Slovenia mulls three options to boost air connectivity


The Slovenian government is considering three different strategies in a bid to boost the country’s air connectivity which has been affected by the collapse of Adria Airways in September 2019 and the ongoing coronavirus pandemic. According to the daily “Delo”, these include the establishment of a new national carrier, a partnership with a foreign airline which would base its aircraft in Ljubljana and hire Slovenian crew members, as well as subsidies for foreign airlines, which the government has already adopted and put into action. The creation of a new national carrier is currently the most expensive option, but is likely to quickly improve the situation on the market, while subsidising foreign airlines requires the least funding, although the government has decreased the original budget set aside for this measure. 

The government is considering allocating 76 million euros for a new national carrier as part of its Recovery and Resilience Plan, which needs to be submitted to the European Union for approval, as the block will be providing 1.6 billion euros in grants and 3.6 billion euros in repayable funds. According to Slovenian media, initial reactions from the European Commission towards the entire draft proposal last month have been negative as some of the planned investments are considered inconsistent with EU guidelines. The Commission recently noted it was looking forward to further dialogue with the Slovenian authorities with the aim of making the best possible use of the funds to support economic recovery, in line with the European Union's priorities. If the government chooses to provide funds for a new airline, and it receives the EU’s approval, it would likely do so jointly with a private partner. 

Ljubljana Airport has said it is in talks with a carrier to base an aircraft in Ljubljana and hire Slovenian crew. It noted this strategy was more sensible and financially viable than the potential set-up of a new national carrier. The airport’s General manager, Zmago Skobir, noted last week, “Talks are underway on this, but there are several possible models of collaboration, which are a matter of assessments, business plans and risk sharing. The concept involves a reputable foreign carrier that could operate with Slovenian crew and perhaps also in our colours”. 

The government’s last option is to continue providing subsidies to foreign carriers to maintain flights to Ljubljana. This measure has already been implemented, with another two rounds of subsidies to follow next year. However, the budget for these incentives has been slashed compared to the initial total of five million euros. In the first round of funding, awarded last month, eight airlines shared among them 985.320 euros, instead of the initially planned 1.5 million. Although another 3.5 million euros were planned for the remaining two rounds, the government has recently said just one million euros would be provided.


Comments

  1. Anonymous09:01

    In the end they will just subsidize foreign carriers and that will be it. No new airline and no base in LJU.

    ReplyDelete
    Replies
    1. Anonymous09:03

      That will do little to improving Slovenia's connectivity.

      Delete
    2. Anonymous09:09

      Doesn't matter, it's the most realistic outcome.

      Delete
    3. Anonymous09:10

      And even for that they reduced funding.

      Delete
    4. Anonymous09:16

      It's not just Slovenian aviation that has collapsed, there is also the economy which suffered greatly from the China virus pandemic and endless lockdowns. Government lives from taxes it collects and this year there were much less of it.

      Delete
    5. Anonymous09:17

      The government was considering complete border closure the other day. Thankfully they didn't.

      Delete
  2. Anonymous09:02

    And Air Slovenia is the best option

    ReplyDelete
    Replies
    1. Anonymous09:05

      It is the only option that would be of some use. Not just for connectivity but for the overall economy.

      Delete
  3. Anonymous09:05

    Anyone have an idea which way they are heading towards?

    ReplyDelete
    Replies
    1. Anonymous09:18

      There are different interests by different people in government.

      Delete
  4. Anonymous09:09

    Germans will again decide about Slovenia's national airline, like they decided about Adria.

    ReplyDelete
    Replies
    1. Anonymous09:10

      Unless LH and its almost bankrupt daughter companies can get aid from Slovenian taxpayers like Swiss did.

      Delete
  5. Anonymous09:10

    Just give some money to Solinair and let them set up an airline as they planned.

    ReplyDelete
  6. Anonymous09:20

    Only thing that's certain is that after more than a year since JP died the government still doesn't know what to do.

    ReplyDelete
    Replies
    1. Anonymous09:21

      And that the market didn't take care of itself.

      Delete
    2. Anonymous09:26

      I'm so glad there wasn't a global pandemic that decimated the aviation worldwide, so we can easily and clearly compare the 2019 and 2020 numbers.

      Delete
    3. Anonymous09:26

      Issue is that the market did fine after JP but only because it was a period of unprecedented growth and prosperity for airlines around the world. Now we have to see how many rush to resume LJU when profits and demand are much lower.

      Delete
    4. Anonymous09:29

      Market didn't do fine after JP went bust. Even if everything was perfect, capacity at LJU would have been down almost 50% this summer.

