Adria's decline in Ljubljana deepens


Adria Airways has seen its passenger numbers decline 12% during the first seven months of the year from its main hub in Ljubljana, while its figures were down almost 20% over the last three months. It comes as a result of the carrier's network cuts, which have seen it discontinue several routes from the Slovenian capital since the start of the year. Commenting on Adria's performance under its new German owners 4K Invest, the General Manager of Ljubljana Jože Pučnik Airport, Zmago Skobir, said in an interview, "During recent talks, Adria assured us that they have an entirely new concept through which they plan to strengthen the network in a different way and now we are waiting to see whether this will come to fruition". He added, "Personally, I am worried about their development. The figures are showing that it is not good. We understand that that some routes are not profitable and that they can't be maintained just because it is nice to have them in the network or because it benefits a third party. We will see how things develop. We hope that the story will end successfully although it does not look good at first glance". Adria's reductions have affected Ljubljana Airport's performance, which saw its passenger numbers decline 4.6% over the past seven months. The airport has managed to offset a stronger fall in figures through foreign carriers, which registered strong growth.

According to Mr Skobir, relations between the airport and the Slovenian national carrier have been difficult at times but are improving. "When we first met with representatives of Adria's new owners, I would say that the conflict worsened. They were convinced that we could not survive without Adria so they entered negotiations with the expectation of securing even greater discounts because we had no other choice. This, of course, is not true. Our owner is one of the world's largest airport operators and they understand how to do business. However, we quickly managed to sort out our differences and we have respectful relations now", Mr Skobir told the daily "Dnevnik". He added, "Payments towards the airport under Adria's new owners have been much more regular than they were before. We will see how this will develop, since we are planning to revise our tariff system which has been unchanged for ten years".

Commenting on Adria's future, the head of Ljubljana Airport said, "If we look only at the numbers, I would say they do not have many options. However, if I look at their plans, now that we meet more regularly at a more professional level, I would say that the company really wants to recover. Even if they do so, in my opinion, Adria cannot survive on its own without a larger partner because it is too small". Mr Skobir concludes that Adria has lost the race in the former Yugoslav market. "It should be noted that both Adria and the airport used to set the standard in the Balkans, now we are last. All have recovered and found successful models. Serbia has Etihad Airways, Skopje Airport, which was a dead-end, is now run by the Turks and has linked up with Wizz Air. It now boasts 1.2 million passengers. Zagreb is being developed by the French. Through Etihad Airways, Ljubljana is now linked to New York through Belgrade. In the seventies and eighties, JAT operated flights from Belgrade to New York via Ljubljana. Therefore, history repeats itself but we have stayed ten steps behind". According to Mr Skobir, Adria's main advantage is its long tradition. The carrier now has a passenger share of some 60 - 65% at Ljubljana Airport. The airline has been pursuing opportunities in Poland over the last two quarters where it has seen significant growth, as well as Estonia through its commercial agreement with Nordica, which it helped set up.

Comments

  1. Anonymous09:05

    Very interesting read. I really hope Adria recovers or that the new owners help in the short term and sell the company to secure long term stability. Looking towards seeing the winter timetable now.

    ReplyDelete
  2. Anonymous09:07

    Skobir makes a good point about the Balkan market but I think there is nothing Adria really could have done there. Before, it was impossible to set up bases in ex-Yu countries. By the time the market was liberalised it was already too late. Skopje is the only market I think they missed an opportunity with and I know Adria had plans to set up a base there but with everything that was happening in the company it never materialized.

    ReplyDelete
    Replies
    1. Anonymous11:00

      +1

      We all seem to be forgeting that opening bases across Ex-Yu right after the collapse of YU was simply impossible. (ECAA was build in 2006)

      However, 2006 was not too late as SKP was stil struggling with some 500k pax.

      Its a shame because Adria had an excellent reputation in Macedonia.

