Adria Airways posts 2017 loss


Adria Airways has swung from a profit of 3.2 million euros in 2016 to a net loss of 5.438.702 million euros last year, the carrier's financial report shows. The figure represents the airline's biggest loss since 2012. Adria's revenue grew 1.7% to 159.2 million euros, however, its operating expenses increased 7.8%, primarily as a result of rising fuel prices. The airline blamed its overall financial loss on fuel, the termination of its lucrative cooperation agreement with Estonia's Nordica (which it helped to set up) and the closure of its base in Lodz in Poland, from which it operated subsidised flights under a Public Service Obligation contract.

Despite the loss, Adria's CEO, Holger Kowarsch, who took over as the company's head in February 2018, said, "We are satisfied with the business year, during which we increased our passenger numbers by 10% and began optimising in all business segments, which will help us improve our results in the coming years and adapt more easily to the market". He added, "The aviation industry is changing on a global level. Higher oil prices, shifting passenger habits and expectations, new business models and competition have forced Adria to change and focus on greater rationalisation measures, opening up possibilities for cooperation with other regional carriers and seeking out mutual synergies".

AirlineNet profit/loss (millions €)
Air Serbia+ 16.0
Croatia Airlines+ 3.6
Montenegro Airlines- 4.6
Adria Airways- 5.4

As previously reported, Adria handled 1.209.692 passengers last year, up 9.6% on 2016. It operated a total of 20.415 flights, representing an increase of 4.9%. Passenger carrying capacity, measured in Available Seat Kilometres (ASKs), amounted to 1.2 billion, up 13.2% year-on-year. The average cabin load factor stood at 66.9%, an improvement from 65.5%. The largest increase in passengers was recorded on flights from Ljubljana to Podgorica (82%), followed by Sarajevo (58.5%), Warsaw (54%), Copenhagen (53%) and Skopje (33%). Adria's busiest routes were Ljubljana - Frankfurt, Ljubljana - Zurich, Ljubljana - Munich, Ljubljana - Brussels, Pristina - Frankfurt, Ljubljana - Vienna and Ljubljana - Tirana. In 2017 the carrier operated 1.928 charter flights, carrying 122.595 passengers and generating 18.7 million euros worth of revenues, representing 13% of Adria's total revenues. The airline’s cargo operations recorded an increase of 14.1%, with 1.899.467 kilograms of mail and freight uplifted in 2017, compared to 1.664.112 kilograms the year before. At the end of 2017, the carrier had 416 employees.

AirlinePAX (million)Change (%)
Air Serbia2.6 0.1
Croatia Airlines2.1 9.6
Adria Airways1.2 9.6
Montenegro Airlines0.568 2.2

Mr Kowarsch noted, "Existing conditions, a dynamic environment and anticipated developments will further result in the growth of scheduled and charter traffic. In line with modern economic principles, the direction of growth is also in the ACMI segment, where Adria Airways sees its competitive advantage since we are a company that adapts well to changes in an increasingly demanding environment". He added, "Aviation connects people, businesses and cultures. Requirements for even better connectivity are increasing, so our commitment is in the direction of finding proactive business opportunities that provide timely, safe and reliable solutions".

Comments

  1. Why am I not surprised.

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  2. They would have had a loss in 2016 too had it not been for the brand name sale and the aircraft sale.

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  3. funny they mention TGD n SKP but have cut the evening flight to both this summer, lol

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    1. I believe it was way before summer that they've done that-or at least it was not regularly served: I flew LJU-SKP during Easter and I was rebooked to the morning flight since the evening flight was cancelled.

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    2. summer schedule. sometime in April

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    3. Not surprised about SKP.
      Overwhelmingly saturated and less demand. The gasto routes are 100% covered and TK is already 18 weekly next summer....no chance for JP there.

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    4. lol "saturated", kaze dezurni sinopticar

      OU has gone double daily to SKP, the biggest surprise this year (puts JP to shame)

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    5. Yes, but demand is currently decreasing. No routes for 2019.

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    6. usamljeni dezurni hejter

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    7. Sorry, facts of life...

