Slovenian government undecided over new carrier


The Slovenian government still hasn’t made a decision on whether to form a new flag carrier despite plans to do so by the end of November. The Slovenian Prime Minister, Marjan Šarec, said this week, “A decision is yet to be made as experts are still examining the matter. If a company is to be established in any shape or form, it will be impossible without a foreign partner. A potential new airline would initially operate with a loss. However, when we determine the exact numbers, we will have to decide whether we are prepared to go ahead and form a new carrier. The airline business is very risky”.

The Slovenian Minister for Economic Development and Technology, Zdravko Počivalšek, who has backed the creation of a new national airline since the collapse of Adria Airways in late September, is believed to be increasingly isolated in his pursuit to form a new flag carrier. Mr Počivalšek noted that talks with a regional carrier, as a potential part-owner in the company, have come “a long way”. “We are working on establishing a new company, a new Adria. The government has two options. One is to let the aviation market take its own course and the other is to try and re-establish a national airline in cooperation with a foreign strategic partner. I support the latter because I am convinced that Slovenia’s connectivity will never be as good without our own airline”, Mr Počivalšek said recently.

Earlier this month, the Slovenian state-owned Bank Assets Management Company (BAMC) drafted a business plan for the country’s potential new national airline. Under the proposal, the carrier would reportedly operate a fleet of five Bombardier aircraft and count some 200 employees. Based on the Assets Management Company’s calculations, the airline would record a twenty million euro loss in its first year of operations. Meanwhile, former Adria Airways employees received their August wages this week, after the Public Scholarship, Development, Disability and Maintenance Fund paid out 1.83 million euros. The Fund noted this was one of the biggest payoffs in the past few years covering workers’ insolvency rights. The next payment will be made in late December.




Comments

  1. The more time passes the less of a possibility there is to establish a flag carrier.

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  2. Pocivalsek should give up.

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    Replies
    1. Perhaps he feels guilty for the role he played in selecting 4K Invest and destroying Adria Airways.

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    2. I don't think such people have a conscience ;)

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    3. He should go. He has done enough harm. Completely incompetent

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  3. Other airlines have already taken over. Lufthansa is doing extremely well on its new routes into LJU. From what I hear they often have overbooking issues on this route. Hopefully next summer they upgrade capacity.

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    1. Yes there has been overbooking several times this week. They should deploy A320 in summer.

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    2. You can only dream about 320 in LJU, this A/C has double capacity of CR9. Adria was operating with 319 at least once per day with 319 and 2x with CR9. With such decrease in seats on FRA route, LH should have overbook on each flight!

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  4. The fact this process is taking so long would indicate to me that the "regional carrier" has backed out of these plans.

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    1. I'm still wondering which airline that is/was.

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    2. Probably some no name partner.

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  5. "Meanwhile, former Adria Airways employees received their August wages this week"

    Feel sorry for former Adria employees :(

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    Replies
    1. It's good that they have been paid at all. Not usually the case with bankrupt companies.

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    2. Didn't all former JP pilots already find jobs elsewhere?

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    3. Yes, vast majority of them did.

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    4. It makes me wonder who they would hire if they formed a new airline if Slovenian pilots are already contracted elsewhere.

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    5. Plenty of airlines went bust, so shouldn't be a problem.

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    6. Actually, it would be a huge problem. A startup airline with a CRJ fleet (useless rating in a company with uncertain future) and a non-commuting roster + unattractive pay. Adria had next to zero applications from direct entry captains when it was still hiring.

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    7. See, this is why Adria 2.0 will never be successful.

      Fleet should be selected based on the route network and estimated number of pax. Just because Adria operated CRJ for 2 decades and there are couple of pilots on the market with the rating doesn't make it the best aircraft for the job.

      Why couldn't Adria 2.0 offer commutable roster? 14/7 or 14/14 with decent money, and you'll get plenty of applicants, given Slovenia is in Europe and a nice place to love/work in. Lease ATR72 or Q400 instead of CRJ and spend difference in fuel on salaries, if needed.

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    8. I agree, however there was talk of 5 CRJ aircraft.

