4K Invest to inject further €4 million into Adria


Adria Airways' owner 4K Invest will recapitalise the company with an additional four million euros, on top of the ten million it has already committed to investing into the airline during the first quarter of 2019. The funds will be used for "further business development of the Slovenian airline". In a statement, the company said, "The decision was adopted taking into account the firm commitments and strong beliefs of the owner in the successful future of the Slovenian airline, which is becoming one of the strongest regional air carriers, operating scheduled and ACMI services in Central and South East Europe". Last month, the Slovenian Civil Aviation Agency warned Adria it needed to provide proof of its liquidity by the end of the year or face penalties.

Adria's CEO, Holger Kowarsch, said, "We work hard to position Adria Airways as a stable business for further growth. We already achieved substantial development and we will continue to expand the potentials of this company and build it into an even stronger airline in the future", Previously, Mr Kowarsch noted that 4K Invest has long-term plans for the Slovenian carrier. "Our plans for Adria are long-term and we want the company to grow and develop in the future. We see huge potential in the company, with our priority being to stabilise our operations and restore the trust of our passengers. There is a lot of hard work ahead of us, but we are confident that we will succeed", the CEO said.

Initially, 4K intended to recapitalise the Slovenian carrier with at least ten million euros by the end of the year, however, this has been pushed back until the first quarter of 2019. The airline's owner has not said when the latest four million euro recapitalisation payment will be made. Adria has faced significant operational issues over the past few months, which the airline blames on crew shortages and technical problems with some of its aircraft. The situation has somewhat dissipated with the suspension of three routes, which were planned to operate throughout the winter. However, Adria has previously said that sporadic flight cancellations may persist until December.

Comments

  1. This is turning out to be an expensive investment for 4k.

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    1. I don't understand why they don't just sell it?

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    2. Don't worry they took a lot of money out of Adria in the past 3 years, now they will or maybe even not return just a small portion of that money.

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    3. 2nd Anon@ 09:14/ Are you really serious? Does not make any sense at all.

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  2. What the hell is going on here??? This all seems very fishy.

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    1. A što bi se događalo, iz šupljeg u prazno eto što se događa.

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  3. A way to cover the losses planned for 2018?

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  4. Good luck Adria

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  5. The photo sums up everything :D

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    1. I honestly don't know who still thinks Lufthansa is behind this. It just makes no sense whatsoever.

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    2. Obviously EX-YU editor thinks the same. Great choice of photo!

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    3. LH is consolidating regional operations through 4K.

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    4. Recently a former mid level manager of Lufthansa started working for my company. From information I got there are relations between Lufthansa and 4K. Whether it will end with Lufthansa taking over JP it is not yet decided.

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    5. Maybe we see LH step in at the last minute to "save" Adria. But at what cost?

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  6. Interesting. My guess is these 4 million will be deposited by the end of the year while those 10 million are up in the air.

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  7. This is not looking good. Second recapitalization in less than a month?

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    1. If you read the text, uou would see they haven't actually delivered on their first recapitalization promise.

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  8. This is urgent cash so they can pay off suppliers I think.

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    1. Remember the millions in compensation they have to pay to passengers for cancelled flights.

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    2. They are not paying the compensations anyway. I am still waiting for money for flight canceled in December 2017. Another case in March this year, they didn't even answer to the compensation claim.

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    3. How many people actually claim compensation? Most people are not aware of their rights.

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    4. Did you used agency for compensation claims?

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    5. After 6 months I involved local consumer organisation, which was successful, but the money is still not on my account.

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    6. Which local consumer organisation?

      Waiting for my compensation as well... From June 2018

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    7. Write to Civil aviation agency of yr country

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  9. I would like to see when that 10 million € in cash injection will be made... I am afraid that they plan to wait as long as possible... At the and they will say we wanted to put that money in but unfortunately we went bust before that because of fuel, union, coupon, pick one off favourite excuse....

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    1. First they said by the end of the year. Now they moved it until end of first quarter of 2019 (March).

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  10. Will this be enough for them to get over the liquidity issues they had some time ago? I thought they needed 15.000.000 to make it.

    Any news on OU and their liquidity issues? There was an article in the press that said they don't have enough money to make it through the winter. Could they get a new loan or sell some assets?

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    1. That was just a piece of tabloid journalism based on "unspecified" sources. Don't believe everything you read.

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    2. Well OU admitted they will be in the red this year so the reports can't be that unfounded. I don't know really, just thinking out loud.

      JP and OU should cooperate and synchronize their operations. OU could use one of JP's regional jets in winter time.

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    3. It may have been reported by a "piece of tabloid journalism", but the conclusion was made by BDO - the consultants who came in to look at the financial state of the airline

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    4. 150 000 000 kun za naslednjih 6 mesecev

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  11. 3 routes suspended, urgent cash injections, some flights still being cancelled... not looking good.

