An invitation to bid for 91.58% of the state-owned Adria Airways has attracted several parties interested in the Slovenian flag carrier who hope to have new owners in a matter of months. The airline has though been here before three years ago when an ultimately aborted sale process failed to secure a purchaser, resulting in ongoing bailouts from the state and the need for Adria to secure a bridging loan prior to selling and leasing back several of its aircraft. The process having now gone full circle sees Adria in desperate need of liquidity, especially during the traditionally fallow autumn and winter months that heavily dictate annual financial performance.

The Reichenschwand-based Intro Aviation first showed an interest in Adria in 2012 and despite an unsuccessful bid for the Brnik-based airline have returned three years later with an offer that will presumably reflect the lack of tangible assets now at large within Adria’s portfolio. One wonders if Intro’s unsuccessful bid for a majority stake in Adria was substantially bigger than its tender three years later, now that the airline has less to materially offer other than its name, goodwill and confirmed timetable.

Specializing in turning around distressed companies prior to their resale, Intro in many ways seem an ideal fit for the many issues engulfing Adria but an organisation whose ethos is predicated on restructuring rather than growing a company over the medium to long term offers fewer guarantees when their aim is to once more place the airline on the market. This lack of stability and certainty for Adria’s beleaguered rank and file affords them little comfort – whilst not a synonym for redundancy and streamlining restructuring is normally regarded euphemistically as bearing those meanings. Intro do have a solid track record of reversing the fortunes of failing airlines although in many cases their new acquisitions were starting from a very low base. It is unclear to aviation observers if the criteria for successfully bidding for Adria is based upon the highest offer being victorious or one from a enterprise best suited to the interests of moving the airline forward.

The sale process has seen the airline touted on the world stage – whether this is the pursuit of adhering to best practice in the search for a suitable buyer or a desperate attempt to hawk Adria and expeditiously remove it from state-ownership is open to interpretation. I feel the former is the most likely, even though the latter isn’t beyond the realms of all possibility. The noncommittal generic speak emanating from Adria’s bosses provide few clues to the value of bids and the timescale to which the sale procedure will follow is understandable, considering the same process undertaken three years ago came to nothing. All the while Adria will lose value. potentially invalidating bids which are based on its current asset portfolio, should it seek to secure further loans and sell property to prop up the business through the winter period. Whilst passenger numbers on its charter and scheduled services have seen significant increases during the summer season it will nevertheless be the next three months which determine how successful 2015 has been for the airline, underlining the precarious conditions it operates under.

Further reading on this subject can be found at:

Ex Yugoslav Aviation: Intro Aviation interested in Adria Airways