Friday, August 4, 2017

Adria unveils Darwin plans


Adria Airways has revealed some of the future plans for Switzerland’s Darwin Airline after acquiring a 99.1% stake in the company last month. Adria Airways Switzerland, under whose name Darwin is now operating under, says the carrier is “very likely” to feature the Adria livery, new cabin crew uniforms and complement the network of its Slovenian counterpart. The airline’s CEO, Heinrich Ollendiek, who previously served as Adria’s Chief Finance Officer, said the Slovenian carrier will be a much better “fit” with the Swiss regional airline than its previous equity partner, Etihad Airways. The Lugano-based Darwin operated as Etihad Regional for the past three years, after the Arab airline acquired 33.3% of its shareholding.

Speaking to “ATW”, Mr Ollendiek said, “It will certainly be a different relationship than that with Etihad. It will be a much better relationship. Darwin will be integrated into Adria Airways and will, in the future, fly under the title of Adria Airways Switzerland. It will be much better for Darwin in the sense that Etihad was a giant compared to it. Adria is bigger, but it’s not a giant. It’s a similarly sized company, with thirteen jets. That is what makes this a strong team”. Darwin has ten regional turboprops, half of which are on wet-lease with Alitalia. Adria has already utilised some Darwin aircraft for its flights out of Ljubljana over the past few weeks.

Mr Ollendiek said the route networks of Adria Switzerland and Adria Airways were complementary, with the Slovenian airline connecting southeast Europe with the center of the continent, while its Swiss subsidiary weighted toward central-southern Europe. He added that Darwin had relied on Etihad for much of its marketing, “But Etihad was never so focused with selling the Darwin product. That will change with the new Adria connection. Both companies will derive mutual benefit from the deal, more than Etihad could ever have dreamed of, because they’re a similar size”.

Adria Airways’ owner, the private equity firm 4K Invest, will study the cost side of its new acquisition and redundancies have not been ruled out. However, its aim is to expand Darwin. “Experience tells us that if you want to turn around a company you have to look at the cost side, of course, but it’s decided on the top line whether you can lead your business into growth. We focus on improving the top line and developing the business”, Mr Ollendiek said. He concluded, “Adria and 4K Invest will now spend the coming weeks evaluating Darwin’s business and planning the way ahead”.

109 comments:

  1. I think this partnership will be really good for Adria. It helps that both airlines are the same size.

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  2. I'm thinking more and more that Lufthansa has something to do with this. Etihad is talking to LH, will probably join Star Alliance as well, and is trying to sell its European shareholdings. I wouldn't be surprised if LH gave Adria the nudge. It will also help Swiss which will have less competition.

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    1. SWISS leti samo Lugano Zurich sa iznajmljenim avionom. U Ticinu svi gube pare.

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    2. "Following Etihad's purchase of a 33.3% stake in Darwin Airline in 2014, Swiss cancelled an agreement to accommodate Darwin passengers in the event of flight disruptions, terminated the wet-lease arrangement a Darwin aircraft and targeted Darwin's route network. As a result, the regional carrier lodged a formal complaint with the country's competition commission over alleged anti-competitive behaviour."

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    3. Ako pogledas na kalendar videces da je 2017 i da lete samo za Cirih sa turbopropom.

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    4. Anonym 0906 am

      I think so too. Maybe Adria becomes the real ADRIA Airways and links the Adriatic coast (both sides) with LH LX hubs plus of couse some other destinations which Darwin already has in its network
      There is rumours that YM will be taken over by 4K. Eventhough best would just be take out assets and let rest go belly
      Wondering what fleet plan Darwin had. The Saab 2000 are rather old by now

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    5. Does anyone actually think JP/4K is going against LH on its own?

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    6. How are the economics of the Saab 2000? Can it be profitable?

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  3. Would it be realistic if one day JP/4K buys OU? With the new expenses regarding crew their financial reports will only get worse.

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    1. I think that this may be 4K but don't know
      http://www.exyuaviation.com/2017/04/croatia-and-montenegro-airlines-eyed-by.html

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    2. It would make much more sense to now acquire Adria Airlines Montenegro (YM)

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    3. And once upon a time people were talking about Etihad buying Montenegro :D now it's Adria that has more perspective.

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    4. Montenegro Airlines has denied that Adria is interested in buying them.

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    5. http://www.rtcg.me/vijesti/ekonomija/173584/adria-se-nije-interesovala-za-ma.html

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    6. and why would Adria (or anybody else for that matter) want to buy YM?
      or to rephrase: what is there to buy? the huge debt of YM perhaps?

