Adria to seek strategic partner after Sukhoi fallout


Adria Airways is seeking a strategic partner following a failed agreement to acquire fifteen Sukhoi Superjet 100 aircraft. The airline's shareholders have cancelled a planned ten million euro capital injection into the company. The carrier's CEO, Holger Kowarsch, said the deal with the Sukhoi Civil Aircraft Company (SCAC) would also have involved a ten million euro investment on behalf of the Russian manufacturer which would have been turned into equity. Mr Kowarsch explains that after preliminary contracts were signed, SCAC did not deliver the payment which was due in late February, which is why Adria quit the deal. He rebuffed claims that it was SCAC who walked away from the agreement due to the Slovenian carrier's finances, noting that the Russians carried out comprehensive due diligence, which involved between twenty and thirty experts from consulting and auditing companies. Mr Kowarsch noted that SCAC had access to all information concerning Adria's business, prior to signing a Letter of Intent with the airline, including the carrier's net loss for 2018 which will be in the double digits.

According to Slovenia's national carrier, the amount of shares SCAC would have received for its ten million euro investment into Adria was yet to be determined. "We need a partner whom we can rely on and can find a common language on the future development of Adria Airways", Mr Kowarsch said. He added that the company was at first disappointed with its failure to reach a deal with SCAC, since its crew had already been undergoing training for the Superjets in Venice. However, following talks with its partners in Europe and the United States, the CEO noted he received information that "put the Russians in a bad light as business partners". Mr Kowarsch explained that Adria still needs a strategic partner but there is "no rush". Talks are taking place with potential investors.

Adria's shareholders have cancelled a planned ten million euro capital injection which was to be carried out during the first quarter of 2019. "Given that Adria doesn’t need to finance the transition to a new aircraft type anymore, and based on its positive business plan, no additional capital increase is planned", the company said. Mr Kowarsch added that following the initial capital injection in late 2018, which was paid for in cash, Adria has been financially stable. "While there were still some liquidity problems last winter, the prospects for the summer season are good. The plan for this year is to get out of the red. Last year's loss is a result of several factors, among them damages Adria had to pay for cancelled flights and delays, increased fuel prices, lack of staff and the delay in introducing Saab 2000 aircraft", the CEO said.




Comments

  1. So they wanted Sukhoi to become a part owner.

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  2. I thought they already had a strategic partner and it's name was 4K. Adria is turning into a full circus.

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    1. They are obviously looking for an exit strategy.

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    2. That's how it looks like.

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    3. Nothing surprises me anymore from JP.

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  3. Double digit loss in 2018? How much can we expect?

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    1. I think it's around 15 million loss. We will see in a few months.

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    2. Yes it was reported that loss will be up to 15 million EUR. So if it's double digit it's between 10 and 15.

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    3. That's surprisingly low considering everything that's been going on...

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    4. It would be their second worst result on record. Worst was 2010 when they had - 63 million.

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    5. They probably used some creative accounting to lower it.

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    6. The loss will probably be more like 50 million and not 15.

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  4. I wonder if the Civil Aviation Agency of Slovenia will still say that the airline is solvent even when the salaries will be late. These swindlers are accumulating debt to Slovene companies, such as Air Traffic Control and so on..

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    1. Late salaries in Adria are nothing new.

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    2. salaries have not been late

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    3. So in the last 10 years all salaries have been paid in full on payday?

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  5. So it means they actualy never intended to invest 10 million as announced but they wanted SSJ to do it and then to present it as great business move. Now when SSJ is out of the game Adria suddently does not need this money.

    From the other side they say that negative business results came as the consequence of
    - cancelled flights and delays
    - lack of staff
    - delay of introducing Saab 2000 planes

    For all these factors 4K is directly responsible, but they are presenting it here like these were factors out of their control.

    Unbelivable.

