German fund close to Montenegro Airlines takeover


A German investment fund is close to purchasing a stake in Montenegro Airlines, Prime Minister Duško Marković has said. Without elaborating further, the PM noted that he held talks with the potential buyers earlier this month. The fund is widely tipped to be 4K Invest, which also owns Slovenia's Adria Airways. The Montenegrin government is moving quickly with plans to sell a majority share in the loss making national carrier ahead of the planned concession of its two commercial airports. It has set a tentative deadline for May 2019 to finalise Montenegro Airlines' privatisation process. The Montenegrin Minister for Transportation and Maritime Affairs, Osman Nurković, described the German fund as a "major company", which also "owns a carrier".

Asked earlier this year whether Adria sees opportunities in cooperating more closely with other airlines from the former Yugoslavia, the Slovenian carrier said, "We strongly believe in synergies among partners and thus we continuously seek for opportunities. We are always open for closer cooperation, new markets, greater efficiency and faster growth – without jeopardising sustainability. The success of such cooperation depends on more complex factors, so our decisions and future directions are and will be cautious". Last week, Adria Airways' CEO, Holger Kowarsch, said, "There will be a similar trend in Europe as to what is happening in the United States. Large carriers are focusing only on medium and long haul flights and they do not have a regional fleet. In recent years, consolidation is taking place among regional carriers. Not only have they merged but large carriers have given them the opportunity to carry out regional flights on their behalf. We will also see something similar happening here".

4K acquired Adria via its subsidiary AA International Aviation Holding in March 2016 through a recapitalise-and-sell procedure for 100.000 euros and an additional one million euro capital injection. It later purchased the remaining shares. As part of the deal, the Slovenian government provided 3.1 million euros in capital. 4K Invest says it is a leading European restructuring fund registered in Luxembourg and managed out of Munich. All of it ́s subsidiaries, including AA International Holding as Adria's parent company, are completely owned by European investors, mostly German nationals. Despite expectations that 4K is close to purchasing a stake in Montenegro Airlines, there are other plausible buyers as well, including Germany's Intro Aviation, a consultancy firm which has turned around several loss making carriers.

Comments

  1. Some sort of consolidation in this area is necessary.

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  2. 4K's track record is far from great. Especially after the Darwin debacle and Adrias liquidity issues.

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    Replies
    1. Today 4K capitalised Adria with 10 milion euros

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    2. If you have to capitalise an airline in order for it to survive the year it means you are doing a very bad job. Last time they bankrupted Darwin so they could save Adria. I wonder which of their companies they bankrupted now. The one that was giving loans to Adria at the start of the year (of course a 4k owned company) is now also in bankruptcy.

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    3. Darwin was actually bankrupted long before Etihad took over. Etihad feeded them with petro money, than later left the sinking ship. We in Switzerland see the Adria "investment" into "Adria Airways Switzerland" not as a procedure to save Darwin and its ops, but as a procedure to easy get out the six Saab 2000 - like it happened.

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    4. Not true, 4K Invest has only announced, they will capitalise Adria with 10 mio EUR in cash. So first it needs to happen before we can believe it.

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  3. It would be interesting to see what this partnership could bring. My guess is YM would be getting some of those Saabs, while some of the Embraers might be swapped to Adria.

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    Replies
    1. Maybe Montenegro Airlines would get one of Adria's A319s over the summer.

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    2. That would make sense.YM was smart to lease a B737 this summer.

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    3. But they need those planes to wet lease to the Lufthansa gang.

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  4. It could turn out to be a nice regional airline with two distinctive brands.

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    Replies
    1. Maybe they rename YM to Adria.

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    2. Government wouldn't allow that.

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    3. Wouldn't it be a problem since Slovenia is an EU member and Montenegro isn't (and won't be for a long time)?

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    4. Government would have no say since YM would be privately owned. And with 4K being from the EU they can take 100% share which they probably will.

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    5. OK, Anon 9:50, but merging 2 companies, one from Slovenia and one from Montenegro, EU, non-EU member, Schengen?

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    6. There is no problem with that.

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    7. What do you mean "there is no problem with that"?

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    8. There is no bureaucratic issue with the takeover just because one airline is from a country within the schengen zone and the other isn't.

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    9. The EU commission has no problem with that. It is not against the rules.

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    10. They would stay two different companies.

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  5. Great development for the airline if it turns out to materialize.
    Bravo Montenegro!

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  6. Thats how they (4K) get fresh capital....

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    Replies
    1. My thoughts too

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    2. YM has no capital- it only has debt

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    3. There will be a deal with Djukanovic government. Dont worry...

