Mesa Airlines eyes Adria Airways stake


US regional carrier Mesa Airlines has been revealed as the mystery investor interested in acquiring a stake in Slovenia's Adria Airways. According to the "24ur" portal, the Americans have been screening Adria's business for almost a month. Mesa is expected to make a final decision on the potential acquisiton within a month or by the end of the summer, at the latest. In a statement, the Slovenian carrier said, "Thorough assessments and negotiations with potential investors are being carried out. At Adria, we are confident that a transaction will be successfully concluded". At a press conference last month, Adria noted it needed a strategic partner in order to maintain scheduled services but emphasised that its part-owner, 4K Invest, would stay on.

Mesa Airlines, a subsidiary of the Mesa Air Group, operates regional domestic flights on behalf of American Airlines and United Airlines under the American Eagle and United Express brands. It boasts a fleet of over 140 aircraft. Most of its planes are either Bombardier CRJ700 or CRJ900 jets, which also make up the bulk of Adria Airways' fleet. Mesa also operates a major Bombardier training facility in Phoenix. The Mesa Air Group has extensive experience in mergers and acquisitions, owning stakes in up to ten airlines at one point, prior to filing for Chapter 11 bankruptcy, from which it successfully emerged in 2011. All of its past acquisitions have been in the United States.

Adria Airways' CEO, Holger Kowarsch, suggested last month that larger European carriers will follow the example of their peers in the United States which utilise services of regional airlines on a significant number of routes. As a result, Mr Kowarsch hinted that Adria is likely to expand the scope of its ACMI business in the future. Regional carriers operating on behalf of larger companies are usually paid a fixed price for maintaining certain routes, with all the risk lying with the major airline. Furthermore, in some cases, major carriers will offer incentive payments to regional airlines for operating on-time flights without cancellations.




Comments

  1. So if they buy Adria my guess is the airline will keep around 10 scheduled routes from LJU and charters while for the rest they will fly ACMIs.

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    1. But what can Adria do? They have pretty much done everything they could. 10-15 years ago they relied on the entire Balkans to shuttle them to western Europe. Now all those countries have more airlines flying there than Ljubljana. I think they missed a huge opportunity in Macedonia where they should have set up a base. Now it's way too late with Wizz Air there. I think Adria probably has one of the best fleets out of all ex-Yu airlines, especially for low-yielding routes and let's face it the entire region is low yielding. But they also have a massive issue of having one of the smallest markets. I don't see what more they can do other than focus on ACMI business which brings them money.

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    2. Mali avioni nemaju sta da traze na trzistu i mora se prestati sa gubicima sa dnevnim letovima na svaku destinaciju. Wizz i FR i EJ to pokazuju.

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  2. What can they gain from buying JP?

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    1. Access to Europe to establish similar biz model here like they do home. Fleet harmony helps as well.

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    2. Huge debt and several dry lease contracts. Sounds like a great deal from 4K's point of view :)))

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    3. Yes that makes sense JU520 but I wonder would JP keep scheduled flights too.

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    4. They will probably keep the basics.

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  3. This could make sense. Lets see...

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  4. Mesa wants to buy mess...

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  5. Looks like telenovela will end with the wedding.

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    1. Don't be so quick with the conclusion. Telenovelas are known for last minute twists ;)

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    2. You are right. I remember La Mujer de Judas, which ended with murder of Altagracia.

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  6. I wonder for how much money. I assume they will buy 49%.

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    1. First they have to decide whather they want to buy Adria.

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  7. Maybe they give JP some planes and provide them with some much needed crew.

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  8. Since they are a US investor the most they can get is 49%.

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    1. They can establish an EU subsidiary that will own the rest.
      MESA air group has thousands of shareholders from all over the world. I doubt even the majority of them are US citizens.

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    2. True that. Didn't cross my mind.

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    3. 4K said they would keep a stake too.

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    4. 4K shouldn't keep any stake at JP. They proven to be completely incompetent.

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  9. This could be the best solution for Adria.

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  10. Good luck JP!

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  11. Now all the statements from management about Slovenia being small, there being no market in Slovenia etc make sense. Under new partial owners they will probably primarily focus on contracting for other airlines.

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    1. Well that could result in more foreign airlines coming to Slovenia or even an LCC basing a plane in LJU.

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    2. @9.14 that and them talking about American model all of the sudden.

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    3. I just don't get that they realized that Slovenia is a small market with limited opportunities 3 years after they bought the company. I mean don't you study the market before you buy the airline, especially since the state appointed management used to say exactly the same thing.

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    4. Today u hve plenty of incompetent people. They hve degrees, they can talk, they can present but often they do not have a clue.

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    5. But it is true. Adria's problem is its catchment area. The country is small without any domestic traffic, and LJU is 1 hr driving distance to ZAG, where both no. of flights and passengers are doubled, hence better alternatives offered. TRS and VCE catchment areas are overlapping with LJU too, making life difficult for the base carrier. It would be wise not to try to compete in that squeezed region.

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    6. @ 9.15 I'm not so sure that LCCs will add more flights. Why haven't they added them when Adria is already struggling. Why isn't Wizz Air adding more flights in Ljubljana?