      Delete
    5. Anonymous10:08

      @Anon 09:29: If so many of Adria's routes were profitable, somebody else would step in and start flying them.

      Delete
    6. Anonymous10:12

      It's not always about being profitable but what connectivity can bring to national economy. We are investing money in a billion projects which are not profitable but we know that this will bring something to economy/clean world/healthcare/etc etc..
      Slovenia needs its own carrier!

      Delete
    7. Anonymous11:59

      Agree with @9.21. So much for people's predictions how the market would take care of itself and LCCs would jump in to take over.

      Delete
    8. Anonymous12:03

      If it were not for covid people would have a greater choice in terms of airlines and more competitive pricing now that Adria is gone.

      Delete
    9. Anonymous12:19

      @anon 12:03

      we saw what happened with prices and choice of flights after JP demise. Prices went up, not to lose words about connectivity...

      Delete
    10. Anonymous12:35

      Not a single destination east of Ljubljana was compensated after JP's demise. So much for the market taking care of itself.

      Delete
    11. Anonymous15:35

      Because they were not profitable, that's why.

      Delete
    12. Anonymous22:37

      Oh really, so what about west destinations which were mostly all profitable. We got once flight to ZRH/BRU/MUC and even that in middle of the day so 90% of Slovenians had to use flights from ZAG. We were waiting for morning FRA for 6 months and their latest outbound flights was at 4 pm. Which means that businessman could go to LJU for a meeting and return in same day. So even west destination schedule was complete crap!

      Delete
  7. Anonymous09:24

    Ljubljana has now been overtaken by all capital cities in ex-Yu. Better act fast.

    ReplyDelete
    Replies
    1. Anonymous09:25

      ALL airports ALL over the world have been hit by steep passenger decline. And things won't be getting back to 2019 levels anytime soon.

      Delete
    2. Anonymous09:26

      Anon 9:25 some more some less. And LJU was hit the most

      Delete
    3. Anonymous09:26

      True, but despite steep passenger decline, almost everyone surpassed Ljubljana.

      Delete
  8. Anonymous09:28

    The Slovenian government said that money for the airline would be given in some form of a loan. So the money would be paid back eventually.

    ReplyDelete
    Replies
    1. Anonymous09:30

      Good luck with that.

      Delete
    2. Anonymous09:48

      Well the EU recovery plan is supposed to be used as an investment so I see no issue.

      Delete
    3. Anonymous09:50

      Yes, but a sustainable investment. A state run flag carrier isn't.

      Delete
    4. Anonymous10:13

      @anon 09:50

      New Alitalia wish you all the best in 2021!

      Delete
    5. Anonymous10:23

      Two wrongs don't make it right.

      Delete
    6. Anonymous10:39

      The funny thing is that this is actually not wrong..

      Delete
    7. Anonymous12:04

      "So the money would be paid back eventually."

      Hahaha, good one.

      Delete
  9. Anonymous09:30

    If they were going to create an airline they wouldn't have given money to foreign airlines.

    ReplyDelete
    Replies
    1. Anonymous09:30

      That's just a temporary measure. The fact that they decreased the funds is telling.

      Delete
    2. Anonymous09:33

      Its probably only for 2021, and when the national airline will be created the subsidies are gone

      Delete
  10. Anonymous09:33

    I see why the EU may not be keen in their money being spent on such a project.

    ReplyDelete
  11. Anonymous09:34

    I think a national airline could work if run by the right people. The tourism sector would definitely benefit.

    ReplyDelete
    Replies
    1. Anonymous10:01

      It would need to be someone with from abroad, with experience running a profitable airline and with no political connections.

      Anything else... forget it.

      Delete
    2. Anonymous13:04

      Can't remember, was 4K domestic or foreign?

      Delete
    3. Anonymous13:21

      Good one @anon 13:04 :)

      Delete
    4. Anonymous15:37

      JP was a basket case even before it was sold. The government just washed their hands and let somebody else close down the company.

      Delete
    5. Anonymous22:30

      And after JP demise we saw what was the effect not having this "basket"...

      Delete
  12. Anonymous09:34

    I don't see what's the problem. A new airline would create jobs, improve connectivity with Europe and the world, generate more tourists. Reason enough to set it up.

    ReplyDelete
  13. Anonymous09:35

    Good luck

    ReplyDelete
  14. Anonymous09:36

    All of this could have been avoided had they just helped Adria at the time.

    ReplyDelete
    Replies
    1. Anonymous09:39

      Only if the airline was restructured and its debts paid off.

