Slovenian regulator launches Adria review


The Civil Aviation Agency of Slovenia has begun a review of Adria Airways' business after obligating the carrier to submit proof of its liquidity by January 1, 2019. The airline submitted necessary documentation on December 31 of last year, after its owner, 4K Invest, injected four million euros into the carrier and promised a further ten million euros in funding during the first quarter of 2019. In a statement, the Agency said, "This extensive material will be thoroughly reviewed and the evaluation is expected to be completed within a month". If the regulator finds that Adria is unable to prove its future liquidity and financial stability, it could face penalties, which may include the revocation of its Air Operator's Certificate (AOC), although such extreme measures are hihgly unlikely.

Following a review of the airline's 2017 financial report, the Agency established that Adria met one of the conditions for declaring insolvency. "By the end of 2017, insolvency was not disclosed, as a result of which the Agency issued a decision ordering the airline to regulate its finances", the head of the Civil Aviation Agency, Rok Marolt, said. Adria recently noted that its finances are in good shape. "All supervisions conducted by the Civil Aviation Agency are determined by official regulations and the agency is obliged to carry out regular assessments of the carrier's financial state in relation to fulfilling conditions for maintaining its operating licence. Adria Airways regularly informs the Agency about its financial performance and the Agency regularly issues resolutions and findings which we follow", the airline said. It added, "The Agency’s resolution that Adria Airways must provide evidence it has received funds either through recapitalisation or any other way by the end of 2018 is not of an extraordinary nature and does not mean that Adria Airways is in any worse shape than before or is being threatened with the grounding of its fleet, as implied by some media. These are regular measures which Adria Airways needs to constantly perform and fulfil".

Adria Airways' CEO, Holger Kowarsch, previously said the airline's financial loss in 2018 would be "significant" but added that the company would be restructured and placed on "firm foundations". "Slovenia needs its airline, because it is very important for Slovenian society, tourism and economy that a national carrier operates from Ljubljana Airport", Mr Kowarsch said. He added that the company would not file for bankruptcy, "contrary to what many wish for". 4K Invest has said that the upcoming ten million euros it will use to recapitalise the airline willl "make a significant contribution to the continued successful development of the Slovenian airline".

Photo courtesy of Nik Korošec

Comments

  1. It would be so sad to see Adria closing completely. I keep my fingers crossed for Adria.

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  2. Televisa presenta... the saga continues.

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  3. I doubt they will shut down Adria. Marolt used to be Adria's COO from 2012 to 2013 and assistant director of flight operations from 2006-2012.

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    1. I doubt it will loose its license too but it has little to do with the professional career of the boss at the CAA. The decision is made in accordance to rules and regulations.

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    2. "The decision is made in accordance to rules and regulations"

      Right. Slovenian CAA will never revoke Adria's AOC, they will wait until the suppliers reposses one or more aircraft.

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    3. In Macedonia the CAA revoked MAT's license.

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    4. In Bosnia , BHDCA revoked BHA's AOC !

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  4. Hurreee Let us start our dose of Adria bashing

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    1. The only reason people "bash" Adria is because they cancel flights on a daily basis and flights are routinely delayed. They opened a whole bunch of new routes of which one has survived. They bankrupted an airline to get second hand old Saabs and will now replace Canadian made Bombardiers with Russian junk.

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    2. And the most important thing in all this mess is that they opened a base in Paderborn, but even that is not working out, they already closed one route.

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    3. This bashing is not groundless though. They are to blame for all of it.

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    4. That's true!

      Wake up ADRIA cancel Russian junks immediately keep Adria Airways safe.

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    5. The SuperJet is a decent aircraft. It already flies daily to many former communist capitals. Not a sole incident reported so far.

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    6. Anonymous at 09:26
      Sure it is Vladimir Vladirovich, sure it is!

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    7. For Adria SuperJet is indeed a great aircraft - providing that they open a maintenance base in Ljubljana. Without that, they'll have the same problems as Brussels Airlines or InterJet. Also contrary to popular belief - it actually burns less fuel per seat than CRJ 900.

      Regarding cancellations - they over expanded last summer season, which was a decision of the (now ex) CEO. They didn't have the crew for such expansion, thus the cancellations. But things calmed down in October/November 2018 and it looks like 2019 will be much better for them, since they are again focusing only on profitable markets.

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    8. The fact that they haven't even started hiring crew for SSJ100s indicates to me that they won't be getting them.

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    9. They don't have to hire new crew. I assume current crew will be trained to fly the SSJ100.

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    10. Plus they will probably get the first jets with Cityjet crew.

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    11. The SSJ100's irregular availability will work perfectly within their current network of continued cancelled flights.

