Adria's new MD outlines company plans


Adria Airways' new Managing Director, the 31-year-old Sven Kukemelk, has said his main priority will be to grow the airline in the coming period. Mr Kukemelk, who will manage the company alongside Holger Kowarsch, has said that in the long-run the airline should more than double its fleet and focus on turning Ljubljana into a transfer point between the Balkans and Western Europe. "When I left Nordica I started a consulting company and it has done well. We advised Adria and developed a business plan for them. The airline's owners thought I could give advice from the Managing Director position, and that also involves responsibility", the Estonian told the "Delfi" portal. He will be in charge of managing the Operations division, and will continue to lead Adria’s Flight School.

Commenting on the airline's future plans, the newly appointed Managing Director said, "We have different opportunities and challenges here - Adria has tried to do everything - ACMI business, charters, building a hub in Ljubljana and focusing on point-to-point travel. But now there is a clear need to concentrate and put emphasis on certain services and groups". He added, "Today, Adria is clearly too small. In the long-run the airline must have forty to fifty aircraft in order to be sustainable. I wouldn't double my fleet within a two-year period, rather, it could be part of a ten-year plan. My goal now is to see the most sensible way to get this growth happening. Building a hub in Ljubljana is not easy - there are both pros and cons. Slovenia was and is the richest region in the former Yugoslavia, and there is already great demand for it in the area. We are in a relatively good position to connect the whole Balkans with Ljubljana".

Despite plans to revive the company's hub-and-spoke model, Mr Kukemelk noted, "For us, serving the Slovenian home market is still our main mission". He conceded that last year was complicated and unprofitable for Adria, however, he noted that this year the carrier has kept its nose above water. "Currently, the company's financial position is relatively normal. We have a whole bunch of development projects to work on. Since Adria is privately owned the decision-making process is much faster and changes can be implemented immediately when compared to state ownership. Leading Adria is a big challenge, no doubt". Mr Kukemelk jokingly concluded, "When I was younger, I always wanted to become the CEO of a national airline. At the time, I was not thinking of anything other than Estonia's airline".




Comments

  1. I will be 31 soon .. and can not imagine running an airline. Good for him, but I have to be honest I am skeptic he will be able to handle it.

    ReplyDelete
    Replies
    1. Well much older people were in charge before him and look at the mess they made.

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    2. Age has nothing to do with competency.

      But I believe the Balkan hub model will not work, as it has not even in the past, with fery few P2P options around.

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    3. That's because LJU is punching above the waist. Let's face it, they should be realistic and drop this hub model. JP needs to go bankrupt so that LJU can thrive SKP style. Ljubljana is eclipsed by ZAG which takes care of most passengers. LH and OS should take over transfer passengers from Adria while AF and Transavia keep on expanding. This is a model LJU and Slovenija need, not some daydreaming project with 50 planes.

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    4. Anon 09:32: +1.

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    5. The Slovenian government would rather burn itself alive than to let JP go bankruprt. Do you know how many of their sisters, aunts, cousins, lovers... work there? It's basically a social welfare company.

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    6. "This is a model LJU and Slovenija need"
      LOL. You mean model that ZAG wants?

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  2. Haven't they already tried the Balkan transfer hub model... and it didn't work out.

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    1. My thoughts exactly. This is not the 1990s where people from the Balkans don't have nonstop options to Western Europe. And there are more and more LCC options. At the same time, Adria offer low cost service and full fare prices. I don't see why someone would opt to transfer via Ljubljana.

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    2. They are way too small to compete with Air Serbia in ex-YU and they have nothing they can pick up from Balkan region that had not been taken by bigger players already.
      This guy looks more like a dreamer

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    3. I wouldn't be surprised if Air Serbia opening Nis-Ljubljana was a preemptive move. Remember Adria applied to operate flights to Belgrade late last year.

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    4. And they gave up very soon

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    5. It is inevitable. Airlines have to choose a business model and follow it strictly. Either you go for charter business, or follow hub&spoke model, or go for O&D pax and establish a low cost model. But one thing you shouldn't do is trying to mix these business models.

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    6. Why would I transfer in LJU when nearby ZAG and VIE offer so much more?

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    7. Hub model never works without a long-haul network. Somebody who wants to go from Skopje to somewhere else to FRA/BRU/MUC, will still have to take 3 flights.

      Or they could just go to VIE and fly from there. And unlike Adria in last year or so, it probably won't include a yet another stop in PRN or SJJ.

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    8. Well Aegean and airBaltic have successful hubs and no long-haul flights.

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    9. You can't compare A3 and BT to JP...

      BT has a huge network and they are transitioning to a single type ultra-modern fleet. JP is stuck with A319, SB20, CRJ7 and CRJ9. 3 different type engineering/pilot wise and 4 different types booking-wise.