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    7. Buying MGX would give you market access. We all know Montenegro's sky isn't liberalised and not everyone can fly.

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    8. MNE signed the Open Skies agreement so the only markets where it would matter is Serbia and Russia.
      Then again, MNE is a country of some 600.000. Not a prime market.

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    9. nice to see Purger setting rumors around :)

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    10. I fail to see anyone giving any money to buy YM. If anything, the Montenegrin government will have to pay someone to take YM off their hands.

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    11. Like Slovenia did with JP you mean? :D

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  4. Interesting times. I think we will see some significant changes by next summer 2018 as the winter season will start in less than 4 months. That said, Darwin was an epic failure when it was managed by EY. No specific target and ridiculous airline name to be honest.
    Lets wait and see how JP will do. Wishing them all the best.

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    1. not only Darwin is an epic failure for EY: Airberlin and Alitalia were not exactly smart moves either

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    2. It's funny to see all you people talking failure about the Etihad. It made a step in its first 10 years of operation like any other airine of its era. Allow to see behind, why "EY" would buy all those prebancrupt airlines worldwide (don't forget Jet, Seychelles, ...)maybe you get the answer. It's not EY buying anything but the rulers of Abu Dhabi.

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  5. For the livery they should just replace the Etihad logo with Adria's and leave the Swiss flag.

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    1. Agree. I think it's a smart livery and it would be cheap just to replace the logo.

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    2. Maybe with all these developments and possibly new fleet at JP it's time for a livery refresh.

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    3. Colors don't match at all. Adria's CI CD does not incorporate gold and red!

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  6. This is great news for Adria!

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    1. we will see. Many thought it was smart for Etihad too.

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    2. Etihad has done poorly with pretty much everything it has touched. Does not mean others will.

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    3. Don't get at all why EY never did any regional feeders in Europe when they had their own regional European airline perfect to feed their Abu Dhabi routes from like 10 airports across this continent. Why on Earth did they acquire EY regional then in the first place? Looks like plain stupidity to me.

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    4. Never underestimate the power of stupid people in large groups.

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  7. Is 4k in it for the long haul with Adria?

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    1. This move would indicate so.

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    2. Doubt it. They are propping them up so as to sell them to the highest bidder.

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    3. It certainly makes Adria much more attractive to a future buyer.

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  8. Don't know what to think of this arrangement. Leaves a lot of open questions.

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  9. Congratulations Adria. I hope the investment turns out to be a smart one.

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  10. Darwin never really managed to serve the purpose Etihad wanted it to serve. They should have more success with Adria.

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    1. What was its purpose in the first place?

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    2. No one knows...

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    3. To have a cash depo in Switzerland.

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  11. That'll only accelerate the bankruptcy process Adria cannot escape. No airline can survive with such a small market and high costs. Hope it'll be delivered to LH finally, as almost everyone expect.

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    1. But they just expanded their market into Switzerland by acquiring a Swiss company.

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    2. Another company of which balance sheet is negative.

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    3. No it's not?

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    4. Etihad Regional had a profit in 2016.

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    5. Only because of the alitalia wet leases; otherwise their own flight were running a loss.

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    6. Actulally, because of Alitalia they got busted. Lucky 4K pickedup.

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  12. They seem to know what they are doing.

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    1. Well they recognized where Etihad failed with Darwin.

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  13. I hope they can finance taking on another airline. With all due respect, Adria is far from a financially stable company.

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  14. For starters they could introduce Ljubljana-Geneva.

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    1. Is there any demand for that route?

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  15. The winter timetable will be a good indication of where this partnership is heading.

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  16. what will happen with the alitalia lease?

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    1. I assume they will keep the arrangement.

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    2. Alitalia will probably go bankrupt soon and all leased planes will be returned.

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    3. It has been confirmed that the wet lease will be terminated next month and planes will be returned to Darwin.

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    4. Ok, thanks. Perhaps they will go to Adria?

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    5. I don't think so but we will see.

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    6. Anonymus 10:11, Alitalia WON'T go bankrupt. Just wait. :)

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  17. Still can't get over the name. Adria Switzerland makes no sense.

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    1. Because you don;t know how things work. It will be simply Adria but since it is another airline registered in Switzerland, it will be registered as Adria Airways Switzerland. Do you know that there is Wizz Air Ukraine and Wizz Air Bulgaria and also Transavia France? If you knew that, you would not be complaining and you would know that it will be just "Adria generally.