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  6. No airline will buy JP. Lufthansa already informed K4 that they would not buy a single airline of ex YU but if, than just if one airline would cover all ex YU republics, but this at current circumstances impossible as OU would never join forces with JU or even JP

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    1. It's not only that, I don't think OU has the know-how to do it. They are completely and totally slow and unresponsive. I think they are in a rut and that's about it. Also why should LH push OU to expand into Serbia when they themselves do really well here? New MUC flight at night is a smashing success so no need to dilute yields by switching carriers to other partners/airlines.

      I think the end is near for JP and I think we have a glimpse of what to expect at OU in a couple of years from now.

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    2. LH said they would buy one single airline for all Balkans which mean that OU JU JP YM would hve to be deleted.

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    3. With Eurowings growing I think it would be easier to let these die and set up a base there. When OU goes bankrup they can base three CRJ-900 and operate most routes that have enough O&D demand. I think they would fly to: SKP, SJJ, VIE, ZRH, FRA, MUC, CPH, BRU, CDG and AMS. Rest could be covered through major hubs.

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    4. OU going bankrupt is someone's wet dream. Not gonna happen folks.

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    5. Nothing to do with wet dreams, just facts and realities.

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    6. OU is a political project and it will continue to exist.

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    7. So was MA yet here we are.

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  7. Contrary to my earlier assumptions seeing all the media articles and some biased comments against Adria, I am now impressed with the strategies they are trying to keep Adria running despite all the troubles airlines are having today. I am more confident than 3 months ago that they will keep our Slovenian airline in good shape for coming years.

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    1. Every airliner is a cash cow during summer season. There is a strong cashflow during summer (high season) months which you can redirect to Malta or some other heaven destination. September will be another story... reality check.

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    2. The only problem with their impressive strategies is that they don't work.

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  8. This is the end
    My only friend
    The end

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  9. Desperate times call for desperate measures

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  10. Every piece of Adria news is like watching a soap opera unravel.

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  11. I hope 4K sells 100% of Adria to someone not involved in any way with 4K.

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    1. Very difficult to find anyone willing to buy an airline is such financial state.

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    2. They have no property, they are operating at a loss, the competition from neighbouring airports is constantly diminishing the prospects at Ljubljana, and the only reason why they still haven't closed shop is that their debts are mostly to Slovene companies, who are tolerating this.

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    3. ok, and whats there to sell? the 15 million debt?

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    4. The debt is more than 15 million, quite more than that. Some companies they owe money to are still in Slovene government hands, and they are basically under orders not to start debt collection proceedings, as this would mean an instant bankruptcy.

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  12. So, Adria will be the first to go under. And with it, Ljubljana airport will probably go back to pre-2008 levels. Both good and bad news for Fraport, as no expansion will then be needed

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    1. Just as in PRN when Germania went bankrupt, other carriers will jump in

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    2. I think JP going bust would result in Wizz Air opening a base there. They could fly to LTN, DTM, FRA, VIE, ATH, BEG, CIA, BCN, BVA...

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    3. A tko će bump in prijatelju? Reći ću ti. Imat će uz Turke, OS jedan do dva letova dnevno VIE, LH će imati jedan do dva letova dnevno FRA i MUC, ostat će ovi LCC koji su već sada plus AF, a nitko drugi neće bump in. Slovenija je crna rupa na aviokarti Europe. Nemaju jak turizam ko Hrvatska, nisu milijunski grad s multinacionalnim firmama ko Budimpešta a nisu razvili ni jak hub ko RIX. Sve u svemu. Popušili 25g.

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    4. I think Wizz would jump in and expand. After all Slovenia is much richer than SKP so we could see a similar if not better network.

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    5. Slo has almost no diaspora... however wizz will jump in to cover LJU-SKP ;-)

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    6. @athos_cro Slovenija namjenski ne razvija masovni turizam ka Hrvatska, niti nikad nije niti nikad neće.

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    7. Slovenia doesn't need diaspora as it has an extremely wealthy local population that can afford to travel abroad.