      A3 has an enormous domestic network with a very large seasonal demand. Don't see people rushing to go on summer holidays to SJJ, PRN or SKP, where Adria's "Balkan hub" currently brings you.

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    10. @anon 9:32
      And both of them should not be compared to exYU airlines due to significant differences in market position (geographical and economic)

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    11. BT was a mess like JP was, they got state money like JP did but the biggest difference is that they did something with it and became successful. Aegean has to deal with so much competition in such a large market.

      It's not about the market but about management competence.

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    12. what it has to do with summer holidays o_O

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    13. airBaltic has absolutely no geographical advantage. Their key markets are Finland, Russia, Baltics and Belarus. This makes their success even more impressive.

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    14. Saab could serve LYKV offering connections to Europe.

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    15. It is a small plane which I think could serve several cities in the region well, Banja Luka and Tivat included.

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    16. I'd say OMO as well.

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    17. Smaller airports that do not have the frequent flights by LCCs should be the target. Frequencies and range of destinations through connections are the key value proposition vs LCCs.

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    18. I'm very curious if people saying that in case of airBaltic local market is irrelevant have ever been there? Economics is much better then in exYU region, business is going well, people have more money and therefore travel more. If you check airBatlic prices you will see that they are not cheap airline, luggage rules are not generous and absolutely nothing is for free. I've been traveling there multiple times.

      Regarding geographical circumstances, anon 9:49 is right, they don't have any advantages. They have a lot of disadvantages as a region - weather is really bad most of the year (last 2 years are exception :), if they want to go somewhere it is not convenient to go by car, region was not getting too much attention from major Europe airlines, etc. And that exactly AirBaltic as "local" business was taking care of.
      And of course, nothing would be possible with good management, that is absolutely true.

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  3. If growth is his goal then profitability is not. Investors are willing to keep fueling this dream of Adria becoming hub model airline similar as Air Serbia. Who would have an interest to keep burning money to create Air Serbia competitor?

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  4. Perhaps we might see Adria opening more secondary cities in the region like BNX, OHD, TIV...

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    Replies
    1. Tivat can't work because YM-JU codeshare crushes any newcomer.

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    2. lol thatswhy Tivat announced all these new flights

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    3. Those new flights are for tourists coming for holidays, not for transfer passengers. Look at LH's schedule and you will see what I am talking about.

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    4. and the Belgrad flights are transfer? lol

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    5. Anon 10.30

      Absolutely, at times an entire Atr is filled with transfers from Moscow alone. Don't know what's so surprising.

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  5. 40-50 planes!!!

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    Replies
    1. New SHS :-)

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    2. He said in 10 years though...

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    3. In ten years there won't be JP to play around with. I give them maximum two, three years.

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  6. Saj JP bo kupil O'Lary potem pa bo LJLJ kot Bratislava. FR je itak dal v začetku leta statement, da bi radi konsolidirali letalski trg v EU z nabavo nekaj letalskih družb.... FR se kaj hitro lahko oglasi pri K4...

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    Replies
    1. Even some so called experts who claimed that LH is behind 4K did not come up with this idea...

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    2. I doubt Ryanair is interested in buying heavy loss-making business with zero assets. If the airline had production slots for A320neo, that would be a different story.

      Better ask EY, they seem to specialize in buying failed airlines and making them even worse.

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    3. I know one which became much better

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    4. OK, come back when Air Serbia with it's profit (even with government subsidies) will cover all the losses EY made with other great projects.

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    5. Why should JU care about the mess EY made in other airlines? JU getting back on track only goes to show the competence of the Serbian team in Belgrade. That's all.

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  7. 40-50 planes that would be awesome!! Any idea which planes they would get ?

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  8. I think competition at LJU will become bigger and bigger now. The management there is trying to attract new airlines so Adria will have to deal with this too. So making themselves more competitive and offering new services would be a positive development.

    ReplyDelete
    Replies
    1. We can talk about real competition if and when Ryanair comes.

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    2. JP has had a long time to adapt and work out a strategy for when LCCs come along to Ljubljana.

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    3. Hvali mladu pred udaju, ili propast?

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  9. Are there any new routes planned for the winter?

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    Replies
    1. I sure hope they announce Stockholm service next year again.

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  10. "the company's financial position is relatively normal" - relatively.

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    Replies
    1. Relatively speaking when compared to Air Zimbabwe.

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  11. They are going back to the strategy that worked for them during the 1990s and early 2000s.

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    Replies
    1. But can it work now?

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    2. So you are suggesting JP was profitable back then, if the strategy "worked for them"?

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    3. Its model was based on there being poor connectivity in the Balkans with few airlines flying to the region in the 90s and them offering connections via Ljubljana. With so many airlines now and a lot of low cost competition, I'm not sure it can work.