      Delete
    2. Anonymous09:58

      It would also likely to be challenged by other airlines as illegal state aid.

      Delete
    3. Anonymous10:55

      Agree. The biggest mistake of the Slovenian government was that it did not buy back Adria just before the bankruptcy for peanuts and restructure it. The same minister as in the current government is responsible for these decisions. Once again, the fate of Slovenian aviation is decided by the same people.

      Delete
    4. Anonymous12:01

      @Anon 10:55: They could buy it for 1 EUR, but somebody would still have to pay off all those debts.

      Delete
    5. Anonymous12:11

      In fact, the government should have an alternative scenario ready, as Estonia had. On the day Adria stopped flying, we should already have a new carrier. Adria's bankruptcy was in the air for at least a year.

      Delete
    6. Anonymous15:46

      "Adria's bankruptcy was in the air for at least a year."

      I wonder why people stayed with the Titanic, job market was booming in 2018.

      Delete
    7. Anonymous22:29

      You can't really know that because you are not loyal to anyone. People at JP were connected, like they are in other carriers. For someone who did not get job at JP and now is against every progress of Slovenian aviation.

      Delete
  15. Anonymous09:40

    Creating a new airline in these sort of circumstances would be just crazy.

    ReplyDelete
    Replies
    1. Anonymous09:41

      Not the only airline to be established this year. Each week i see news about new airlines

      Delete
    2. Anonymous09:44

      They don't plan to set it up tomorrow. It will be next year.

      Delete
  16. One of the hypotheses that were circulating the industry circles for over a decade now is that there were, and there still are, too many airlines within the E.U. Airlines, especially the Ex Yu airlines were urged to find ways to cooperate if not somehow merge/consolidate, because they were all loosing money. In order to make themselves attractive to a potential buyer, the main problem then were incompatible fleets etc. You need large funds to set up and sustain an airlines in a already cluttered market. Especially now in times of low demand. The aviation will take 2 to 4 years to fully recover. With Adria out of the picture, there will be more business for OU, Austrian, Lufthansa, Air Serbia etc. I don't see how EC would approve funding a set up of a new airline. LJU is best of to have easyJet and/or Wizzair set up a base, open up to 10 popular tourist and business destinations (London, Paris, Brusseles, Athens, Madrid, Copenhagen). Those routes + Frankfurt, Munich by LH sounds plausible and feasible. VIE and VCE are all too near and have much better established networks. ZAG too.

    ReplyDelete
    Replies
    1. Anonymous10:04

      + 1000.

      And the most sensible comment is awarded to ^

      Delete
    2. Anonymous10:27

      I agree that airlines within EX-YU should cooperate more but I can't agree (neither normal person from Slovenia can) that we should suffer deficit of air connectivity so OU could have more business. Its good for OU and other carriers but Slovenians deserve better and weak connectivity will have huge impact to Slovenian economy. I also believe that Alitalia would not agree with your statement regarding EC approvals for new airlines, actually Italy is in process of establishing new Alitalia. Last but not least, we already saw how interested LCCs are for having flights to Slovenia. Of course I would agree not to have our own national carrier in order that foreign carrier place 5 aircrafts at LJU and start operating but we all know that this would cost much more than 5 mio € (which was the loss of Adria at time when they have more than 10 aircrafts).

      Delete
    3. Anonymous12:48

      Easyjet is downsizing (they just postponed the delivery of new aircraft to 2022) and Wizz just lost compass. Ryan can't be bothered with such a small market and Norwegian is on life support. Except some small, exotic LCC (perhaps Volotea), there is no chance for any of the "big ones" to set up a base in LJU.

      Delete
    4. @anonymous 10:27 - I agree with you. National carriers are vital in providing basic connectivity, a prerequisite for developing business. I was using the arguments to illustrate how challenging this would be, especially now. Alitalia is a national carrier to a country of 46 million people, the 4th largest economy in the E.U. Secondly, no carrier(s) would be able to fill in such a large loss of network. Slovenia's market is more easily absorbed, and Slovenia's political influence can't be compared to the one of Italy. That's a major difference. Slovenian government should have foreseen the negative processes stemming from Adria's demise.
      Not to sound mean (I personally like Slovenia and Slovenians), but Adria was always just a charter company. The only reason why it has temporarily managed to develop, was due to JAT's demise and Croatia's homeland war 1991-95. Adria seized the market opportunity and has positioned well during the 90s. It's a small country with low travel demand (comparatively speaking), that's all there is to it.

      Delete
    5. Anonymous13:17

      Italy has over 60m inhabitants.