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  4. What a shame. At least passenger number are improving. Interesting that Ljubljana - Podgorica route is doing really well for both Adria and Montenegro Airlines.

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  5. I am not at all happy that the company that bought Adria has no experience in managing airline.

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    1. As opposed to the government appointing seasoned airline managers to run Adria in the past you mean?

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    2. Well that's the problem. Neither did. So the problem was not solved.

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    3. The problem is not solved yet, but it is solving ! Nowadays JP is in a much better shape than 2 or 3 years ago. Probably the only ex-Yu airline without direct or indirect state subsidies ...

      4K goal is to make JP profitable and exit. No profit, no exit. Much better than before, when the state poured in the money without limits.

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  6. Nevertheless, the champion here seems to be Montenegro Airlines with a loss of 4.6 mio and only 500k passengers.

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    1. To give them credit, they had 11 million loss in 2016 so they managed to halve it. I think this year they will actually be positive but we will see.

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    2. 568k passengers,be precise, don’t be so cute..

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  7. Interestingly the Nordica deal and the Lodz base deal were done by the former state run management. Now they blame their termination for the loss.

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  8. Slovenia is in EU. Adria is airline from Slovenia. Croatia is EU also. And instead of using all that and hauling holidaymakers to/from Croatian coast and earning money you have what? Airlines like Volotea flying to 7 destinations out of Dubrovnik! But you are just pleased taking easy money flying for others. Oh yeah and collecting CRJs...

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    1. So what?
      Is it wrong focusing on smaller aircrafts to become a regional legacy focused on transfer?

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    2. It's not wrong, just that the market at the moment seems to be going in the opposite direction than JP. Just compare deliveries of A319 or B737-700 vs. orders for A319neo and B737 MAX 7 and you will see.

      Everybody is going for larger capacity these days.

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    3. Negative.
      There is still huge demand for regional aircraft in Europe. Embraer and A220...

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    4. True, 100 orders for A220 for European airlines and 3 orders for E-Jet E2. Both of them are much more versatile aircraft than CRJ, not to mention they have higher capacity.

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    5. @Anonymous11 September 2018 at 09:57

      A220 100 is efficient and can seat about 130 passengers @31inch pitch, A223 can seat 150 pax @32 inch pitch. CRJs, especially smallest, is expensive to run, CRJ 200 is a corporate jet, burns fuel like it is being flows by Microsoft Boss.

      Why any airline would go with CRJ 200 or even 700 is beyond me.

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    6. Thank you. So you think that the regional aircraft era is over? Is this why ATR not selling? In countries like Indonesia there is still lots of demand.

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    7. Yes, just not in Europe as is visible by the order book.

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  9. Considering that the fuel prices are 30% higher this year, the loss is likely to extend to double digit millions in 2018. Good luck Adria.

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    1. My thought exactly. I barely registered rising fuel prices last year, bust most definitely have done so this year. 2017 was a good year for most airlines in Europe - good economy generating good demand and low fuel prices. That does not bode well for Adria when fuel prices now rise, and definitely not if the economy was to take a turn for the worse. However, maybe they do more ACMI to depend less on fuel prices. It becomes the customer's problem instead.

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  10. @ Admin: Could you please also provide the total turnover of the mentioned airlines?

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  11. Just when I thought they were recovering :(

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  12. So the honeymoon with 4K is over unfortunately. After launching 7 new routes and adding 6 planes, as well as wet leasing planes from other airlines, I don't see them turning a profit this year either.

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    1. Now it would make sense what the other person wrote in the comments a few days ago that they will wet lease to other airlines 10 or more of their aircraft this winter. They need cash.

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    2. Well let's wait and see what they do this year. They have a new CEO so his strategy and way of doing things may be different.

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  13. I find it interesting that not a single Slovenian media has written about their 2017 results. Why?

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  14. I like their optimism.

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  15. Kind of sad for Adria but I’m not surprised

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  16. I'm actually surprised with these results. The way they were talking about them I was sure it is a plus, even with some creative accounting. But that doesn't seem to be the case.

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    1. There results were not good in 2016 either it was only due to creative accounting that they showed a plus.