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    8. Slovenia's diaspora has been increasing significantly since the economic crisis of 2008.

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    9. @anon 13.26 Slovenija ne može razvijati masovni turizam, jer ima 40km obale i nekakve znamenitosti u gradovima. Reci mi jednu zemlju koja ima planinski masovni turizam

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    10. Anon 14.20: što ti je to extremely wealthy? Imam osjećaj da govoriš o Švicarskoj

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    11. Anon 11.34: usporedi udaljenost SKP do europskih metropola i većih hubova i LJU do tih istih metropola i hubova

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    12. Љубљана има позитивних ствари као што је огроман број путника који лете са Туркишем па чак и Аерофлот кида у Љубљани. Уз све то, погледајмо број летова ка Лондону. Из без дијаспоре они имају солидни промет путника имајући у виду конкуренцију у региону.

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  13. As we see here adria seems to be bulletproof to bankruptcy and it will stay with us for a long time! Trust me!

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  14. Balkan business model.

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    1. Debts over debts, who will pay we don't care, Yugoslavia before and Slovenia in the EU now ... the same strategy ... and it's working! They are magicians. Give them a prize they are genial.

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  15. Can we finally say that Lufthansa is obviously not behind 4k and adria? :D

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    1. Well everything points to LH using or influencing 4K and JP for their needs like feeder routes, aircraft leases, messing with the regional market etc.

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    2. That idea was at least strange from its start

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  16. This is a completely different problem. Adria would have been able to blackmail Sukhoi indefinitely had they gone into the business. Basically, Sukhoi would have been forced to support Adria indefinitely at the cost of their own reputation should the 15 aircraft been returned.

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  17. *letter of intent

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  18. Dead man walking.

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  19. If there were enough wisdom Adria A. and Croatia A. should have merged long ago. Croatian tourism and diaspora, slovenian tourism and industry, transfers from ex-yu, 10 airports, 6 million inhabitants, all EU open agreements applicable, not too expensive labour, existing infrastructure, existing cooperation in tourism which could boost further, are all decent ground to form joint company, and successful one, unlike the two existing

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    1. Ne znam. Nisam stručnjak za EU zakone po pitanju aviokompanija, ali budući da je Hrvatska ušla tek 2013 u EU to mi se čini dosta iluzornim. JP još od odlaska Kocjančiča nije bila vođena dovoljno ambiciozno. Početak 90. bio je stvarno težak. Neko vrijeme se letilo čak iz KLU, jer je slovenski zračni prostor bio zatvoren. Ali nakon toga nije bilo neke jasne vizije. Trebalo je kao prvo puno jaće napasti prostor Koruške, Friulija, Istre i Kvarnera. To su trebali i mogli zajedno JP i LJU budući da su oboje bili u državnom vlasništvu.
      Drugo trebalo je iskoristiti dobru startnu poziciju na tržištima Makedonije, Albanije, Kosova, djelomice BiH. To se pokušavalo na papiru, no u praksi redovi letenja bili su dosta loše usklađeni, a sve do godinu ili dvije natrag web stranica bila je samo na slovenskom i engleskom. Trebalo je napravit jedan jak call centre na albanskom i makedonskom. Dijaspore za ovako nešto u Sloveniji ima dovoljno.
      Što se ovog tiče sam siguran.
      Nisam siguran da li je trebalo unajmiti 2-3 Boeinga 767 ili nešto slično i pokušavati letjeti za Sj. Ameriku. Ali to nikad nećemo saznati čini mi se.

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    2. Poz iz RJK

      Problem in Balkans is nationalism. Nationalism makes u all blind. Ok to be lit bit patriotic but here we talk of pure primitive nationalism which harms your economical potential. Maybe in 200 years people will start realizing that, maybe never. There could be one airline for all YU and you would not just fly 20% of total pax to CRO but 65%. But thats impossible with current leadership and worst of all, sorry to say are CRO politicians (atm and last 5 years for sure). But others are bad too. And all are corrupt and instead of working for their country, they work for their own advantage.

