As one of the fifteen companies endorsed in 2013 by the Slovenian parliament to be made available for privatisation, it will perhaps surprise many observers that Adria Airways have theoretically been on the market for several years. Furthermore, it is somewhat revelatory that only three of those fifteen publicly-owned assets have been snapped up by the private-sector, considering the prevailing wind in the Slovenian business-community is one of rapid transition, on a fire-sale scale never seen before in a country just twenty three years young.
As the national flag-carrier, Adria Airways have stagnated over the last few years, paring down its operating costs to remain viable but are far from unique in the aviation industry in doing so. Mark Anzur, the current CEO remains adamant that Adria can continue to remain a going concern without investment from the private sector but realistically, further growth of the airline remains unlikely without a significant injection of funds and a more aggressive business plan encompassing a variegation of routes, an increase in fleet size and the possibility of also using Maribor’s airport, recently acquired by the Slovenian savings bank, Delavska hranilnica. Adria’s plan for this year to break even may be thrown into jeopardy by Fraport, the majority-stakeholder of Ljubljana’s recently acquired Brnik airport, who plan to impose a large increase on the fees paid by airlines for the privilege of operating out of Slovenia’s capital, placing at risk planned new routes to Berlin and Stockholm. The posturing by Fraport might just be a negotiating jumping off point but keen to recoup their significant investment and grow Brnik’s potential, Adria can expect to see their fees increased by Fraport but hopefully less than the ten percent level widely reported in the media. It is clear though to industry observers that Adria cannot increase its fleet and roster of routes without outside help.
Critics of the privatisation process currently ongoing in Slovenia will with some justification point out that Slovenia is a tiny country with an airline of commensurate size and reach – any further growth could do more harm than good. It can also strenuously be argued that Adria is a national symbol of Slovenia and should be immune from falling into the hands of foreign investors although, Maribor airport has successfully proved there is a middle way by being acquired by a trade union backed savings bank, of strong Slovenian heritage. Its situation at the strategic crossroads between Western and Eastern Europe, as well as being a gateway hub for traffic accessing the up and coming markets of South Eastern Europe, Slovenia is perhaps a special case of having a greater influence in regional affairs than its size would normally warrant, This can only be of benefit to Adria Airways and Brnik, something Fraport have obviously been quick to realise, now owning over 97% of Brnik. I have fond memories of travelling on Adria flights from Manchester to Ljubljana and hope an appropriate strategic partner can be found, ensuring this proud airline’s best days are ahead of it and not, a thing of the past.
Additional reporting on this matter can be found at: