/DBV/SPU? Dont get it why not. Is not a Segment that JP is turning now! Kukesi a joke, right?

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    1. Don't worry, you're not alone. However, as it seems, the management knows better than all of us. Look at their impressive financial results.

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  14. Sta moze da preuzme od linija CTN(ASL) sa jednim CRJ900 avionom stacioniranim u Ljubljani?

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  15. They are not losing as much money as they did before which is a good thing. Maybe these guys manage to turn the airline around. That's why they were brought in after all.

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  16. It seems the only lucrative business for Adria is its involvement in the Nordica and the new owners plan on capitalising on that.

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    1. Who knows maybe they merge.

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    2. It would have been best if they merged Adria, Croatia and Montenegro Airlines and kept the name Adria.

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    3. Adria Slepci?

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    4. There was a plan like that. First merge JP and OU and then bring in YM. Of course politics got in tge way.

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    5. It would make sense. Adria is a brand and neutral name. They could have had two main hubs - in LJU and ZAG rather than places like Lodz. Woyld have worked better for both.

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    6. Hehe. much bigger and richer and more profitable and more known OU to merge into JP? That's a really really good one.

      JP will also not merge into OU as this would mean that LJU becomes a ghost airport.

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    7. It nearly happened in 2012 http://www.exyuaviation.com/2015/02/croatia-airlines-adria-merger-blocked.html

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    8. Thank god it did not

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    9. I also think it would have been best to have somehow linked OU and JP together, with the support of Lufthansa. They could have created a much more competitive airline. They could have focused on Bosnia then and developed flights there too.

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    10. Oni gube novac i na domacem terenu, a Baznija je poznata kao mesto gde se rasipaju sa novcem. To sto mislite su samo puste tlapnje kojih smo se nacitali na ovom blogu. Adria moze samo u
      Eurowings, a boga mi i Croatia A.. MA ako kupi Etihad potpune su dileje.

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    11. It would be even better to merge JP with JU, with JP serving regional flights and charters. Ditch LH alliance altogether. It does much more harm than good to JP.

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  17. I have to question whether a multi hub system is profitable for Adria considering its size. Can an airline with 12 aircraft be profitable with 4 different bases (which are not that close by) with crew from different countries that have different laws and regulations.

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  18. Such fun. Is he speaking for real?

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  19. August Numbers ???

    Skopje ?

    Pristina ?

    Please

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    1. PRN pax figures are up for Aug 2016 vs Aug 2015, but the growth not as big as earlier in the year: ~4%.

      Still ~9k pax more than Aug 2015 making this the busiest month ever for PRN. The airport is set to have the busiest year beating 2013 figures prior to the demise of Belle Air Europe.

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    2. perfect Pristina:):)

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  20. Winder if Adria will turn a profit this year.

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    1. When the new owners took over they said they would have profit by the end of the first year.

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    2. Just goes to show they have no idea what they're doing.

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  21. OT: regarding the newsflash of today: http://www.blic.rs/vesti/drustvo/aerodrom-nikola-tesla-demantovaio-napise-izraelskih-medija-nasa-sluzbenica-nije/m9qzs8j

    The plot thickens!

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    1. No need for an ot since the same thing is written in the last paragraph og the newsflash

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    2. There should be a sign "Updated" next to the news flash.

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    3. My mistake. I had forgotten that when I saw this on blic.

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    4. RE: Anonymous 7:11... Aha, so maybe it wasn't there when I read it. I thought that the last thing that I read was the apologies made by Air Serbia (currently the end of the second paragraph).

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  22. 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. If it means no government funds into the Adria Airways black hole and a faster bankruptcy process, that will invite airlines to LJU, why not?

      Was it better before, paying millions of taxpayers money to reduce routes from LJU?

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    2. All the crew is more or less Slovenian,since you need an excellent knowledge of Slovenian language to operate Canadian and French-made aircraft in European airspace and to read company manuals written in English. Of course this is only when you see job ad in Slovenia. Meanwhile, they hire couple of people behind the curtain who don't speak Slovenian :) Somebody should give them award for equal opportunities employer :)

      How anyone can think that transferring crews on 4/2 roster across Europe is not a recipe how to throw away a lot of money, is beyond me...

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  23. If a LCC based an aircraft in LJU and opened new routes Adria would be dead. Then again with the high fees at LJU this will never happen.

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  24. Kao sto je najavljeno u izvornom obliku, YM nestaje prvi, zatim JP i konacno za dve godine OU. Saopstenje u vezi buducih planova JP predstavlja apsolutno neodrzivi model rentabilnog poslovanja. Adria jednostavno nije spremna da posluje bez pomoci drzave (uostalom kao i ostale ex yu kompanije).

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  25. This comment has been removed by the author.

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    1. Trebali su malo bolje prilagoditi Flotu nije se trebala uzimati CRJ Flota posto se ne uklapa u tadasnju strategiju trebalo se umesto toga uzeti A319 .
      Ali posto trenutno imaju odlicnu saradnju sa Bombardier-om onda se treba preci na CS flotu koja se mnogo bolje uklapa u njihovu vrstu LCC poslovanja.
      INN-NS

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    2. CS100 I CS300 SE ODLICNO UKLAPAJU I U ASL POTREBE.

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  26. OT - Turkish Airlines A321 diversion from Zurich today at BEG.

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