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    3. Nothing to do with nationalism, just common business sense. Merging businesses is hard, even LH didn't merge with Swissair or Austrian but in stead they bought them. Maybe JP should have bought OU when they were both national airlines. Like that Slovenes would run the whole show as they seem to be more business savvy than the Croats. I think that's the only way this Croatian-Slovenian story could have worked. Now it's too late as both JP and OU are terminally ill.

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    4. Athos_creo, očitno res nisi neki strokovnjak. Adria je v času po osamosvojitvi hotela sodelovati s Hrvaško, pa so bili, tako kot vedno, hrvati proti. Adria ni dobila dovoljenja da bi opravljala lete iz in na hrvaško kot reden letalski prevoznik. Če bi se takrat to uresničilo, bi imeli še vedno velikega letalskega prevoznika na območju nekdanje jugoslavije. Sodelovanje Adria in Croatie je onemogočeno zaradi različih političnih pogledov obeh uprav prevoznikov. Žal se tudi pred približno 4-5 leti hrvati zavrnili sodelovanje Adrie in Croatie. Jaz osebno sem prepričan da bi, če bi oba prevoznika sodelovala, lahko naredili dobro zgodbo in zgradili uspešno podjetje. Motiš se tudi če misliš da je Albanska in Makadonska diaspora v sloveniji in na hrvaškem dovolj velika za opravljanje takih letov. Takšne diaspore so cenovno zelo občutljive in dokler lahko dobiš avtobisni prevoz iz Ljubljane do Pristine za 30€, potem nima smisla ceiljati na diaspora da bi oni reševali letalskega prevoznika. Tudi Wizz ki leti v Skopje ima sofinancirane linije, ker si potniki višjih cen letalskih prevozov žal ne morejo privoščit. Osnovna matematika. Plan, ki ga ima 4K (lufthansa) je da se konkurenca na balkanu zmanjša. Za vse žepne države (Slovenija, BiH, Makedonija, Hrvatska, Albanija) bi bil dovolj en letalski prevoznik, po vzoru AirBaltika. Samo malo manj politike in korupcije ter več sodelovanja in logičnega razmišljanja.

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    5. @JU 520BEGLAX
      Completely wrong. Exactly the picture new world order makers want you to see. Normal people in ex-yu never had problems with which other. On the contrary, we had people mixing up with marrying which other, being friends and relatives, from all nations. One small group, some 10 percent, the most loud and most exposed, led by politicians, creating such picture in order to justify neocolonialism which has been reintroduced on the territory of ex-yu

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    6. anon 11.52: spominjam se 90. JP je takrat hotela leteti v DBV in SPU, pa Hrvaška ni dovolila. Pa so se potem nekaj hendlali. Krivda je verjetno nekje na polovici. Tudi Slovenci znamo zafrkavati.
      Uspešno podjetje bi lahko zgradili brez sodelovanja, z malo bolj ambicioznim in manj korupiranim managementom.
      Glede diaspore pa nisi razumel. Vem, da v SLO ni kritične mase Makedoncev ali Albancev za P2P povezave. Hotel sem reči, da je imela JP v teh državah odlično startno pozicijo, da bi LJU bila hub, preko katerega bi ti leteli na zahod. Diasporo v SLO sem omenil, da bi jih uporabili za call centre, marketing itd.
      JP je bil prvi zahodni prevoznik, ki je letel npr. v TIA. Že nekje leta 88. ali 89. Če ne verjameš vzami v roke stara Krila in poišči reportažo.
      Imeli so odlično starno pozicijo. Niso bili pod sankcijami kod YU, niso imeli vojne kot OU, pa je niso izkoristili.
      Sedaj je prepozno

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  20. I was born in 1988, lived in Serbia and from my early age I was taught that Slovenian brands were making the most quality stuff in ex yu. Loved Fructal juices as a kid - now they are more less gone. Had Mehano toy trains - gone. Tomos motorcycles - gone. Iskra electric appliances - gone. Gorenje household appliancese - sold to Chines but more less gone. With Adrias one way blind road to the "future" I kinda feel sad and a bit old :-D. Slovenians were making really good stuff but they somehow slowly lost their mojo after 91.