      There is stil room for feeding LH on SKP-FRA though ;)

      Delete
  3. Anonymous09:11

    Full interview:
    https://www.dnevnik.si/1042748394/posel/novice/zmago-skobir-zgodovina-se-ponavlja-mi-pa-smo-ostali-deset-korakov-zadaj

    ReplyDelete
  4. Anonymous09:11

    I am not too worried about LJU. If Adria goes bankrupt (which I hope won't happen) other airlines will just come instead. Sure there would probably a large short term decline but things would recover. What I do not get is why LCC are so weak at LJU. Yes there is Easy jet and Wizz but they only have 1 or 2 destinations. Maybe Ljubljana could have capitalised on the fact that most low costers are avoiding Zagreb.

    ReplyDelete
    Replies
    1. Anonymous09:19

      They could… but not on routes to Sarajevo, Podgorica, Skopje, Priština, Tirana.

      Delete
    2. Anonymous10:23

      @anon 9.19 i dont think u understood at all what he is saying ...

      Delete
    3. Anonymous11:01

      Of course other airlines will come in that scenario (on routes to Brussel, Frankfurt, Munich, Zurich, Amsterdam, probably Moscow, Prague and Scandinavia). But LJU will lost some of the connections...and of course frequencies.

      Delete
  5. Anonymous09:23

    I think Adria's share used to be about 70% at LJU. It has declined although I think this is good because more foreign airlines are flying which is something Ljubljana needs.

    ReplyDelete
    Replies
    1. Anonymous09:32

      So Croatia Airlines now has the biggest share at its base - around 70%, then Adria around 60% and Air Serbia around 50%.

      Delete
    2. Anonymous09:46

      Not true

      Croatia Airlines 61%
      Air Serbia 52%

      Delete
    3. Anonymous10:00

      And where can we find the official statistic for this anon 9:46? Unfortunately ZAG does not post a break down of passenger numbers, its financial results...

      Delete
    4. Anonymous12:05

      You can get those information (exempt financial results, which as private company they are not obligated to do so). Just few days ago I published information of traffic share in this blog.

      Delete
    5. Anonymous12:15

      Can you repost it please. I can;t find it.

      Delete
  6. Anonymous09:44

    No only in Ljubljana but also in Tirana and Pristina. I think the only market where they are growing is Poland at the moment.

    ReplyDelete
  7. Anonymous09:45

    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 but decreased airport numbers as well.

    ReplyDelete
    Replies
    1. Anonymous11:08

      restructuring doesn't happen fast, it need some time to kick in. I think that adria will turn out just fine, but we just need it to give it a bit more time

      Delete
  8. Anonymous09:58

    We have to give these guys a year before we can pass judgment. But I agree with what Skobir says. I really think Adria needs a stronger partner.

    ReplyDelete
  9. Anonymous10:00

    This is pure and clear model what could be the future of each airliner in the region...NO politicians, NO state help, ONLY matket and it's demand...by my humble opinion this is the rigjt way

    ReplyDelete
  10. Anonymous10:05

    I don't think Adria's problem is that it is small as an airline (OU is similar size for example), its problem is that its market is way too small.

    ReplyDelete
  11. Anonymous10:07

    Bad news for Adria and Ljubljana Airport.

    ReplyDelete
    Replies
    1. Anonymous18:44

      Bad news for LJU airport but not necessarily Adria. These are sharp guys who need to undo many years of poor mgt and poor practices. It doesn't turn around overnight.

      They are doing the right thing by shifting flying to where they can make more money. They don't owe Fraport or the govt anything.

      That's the real world reality. All this shows is what a poor job the new owners of LJU airport are doing - same as BEG airport mgt

      Delete
    2. Anonymous12:49

      The thing is, they aren't shifting flying to more profitable locations. Poland is being subsidised, however they (Polish cities) are only covering losses. Since the loads are terrible (less than 40%), they aren't making any profit.

      Delete
  12. Anonymous10:08

    Will they cut anything else besides Berlin in the winter?

    ReplyDelete
    Replies
    1. Anonymous10:10

      That's the only destination unless there any surprises but they will cut quite a few frequencies. If I saw correctly Paris, Brussels and a few others.

      They will also end Pristina - London Gatwick which they launched a few months ago but I'm not sure if this was planned only on a seasonal basis.