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    12. Reasons from some of the bashers seem either they are too obsessed against Adria or they didn't see any other airline in Europe. I had more than 15 flights with them in 2018 and they are not as bad as some are projecting them here. I got one flight cancelled but they arranged me a transfer flight through FRA with proper communication and brought to my destination one hour later. All other flights were just perfect. Had bad experiences with some other airlines this year though not in Slovenia

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  5. Good luck, Adria

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  6. Time to renationalize.

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    Replies
    1. Yes, the government has previously proven to be a great manager of Adria...

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    2. +10000000

      Senegal did the same thing and it did wonders for Air Senegal. They are about to receive two brand new A339!!

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    3. The Slovenian government should have done a better job when selecting Adria's future partner.

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    4. Yes Anon at 09:16, I am sure the Senegal taxpayers are thrilled...

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    5. Why wouldn't they be thrilled? They get a great airline that has a fleet of A319, Atr-72 and A339. The government has done a great job at bring back the airline from the dead. Slovenian government can do the same, just like Italy is doing with Alitalia.

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    6. They wouldn't be thrilled because 99% of them will never set foot an a plane.
      But they will be paying so that the ruling elite can continue wasting the little money their country has.

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  7. If their finances are in a dire condition how are they going to finance 15 SSJ100s?

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    1. They are probably getting them for peanuts or some of them even free. And the first ones they will get are probably these ones that Brussels Airlines couldn't get rid of fast enough:
      https://airwaysmag.com/airlines/brussels-airlines-terminates-cityjet-superjet-contract/

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    2. Well, they are not getting them, for starters.

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    3. I am willing to bet that the lease cost of a single CRJ more than covers the lease costs of 5 SSJs!

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    4. @ 09:46

      Super - they are not getting SSJ's.

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    5. They are getting Sukhoi SuperJets, SSJs for short.

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    6. @10:10

      Has the contract been signed?

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    7. Contract is planned to be singed in February/March and first deliveries should commence in April/May, according to Sukhoi.

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    8. @13:13

      Yes, because we all know that the 4K lot is highly credible.

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  8. I hope Adria weathers this crisis and wish them all the best.

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    Replies
    1. Agree! Some tough times ahead but hope it will turn out fine!

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  9. Do they plan to open any new routes this summer?

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    1. They said they did but that was before these financial problems were made public so I don't know if it is still valid. They mentioned Spain, Italy and Stockholm.

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    2. And what routes from last year are being resumed?

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    3. None at the moment.

      Brac, Dubrovnik, Hamburg, Kiev, Bucharest, Dusseldorf and Geneva are not scheduled for next summer. Only Sofia stays.

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    4. Ouch. Unfortunate.

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    5. Is this because of general financial issues or is it really that none of these routes worked out??

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    6. Probably a mix of both. If they were strong, they would have kept them like Sofia.

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    7. The biggest mystery of the Ljubljana-Sofia success route o_0

      The Saab is barely used on the route but rather CR9. I won't be surprised if they add more frequencies once they take hold of the Ruski jets in spring.

      I also see the return of BWK.

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  10. Don't worry, soon we may see Slovenian government announcing a tender (or just a fund) for "support for connectivity to major EU hubs" for an amount of approx. 10 million Euros.

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    1. I don't understand why the last government's tender for Brussels flights was such a problem. The same tender was published every year for the last 6 years for the same amount of money (4 mio EUR) and it was never an issue. But somehow in 2018 it was regarded as a "hidden government support".

      Some people only see the agenda they want to see...

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    2. It was always treated as government support. Given that government is subsidising the route (no problems with that in general) , why are the return tickets still at 600+ EUR a piece?

      If the route is heavily subsidised, the tickets should be cheaper, no?

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    3. @11:15

      The BRU route is not subsidised. Government signed a contract with JP, that they can buy tickets to BRU not later than three days before flight at an agreed cost. That's it. The money changes hand only when the tickets are needed.

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  11. I guess they just need some internal reshuffling and perhaps a newer management to try and cope with the crisis. The trickiest part is that the Slovenian market remains relatively small.
    The same happens with a country like Slovakia.
    Also, I read an article, that the Slovenes have a very driving mentality. So I will not be surprised if people drive all the way to Venice, which also makes sense being one of Italy´s biggest airports and wealthy of course.
    You have direct flights to America, Emirates, Delta and a significant number of easyJet and Volotea destinations.
    And of course, Treviso, which is another story. Around 4 Ryanair destinations.

    But I would stick to the Slovenian habit and car mentality, which is also quite extensive in many parts of the Balkans.

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    1. Treviso 4 Ryanair destinations? 35 in Europe and 7 in Italy.
      And yes, Slovens love to drive, they even use goopti a lot. To Zagreb as well.

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    2. Sorry, I meant 40. I am still waking up, with the coffee in my hand xD

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  12. Adria is in need of quite a substantial amount of money this winter. Let's see what happens.

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    Replies
    1. 4k will provide funds from another phantom company they own and operate.

