The Adria affect

Tough times for Adria

Over the weekend Adria Airways revealed it will cut high profile destinations such as Istanbul, Paris, London and Warsaw. It will also shed a part of its fleet and workforce. The airline’s management yesterday said that Adria’s survival is vital for the Slovenian economy and its demise would cause a domino effect across the country. A foreign financial advisor estimated that some 3.000 jobs would be affected if Adria were to file for bankruptcy, despite the fact that the Slovenian national carrier employs only 450 people. The airline’s CEO, Klemen Boštjančič, says that Adria’s bankruptcy would cause a crisis in the Slovenian tourism sector. "Even today, one of the main problems in Slovenia is that it has relatively weak air links", he explained. "If you need five hours from one European capital to come to Slovenia, it is quite unattractive for business". Boštančič also warned that Adria’s demise would heavily impact Ljubljana Airport as well as Slovenian Air Traffic Control.

Adria Airways is in serious financial trouble. The airline is in debt of up to 100 million Euros and is waiting for the European Commission to approve a state injection of 50 million Euros. Furthermore, it is also seeking a further 40 million Euros from the banks. Boštjančič says that Adria should find a strategic partner after the restructuring process is completed. He believes the Slovenia as a market wouldn’t be too attractive to a future partner, rather, the airline’s strong regional and South East European network.

Adria currently operates a fleet of 14 aircraft. This summer the airline leased 2 Airbus A320s for a 12 month period despite needing to rationalise its fleet. Other than Ljubljana, it also has a base in Priština and was considering opening a base in Skopje, however, its financial woes put an end to those plans.