Adria could be grounded in 2011

Adria to follow in MAT’s footsteps?

A dramatic month at the Slovenian national carrier continues this week. After revealing that the company is tackling financial problems and facing potential bankruptcy, the Slovenian Government has said it will review the airline’s financial performance which could see the carrier’s operating license revoked, effectively grounding the airline. The news came after the Minister for Transport, Patrick Valičič, held talks with Adria’s management.

A financial body is set to review the airline’s performance, after which it will be decided whether Adria’s operating license will be revoked, extended by 12 months or left as it is. Adria’s demise would have great impact on the Slovenian economy and it is unlikely that the government would let the carrier go. However, with the Slovenian Government owning most of the airline and with strict European Union laws forbidding any sort of aid, the airline will quickly have to be privatised.

On Monday, the Adria’s management cut employee wages by 20%. The airline has accumulated losses of up to 86 million Euros in the past 10 years with banks no longer willing to extend the loan repayment period. The company is expected to end 2010 with a loss of between 8 and 9 million Euros, after a 14 million Euro loss in 2009. More alarming was a statement made by an Adria Airways spokesperson yeasterday, who gave out advice on the actions passengers should take if Adria goes bankrupt and they happen to have booked a seat on one of their flights, published by a local newspaper.