Despite the tangible interest expressed in Slovenian flag-carrier Adria Airways there is little inside confidence that any of the bidders hail from the aviation sector, potentially leaving the airline at the mercy of hedge funds and businesses whose ethoses are predicated on restructuring distressed assets, a process that usually results in redundancies and the purchased company being put once more on the market.

One such enterprise who have been heavily linked with acquiring the majority stake of the state-owned airline are the German-based Intro Aviation. Whilst not being an airline themselves their recent acquisitions are deeply rooted in the aviation industry, many of which have been turned around and remarketed. Whether Adria can be rebooted to such an extent is debatable, especially now that it doesn’t own any of the jets it uses for its timetabled services. With virtually no assets and spiraling debts there is a real danger of flights being grounded should its largest creditor, Slovenia’s Air Traffic Control, refuse to grant permission for planes to leave or enter Slovenia airspace until the airline has met its liabilities. The domestic and commercial fuel supplier Petrol would also have a strong bargaining tool with Adria should outstanding monies owed to it remain unforthcoming.

Whilst Adria remains a state-owned enterprise it is unable to request the cancellation of its debts, a scenario that could be labelled anti-competitive and one that breaches state aid statutes. Passenger numbers have increased but a loss of 4-5 million euros(€) is expected to be posted for the year ending 2015, reflecting pricing pressures placed on the airline despite it having slashed day to day running costs and what an economy class passenger can expect for their money once on board. All this forms a contemporary backdrop to a deep-seated problem that Slovenia’s incumbent administration are no longer willing to entertain having previously bailed out Adria in 2011, who themselves had to resort to a bridging loan to keep operations airborne whilst a process of selling and leasing back several of its aircraft was completed.

Further reading on this subject can be found at:

RTV Slovenia: Adria Airways no nearer a brighter future