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    2. how exactly would it help them to post a profit by using some "creative accounting" now?

      they would not be in any better position to negotiate with any union or supplier

      better to realize all possible expenses now, and show profit in two years when 4K negotiates the exit from adria

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    3. The only reason why JP made profit in 2016 is because they sold the brand. It may not be creative accounting, but they haven't published a clear figure of profit/loss before sale of any assets of considerable value, as is best practice in the financial report of respectable firms.

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    4. Anonymous: 10:04

      Because of Slovenian's Financial Operations, Insolvency Proceedings and Compulsory Winding-up Act (ZFPPIPP)

      For retaining their AOC certificate under EASA legislation

      Because of their suppliers and banks

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    5. Retaining AOC, c'mon. The only reason Slovenian CAA would retract Adria's AOC if they officialy declared bankruptcy and not a second earlier. In other countries (UK - Monarch), it would obviously done differently, but not in Slovenia.

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    6. True... especially because the CAA Slovenia Director is former Adria's Chief Operations Officer and the head of OPS at the CAA is active Adria pilot :)))

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  17. Now we know why Arno Schuster suddenly "left" in February. Obviously 4K was not happy with these results.

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    1. Aye, some people actually "can read" the lines between the given statements. One must be very naive to believe in unexpected retirement of an airline's CEO due to "personal issues".

      For example, "ACMI segment, where Adria Airways sees its competitive advantage" actually means a confession of awful fleet planning. More clearly it means: "we believed that we can grow substantially despite being toasted between Venice, Vienna and Zagreb, and recently noticed that it doesn't work. Now we have to find a solution for these toys, at least to reduce the loss, therefore we'll try the ACMI market with discounted prices."

      Or, "increasingly demanding environment" means "we can barely pay our invoices, why the hell did the oil prices increase so high?"

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  18. Well, this is really not news to anyone. JP will go bankrupt and Eurowings is going to take over some of the pilots and make LJLJ their base.

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    1. That would be a disaster for LJU. First of all LJU would loose a huge amount of traffic since Eurowings would never fly many routes that Adria flies to. They sure wouldn't be flying regional cities several times per day, they wouldn't fly charters etc.

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    2. Pitanje je kada. Koliki izvor kapitala imaju?

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    3. The source of their capital is Darwin (the missing cca 10 million euros). And they are quickly burning through this stash. So as soon as they start to delay the payment of salaries to the workers, it's game over.

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    4. People in JP are used to getting paid late and a lot of them can't get a job somewhere else.

      And in Slovenia, nobody will prosecute the company for paying the salaries with couple of months delay. Unless you are self-employed of course, then you get penalty for delaying payment of your own social contributions for one day. Slovenistan.

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  19. So two years under 4K and worst financial result in 5 years...

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    1. Still far away from the 50 million loss in 2010 or somewhere around then.

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  20. Well I hope they find a solution. The good thing is they are a private company so it's their money that's being burnt not ours.

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    1. But it is company that our money paid for years. And for what in the end?

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    2. When they go bankrupt, they will owe money to state owned companies (Slovenia Control, Petrol etc).

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    3. Sometimes you have to cut your losses and this is what the government did when it sold JP to 4K. Just because you've invested (wasted would be better word) 500 million EUR in the company, it means you have to keep wasting the money down the drain, just so it doesn't make you look bad?

      People in JP are now realizing what the reality of the market is, as opposed to what was going under government management, i.e. stealing the money from the company at every single available opportunity.

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  21. Everytime there is an article about Adria people become so negative and sarcastic. Why?
    Slovenia cannot afford not having its proper flag carrier. It might be small but definitely one of the richest compared to its southern counterparts.
    If JP has a different strategy, just leave her alone!!
    Those 57 years of history didn't come for free.
    Wishing Adria all the very best...at least it's not selling slots to survive or suddenly becoming a low-cost carrier...God forbid.

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    1. Adria already is low cost. It charges you for everything on board expect for water. And they stopped charging for water just a bit over a year ago. Also they sold their slots in London long ago. What it did to survive is sell that 57 year old brand name you talk about and bankrupt an airline in Switzerland and run with their assets and money. I don't see what being the richest has to do with it. Ethiopia is one of the poorer countries in the world but has a world class airline that can put every ex-Yu airline to shame.