      Delete
    6. Anonymous13:30

      Petar, if one airline is small that not necessarily mean that it does not contribute to state economy. Quite the opposite, we saw after JP demise how important role JP had in terms of connectivity of Slovenia and what brought that to our country. I actually don't understand what you mean with charter carrier as more than 80% of JP's passengers were actually from scheduled flights. If you mean charter carrier because it was small, then American Airilines could easily say for Air Serbia that's only charter carrier. It does not go in way, each airlines has very important role in their domestic environment and we have to respect that.

      Delete
    7. @anonymous 13:30 - I will try to illustrate this better. I will use a historical network setup to illustrate why I think it was challenging for Slovenia to sustain a national carrier in a long run.
      Adria based in Slovenia and Aviogenex (now Aviolet took this role) based in Serbia mostly did charters for decades in the Ex Yu. JAT was the legacy carrier which had its primary base in BEG, and a secondary base in ZAG. LJU also got a portion of direct flights by JAT, but this was little, as about 1/3. of Slovenians used ZAG for similar reasons they are using it nowdays as well. Even JAT has used Ljubljana-Zagreb train to merge these markets and make use of the same catchment area. All this has to do with the population size and economics of volume. This was like that all the way until 1991. Then the war broke out. ZAG was closed for 9 months and for another 3 or 4 years there were barely any airlines flying. Most of the flights were military flights. Many Croatians from the north have used LJU and Adria to get to places in Europe. ZAG was depended on OU slowly expanding its fleet and network - building it all from the scratch. The war had ended in 1995, with the east Slavonia region being re-integrated only in 1998 . It was not until the early 2000s that the croatian aviation started recovering and it has done thanks to a slow recovery of tourism. Just to illustrate, in 2004 ZAG had around 1,4 mil pax and LJU had around 1.2 mil. By roughly 2006-07, Croatia Airlines had restored the traditional ZAG routes served by JAT in the late 1980s. Ever since then, Adria has been struggling, because it got a competitor in its back yard. I am sure there were other reasons why Adria struggled too, but this is one the key reasons in my opinion. You have 2 x airlines serving the similar catchment area of 2 mil people.
      I am not saying that Slovenia does not need a national carrier - off course a national carrier is great, and off course it plays a very important role in a national economy, but it is an expensive sport - not just for countries like Slovenia and Croatia, but for countries with much bigger populations. Too many big fish in a small pond. If "new Adria" does get set up, I see it in a smaller form from what it was. Perhaps 3 to 4 aicraft, able to carry 70 to 110 pax (E-170 to E-195) serving 8 scheduled destinations in winter and 12 in the summer.

      Delete
    8. Anonymous22:26

      Thank you for your detailed report regarding history of aviation in our area. I am quite sure that you are aware that OU (or JU/YM) is struggling in the same way as JP did, if not even more. The only difference between JP and OU is that Croatia stood behind their carrier and our politicians did not. I also agree that for the start we don't need more than 5 aircrafts here for the start, later on who knows in which direction aviation will go...

      Delete
  17. Anonymous11:58

    The importance of Adria to the Slovenian market has been illustrated in the last year, despite what people say.

    ReplyDelete
  18. Anonymous11:59

    a new national airline is required.

    ReplyDelete
  19. Anonymous12:03

    One year on since Adria collapsed, barely anyone flies to Ljubljana.

    ReplyDelete
    Replies
    1. Anonymous12:06

      That's because of covid, not Adria.

      Delete
    2. Anonymous12:08

      There were not any sign of Covid between October and February and we saw had huge decrease. Even now LJU has less flights than many smaller cities in Ex-yu. Of course huge reason for that is due to Covid but with carrier based in LJU we could react much quicker to any business opportunities.

      Delete
    3. Anonymous18:53

      Are you serious? Adria went bust in September and you give the market no time to adapt? I know this is Christmas, but Santa and magic don't exist.

      Delete
  20. Anonymous12:04

    Corona or no corona, situation on the Slovenian market is poor. When you loose your airline, you also loose innovation and education in this sphere. The market is too small to support LCCs which fly with A320s/B737s. So we are destined for Lufthansa Group which has been so committed to Ljubljana that it currently operates a single route.

    ReplyDelete
    Replies
    1. Anonymous12:07

      +100

      Delete
    2. Anonymous12:09

      that is a price of destroying its own national carrier

      Delete
    3. Anonymous15:47

      The national carrier destroyed itself.

      Delete
    4. Anonymous22:21

      Actually it was destroyed by politicians..