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    1. Any cancellations planned for today?! This is bad. This is really bad.

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    2. Today there are no cancellations planned. Things are much better since Kiev, Bucharest and Warsaw were suspended. But they did cancel Moscow the other day.

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    3. There are still cancellations almost every day, but not visible from daily timetable as they cancel a few days in advance... I am talking about PRG, AMS, CPH and others, who were not completely deleted from winter timetable...

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    4. Interesting, not good.

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    5. Are those measures not aimed at stability? It is good they are working to solve issues rather than let them be like that.

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  12. 4k has failed in its promise. They came to Adria saying they would turn around the business. That they are turnaround specialist. It turned out they are now planning a second (in reality third) year with a loss and it increases each year.

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    1. The company that bought Adria has no experience in managing an airline. It was visible when they bankrupted Darwin. It is visible now too.

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    2. Here's my prediction - they will continue to mismanage and bleed the airline dry until it gets to its inevitable end - bankruptcy. The Govt will be pressured into not allowing this to happen and they will be 'forced' into buying back the airline and 4K will walk away with HUGE smiles and full pockets !

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    3. @anon 09:26

      The government cannot buy JP back. They have Brussels 'up their behind' as is, with their current budget, so buying an airline, that has never made a profit, would make their heads explode.

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    4. Sure they can - Govt's can do anything that is in their national interest. Just look at what Hungary and Poland have done and continue to do against the principles of the EU ...

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    5. furthermore theres nothing left to bleed... JP has no assests

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    6. Ofcourse they have .. they have lucrative ACMI deals which bring in very good money and is in fact, currently the only profitable part of their business. The scheduled flying is massively loss making

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    7. Why would a loss making company with revenues of less than 200 mio be of national interest? there isn't even sLOVEnia in the name of the company for a PR

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    8. Exactly, the company has 160 mio€ yearly revenue. That is a lot of money you can hide. If the company is in red it doesent mean that the owner didnt have profit.

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    9. well Alitalia is stil around ...

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    10. I dont know the motive of the original poster of this comment. But he/she is repeating the same very negative statement every possible time. Some one is determined for a motive to talk negative about them.

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    11. Well it's true.

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  13. Well, since they haven't invested one euro in the company, my guess is, they are again using the media to try to appease the suppliers. It is highly unlikely they will produce any real cash, they are simply stalling - their aim being to milk the cow as long as possible.

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    1. It seems this is true. Instead of the owner the operations are financed by suppliers. According to some rumors their debt to suppliers exceeds 40 mio.

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    2. If that figure is true that is huge and almost at the level of Montenegro Airlines. The only difference being that YM is state owned and owes the money to other state owned companies. With Adria it is different.

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  14. Apparently plans to lease 3 CRJ900s next year have been scrapped too.

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    1. Makes sense if you ask me. It would be completely irresponsible to take up those planes due to a range of reasons. First and foremost not having money and second not having any crew.

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    2. I think the plan now is to lease only 1.

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  15. There was an emergency landing (due to icing) with one ATR they used for the route from Padeborn to Vienna the other day.
    They landed in Brno.

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    1. You mean Saab right?

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    2. It was wet leased ATR while most of the Saabs are grounded.

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    3. Od Nordice ATR

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    4. no, what i mean is an ATR 72 - 600 they have rented from Nordica

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    5. Oh tanks, I wasn't aware of that. So they are paying for lease of Saabs which constantly have mechanical issues and are grounded?!

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    6. What a catastrophic investment. They are leasing planes to cover broken Saabs while leasing the Saabs. Crazy.

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    7. Problems are crews not airplanes.

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    8. They this moment they use just 3 out of 6 Saab 200 they have: 2 planes in Ljubljana and one in Lugano for Swiss (and those operations also have problems). Huge amount of money they are loosing.

      Till now they invest almost 23 million EUR (1,1 invesment during buying Adria, 0,1 to Slovenia, 7,6 million for name if that is true that was done by their sister company, 10 millions last month, 4 millions now. And that is not enough to make solvent because of huge mistakes in 2018.

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    9. @purger

      This is not true - they said the WILL invest 10 million and 4 million - they haven't acctually invest anything.

      And those 6 million euros were never given to JP - one of the 4K companies bought the Adria name via an IOU - meaning, they will pay for the name in the next, if I'm not mistaken, 20 years. But on the accounting books it said +6 million.

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  16. Since JP's Airbuses are stationed in MUC and the Austria wet lease is finishing, my guess is, they will go bankrupt by the end of the year, LH will take over the leases for Airbuses and the crews, the rest will be send to bankruptcy.

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    1. This would be a really sad end to a company with such long tradition. I really hope it doesn't happen, but it looks plausible at the moment.

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    2. Long tradition of loss making...

