The Slovenia Times

Adria Airways With EUR 11M Net Loss


After finishing 2011 over EUR 12m in the red, the flag carrier planned to reduce the figure to EUR 7.5m as part of restructuring last year.

However, the situation in the aviation industry further deteriorated in 2012, acting CEO Mark Anžur told Tuesday's press conference in Brnik.

The world aviation industry generated EUR 5.8bn in profit last year, down from EUR 6.8bn in 2011.

He pointed to the connection between the global gross domestic product (GDP) and the performance of the aviation industry. If GDP growth falls below 2%, the aviation industry posts a loss.

This year, the global GDP is to rise faster than last year, oil prices are expected to go down and the profitability should go up, he added.

Adria Airways recorded higher costs of the fleet than planned last year, was unable to sell off as many planes as it planned to, labour costs were higher than planned and so were the costs of restructuring.

The company was also affected by the strong dollar currency and consequently costlier fuel.

Adria Airways's total revenue decreased by 6% to EUR 150.3m in 2012, compared to 2011, but the average income per passenger rose by 16.2% to EUR 134.13.

Operating loss decreased by 46.9% to EUR 8.1m year-on-year, and the company's liabilities to banks were up by 6.7% to EUR 39.4m.

Adria Airways transported a total of 987,279 passengers in 2012, which is 15.1% less than a year earlier. Seat occupancy rate meanwhile rose from 63.1% to 69%.

Between May and December 2012 gross operating profit was up by EUR 10m compared to the same period in 2011.

Adria Airways will in the future strive to get the passengers who have so far opted for any of the other airports in the region, especially Italy's Venice, back to Brnik. To achieve this, the company has already started offering better quality and cheaper products last year, Anžur said.

Due to the financial problems of the flag carrier, the state carried out several capital increases in the past, most recently in September 2011, when bank creditors converted EUR 19.7m in claims into shares, while the state provided for EUR 50m in fresh capital.

Currently, the state's direct share stands at 69.86% and the state-owned NLB bank's at 19.62%. Abanka Vipa holds 4.73% of the company, while Hypo Alpe Adria Bank has a 1.80% stake and Unicredit banka Slovenije follows with 1.76%. The state-run PD restructuring fund holds 2.07%.

At the moment, the state, PDP and banks are selling their combined 74.87% stake, but Anžur would not comment on the process of the sale today.

He though said that the management offered all the necessary data on the company in the process of privatisation, while the rest was up to the owners.

While expressing conviction that Adria Airways was capable of getting a strategic partner, he said it could also survive without one.


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