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    4. Yep. Most cities now have direct flights to the West, good LCC presence and people no longer need visas.

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    5. people that fly with Wizz have not seen an aircraft from inside in the 90s and 00s and believe me they dont know there are other existing airlines.

      problem with JP is that they are too expensive

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    6. That ship has sailed long ago. This part of Europe is getting very well connected every single year and people will no longer need to make transfers.

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    7. Turkish Airlines begs to differ.

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    8. Add Lufthansa, Austrian Airlines, Swiss and Lot to that list.

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    9. You are seriously comparing all those airlines with Adria? They all have long haul networks and 100+ destinations.

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  12. they clearly want now a fusion with OU. poz

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    Replies
    1. That would never work, talks would fail on day one when they couldn't agree where the HQ should be located (LJU vs ZAG).

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    2. Hahah, that is very correct.

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    3. Why not Novo Mesto, halfway between :)

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    4. Because it is still Slovenia

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    5. The HQ could be an aircraft carrier in the Bay of Piran if they would ever agree which half is in Slovenia and which in Croatia. Totally unimportant, as in fact both JP and OU are serving the same HQ in Cologne.

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    6. +1000000
      Danke Deutschland LOL

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    7. Ja mislim da na Sv. Geroj odn. Trdinovom Vrhu, ali ideja s Piranskim zaljevom je također dobra.

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  13. ,, the company is currently in normal financial condition’’ i guess they won’t go bancrupt..

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  14. completly do not get what are they aiming at?

    1. connect west balkans with eu??? like BG and ZAG, biggest airports that are not prone to extreme seasonality, are not having good collections already, with JU throwing everything it has on this new expansion.
    also the distances are too small, it is not like they are tying continents together

    2. as for domestic market, large majoritiy of slovenians are spending their holidays in croatia, which is a couple of hours drive, not so much diaspora, small population to begin with... so you end up with probably small domestic potential. and again distances could be to small

    3. 40 - 50 aircraft? that's like JU + OU + YM. for which passengers? the competition is already stiff, markets saturated...

    this will be fun

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  15. come on just launch SKP-FRA on behalf of LH for once ...

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  16. If BEG has regional leader ambitions, then why not LJU which is in the northern Balkans and more geographically connected to Europe? Flights will take up to maximum 2 hours everywhere. When LJU gets a terminal by 2021 then JP can launch long-haul flights too.

    ReplyDelete
    Replies
    1. They can’t even pay fuel, airport fees and EU261 claims.

      And you think they can lease and fuel a long-haul aircraft...

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  17. JP must seriously consider OTP, LIS and BCN/MAD.

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    Replies
    1. Agree about OTP. Both Croatia Airlines and Air Serbia seem to be doing well on this route and have a lot of transfers, which is something Adria seems to be after.

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    2. I still think that Adria should fly also to Riga which is huge hub in Baltics. I am sure that with codeshare with airBaltic this would be busy route.

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    3. OTP su probali već dvaput. Prvi put prije skoro točno 10g i drugi put godinu dana natrag. Oba puta propali

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  18. Nothing has changed dramatically since Adria was state owned. The biggest breakthrough was the shortening of connecting times in LJU. Oh, and the introduction of free cup of water.

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  19. They need to grow in order to remain relevant in Slovenia.

    ReplyDelete
    Replies
    1. They have a share of over 50% as is at LJU, so they will remain relevant for years to come, growth or no growth.

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  20. They just tried this model last year and launched KBP, BWK, DBV, SOF and a bunch of other transfer routes and we have seen the result. What has fundamentally changed in 365 days at Adria for it to work this time around?

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  21. I just hope any future expansion is viable unlike last time.

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  22. All this interview shows to me is that the previous managers (who still seem to have managerial positions) made a massive mess. So when they realized how big of a mess they made they hired this guy as an adviser. 4K, perhaps you should have hired an adviser from the start knowing full well your managers have no clue about aviation and had already run one airline into the ground.

    ReplyDelete
    Replies
    1. +100
      So far, it looked to me as if they didn't have much idea what are they doing.

      Delete
  23. Happy they are reinforcing Ljubljana as a hub. I think it's a good strategy and Slovenian travelers will benefit too.

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  24. "Slovenia was and is the richest region in the former Yugoslavia, and there is already great demand for it in the area."

    True. But it is also the smallest market in ex-Yu.

    ReplyDelete
    Replies
    1. Actually, that would be Montenegro and/or Kosovo.

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    2. No, Montenegro has more passengers per year than Slovenia. Same with Kosovo. Montenegro is actually the third biggest market in ex-YU based on passenger numbers in 2018 with 2,454,524 pax.

