The Slovenia Times

Analyst warns time running out to establish new Adria Airways


While many in Slovenia are opposed to the idea, the Croatian analyst told the STA on Wednesday it was in strategic interest of the state.

It was the government who mentioned the possibility to establish a new airline, either in full state ownership or in cooperation with a strategic partner, as a way to secure connectivity between Slovenia and the rest of the world.

After the German-owned Adria Airways went bust in early October, the finance and economy ministries are still waiting for the Bank Assets Management Company (BAMC) to present calculations on the feasibility of establishing such a company.

According to unofficial information, Economy Minister Zdravko Počivalšek is practically the only one to promote the idea to establish such an airline, as the aviation circles have expressed doubt about the possibility to implement such a plan.

Asked to comment on what is going on with the plans, Prime Minister Marjan Šarec said that a decision was yet to be made, as experts were still "examining the matters". "If a company is to established in any form, it would not be possible without an external partner," he added.

Šarec also noted that the potential new airline would initially operate with a loss by default. "When final numbers are known, we will have to take a look and see whether we are prepared for going into it or not," he said, adding that airline business was very risky.

What is being questioned by experts is the ability of a Slovenian air carrier to compete with the established airlines which fly to Ljubljana's airport, with Adria's flights and connections being already almost fully replaced.

As the number is expected only to increase with the summer schedule, Šćuric is inclined to the idea to establish a national carrier, noting this is in Slovenia's strategic interest.

The needed financial investment is huge, but he believes that the matter should not be looked at from a short-term perspective, as airline transport services all the other sectors of the economy and brings benefits not only to tourism and the hospitality sector.

As an example, Šćuric pointed to business guests who could be distracted from coming to Slovenia by the expected longer times of travel and higher costs related to the use of other airports.

He is surprised that the Slovenian government had "no action plan", although it had been clear that Adria would end up in receivership, and he believes that the government should have established a "new company the day after the receivership".

Such a company would preserve its status in the global Star Alliance and the International Air Transport Association, as well as slots, which are now under a question mark, according to Šćuric.

He believes that the plan to establish a new Slovenian airline in the next few months is "absolutely and totally unrealistic". The deadline until it would make sense to establish a new company is the summer of 2020.

Radio Slovenija has recently said that the new carrier would have five Canadair aircraft and 200 employees, and that a EUR 20 million loss was expected in the first year after incorporation.

BAMC has labelled the numbers as excessive and is advocating a "slimmer organisation", but it does admit that it would be hard for the company to function without making a loss, according to executive director Matej Pirc.


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