China Southern eyeing Adria and Ljubljana

Minister avoids China Southern talks

One of the world’s largest airlines, China Southern, has reportedly expressed interest in purchasing both Adria Airways and its base Ljubljana Jože Pučnik Airport. A delegation from the Chinese carrier is in Ljubljana for talks with government officials, however, the country’s Minister for Infrastructure, Samo Omerzel, took surprising pride in announcing that he did not attend the talks despite being invited to take part. He added that tender procedures should take place for the sale of Ljubljana Airport as more interested parties could apply. “Everything must be in accordance with privatisation regulations. This means we can find a partner willing to further develop the company and thereby create added value to Slovenia itself”, the Minister said.

The Slovenian government recently approved plans to sell fifteen state companies in an effort to cut the country's budget deficit and avoid becoming the latest euro zone member to seek a bailout. Both Adria and Ljubljana Airport are among the companies earmarked for sale. China Southern is initially interested in launching charter flights to Ljubljana and eventually turning them into regular services. China Southern is the world’s sixth busiest airline and Asia’s largest in both fleet size and passengers carried. It currently operates flights to 121 destinations with a fleet of over 420 aircraft. Despite its size, China Southern has a limited presence in Europe with flights to Amsterdam, Paris, London, Moscow and Istanbul. Ljubljana Airport hopes passengers would use the service as a transit point to South Eastern Europe and the flights would also attract a sizable amount of tourists.

In August 2012, the Slovenian government offered 74.8% of Adria’s shares with interested parties having until September to submit non binding bids. The Assets Management Agency (AUKN) confirmed that ten parties submitted in their offers but declined to give out their names. Since then, there has been no information on the progress of the privatisation process. It is believed financial investment firms made up the majority of those seeking shares in Adria, which is not what the national carrier was hoping for. In March it was announced that an Air Berlin affiliated company, Intro Aviation, was close to purchasing the majority share package, however, these plans never materialised.