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  7. And I assume the government will also have to pay them something, as was the case with Adria.

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    Replies
    1. Of course. YM is in worse shape then Adria was when it was bought.

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  8. This will surely make YM a much more stronger competitor in the region.
    But it is bad news for JU.

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    Replies
    1. Yep they have a great record so far. Just ask the guys at Darwin.

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    2. Is there ever a day that something isn't bad news for JU?

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    3. YM close cooperation with JP will funnel a lot of passengers through LJU who today are connecting in BEG to travel abroad.
      I think that what he means.
      JU currently carries a lot of Montenegrins to Serbia and to the rest of Europe.

      Just my2cents

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    4. But JU still offers a much bigger network then Adria. And I'm not sure how many passengers will be funneled through Ljubljana when there were a 100 flights cancelled in a month.

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    5. With Montenegro O&D passengers connecting in LJU instead of BEG there will be less Ned for JP to cancel flights because of poor loads.

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    6. 100 otkazanih letova u mj.dana?

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    7. Yes between 4 - 10 flights (counting return service) cancelled each day.

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    8. I believe the flights are being cancelled because of crew shortages/sickness and mechanical issues and not because of lack of passengers

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    9. Could YM help in that regard?
      Send aircraft and/or crews to LJU to cover some of JP's schedule?

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    10. They can but YM crew are only trained for Fokkers and Embraers. They could only send planes and crew together.

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    11. Yes, wet leasing would work.

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    12. koji mj. su bila svaki dan 10 letova otkazana?
      nemoj da siris lazne vijesti

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    13. Last 30 days. And I said 4-10 flights. Read what I wrote. Yesterday there were 8 cancelled, today 4. Cancellations scheduled all way through to December.

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    14. citam ja to sto ti pises..samo vidim da imas problema sa matematikom....prvo si pisao u mje dana 100 letova a sada pises do decembra....

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    15. I think you just don't understand english. There has been a 100 cancellations in the last 30 days. And there will be many more until December. Read again.

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    16. O&D passengers from Montenegro are main market for JU. With 650K population there are very few transfers.

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    17. ha ha ha tvoj engleski je kao japanski
      u kojem mj. su bila 100 letova otkazana? zanimljivo da ni kod adrije nemaju to vijest niti na aerodormu u beogradu. mora da imas doma neki toranj....

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    18. Tuesday:
      LJU-DUS
      DUS-LJU
      LJU-OTP
      OTP-LJU
      LJU-CPH
      CPH-LJU
      LJU-PRG
      PRG-LJU

      Yesterday
      LJU-CDG
      CDG-LJU
      LJU-WAW
      WAW-LJU
      LJU-PRN
      PRN-LJU

      Today
      LJU-HAM
      HAM-LJU
      LJU-DUS
      DUS-LJU

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    19. I told you in the last month. A month is a 30 day period i.e in the last 30 days and unlike you I am a native english speaker.

      Not sure what Belgrade has to do with it. Adria doesen't even fly there.

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    20. Guys you can easily check how many flights are cancelled on flightradar. This week around 40 will be cancelled. Inaugural flight from Paderborn also cancelled.

      Honestly don't know what the Montenegrin governemnt is smoking.

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    21. Obviously that is not working as it should, becouse cdg was not cancceled yesterday.

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    22. Yea it was, JP322 at 7.10am.

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  9. Are assets worth 10 mio EUR? Just asking...

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    Replies
    1. Well, it doesn't help:

      "It has set a tentative deadline for May 2019 to finalise Montenegro Airlines' privatisation process."

      JP needs 10 million now.

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    2. Today 4k capitilased Adria with 10 m euros

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    3. They didn't capitalise it today at all. They said they would in the future.

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  10. If this happens they can rename the company to Montenegro ACMI Airlines. That will be its main purpose.

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  11. Being bought by a shady investment fund is right up Montenegro Airlines' alley.

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  12. Where was 4K when B&H Airlines needed them....

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  13. I wonder if they will change the Montenegro Airlines fleet?

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    Replies
    1. Judging from JP they will increase it.

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    2. Or judging by Darwin they will transfer it to Adria.

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    3. Adria has more aircraft than crews to fly them.
      I also think that some Saabs will go to YM.

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    4. Increasing YM's destinations and frequencies will definitely be bad for JU.
      I don't know if it will be profitable for YM/4K though.

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  14. Makes sense why Adria is suddenly flying so many flights to Podgorica.

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    Replies
    1. But it doesn't make sense that they ended their code share partnership with YM.

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  15. Ultimately bad news for Montenegro Airlines.