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  13. So can we now safely say that 4K will not be acquiring Montenegro Airlines and Croatia Airlines?

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  14. They sent the documentation on 31st December hours before the deadline? Ok...

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  15. The main problem for JP is not the CAA but the contractors. According to Dnevnik newspaper, they owe more than a million euros just to Slovenia Control, and unofficially many millions more to others.

    It's also clear that the SSJ news bombardment was a PR stunt by 4K to give the CAA and the contractors the impression of 'something happening in Adria'. They only signed a letter of intent, nothing else.

    And also, just given the fact that Dnevnik newspaper has taken such interest in JP in the last couple of days is telling. They are a mainstream, establishment media, used by political parties to further their agenda. Their articles contained statements by people who are close to the current government - they basically said it doesn't matter if JP goes down.

    Plus the last capital injection was again fictitious. So the writing is pretty much on the wall - either bankruptcy or all of this was a sham and a mysterious buyer will pop up from nowhere.

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    1. Very interesting and unfortunate at the same time. But it's never good to own money to air traffic control. Then the end is really near.

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  16. Adria ows probls min 3 mio EUR to passengers who claimed delay and cancellation compensations. They are not paying it. I know fm 7 passengers who are waiting since June last year.

    And no Mr Kowarsch: Slovenia does not need an own airline, it needs good air travel connections and this can be done by any european carrier, the sooner, the better.

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    1. Isn't there some set time frame by which they have to compensate passengers?

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    2. You are right. Slovenia need GOOD air travel connections. And that can be done by ANY european airline? Name one please able to do that?

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    3. The only thing they are currently paying are the wages, in order to avoid a strike. Everything else is done via I.O.U. The stories about SSJ are meant to comfort the creditors, so they would start callling in the debt payments (and bankrupting JP instantly).

      Only one of the contractors need to say 'pay up the past debts or we cancel our service' and the game is over.

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    4. ^ What do you think will be the end results of all this. Do you think Adria will really go bankrupt?

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    5. @10:08

      Unless there some sort of a background deal between 4K and an 'X' company (or the government, to buyback JP), yes, JP will go bankrupt. When? It's impossible to know. It could be today, it could be in a couple of months. The contractors usually give a lot of leeway before they start calling in the debts.

      If what I heard about the last capital injection is true (that it was again an accounting trick), then then will go under very soon.

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    6. Thanks :( I hope they survive somehow but it really isn't looking good. I wonder what the morale is like among workers in the company.

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    7. They are all drinking the Kool-Aid. Most of them were around when the government sank millions of EUR every year to keep the boat afloat.

      And they think the same will happen now.

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    8. @Anonym 1003h

      U hve YM U2 TK JU AF AY W6 SU LO BA HV already in town. If JP disappears LX OS LH and more U2 W6 flights are to follow. With clean receipts and a win win situation for the airlines and for the nation. Think big and your horizon will widen :-)

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    9. They did recently win a Slovenian government contract worth 4.5M Euro's (from another blog) to fly government employees around.... maybe this would help a bit.

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  17. This could go down one of two ways - either they will go bankrupt or 4K is setting up to hand over the company to someone.

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  18. Guys take a look at their (current) summer schedule from Ljubljana . They have drastically cut frequencies on many routes compared to last year.

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    Replies
    1. Becouse half of the fleet goes to acmi deals with lufthansa group.

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    2. But aren't the SSJ100s supposed to replace them?

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    3. S19 schedule so far:

      LJU-AMS 6 weekly
      LJU-BRU 13 weekly
      LJU-CPH 5 weekly
      LJU-DUS - no flights
      LJU-FRA 3 daily
      LJU-SVO Daily
      LJU-MUC 2 daily
      LJU-CDG Daily
      LJU-TGD Daily
      LJU-PRG 4 weekly
      LJU-PRN Daily
      LJU-SJJ Daily
      LJU-SKP 2 Daily (peak season) otherwise 1
      LJU-SOF 3 weekly
      LJU-TIA 2 Daily (peak season) otherwise 1
      LJU-VIE 2 Daily
      LJU-ZRH 3 Daily

      Seasonal routes:

      LJU-BWK no flights yet
      LJU-DBV no flights yet
      LJU-MAN 1 weekly
      LJU-TLV no flights yet

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    4. Can't really blame them if they decided to focus on profitable markets. ACMI has been a very successful business for them and I see it as the only way to survive right now. Ljubljana expansion in 2018 was a huge debacle - both financially and operationally.

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    5. if SKP goes double daily in pick season that would be an increase compared to last year.