      Delete
    2. Anonymous12:16

      I think PRN-LGW was only seasonal.

      Delete
    3. Anonymous18:26

      They won't cut everything. Warsaw and Zurich is being increased.

      Delete
  13. Anonymous10:14

    4K might try to merge Nordica and Adria. RThe same people are advising both companies.

    ReplyDelete
    Replies
    1. Anonymous10:25

      I doubt it. They would not work on establishing the Nordica brand and waste money on it if they were to merge it with Adria. But it is true that they have the same main adviser.

      Delete
  14. Anonymous10:33

    Adria is cutting pay and unsuccessfully trying to renegotiate contracts with suppliers such as Ljubljana Airport. I'm not too optimistic. Hope for the best.

    ReplyDelete
    Replies
    1. Anonymous13:39

      Logical that they are renegotiate contracts. Every business should strive to find where they can reduce costs to generate profits.

      Delete
  15. Anonymous10:37

    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.

    ReplyDelete
  16. Anonymous10:43

    It would be nice for the CEO of Adria to give an interview or say something about his company.

    ReplyDelete
  17. Anonymous10:58

    This summer Adria has two aircraft flying for other companies (OS, JU). What are their plans for the winter? Lay off people, park the aircraft, get rid of the aircraft?

    ReplyDelete
    Replies
    1. Anonymous11:00

      Isn't the plane flying for Air Serbia coming back next month?

      Delete
    2. Anonymous11:42

      If they are renting out their aircraft in summer, then one needs to be seriously worried about plane usage in winter!!

      Delete
    3. Anonymous11:45

      The funny thing is they themselved had to lease a plane to fly some routes out of Pristina because they didn't have enough aircraft. I believe they leased a Blue Panorama B767-300ER. They also leased an Air Serbia B737-300 for a few flights.

      Delete
    4. Anonymous11:57

      I think they did this because one of their 319s broke down.

      But their fleet is streched. They have had lots of delays this summer.

      Delete
  18. Anonymous11:49

    There is some construction going on at Belgrade Airport right by C10. Is it deicing platform being constructed? Tons of trucks there as well.

    ReplyDelete
    Replies
    1. Anonymous11:56

      Yep

      http://www.exyuaviation.com/2016/07/belgrade-airport-begins-work-on-de.html

      Delete
  19. Anonymous13:04

    There are a lot of charters from Israel to Ljubljana this year. That's already a few years in a row. Why don't they introduce regular flights. Does Adria fly to Tel Aviv?

    ReplyDelete
  20. Anonymous13:37

    Political interference, mismanagement and corruption have brought Adria to the state in which it is today. Skobir says so himself in the full interview.

    ReplyDelete
  21. Anonymous14:19

    In my opinion, 4K doesn't have a strategy. Remember, they have no experience in aviation. They already replaced their own CFO. Mr. Schuster allegedly has a PhD, but nothing comes up when you try to google his dissertation.

    My guess is, they bought the company because of the high income, thinking they'll make it profitable by reducing cost. Boy, have they screwed themselves.

    ReplyDelete
    Replies
    1. Anonymous15:05

      +1 agree completely

      Delete
  22. Purger15:09

    Zagreb-Beograd, Air Serbia, četvrak 18.8. u 10:05

    95,37 EUR jedan smjer (nema razlike, povratna je dva puta toliko)

    Zagreb-Osijek-Zagreb, Trade Air, petak 19.8. u 8:30 iz Osijeka, povrtak isti dan u 16:30

    67,10 EUR (kupljene 2 povratne i jedna jednosmjerna)

    Moj put:
    Zagreb-Beograd Air Serbia 95,37 EUR
    Beograd-Vinkovci, vlak 1. razred 13,50 EUR
    kolege dolaze avionom dvije karte Zagreb-Osijek-Zagreb 134,20 EUR
    ja Osijek-Zagreb 30,55 EUR

    ukupno: 273,62 EUR
    što je 106,95 EUR skuplje nego da sam isto to prošao automobilom, a za te novce ne drnam se i ne trošim auto!