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    Replies
    1. When airports are given up for concession, YM will have to start paying the airports for fees. That's why the government is urgently trying to sell the airline.

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    2. Yes, i wouldn't be to so optimistic. :(

      Mihael

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    3. YM not being run by government bureaucrats is the best thing that could happen to it AND the country's taxpayers!

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  16. And apparently they also want to buy Croatia Airlines.

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    Replies
    1. Merging 3 failed airlines - interesting strategy.

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    2. A single airline serving the Adriatic coast and ts exploding tourism industry could just be successful. Instead of three airlines competing with each other.

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    3. Anonymous at 09:57
      That would be bad news for JU.

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    4. @09:57
      Why is that bad news for JU? Because they have 15 weekly flights to Croatian coast mostly with ATR for 3.5 months?

      Delete
  17. I see they are going after James Hogan's business model.

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  18. Who is behind this 4K company? Who owns them? What companies do they own? I thought Germans and the EU were beacons of transparency.

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  19. Anyone is better than the government managing it.

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    Replies
    1. YM has been doing ok since they replaced Daliborka.

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  20. Well that's the end of Montenegro airlines being a full service airline.

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    Replies
    1. Hope they do not kill "Luxury" inflight magazine :)))

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  21. Montenegro Airlines go fund yourself!

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  22. Hilarious! I love the Balkan foo... naivety :))

    Though looking at Montenegro Airlines' condition, I can't decide which side is "naiver"!

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    Replies
    1. Naive in what way?

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    2. By selling to same company who bankrupted Adria and Darwin!

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  23. At least YM doesn't have so much problems compared to the rest of the ex-Yu carriers.
    JU stagnated significantly and went from boutique to low cost.
    OU sold many things it owned and LHR slots to survive.
    JP is undergoing deep challenges with its fleet and cancellations.

    YM cleverly rented the Boeing during the peak, summer season to meet demand and is definitely on the right track of growth.

    ReplyDelete
    Replies
    1. +1
      YM is the exyu airline with the largest growth.

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    2. YM has the biggest problems of all. Insane losses every year compared to the number of passengers carried.

      Delete
  24. Sutra ide tekst o skoroj kupovini OU.

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  25. If this happens what will become of Montenegro's and Air Serbia's extensive codeshare?

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    Replies
    1. Well Adria codeshares with Air Serbia...

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    2. I doubt 4k would let most of YM's passengers being shuttled through BEG instead of LJU.

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    3. Anonymous at 10:05 is right.
      YM/JP partnership will shuttle as many Montenegro o&d passengers through LJU as possible.
      That would be good fro LJU and Fraport too ;)

      Delete
  26. So, is this going to create the biggest airline in Ex-Yu?

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    Replies
    1. Fleet wise but not network wise.

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    2. when you combine the networks aren't they to be with the biggest one?

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    3. Is it also gong to be the largest passenger wise?
      Or measured by turnover?

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    4. Najveci gubitas u regiji.

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  27. Let's be honest here. This is YM's only chance to be privatized.

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    Replies
    1. True that. Government finally just want to get rid of it. It should be all about connectivity not having a fake national symbol.

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  28. This was 4Ks plan from the get go. Rumours started last year already. There was even an article on here in April that an investment fund wants to buy Montenegro and Croatia. So Croatia Airlines is next up.

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    Replies
    1. A single arline for Croatia, Slovenia and Montenegro with the backing of LH would be very bad news for JU.

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    2. It seems you are fascinated by anything that would be "very bad" for JU.

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    3. Honestly I think a 4k takeover would be very bad news for YM and OU. One of those two would probably be eliminated as well. My guess is YM.

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    4. JU has so many problems on its own that creation of Adriatic airlines would not cause too much problems. At the end of a day, it is by far in worst shape of all Balkan companies.

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    5. If LH was behind Adria, they would have sent some skilled people to help them do their job.

      any randomly picked eurowings intern would have been more successful to sell those PAD - ZRH seats at decent prices; such a shame that they fail at everything they try because of their lousy execution

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  29. Where will they get the money from?

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    Replies
    1. What money? You don't actually think they are going to pay for Montenegro Airlines?

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    2. Maybe they get 10 mil from Government to take over YM :)))

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    3. Yes, JU and EY style!

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  30. This could be a positive development for Ljubljana Airport too.

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    Replies
    1. Because more passengers from Montenegro would be transferred via Ljubljana.

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    2. Vinci will not like that at all.

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  31. Now imagine Fraport bids for Tivat and Podogorica airports :)

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  32. When you fail in one company, you buy another. Maybe that is right one...