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    6. So compared to last summer based on frequencies by anon 10.08

      LJU-AMS same
      LJU-BRU same
      LJU-CPH - 2
      LJU-DUS - 4
      LJU-FRA same
      LJU-HAM - 4
      LJU-SVO same
      LJU-MUC same
      LJU-CDG - 3
      LJU-TGD - 4
      LJU-PRG - 1
      LJU-PRN same
      LJU-SJJ same
      LJU-SKP - 5
      LJU-SOF same
      LJU-TIA same
      LJU-VIE same
      LJU-ZRH same

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    7. @10.29 (1) but daily out of peak season is a decrease.

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    8. TGD was also only daily (stays same), SKP was only daily for the whole summer,

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  19. Slovenain CAA being a mess since a decade. Discussing in public financial status of state major airline under FOCA, LBA, AESA, DGCA, ENAC or Austrocontrol; he is gone the next day.

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    Replies
    1. Why is Slovenian CAA in a mess? What's going on there?

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    2. Weren't their some issues about who would lead the Slovenian CAA or something like that? I remember the government was warned multiple times by the EU about the CAA.

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    3. Plenty of 3rd world countries have much better ICAO compliance levels than Slovenian CAA.

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  20. JP going bust would be phenomenal news for ZAG and its carriers. I am sure it would boost their numbers.

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    1. Short term maybe, long term no. You would get Wizz, Ryan and other LCCs jumping at the opportunity to open a base in Ljubljana.

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    2. Exactly, and then would be the other way round, since ZAG has 0 low costs. And won't have anything in the near future.

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  21. Why doesen't 4k just sell Adria if they are having so many problems running it?

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    1. Easier said than done anon 11.03

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    2. They can sell it to the same people/company the Croatian government is selling OU to.

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  22. - The CAA director is a former Adria Airways Chief Operations Officer and is negotiating with Adria to re-employ him, now when the government changed
    - The CAA Head of Operations Department is an active Adria pilot
    - Half of the CAA employees are either former employees of Adria, or are trying to get employed by Adria...

    So, nothing will happen, even they are insolvent or lack capital. In worst case they will get a warning...

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    Replies
    1. Interesting

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    2. And instead of using EASA rulebook, CAA's guidance is usually "what Adria does must be the best". So not fulfilling financial obligations shouldn't be a problem.

      Banana CAA. A competent CAA would have pulled the AOC already.

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  23. 3 years after privatization things are really not looking good for JP :(

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  24. I flew VIE-LJU-SJJ on 28th of December. This was the first time to fly with JP. Sectors were to short to draw some conclusions on the service (which is of course BoB based). Cabin was almost completely full on VIE-LJU and maybe 60% on LJU-SJJ leg. I was a bit dissapointed with the state of their two CRJ900s. The interior looks very modest, warn out and cheep. Maybe only my impression, but I can not really find a USP which distincts them from competition, on the contrary.

    LJU looks compact and more or less organized. :)

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  25. Lets all hope, Adria International Airways all the very best with the reforms.

    Here is the official news on the Sukhoi website:

    https://www.superjetinternational.com/media-center/scac-and-adria-airways-loi-for-15-ssj100-and-mro-joint-ventur/
    Things seem to be very serious in that case.

    Additionally it seems that the Airbuses will go to LH Group plus Luxair (LG):

    "....The delivery of the new SSJs delivered on long-term dry-lease agreements will allow Adria to deploy more of its Bombardier CRJ and Airbus aircraft on ACMI services on behalf of third parties. Adria's ACMI customers currently include Austrian Airlines (OS, Vienna), Lufthansa (LH, Frankfurt Int'l), Luxair (LG, Luxembourg), and Swiss (LX, Zurich), according to the ch-aviation fleets module....."

    SCAC president Alexander Rubtsov added that Sukhoi had realised that the SSJ100 after-sales support in the European market would have to be "organized profoundly and professionally.

    Seems that Russians are very happy.

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  26. Adria Airways' CEO, Holger Kowarsch said "Slovenia needs its airline, because it is very important for Slovenian society, tourism and economy that a national carrier operates from Ljubljana Airport"

    Sounds more like politician than CEO. Replace country and city name in that quote with other country and it would sound just like political campaign promise in Croatia, Serbia or Montenegro. For example: "Croatia needs its airline, because it is very important for Croatian society, tourism and economy that a national carrier operates from Zagreb Airport".

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  27. Too bad for Adria. These mirons ruined one nice small airline.

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  28. I just heard from a Nordica/RegionalJet cabin crew friend, that they operated the Paderborn-Zurich route for them over the Christmas on ATR-72 and the LF was a slightly positive 0!

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  29. The problem has started much earlier: How can a state who doesn't have its own fleet, sell the only airline connecting its capital with all major European capitals to an even in Germany completely unknown financial investor? Adria Airways now is a shame for Star Alliances with wet leasing Carpat Air Junk planes last year and now replacing their fleet with not-tested russian planes. As a regular client I have no other chance then escaping to Zagreb, Trieste or Venice

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