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    7. Anonym @1130h

      Same problem as JP. Too small market to fill A319 A320h. Works maybe for some dest such as LON AMS BRU but not for the rest. Vueling tried BCN bit did not work out

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    8. Vueling failed in 90% of the Eastern European destinations they tried from BCN.

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    9. @ 10:04 More like 2 hours when you counting border. Even more in the summer.

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  12. "Welcome to Black Mesa..."

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  13. They are still buying time.

    Pilots will announce a strike in two weeks, contractors are blocking the accounts daily, compensations for psgs are still not being paid, salaries are not on time etc.

    The reason you buy a high revenue company is so you can milk it for a very long period of time.

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    1. That doesn't sound good. I fear a strike could kill them.

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    2. LOL where did you hear that pilots will go on strike ? Hahah stop trolling !

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    3. +1. Just buying time before the inevitable.

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    4. salaries are being paid on time

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    5. Are you getting paid for spreading such nonsense?

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    6. Strike is set and confirmed for september!

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    7. Turkeys voting for Christmas.

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  14. Eskaliraju sa lazima

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    1. Jesu li iz Mesa opovrgnuli ovo?

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  15. Didn't see this one coming.

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  16. This could be the start of something beautiful :D

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  17. If it manages to resolve Adria's problems I hope it works out although like others I fear this would result in Adria becoming exclusively an ACMI airline.

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    Replies
    1. If it would make money and keeps people employed, there's nothing wrong with that.

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  18. Can't wait to see how this plays out.

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  19. This might just work.

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  20. So have we finally accepted that Lufthansa is not behind 4k? :D

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  21. Hopefully new owner will introduce major changes to the company, otherwise...

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    1. You need DEEP pockets to introduce changes of the magnitude that you are suggesting.

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    2. MESA group has deeper pockets than most European airlines.
      And most importantly is has expertise at running regional routes, controlling costs and having a profitable ACMI operation.
      That is exactly what JP needs.

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    3. MESA might have all of the things that you mention - especially expertise at running a similar type of business. HOWEVER, EU rules around effective control prohibit them from doing especially this ie. running the business. So all they can do is provide equity, aircraft and some management know-how. But they cannot assume management control of the business which in the end, if they don't have this, then I'm not sure how interesting such an investment might be, especially when you have incompetent people like 4K running the business

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  22. I wish Adria all the best. It's a brand worth preserving.

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    1. Adria is the first in ex-yu that sees what tough capitalism means in real. Being owned by a fund is the biggest challenge so far.

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  23. Investing in Adria-like airline in the 21st century is akin to investing in a horse stable at the beginning of the 20th century. A 12-year old can deduce that only low cost airlines (some, not all) and big airlines (which are directly and indirectly subsidised) will survive in the long run. The trend regarding medium/small size airlines is clear.

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  24. Adria proved that is a flexible company and I think that this is an advantage. Most probably new owners will seek for more opportunities all around Europe and sooner or later it will become a paneuropean airline. Has a good reputation, well known brand so who would kill this. Go Adria at least for next 50 years

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    1. Flexible... Why are they still pushing this "Balkan hub" then?

      Well known brand if you want to get your flight cancelled, do the Balkan bus ride in an aircraft and wait 1 year for compensation you mean.

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  25. https://3.bp.blogspot.com/-MzUf76X4U30/Vp4xa6c9xZI/AAAAAAAAVRU/0J7udiWK5lk/s1600/4k_logo-220-2.png
    :D

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    1. "we fix it" lol.

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    2. We fix it to be permanently broken...

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  26. Go Adria, good luck!

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  27. It really is a 'do or die' situation. Because if they don't raise money for the winter they will have to liquidate the airline and that would be bad for everyone involved.

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  28. Have a feeling they will arrange and announce the sale just before they release their catastrophic financial results for 2018.

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  29. Na kraju ce ostati od svih kompanija samo Montenegro.

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  30. Americans proved to be naive many times. Look how Yugoslavia sold them non-working space program. But their involvement could save Adria.

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  31. I'm surprised that despite all its problems Adria still manages to find an investor over and over again. Makes you wonder how Croatia Airlines, which is in better shape, can't.

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    1. Maybe because they don't want yo find an investor?

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  32. Great news for Adria and Slovenia!

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    1. How is it great news for Slovenia exactly?

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    2. The alternative is bankruptcy which is not good news for Slovenia.

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  33. It's a reputable company, so that's a positive development.

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    1. Hope they know what they are getting themselves into.

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    2. They are doing the screaming now so they know should they get themselves involved.

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    3. * Screening lol

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  34. Has Adria's operational performance stabilized finally?

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    1. Yes it has. No cancellations for a few days.

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  35. They have 20 CRJ700s and 64 CRJ900s :O

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    1. Mesa Airlines I mean.

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    2. Also 1 CRJ100 and 60 E175s

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    3. Actually they operate 145 aircraft in total! More than W6!

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    4. Impressive

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    5. Sure, but W6 has more seat-kilometer capacity available. Not to mention they are an airline, where as Mesa is literally just an ACMI regional operator for UA and AA.