    ReplyDelete
    Replies
    1. Anonymous17:02

      tax payers from Croatia are for sure extremely happy to invest in your private business via PSO.

      Delete
    2. Anonymous18:39

      Why doesn't the govt cap the fares that OU can charge for these "subsidised" flights, instead of allowing OU to make easy money frm them ? If it is a genuine PSO, then the benefit should be passed directly on to Croatian taxpayers, who at the end of the day, are paying for this.

      This is money straight into OU's pocket and defeats the whole purpose of a PSO

      Delete
    3. Purger21:44

      Intention of PSO is to support local business. That is main goal, isn't it?

      Anonymous 17.8. at 6:39
      You do know that ZAG-OSI-ZAG route is not operate by Croatia Airlines, but with Trade Air. Also, you do know that PSO are precisely regulated by EU rules?

      Delete
    4. Anonymous23:20

      Purger, i'm not talking about the rules, of course i know they are regulated by the EU - i'm not stupid.

      My point is what is the moral reason why the govt supports them ? It isn't to support local businesses, it's to facilitate movement of people because of a lack of transport infrastructure ie. road/rail etc, that can only otherwise be provided by air and in order for airlines to jump in to provide what the govt can't provide, they offer "assistance" in order to cover what would be loss making routes.

      However, airlines such as trade air and OU make huge sums of money in providing these flights at unrealistically high fares.

      If they were really doing what is morally right, airlines would be refunding any balance of sums back to the govt (less a realistic margin after recouping costs).

      Only then would it be a "real" PSO.

      As it is, what started out with good intent, has lost its way and ended up in the pockets of these 2 airlines - while the taxpayer as always, loses out.

      Delete
    5. Anonymous00:14

      Well, prices to Osijek are more than good. Round ticket for as little as 60 EUR (VAT including) is very good.

      As far as I know (and you can read my article about that in Tango 6 portal) to get variable part of PSO those companies must present all bills and incomes for each flight. And they have controls several times per month.

      We can discuss if highway is so good options that there is no need for PSO, but in same time you most know that most of 187 PSO routs in Europe are in same time connected with highways or excellent roads and high speed railways.

      Yes we can discuss if Dubrovnik route is PSO or that is commercial route (and trust me we will have same opinion on that), but for sure there would be no ZAD, PUY and OSI flights if there is no PSO.

      PSO is something that should be done in future, but I would define rules much better.

      Delete
  23. Anonymous16:45

    It looks like Adria is drifting more and more away from Ljubljana which is a surprise because I thought with LJU being Fraport owned and JP also German owned the relationship would improve.

    ReplyDelete
  24. Anonymous16:49

    The only two airlines that have some prospects in exYu are Air Serbia and Croatia Airlines.

    ReplyDelete
    Replies
    1. Anonymous16:58

      Agree. Air Serbia for the fact that it has strong backing from Etihad and the state in its business plans and a relatively professional management which makes good decisions. Croatia Airlines because it has a good market with a lot of potential, little of which it has actually used.

      Delete
  25. Anonymous20:02

    OT: New business class review BEG-JFK with lots of photos if anyone is interested

    http://thepointsguy.com/2016/08/air-serbia-a330-200-business-review/

    ReplyDelete
    Replies
    1. Anonymous23:20

      Pretty cool review

      Delete
    2. Anonymous08:39

      Interesting comment from an American:

      Adam1222 Zach Honig • 15 hours ago
      Thanks for clarifying. Given that Air Serbia has been compensating other blogs, the odd amount of coverage for a 5x a week flight to Belgrade, and language such as "when traveling in style, comfort and around people who really know what they’re doing" for what looks like a not-particularly-special business class flight, the post raises questions.

      Delete
  26. Anonymous00:41

    Treba dati jos sansu management-u ADR i nadam se da ce opet imati vise linija iz LJU.
    INN-NS

    ReplyDelete
  27. Soon eithaid will buy them and they will have only 3 routes. Abu Dhabi, jkf and ljubljana

    ReplyDelete

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