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    1. Fructal juices are not gone, but are owned by a company from Bačka Palanka nowadays. As for the aviation, Ljubljana is nice, but also a smaller city than Novi Sad, and also too close to Zagreb. An influx of LCC to Franjo Airport will be the final and utter disaster for Slovenia's aviation.

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  21. Dogodi se. Otišla Sabena, otišli TWA i Pan Am, otišao Malev, pa na kraju krajeva i oni stari Swissair. Vjerojatno će otić i Adria. Nije u tome glavni problem.
    Mene ljuti i rastužuje to da euro birokrati, domaći politički izdajnici i slugarski novinari ponavljaju mantru kako je država loš gazda, kako je stranac najbolji gazda, stoka sitnog zuba samo to guta.
    Više nego očito je da su K4 polumafijaški lešinari specijalizirani za izvlačenje novca iz firmi na privatne račune.
    Sad je Kowatsch lupio glavom u zid, jer Rusi za razliku od ljudi s ovih prostoriju ne padaju njegove kvazivizionarske spike na onom germano-engleskom: vi ar ze eksperten, nego kažu pare na sunce.
    Mene jedino još zanima da li će Slovenija imati hrabrosti i uvesti istragu tužiteljstva zbog namjernog uništavanja poduzeća kao što to rade Švicarci ili će opet biti pojeo vuk magare

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    1. Ps. Ali zanimljivo da razgovaramo o tome kako Nijemci uništavaju našu avijaciju na 6.4.

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  22. From a political point of view, the JP's bankruptcy will be a very interesting story in Slovenia. Until now, JP (or I should say 4K) were pretty much off the radar. There was a random story once a month, but that's it - no though questions were asked.

    Because what our previous government did was they paid 4K to take over Adria and to basically close it down for them, this was known from the beginning - in the meantime 4K caused massive damage to the contractors in LJU and elsewhere. And the hole will be paid by taxpayers, one way or another.

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    1. Ne radi se samo o tome, mada je to najvažnije. Vlada je prije neka 2mj platila nekih 4 milijuna EUR za aviokarte za nekih 5 godina unaprijede. Ako JP propadne prije toga, otišli novci u nepovrat.

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    2. Ništa nije platila unaprijed. Katre za kupuju po fiksnoj cijeni kad i koliko jih treba.

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  23. Adria's debt could be tranferred to slovenian "bad bank" DUTB and therefore Adria would start again. Taxpayers will pay the major part of loss.

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    1. Can that be done considering Adria is 100% privately owned?

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    2. If that was possible at Istrabenz and Zvon ena, it might be also at Adria.

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  24. How much did 4K buy Adria for 1 million euros was it? And they got the Slovenian government to inject an extra 4 million. Fast forward a few years they try to sell a portion of an even worse business for $10 million!

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    1. They weren't looking to sell a portion of the business, but Sukhoi would invest money and would get equity in the company in return.

      Kind of like if your hours is worth 200.000 EUR and I pay for 50.000 EUR for swimming pool, jaccuzzi and sauna, I would then be become 20% owner (house is now worth 250.000 EUR and I paid 50.000 EUR of it).

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    2. In other words, they were looking to sell a portion of the business for $10 million.

      You can’t say something will be worth more just because you wasn’t it to be. The market dictates how much something is worth based on what someone is willing to pay for it.

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  25. I cannot understand... Adria is in trouble, Croatia Airlines is in trouble, the Slovenian market is far too small and too expensive. Why don't they merge to one bigger Airline, whatever name they will have? LATAM is a good example, I cannot understand how they can be so stubborn in their situation.

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