The Slovenia Times

Adria remains grounded, gets a week to present turnaround plan


The Civil Aviation Agency (CAA) said Wednesday it had given Adria until 2 October to present a restructuring plan that must be supported with signed lease contracts for aircraft and an air operator's certificate (AOC).

The ultimatum comes after the German-owned airline suspended almost all of its operations yesterday due to financial issues, with all companies leasing the aircraft to the company reportedly threatening with withdrawals.

The decision was made at an oral hearing at the agency's headquarters involving representatives of Adria Airways, including officers responsible for safety and the financial director.

If Adria fails to provide the requisite documentation in a week, it will no longer be permitted to operate commercial flights, and if it does, the CAA will make a quick decision about whether the proof is solid enough for the licence to be preserved.

CAA director Rok Marolt said the agency would no longer approve recapitalisations of Adria with "various merger manoeuvres, transfers of brands and similar. Even guarantees from a potential strategic partner would need to be solid."

Asked how much fresh capital Adria would need, he said that it was a "high amount of money, tens of millions of euro", adding that he would not comment on the 2018 annual report as it had not been published yet.

The carrier is insolvent under two criteria and the only remaining criteria it meets is that it has paid out a majority of outstanding wages to employees.

The CAA also ordered Adria today to formally ground two Bombardier CRJ 900 and three Airbus A319 aircraft based on requests from the companies which have leased them to the airline.

The company's AOC currently features only ten aircraft - six Bombardier CRJ 900s and four Saab 2000s, but Marolt revealed that the agency had already received requests from owners for removal of six aircraft from the certificate.

The agency extending the deadline to Adria was welcomed as positive news by Economy Minister Zdravko Počivalšek, who held a meeting today with representatives of the airline's staff.

He reiterated that the government was willing to help the company. "Adria needs a comprehensive ownership, financial and business restructuring, and we will be looking for solutions within this framework," he told the press.

Počivalšek said that Adria "definitely has an irresponsible owner, which has brought the situation in which it is being left without aircraft. We have very little time to resolve such a serious situation."

While the state has been ready to help salvage the flag carrier since early spring, the minister said the condition was a "clear and sustainable business plan ... showing that the company will operate on healthy foundations."

He admitted that options for state aid were very limited, as the ten-year period after the last recapitalisation is yet to pass next year. "What is more, the company is in private ownership, and the manoeuvring space is very narrow."

The government has therefore drafted a bill that would allow it to subsidise certain routes to preserve Slovenia's air links to major hub airports.

The carrier initially suspended operations for two days but it announced today that the suspension would be extended at least through Friday. It will operate only one flight to Frankfurt each day.


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