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    2. Comparing apples with pears. ET is backed by its government and will soon fail, once LCC are more present in Africa.
      As for JP being low cost, as far as I remember they still offer catering on longer routes unlike other carriers that went entirely low-cost.
      Adria has more presence in important and missed markets such as PRN and TIA.
      The base in PAD, the charter flights to Greece, the excellent performance in Kyiv or all this doesn't count....?

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    3. It doesn't count for anything with results like these.

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    4. TIA and PRN important markets... Right, they don't even reach BEG or SOF in traffic together, let alone big markets like Romania...

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    5. Leave Britney alone!!!

      Sorry. Couldn't help.

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    6. 2017 was troublesome for them but in 2018 they did a lot of work. They launched 6 routes and brought new metal. Stop your negative tone.

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    7. Yes, all those wet leases and flight cancellations are a way to go towards profitability. Can't wait to see the next financial report.

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    8. The flight cancellations happen EVERWHERE! This is part of the airline growth believe it or not.
      Adria had to cancel because of the Swiss retards. So, now they got the Saabs, which is apparently bad news for you. I hope we speak again in 2019 and you go tell me all this bull--it theory of yours!

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    9. no country needs a flag carrier; really, no single country!

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    10. So Swiss are retards because they wouldn't allow Adria to bankrupt Darwin, and take all the aircraft the very next day without repaying the debts? Oh, the injustice...

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    11. Don't speak for others. Flag carriers symbolise national pride. Why are so many governments worldwide financing their airlines? Alitalia, Aerolíneas Argentinas, Belavia or shall I continue......???

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    12. Only banana republics need an airline with a flag stuck on tail of the aircraft to symbolise national pride.

      Alitalia - one of the best loss-generating companies in the world.
      Argentina - the economy is in a freefall, with currency loosing more against USD than Turkish lira.
      Belavia - Belarus has the 3rd lowest average salary in Europe. Only Moldova and Ukraine have lower salaries.

      But hey, they have a national carrier. Important things first.

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    13. I clearly see you are not a JP fan, which is respected. However, you are not representing the majority, I'm afraid.
      Adria is not even state owned and you're not paying not even 1 penny as a taxpayer.

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    14. You meant to say not anymore. Now have a look from 1991 to 2016, how much was wasted on the "flag carrier image".

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    15. Precisely, since 4K stepped in, you're not paying anything.
      Besides, the airline industry is extremely competitive, especially in the EU. It's normal for flag carriers to struggle.
      If Adria takes me from point A to point B and have to pay a bit more for being more convenient, I will do it. We have to support the Adria project and support regional growth. Good for Slovenija and good for neighbours.

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    16. @anon 10:49

      "Precisely, since 4K stepped in, you're not paying anything."

      If they owe money to any of the entites owned by the state, I am paying (Petrol, Slovenia Control etc). If the company goes bankrupt and the workes end up jobless - again, I'm paying. If the corrupt government decides to buy the company back - guess who's paying?

      "We have to support the Adria project and support regional growth."

      Slovenians do not use Adria - Slovenians drive to Trieste, Venice or Klagenfurt where they have far cheaper options. So yes, the taxpayers would be far better off, if Eurowings or RYR (or anyother loco) opens a base in LJU.

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    17. Frihki i'm so loving your comment!
      Thanks man!

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    18. Frishki +1 :)))

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    19. Ok, if Slovenes are not using JP, fine. Other nations are obviously using their services. Ukrainians, Romanians, Bulgarians (see Sofia success). I personally made searches on Skyscanner from Otopeni, Kyiv and Sofia and JP offers very good prices and most importantly excellent connecting time.
      As you can see, there is clearly still demand.
      Of course, you are free to drive all day and pay for the parking, worry about the car, pay tolls and petrol just to save 100€...Jeez.

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    20. I dont get one thing. JP keeps saying how well SOF performs. I would expect prices go up, but on most of the dates the return ticket is still around the basic price. With basic price I mean the fare as it was advertised "only 160EUR return ticket LJU- SOF". Any comment?

