Adria falls on hard times

Eurocontrol trouble for Adria

According to sources close to Adria Airways, the Slovenian national carrier owes millions to Eurocontrol, the European Organization for the Safety of Air Navigation, responsible for the management of air traffic across Europe. The airline has failed to make payments to the European body for months despite numerous warnings. MAT Macedonian Airlines, the now defunct national carrier of Macedonia, had similar problems prior to its demise and was forced to suspend certain routes as a result of its late payments.

However, Adria will soon receive government aid to the tune of 6.1 million Euros. Since the European Union forbids direct government assistance, the Ministry of Economy has proposed for the Slovenian Government to issue loan guarantees to banks. The European Commission has allowed for such arrangements to be made. The Ministry further concluded that Adria Airways is a company with a high bankruptcy risk but that its demise would have serious negative consequences in the region. Furthermore, the Ministry believes that Adria has the basis for recovery and restructuring.

The cash strapped carrier recently announced it would be slashing employee wages by 20% and cutting down on its workforce. In the first quarter of 2011 the airline carried 218.384 passengers, a small passenger increase of only 2% compared to the same period last year. April is set to see double digit growth for Adria as this time last year the airline was first forced to cut down on services due to runway work at Ljubljana Airport and then had to deal with air space closure due to the volcanic ash cloud from Iceland.