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  36. Didn't expect they would be able to find a buyer. Will be interesting to see what happens..

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    1. They found a POTENTIAL investor. Nothing settled yet.

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  37. I think that this is just a fog. Mesa won't buy Adria.

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    1. We will see soon. Might certainly end up like with SCAC.

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  38. Mesa is not buying ANYTHING, until we don't here from Mesa this is simply hearsay.... Nevertheless, if Mesa is currently in a due diligence process with Adria, then they will quickly realize the value of this company, and that Adria on paper is debt ridden and pre-bankrupt. If 4K gives Adria to Mesa for 1 euro and Mesa takes on the debt, then maybe there's a chance, other than this is a fairy tale story.

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  39. Televisa presenta... hahahaha

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  40. Maybe it's time for Aero4m to start scheduled flights from LJU.

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    Replies
    1. Yes because the market is so big it needs two airlines.

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  41. Accordng to Siol.net, Mesa airlines walked away already... So the saga continues..

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    1. Yap:
      https://siol.net/posel-danes/novice/domnevni-resitelji-adrie-airways-ze-odkorakali-503265

      Like I wrote in the previous comment: it was just a show again, as the pilots will likely go on strike soon, the salaries are not coming on time, the accounts are blocked/unblocked/blocked again daily, contractors have started to pull the plug, CAA will be pressured to do something etc.

      It's OVER.

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    2. Do you have any proof for your statements?
      There are a lot of malicious comments everywhere and for everything.

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    3. Siol has some motive in all the junk they are throwing on adria. They spread rumors and whenever there is a point coming from adria they try their best to kill any positive sign coming from adria in fraction of seconds. In last few months if they cannot spread negativity on one topic directly they immediately timed a bigger negative news or rumor to kill that postive topic and timed it exactly. What does siol have in background to spend so much effort on adria

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    4. I'm not sure Siol has any motive, they are just doing for clicks. For looong time they had bunch of articles against ńĆeferin candidacy for UEFA president for example (I mean, hello, earth calling). They run alot of rummors and sometimes just hope something will stick. If you look at Adria articles, majority are written by the same 2,3 journalists.

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    5. @1438

      Excuse me - are you serious? SIOL is a news organization, not a PR company.

      And let me tell you something. It was clear from the very begining that 4K will pull JP to the abyss and none of the Slovenian media companies showed interest in that (not even SIOL), because the then government killed two birds with one stone: they appeased the EU with privatization and they didn't need to close down the company and fire all of those workers which would be terrible PR.

      So please, stop with this 'spreading of rumors, negative news' BS. JP is going bankrupt, if you can't see that, you either know nothing about aviation or you're employed there.

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    6. What I don't get is that if its true that Mesa is not interested, why is there no proof of this in the article? Why write an article in the morning saying the Mesa is interested and then rebut it in the afternoon? Did the information of them not being interested just come in today after the morning article? I find that highly unlikely. Siol does seem to hate state owned companies that were privatized; maybe because Siol is still state owned.

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    7. @1529

      They quote an anonimous source, probably someone from JP, who would be fired if identified. When they said the Sukhoi deal is off, you were also accusing them of 'spreading fake news'.

      Insofar as to why JP is creating this charade, it has been explained many times - the longer Adria is operational, the more money can be transfered to the 4K folks.

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    8. @1447

      Looks like you are employed by Siol or behind the motive to defame adria. LOL. I love your speed to attack any comment.

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    9. Adria has denied Siol report and says Americans have not walked away

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    10. @1949
      They also denied the news that Sukhoi walked away, just to issue a statement a day latter, that it was Sukhois fault.

      I honestly cannot understand you guys - OK, if you work for JP, then OK. But otherwise ...

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    11. Yes, i work for adria; also salaries haven't been late except once it was 1 day late.

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    12. Unfortunately, it's true. Messa walked away.

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    13. Anon at 08:20 ... what do you mean by salaries not being late? Part of gross salary, which go to retirement and health insurance funds, that is not the salary for you? Since they are constantly paid with 15 days delay or even more. And professional retirement fund, which is also part of gross salary for flight and cabin crew and mandated by the law in Slovenia, have not been paid from last October, which actually is a law violation. As wel as the fact that newcomers into the company after that date have not even been introduced into that system, which is also violation of the same law. My god, and you really think, that getting net salary is all, what company owes you?

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  42. Company that chronically lacked ambition. In 1991 they declered "we'll stay small mainly operating in Europe"..it's like McDonald's would say in those pioneer years "we'll sell only to the nearby local residents". They deserve to eat what they have cooked.

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  43. They should change their name to Alpia, press reset, and start over. ;-)

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  44. What a mess .
    I mean mesa .
    As in Mesa Airlines ...

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  45. we should see what happens, Adria def needs some help and cash. A few years ago should of set a base in Skopje and or Prishtina

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  46. Why invest in nearly bankrupt airline with no equity and no advantages when you can start a new one from the scratch? Indigo Partners didn't buy dying Malev - they started a new airline instead.

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