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    3. I'm talking about the population of a country.

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    4. Well Kosovo as a 'country' doesn't have that much demand, what drives demand is diaspora.

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  25. Only two questions with JP: how much do they owe to Petrol and Fraport, and when will they pull the plug?

    Everything else is a pony show for the public.

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    Replies
    1. Why Petrol is still "giving" them the fuel? I can't get this business right. In this case where the profit for Petrol is coming from? Something we don't know? Regarding Fraport: I guess they already know their money is gone but OK they are still flying to Ljubljana so it's OK.

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    2. The answer is a lot and never. Well, not before somebody else does it anyway.

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  26. This will once again turn out to be unprofitable.

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  27. I'm also a skeptic. Balkans already have good connections with western Europe, with a lot of cheap flights. Why would people choose to fly via Ljubljana for the same price and service?

    ReplyDelete
  28. So this guy made Estonian Air or Nordica or whoever an airline with 50+ planes and TLL a hub because Estonia was and is the richest of the Baltic states and now he will do the same with Adria and Ljubljana. How cute!

    ReplyDelete
  29. I hope he succeeds whatever his strategy might be and that we are able to celebrate Adria's 60th in 2021.

    ReplyDelete
    Replies
    1. Because celebrating 60 years of Adria is what counts.

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    2. Adria is the second, oldest airline in ex-Yu after JU. It has a reason to be proud about it.

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    3. With this track record lately, they don't have much to be proud about.

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    4. Nah, all those are temporary organisational issues. JP will be back on track by the autumn of 2021 at latest.

      Delete
  30. Oh no, not again. Not another boy genius. After Dr. Arno, we now have Dr. Sven. 4K, why are you desperately trying to destroy AA? Please, get someone with REAL aviation experience. Not this arogant buffoon.

    ReplyDelete
    Replies
    1. He wanted to be airline CEO as a kid, now he needs to convince investors to let him burn their money. Nordica model didn't work, so he won't go that way. Getting free SSJs didn't work either. Taking a rational approach to make cuts, streamline operations and turn profit is clearly not on his agenda. So here's what he will do: convince investors to follow airBaltic-like vision of lean regional airline by ordering, say 20 firm + 20 options for a new regional aircraft (E2, MRJ, A220) and purging existing fleet as new aircraft trickle in. Adria will sink much deeper in debt but the future he presents will look bright, so at that point he will get state or another large investor to take over.

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    2. To be honest, that doesn't sound too bad. However, I don't believe he'll find a gullible investor.

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    3. Oduvek je zeleo da bude kapetan ladje. To je samo kopiranje Laneta Gutovica.

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  31. This is a wonderful leisure reading item... He is 31, not enough experience no matter how much he knows or thinks he knows. Experience is a must and age does matter here. Also "In the long-run the airline must have forty to fifty aircraft in order to be sustainable." Is that a queue for fairy tale music? My dear child, let the grownups do the business. Oh God, aviation is becoming a real mess with kids into planes taking over the business.

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  32. I agree. The saddest thing is, as am employee you have no saying in the matter.

    ReplyDelete
    Replies
    1. Why would you? You don’t own any part of the company.

      It’s not 1970s Yugoslavia anymore.

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    2. As much as we’re all nostalgic about the great Yugoslavia we need to move on from that era. The ex YU business model needs to modernise from that.

      Delete
    3. @Anonymous28 May 2019 at 02:22:
      Err, I don't know. Maybe so I could keep my job?! No, It's not Yugoslavia, however it isn't a kindergarten, either. The guy doesn't have a clue.

      Delete
    4. Well, if Adria would operate by principles of the free market, everybody would be out of job at least a decade or two ago.

      I'd count myself lucky, if I were you.

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    5. @Anonymous28 May 2019 at 10:07:
      Actually, I won't. It's not my fault the company is run by lazy imbeciles. All I know is, I work very hard. I wonder what kind of company you are working for. Sure hope it's not public sector :).

      Delete
    6. Yugoslavia Yugoslavia... so got, everything for free... best country .... but where is now??? We still paying great Yugoslavia debt...

      Delete
    7. Anon 10:46: I don't work for the public sector fortunately.

      You always have an opportunity to work somewhere else. EU passport, plenty of airlines around EU.

      Delete
    8. Been there, done that. Can you say the same? If not, be a smartass somewhere else.

      Delete
  33. Age shouldn’t matter. If he has proven credentials then why not give him a go, he’ll be under a watchful eye for sure. He sounds ambitious but Europe is a tough market for hub creation. Good luck I’ll watch with interest.

    ReplyDelete
    Replies
    1. I beg to disagree. In business where experience is of vital importance, it most certainly does matter. A PhD won't do him any good.

      Delete

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