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  18. Is Darwin/Etihad regional a full fare airline with normal service? Or is it also hybrid?

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    1. Full fare although they have hand luggage only tickets.

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  19. Great work for Adria. Good luck

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  20. May be Adria will focus on the Balkans (ex-yu + SOF, OTP, SKG) and the major destinations (FRA, CDG, AMS, BRU, LHR), while Darwin on western European secondary cities (LYO, LIS, BCN + holiday destinations). That is how they can create synergy.

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    1. I think so too. Adria is already advertising "from Europe to the Balkans" across its website.

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  21. I'm interested to know where they found the money to buy Darwin? Less than a year ago they sold Adria's brand name to survive.

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    1. Cause 4k invest bought Darwin, not Adria.

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    2. It was actually purchased by Adria Airways Switzerland.

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    3. That's like the same way Air Serbia 'ordered' A320neos. It is actually Etihad that made the order and is paying for them.

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    4. K4 - AA - AA ch that was the cash flow

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  22. This is a great new beginning for Adria,

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    1. it is a game changer for sure.

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    2. Not so sure about that. But I guess we all need to wait and see.

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  23. Busy year for Slovenian aviation with Adria buying Darwin, VLM Airlines launching flights. Good to see.

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  24. Can't wait to see Adria's winter timetable. I think it will be a very strong winter season and they could possibly even take some aircraft from Darwin.

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    1. I don't think they will take Darwin planes. They already have additional planes compared to last winter. They have the one CRJ700 from Lodz plus they took delivery of another CRJ900 last month.

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  25. wondering what was the purchase price.
    4k bought adria for something like 100k€.
    darwin was probably somewhere between 18-25€

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    1. I don't understand why they are keeping the value of the takeover a secret.

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    2. They are not required to since it's a transaction between two private entities. I agree with Petar, I doubt the price was very high.

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  26. It would be great if Adria would fly to Rome, Geneva and Spain/Portugal from Ljubljana with a stop over in Lugano. Swiss people could also benefit from Adria connections to the east, north and south.

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    1. Again with the stop over ...

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    2. What's wrong with the stop over? SLO and Ticino are small markets. With the stop over this handicap is not so important anymore.

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    3. Anonymus 10:11, Alitalia WON'T go bankrupt. You have only to wait. :)

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    4. Stop over?

      If you can't generate enough pax with 50 seaters in a market then you should probably leave the market.
      Share e.g. a Saab 2000 (good, nice plane btw) between 2 destinations means max capacity of 25 people per destination but fully pay double airport fees, more fuel, higher fixed costs in general. Economical suicide.

      Also don't forget:
      Lugano is inbetween high mountains- I guess you never flew to and from INN? Most of times it's very turbulent, majority of people would particularly be driven away from AA if they had to do to an additional approach and climb in middle of a deep Alpine valley!

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    5. Ljudi vise ne trose maru samo teske droge i prave presedanja na pistama od 1400 m. Kad napisem da su idioti znaci da su idioti ne moes ti njima nikako da objasnis alpske doline.

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  27. I assume the codeshare between Darwin and Air Serbia will also be suspended.

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    1. Not necessarily. Adria codeshares with Air Serbia between Ljubljana and Belgrade.

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    2. You really think they are going to codeshare on flights from Belgrade like now instead of Ljubljana?

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  28. interesting fit. darwin's major functions like route planning, revenue management, pricing, crew planning, etc were probably all in etihad.
    so when adria bought this one, big part of the restructuring was already done for them.
    now it will be interesting to see how they will fit all of this together.

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    1. Opposite. Crew planning, ops and maintenance control are with AZ and should be moved out. Network management is in house. The restructuring is comming.

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  29. Are the two Darwin Saabs that came to LJU two weekends ago still in Ljubljana?

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    1. Nope. They were just there because one of Adria's planes was out of service.

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  30. Very smart words from the CEO.

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    1. Actually pretty bad. Someone should never do a PR on someone else (EY) without a purpose, and never talk bad about other.

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  31. I'm pretty sure 4K will be buying some other airlines as well.

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  32. OT:
    PRN July 2017 figures have been released.
    ~235,000 pax (up ~12% on July 2016)
    ~875 aircraft movements (up ~7% on July 2016)

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    1. Beautiful go PRN��������

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  33. Interesting times ahead for Adria. Hope it turns out well and that Slovenian consumers can benefit.

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  34. So as expected, Darwin will feed Adria flights and I assume we will see some flights between Ljubljana and Geneva. Wonder how many extra pax Adria might get on a yearly basis from this tie up.

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