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    9. The employees should get paid for the work they did whether they found a new job or not. Them finding a new job should have zero impact getting their August (or September for that matter) salaries and "prispevki" (to anon 10:54)

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  6. Time is over. Where to fly? Those airlines here, wont disappear again. So u compete against LH LX SN SU AF TK? Forget it. Other destinations? Difficult for sustainable P2P traffic. For Balkans connections the JU network is good enough and helping to reach TIA SKP SKG SOF SJJ and TK even covers PRN.

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    1. LH group would be happy if national carrier covers routes like FRA/MUC/BRU/ZRH as they are only burning money for nothing. Before Adria was a feeder for their flights. SVO/IST is lost so its worthless to compete there, CDG could be replaced with CPH. For those 5 A/C there is more than enough potential to operate out of LJU.

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    2. What makes you think LH is burning money on LJU routes?

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    3. Before they were receiving revenue with 0 costs, now they have to spend money on their operation for very small market. And also check their prices, 250 eur for LJU-FRA-LJU, 600 eur to NYC. You can imagine low shares for LJU-FRA route with that kind of prices, there is no way to cover operation even with 150% LF.

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  7. This will not work.

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  8. Good idea. Most of what the minister said is true.

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    1. Then the minister should put his OWN money where his mouth is. Not mine and certainly not my grandmother's money who, by the way, has been waiting for over 2 years to have her knee operation despite working hard as a nurse in a hospital for all her life. When we have things like this hapenning, we certainly don't have public money to waste for an airline. Just my opinion obviously.

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    2. Completely agree with anon above. Millions of EUR have been burned already on Adria. No need for more cash to be spent this way.

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    3. This is what Adria fanboys don't understand. People value their health more than the 3 daily connections to FRA instead of 2.

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    4. Do you think that hospitals are making profit? They dont! Why don't we close them all and let market determine rather we need any of it, how many of them etc..

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    5. Health is more of a priority than having a national carrier and connections to every village in exyu.

      I though that was obvious.

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    6. Also health of Slovenian economy is very important and it's proven that good connections is crucial for economy of the state. With more than 100.000 less passengers in only 3 months, what will be the loss of revenue due to that? Who will cover that loss? Next year they are gonna take that loss from seniors, healthcare institutions,...

      Both mr Plenkovic and ms Brnabic said that national carrier is very important for economy of the state. And they say that Slovenians are smart.

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    7. It would be naive to think people have stopped travelling to/from Slovenia just because they can't do it through LJU.

      Look at Slovakia. No national carrier, booming economy and BTS had 400k more pax last year than LJU and that's with VIE right at their doorstep.

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    8. I didn't say that they have stopped travelling but it is clear that there will be much less passengers in upcoming months and this already has effect on Slovenian economy.

      BTS is attractive to many LCC due to lower airport cost in comparison with VIE (huge market as AT is only one additional reason for LCC to place A/C in BTS). Do you think that LJU has same possibility to bring all those LCC in such small country as Slovenia? I don't think so...

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    9. Conectivity was bad enough even with JP on scene.

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  9. I hope the government realizes this is a waste of money and a pointless idea.

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    1. Exactly. No need to burn taxpayers money again.

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    2. All of the richest "Slovenians" have Maltese citizenship and companies registered in the UK. They could easily pull out some spare (bit?)coins and from a LCC company and lease planes in channel Islands. Establish flight between LJU - MLA , LJU - LCY and LJU - BRU. Since they live in Malta lobby in Brussels and collect cash in UK.

      Add attractive destinations could be the case to expand routes.

      Cashflow is key. Even LCCs need to convince providers of finance their business model is credible and durable and management has sufficient experience and ability to execute.

      If government gets involved cash will flow mostly from taxpayer's pockets.

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  10. Does the Slovenian public support this idea?

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  11. It's a very expensive idea with uncertain return.

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    1. If they have a foreign partner, expenses and risk would be shared.

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    2. Because it is so easy to find a foreign partner who is willing to burn millions just so couple of unemployable pilots, cabin crew and other people can have a job and politicians don't need to drive to SJJ.

      Major airlines are already lining up for such an amazing opportunity.

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  12. I don't think it is such a bad idea.

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  13. They should just spend the money to subsidise any missing routes. They can scale up or down or pull out at any time. It's like building a new cinema complex vs paying for Netflix subscription.

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  14. Why doesn't Slovenia just do what Macedonia did. Invest 2 million per year into Wizz Air to open a base and launch routes. It would be much more beneficial for the public.