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  33. Hahahaha Crazy gets crazier! Who in the world would give its company to 4k after criminal investigation in switzerland and neigboring adria on deathbed?

    Milo, if you are reading this, STOP IT!

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    Replies
    1. It will be interesting to see, what will Montenegran and Croatian governments do (I assume the rumors about 4K buying OU are also true) if JP goes under in the following days/weeks.

      JP's CEO said yesterday evening in an interview, that 4K will give a 10 million capital injection to Adria by the end of the year. It was quite a weird interview, to be frank.

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    2. Weird in what way?

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    3. Well, it looked like one of those damage control interviews, where the Titanic is sinking and the captain is persuading the passengers to keep calm, as he has some super glue in his cabin.

      He said that the magical 10 million injection has nothing to do with CAA's inquiry, he did not specify where they will get the money, he addmited that the company is in caos - and overall, his demeanour was wierd.

      I got the filling that the creditors are up their a**, and they try to keep them calm with this BS - I would say until they move to another airline. But I'm not sure they will succeed.

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    4. Thats what i wrote under yesterdays article. I cant decide what impression he gave me? I cant say he impressed me with his “confidence”. Im not sure he believes
      His own words. Not a very plausible interview. Problems are huge as he re(confirmed): 1. That the loose this yr WONT be INSIGNIFICANT (repeated 2x), 2. Cancellations and delays wont be resolved at least till the beginning of decembre. after this interview I AM SERIOUSLY AFRAID that the situation must be VERY CRITICAL, coz he tried hard (but cant say he was successful) to calm down the public, the suppliers and the authorities.

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    5. ...and after interviews and articles sales dip always comes. If they need funding to keep flying, they might need little more of it

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    6. Some one seem not to be happy. We see same posts repeated again and again Adria these days.

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  34. Montnegro will probably accept any offer, just to get rid of the dinosaur ... but I really have my doubts 4k is an ideal solution for YM ...

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  35. Intro has a slogan on their website: We find solutions where others only offer advice..with pictures of LTU, DBA, INTERSKY, Flynext... Non of those airlines even exist anymore!

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    Replies
    1. intro made some money on its way, even if it left a path of destruction behind it

      but intro would not be such a bad alternative at all: because selling to intro would ensure that JP and YM will not be grounded on the same day and YM may even survive JP by a few months

      Delete
  36. Stay away from from "investment funds".

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  37. This is soooo funny. People theorizing about a huge future adriatic company or passangers funneled through Lju and at the same time Adria on the edge of the precipice. Priceless lol Get real folks!

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  38. Everything points to Lufthansa being behind 4K in an effort to consolidate regional operations. Adria and Montenegro, and possibly OU, might become part of some new LH Cityline portfolio or something similar to Air Dolomiti. Branding was always weak spot for LH but they might end up with something similar to SkyWest or Republic, with a single company that owns regional aircraft operating under different stickers and brands on behalf and under control of LH group. SkyWest and Republic operate for competing mainlines in the US but it feels that Mother LH wants exclusive control for their regional ops.

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  39. Leaving some pessimists who keep on posting same repeated posts against Adria every hour, I believe 4K did a decent job to keep Adria running so far. Remember the state Adria was a couple of years. They maintained good connectivity to my country and city, they brought more passengers to and from LJU.
    I work on event management in LJU. They are key for the exhibitions happening in my city otherwise we cannot imagine the huge jump we had in conventions since last year. LJU is now preferred destination for more and more big corporate events and they bring most of the participants to LJU. They brought more good to Slovenian economy than all that imaginary bad some of our fellow commenters want to highlight.

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    Replies
    1. How can u see JP as a successful company if they post negative results? If they cancel flights on a daily basis? If social media is full of critics? If even GS at LJU tells u that organisation is weak and that people complain a lot? I REALLY HOPE THEY SURVIVE, but we shouldnt mix
      Hope and wishes with real facts... im not saying 4K is doing worse than the gov did, but a private owner wont inject money into the company yr by yr, just to
      Keep it alive...they invest to make
      Money and to get a profit,... and yesterdays interview with the CEO was unconvincing... VERY UNCONVINCING!

      Delete
    2. However, today they already injected 10 million fresh capital into Adria Airways: https://www.delo.si/gospodarstvo/novice/adria-airways-za-vec-kot-10-milijonov-povecala-osnovni-kapital-106763.html

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    3. The title of the article is misleading, if you read it, it says 'they will inject capital', in undetermined future.

      Delete
  40. Potrebno je vise udobnih i profitabilnih Fokker100 aviona za Montenegro airlines za sledecu turisticku sezonu.

    ReplyDelete

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