Strapped for cash, Adria Airways suspends operations
"The decision to suspend aircraft operations is the consequence of the current lack of access to fresh money that the carrier needs to continue operations," the company said in a press release late on Monday, prompting speculation about a looming bankruptcy.
Although the carrier has been beset by delays and cancellations for months, media reports suggested the decision to suspend operations from Adria's bases in Ljubljana, Prishtina and Tirana followed the expiry of Adria officials' ultimatum to the government to provide a EUR 4 million loan guarantee.
The decision affected all routes linking Slovenia's capital with Amsterdam, Brussels, Copenhagen, Manchester, Munich, Paris, Podgorica, Praga, Prishtina, Sarajevo, Skopje, Sofia, Tirana, Vienna and Zurich. However, Adria did say it would fly out to Frankfurt on Tuesday and back on Wednesday.
Flight cancellations caused a lot of frustration for passengers at Ljubljana Jože Pučnik Airport, especially among foreign visitors, many of whom did not learn about their flights being cancelled until after they had arrived at the airport.
The cancellations prompted the Polish government to dispatch its own jet to get the Polish volleyball team from the Netherlands, where they beat Germany in the quarter-finals of the Eurovolley, to Ljubljana to play Slovenia in the semis on Thursday.
Ljubljana airport operator Fraport Slovenija said it was helping passengers that had arrived at the airport for the morning flights - the suspension was announced just before midnight - and had arranged transport from the airport for them.
It is not clear how many passengers have been affected because Adria has kept communications with the media to a minimum. But the figure is likely substantial, as the suspension also affected airlines for which Adria operated flights on a contractual basis.
More details are expected tomorrow as the Civil Aviation Agency conducts a hearing in a procedure concerning the airline's operating licence. The agency's director Rok Marolt said they were closely monitoring the situation at the carrier.
Adria's woes are already affecting hoteliers, who are due to meet Ljubljana tourism officials and companies providing shuttle bus links between Ljubljana and other airports tomorrow in a bid to find solutions.
Concern over flight cancellations has also been expressed by businesses, with fears that increasing numbers of passengers will be travelling abroad from foreign airports. They urged the government to find alternative solutions.
"Tourism has already suffered major economic damage due to a low volume of lines operated by the domestic flag carrier, and in the future our wings will actually be clipped," the Slovenian Tourism Board said, urging the government to save Adria.
An appeal for a government bailout also came from Adria pilots, whose union said that the state was responsible for the situation because it sold the company "to incompetent owners" so they "expect the state will assist in the resolution of the situation".
Having struggled for years, Adria was sold to 4K Invest for a mere EUR 100,000 in 2016. It received several state-sponsored capital injections between 2007 and 2011, including a EUR 50 million cash infusion in 2011 and a EUR 38.4 million debt-to-equity conversion the same year.
Economy Minister Zdravko Počivalšek ruled out investing any money into the company under the current owner, which he blamed for the situation, saying that the only thing that could save Adria was a well thought-out restructuring plan, agreed with the creditors.
"It's absolutely necessary to examine the routes, act fast, conduct financial restructuring, reach a deal with the creditors and tap on the potential of the staff so the company can start from scratch," the minister said, noting that Adria could not get state aid again.
A solution whereby the state would help Slovenia preserve its carrier, Adria's expertise of 60 years, and its staff, while not helping its current owner also appears to be favoured by political parties, with the Left proposing the company be taken over by employees.
Meanwhile, the Infrastructure Ministry has drawn up a bill that would allow the government to subsidise selected air links from Ljubljana, including to Brussels. The bill could be adopted as early as this week, and, providing clearance from the EU Commission, would take effect if Adria was grounded for good.
The carrier itself said it was busy looking for solutions together with a potential investor, but previous attempts to find a strategic partner failed or turned out to be merely preliminary talks with few if any prospects of succeeding.
The decision to temporarily suspend operations came less than a week after two of Adria's leased aircraft were repossessed by their owner over unpaid debt. Media reports suggest Adria owes up to EUR 60 million in debt.