Adria Airways filed for bankruptcy and ceased operations yesterday. Slovenia, which refused to give Adria a lifeline, is now floating the idea of a new national airline to take its place.
The trouble really began three years ago when a German investment firm acquired Adria with the goal of turning the then state-run carrier profitable. But the new ownership had a tumultuous relationship with the Slovenian government and continued to lose money.
Last Tuesday, Adria “temporarily suspended” almost all of its flights. This was not just a strategic move, but by necessity…several aircraft in its fleet were repossessed by creditors.
Backed up against a wall, Adria operated only its Frankfurt flight before collapsing yesterday ahead of an October 2nd deadline to submit a reorganization plan (or risk losing its license to operate).
A New National Airline For Slovenia?
Slovenian Prime Minster Marjan Sarec defied expectations by steadfastly refusing to bailout Adria…at least under current ownership.
Sarec mused that “they would throw money away” if given another lifeline, also noting that legislation prevents such aid even if he wanted to grant it.
He mocked calls for a bailout, asking if Slovenia was a ”dairy cow, from which it is necessary to squeeze the last cent”.
Now Slovenia is looking into “setting up a new company” or “providing greater connectivity with other carriers”. Sarec added:
Although we expect difficulties, the aim is to maintain Slovenia’s connection with the world, especially for tourism.
While a new carrier is on the table (and the recent birth of Air Albania illustrates it is possible), I think the more likely outcome is that Lufthansa will beef up presence to Ljubljana (LJU) and budget carriers will fill in the rest of the void. Already, Slovenia is in talks with Lufthansa over potential route takeovers. Brussels Airlines, part of the Lufthansa group, has also announced new 6x weekly service between Brussels and Ljubljana starting next month.
As Sarec noted:
Crying won’t help us much. Adria was sold because it was in bad shape. It was screwed up long ago.
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