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    21. Sofia was the only new destination (out of the 6) that didn't face any major reductions. If you remember, Adria was going to deploy S200 to SOF in September but they ended up upgrading to CR9 and CR7 until end of summer schedule. But you can still see CR7 on many days in November, which is really strange.
      The only way to keep lower prices is to increase capacity, which is what I guess they did.
      The schedule times at LBSF are almost similar to JU, so I think they are competing directly with ASL.

      Current prices on their website in October LJU-SOF are not cheap:

      15-21 OCT 228€

      We talked about this previously, some routes really can surprise us. Who ever thought that there was so much demand between Ljubljana and Sofia in November (very weak month for aviation). Only possible theory is business traffic.

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    22. True about the number of seats offered on this route! Would be great to see whats the average LF

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    23. a bit below 64%

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  22. Yesterday they canceled :
    Lju -Dus , Dus-Lju ,Lju -Otp , Otp-lju , Lju -sjj , sjj -Lju, Lju -gva , gva -lju .....

    this was only yesterday ...

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    Replies
    1. Yeah, so? Ryanair also cancels regularly. What is your point?

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    2. Yes, but people pay 5 EUR for tickets with Ryanair not 200+ EUR (mostly). Different service is expected when you pay more for the ticket.

      For example, Ryanair cancelled 5 flights 2 days ago. 5 out of what, 2000+ flights a day?

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    3. problem with Adria is that they cancel flights last minutes , not 12 or 24 hours before departure .... and the reasons are not thenical but operationals.....

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    4. Dus and sjj were tehnical, but otp and gva were operational

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  23. This is going to burst in a spectacular fashion - they have taken in dozens of foreign FO's in the past months, they leased SAABs, they had to pay carpat and trade etc. A company that is in such an abismal financial state as JP cannot survive such an inflation in costs. Plus the rising fuel prices.

    They will be either forced into bankruptcy or in a significant downsizing (of everything - offices, pilots, fleet) and restructuring of the company in a pure wet leace provider.

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    1. Leased SAABs in 2017?

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    2. @16:50

      I am talking about current finances - they had dug this hole without SAABs. Now, they also have six Saabs without the crews to fly them. But they still have to pay the lease.

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  24. At least Adria has the most beautiful and original logo in ex-Yu. The A reflection converting it into a heart.
    You gotta luv it...
    <3 :*

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    1. Tudi Adria, je najslajša :* xx

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    2. Air Serbia is my favorite actually (i'm not a Serb)

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    3. its not supposed to be a heart, its supposed to be a lipa leaf :)

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  25. 66.9% load factor is very low.

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    1. Yes it is. All of this is actually far more catastrophic than many of us imagined. And one more thing: if any of the loco's decides to open a LJU-MUC or LJU- FRA route, it's over for JP.

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    2. Another boring "it's the end of XX airline" comment. Starting to yawn already.
      All them experts claiming the end of JU, bankruptcy of OU, likvidacia of YM and now is JP's turn.
      Nothing close happened.

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    3. Yet JP is the only airline of the mentioned, which is 100% privately owned, which makes a bit of a difference. Although with the new government under the "we are all poor together" motto, they might actually try to nationalise it if JP goes bankrupt.

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  26. This is not that catastrophic.
    It was a complex year for Adria. They had to fulfill their ACMI obligations while wet leasing on the other hand to deliver on promised new schedule. Will see how 2018 will work for them. Most importantly, to the best of my knowledge, they have not received any state aid so it is OK.

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    Replies
    1. "they have not received any state aid so it is OK"

      This is precisely why it's not OK :) There is no safety net. If the invoices start piling up without being paid, the downfall will be very swift.

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    2. So what? They are private company and not receiving state aid. It will not cost tax payers. Once they are gone as a brand LH will just step in with Eurowings.

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    3. It will indirectly cost taxpayers because the number of passengers would surely shrink. That translates to lower income for the state.

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    4. Negligible effect. As soon as it happen, as I stated, LH would step in with Eurowings base and other companies would boost operations.

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  27. So none of ex-yu airlines would make a profit in 2017 without creative accounting.

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  28. Lol 'been talkin' about this for a year now

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