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    3. Long tradition has little to do with it. Look at Malev. It was 66 years old when it was bankrupted to make way for Wizz Air.

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  17. You will know the end is near when they announce that Adria will completely be focusing on its ACMI deals. After a few weeks we will be bidding farewell to another European airline.

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    1. Adria got significant amount of money in advance for next year Austrian ACMI.

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    2. Why do you think ACMI means instant end. Some airlines are doing very well with that model.

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    3. Because we are talking about 4K Invest and they said the same before Darwin went bust. In fact it wasn't even a week in between that announcement and the announcement that they were declaring bankruptcy.

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    4. @09:50


      I highly doubt that. If they go bankrupt, that money goes to nothing.

      But as I have said many times - if they produce any real cash, then we will know there's someone behind 4K. Until now, they haven't invest a single euro in the company.

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  18. Purger in his article predict they will have to invest more than 10 million because of cancellations and use of Saab 2000. And now they urgently invest another 4 million. He said that it will not be enough and they have to invest even more just to make company solvent.

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    1. Sorry did not see this comment and have similar one several posts up.

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  19. In the event of bankruptcy:
    1. Who will take over LJU destinations? FR?
    2. I guess for transfers in the Balkans, JU and OU will be the winners

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    1. 1. Probably mix of LCCs and legacies. My guess is Swiss, Lufthansa and Austrian would quikcly start flights.
      2. There is Montenegro too :)

      But in the end I do hope Adria survives these problems.

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  20. I hope more foreign carriers see this as an opportunity to launch flights to LJU.

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    1. You realy think, that they do t come becouse of Adria. Or would you say that the market is too small.

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  21. There is a lot of money in the market, and JP is an excellent laundry machine. It burns more than it can produce. It seems 4K is more successfull finding fonds than running an airline ops. That's good news bcz 14mio will vaporate before it happeneds.
    I don't think JP needs money for further" development. They need first to bring it from the underground.
    ps Don't misslead. To recap the company does not necesserliy mean ->inject the money into accounting. That means something very far from that.
    Remember the case of Skywork Airlines from CH who was over a after a few weeks they did very the same.

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  22. Something very fishy about these "investments". Hope I'm wrong.

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  23. Sve u svemu do marta 2019 ce proglasiti likvidaciju Adrie. Neka se spremi OU.

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  24. I am getting really worried now. This situation reminds us of Monarch, who were stuggling a lot and in the end look what happened.
    Also in time of rising oil prices, fierce competition and airlines merging and exploring new markets, tough times ahead are awaiting not only JP but also JU and OU.

    The hungry big lions are waiting for the next weak prey in order to eat it alive, this is just what the law of the jungle is about.

    JP should focus on business travellers and inverting in the business product because this is what we are lacking: a sophisticated, regional business airline, which is exactly what they can do.
    Also consider important financial European routes: LCY, ORY, LIN.

    Also other important destinations: TLV and DXB.

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    1. That would be business travellers based only in Slovenia then - and for that you certainly don't need 19 planes.

      OS and/or LH offer better service than JP (bigger planes and no additional transfer in LJU)
      The only way JP could be competitive for this group is price- but then on the other hand, I as a business traveller dont really care for the price, since im not paying for the ticket from my own pocket.


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  25. If I was the Montenegrin government, I would run away from 4K's interest in YM as much as I could.

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  26. in my neighborhood there is a restaurant that is always empty. i always have discomfort when walking past this place, to see this example of business not going well.

    it is the same feeling i get when i read about the situation that adria is in with this 4k people.

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  27. At least passenger number are improving

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    1. That does not mean much if your finances are performing badly.

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    2. Najbolje da se broj putnika neće povećati nakon otvaranja svih novih linija. Važniji podatak je LF, koji je prilično loš.

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  28. Why doesn't Adria become a fully low cost airline. The "transfer hub" strategy has obviously failed which is illustrated by how many of the 8 new routes launched in the last year have remained in the schedule. People want lower prices and P2P travel is the way to go for Adria.

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    1. Because Adria wants to convert Ljubljana into a leading, regional hub.
      JP is the only airline in ex-Yu connected to HAM after JU dropped this route.

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    2. Yes, the HAM route will make Ljubljana a regional hub...

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    3. Name one low cost airline with Saab 2000 and CRJ in their fleet.

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    4. JP does not fly to HAM.

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  29. Why are people surprised? Adria made its first profit (since founding) in 1997. In total it has had 10 years of profit. That's 10 years out of 57!

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    1. 2010 must have been catastrophic with -63m EUR....

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  30. Hope JP makes it to its 60th :(

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  31. vec odavno je potreban servis aviona CRJ900,4 miliona eura je malo.

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  32. To capitalize means poor balance sheet looks better. Will have no effect to the type of problems JP has. What's the JP's annual turnover? 150mio? 14mio is a joke about the aviation

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