      Delete
  21. Anonymous12:09

    Hopefully things get better in 2021 and we some sort of solution for LJU and Slovenian airline sector.

    ReplyDelete
    Replies
    1. Anonymous12:10

      Things could change quickly if new national airline is set up.

      Delete
    2. Anonymous12:11

      There will be no quick fix. Long and difficult years ahead.

      Delete
  22. Anonymous12:10

    Wouldn't be smarter to negotiate with someone like Wizz Air, Easyjet or Ryanair, which would launch numerous routes all at once?

    ReplyDelete
    Replies
    1. Anonymous12:14

      Slovenian market is very small, not easy to fill large aircraft, even at low ticket prices.

      Delete
    2. Anonymous14:24

      Well, I would also like to see intercontinental flights from LJU, which doesn't mean it makes any sense whatsoever.

      Like I already said before, perhaps only an exotic, small LCC would be interested in LJU. My money wouldn't be on Ryan, Wizz or Easy.

      Delete
  23. Anonymous12:12

    In the short term it won't be easy to replace capacity, that's for sure.

    ReplyDelete
  24. Anonymous12:52

    Herr Skobir is really pulling every trick out of his sleeve to get the funding from the government. "The concept involves a reputable foreign carrier that could operate with Slovenian crew and perhaps also in our colours.” - what is he smoking and can I have some?

    There is no way in hell that a foreign airline will employ new people when they have a surplus of their own. Even if the government heavily subsidies this mysterious, well renown airline. What a load of BS.

    ReplyDelete
    Replies
    1. Anonymous13:32

      Even if they do, those people will pay taxes in other country. Another loss for Slovenian economy.

      Is that one of his brilliant statements again?

      Delete
    2. Anonymous13:52

      I really don't understand why LJU management is so against new national airline, when they would be the ones benefiting the most. They would rather have subsidies for airlines when it has been shown numerous times that when you cut subsidies those airlines are gone.

      Delete
    3. Anonymous15:49

      Because they got burned from unprofitable Adria in the past?

      Delete
    4. Anonymous16:15

      Becouse of Adria they have money for new terminal, just saying

      Delete
    5. Anonymous16:20

      Other airlines can fly to LJU for free? I bet they at least pay their invoices on time.

      Delete
    6. Anonymous22:20

      I wonder if you (Fraport) will get enough revenue from all those parked planes on tarmac to your (Skobir) salary...It's seems after Adria you are getting better and better!

      Delete
    7. Anonymous12:20

      @16:20:

      They might as well be paying all their invoices on time but unfortunately for LJU airport, there are only a handful of invoices to be paid. :D

      Delete
  25. Anonymous13:37

    It's so funny when they say that establishment of new national carrier is most expensive option and that it's cheaper to have foreign airline base one aircraft in LJU but that's not even comparable. National carrier would have 5 aircrafts base in LJU and they are comparing costs to option where there is only 1 aircraft based in LJU. I would really like to see what would be the cost for Slovenian government if foreign carrier place 5 aircrafts at LJU. Then that would almost comparable. Almost because those employees would still pay taxes in other country..

    ReplyDelete
  26. Anonymous14:21

    According to the inside news, Solinair's calculation for the new national carrier show a yearly loss of some 10 million eur. According to them, the situation would be the same as with Adria. So the govenrment has to decide if they want to cover that loss every year or take a chance on a foreign carrier basing an aircraft in LJU (if that is even an option).

    Since I am a bit sceptical about the correctness (thoroughness) of Solinair's analysis, I would rather see a new national carrier, employing local people who are paying social contributions and taxes in Slovenia than a foreign carrier, operating with their own crews (as will be the case if anyone bases an aircraft in LJU). Besides, in the latter case the relationship between the airport and the carrier is more of a host/parasite (just take at look at how Ryanair is blackmailing small, uninteresting airports).

    ReplyDelete
    Replies
    1. Anonymous15:57

      According to the my inside news, Solinair's calculation for the new national carrier show a yearly loss of some 10 million EUR and they are willing to start with passenger traffic only if the government will be willing, able and allowed to pay the loss.

      Delete
    2. Anonymous19:11

      How is that different from what I said?

      Delete
  27. Anonymous17:54

    2nd option: "The concept involves a reputable foreign carrier"

    OK so that excludes Wizz, Ryan and all ExYu carriers?

    ReplyDelete

Post a comment

EX-YU Aviation News does not tolerate insults, excessive swearing, racist, homophobic or any other chauvinist remarks or provocative posts with the intention of creating further arguments. A full list of comment guidelines can be found here. Thank you for your cooperation.