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  15. Whatever they do it will be loss making, at least for the first couple of years.

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    1. And a couple of years after that too.

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  16. Too little too late. The government or employees should have thought of this a month before Adria went bankrupt as was the case with Nordica which started flying the following day after Estonian Air went bankrupt.

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    1. Agree. Other airline are already coming in to cover unserved routes.

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    2. And where/what is Nordica today? Not really a success story despite well prepared state plan.

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    3. Nordica today? People have their jobs, taxes are paid to Estonia's budget.

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  17. Hope it happens.

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  18. Adria's bankruptcy didn't catch anyone by surprise and everyone knew they would go bust. Why didn't the government act in time to secure Slovenia's connectivity?

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    1. Yeah, the government letting this happen with no back up plan is ... a massive blunder and that is an understatement. They were less than unprepared.

      This government is clearly incompetent. However, the alternative is much worse ...

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  19. It is beyond my understanding, why some people in Slovenia hold such hatred towards state owned airline. At the same time they LOVE Lufthansa, which is de-facto in large proportion state/public owned airline. And, they never oppose subsidies and helicopter money to companies like Renault, Magna, Pipistrel and so on and so on. It is cristal clear, that those people have NO idea whatsoever what national air carrier means strategically, they just see the money drainage. There are many examples of companies of simmilar size in STATE and PUBLIC ownership, which are doing just fine. We have seen this kind of neoliberal, far right mental pattern - they destroyed construction industry in Slovenia, just because of few rotten CEOs.

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    1. LH has offered tickets at lower prices and better service than JP. A year ago a weekend city break to BRU for a family could easily cost you 2500+ EUR with JP. And that's on top of all the tens of millions of EUR the same taxpayers have had to sunk into Adria in the past 10 years (not to mention before). Starting to see why people are not too eager to support government, when more money could be spent to improve public health services, etc.?

      Most of what is wrote is whataboutism. So if government wastes 500 million on failed projects, they should waste another 100m on Adria 2 rather than improving or getting rid of existing projects?

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    2. @notLufthansa: People tend to be pragmatists rather than ideologues. They ask, "What has Adria done for me?" For years the State spent their money propping up the airline, and in return, Slovenian travelers got high fares (that often led them to travel to other airports), LCC levels of service, and a carrier whose subsidized position reduced the level of competition at LJU. This led them to ask another, even more critical question: "Why should we keep paying for Adria?"

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  20. Since others are saying how everything has already been covered without Adria can anyone explain to me what exactly has been covered other than 4 routes operated by Lufthansa group?

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    1. What needed to be covered was connectivity is covered by LH Group.

      Loss-making routes for former CEOs to Balkan and PRN/TIA/SKP transfer via LJU isn't, as it wouldn't benefit Slovenians anyway.

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    2. You must be joking if you think that connectivity is covered now! For most conx flights out of FRA/MUC/BRU/ZRH now LH/SN/LX has to late arrival in EU hubs. There are plenty destinations which are not covered at all in the afternoon on those major airports.

      If Slovenia would be connected so well then why 80% of politicians are travelling out of ZAG?

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    3. ...or other airports.

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    4. Look at the schedule for SUTT 2020. Easy to catch the morning wave out of FRA. Would be nice if eventually LH adds MUC, but it's better than nothing.

      BRU was an EU/EP/EC/Ex route anyway, not for connections.

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    5. I saw that but I doubt that they will really place A/C in LJU and have much higher cost due to crew overnight. More or less it seems that they have just secured old slots in case that government decide to establish new carrier.

      True! BRU was for EU/EP/EC but only in the past. With this schedule they are only getting students and VFR onboard. Government is taking OU flights at 07:00 in ZAG with evening flight back to ZAG.

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    6. They do it in every other single European city?

      OTP, SOF, TSR, CLJ, SBZ, KRK, KTW, WRO,...

      All of these airports have early morning departures by LH to MUC and/or FRA. Why would LJU be an exception?

      Overnights are costs of business if you operate a hub model.

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    7. Why would they place A/C in LJU if they have morning departures already in TSR and ZAG which are actually less than 2 hours away? It doesn't make sense at all.

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  21. What about results of bidding for Adria? Seems they can't even organize simple procedure,
    but want to create successful an airline)

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