Recapitalization seen by Adria Airways as vital for its continued presence in the skies throws into considerable doubt the viability of the ongoing bidding process for 91.58% of the Slovenian flag carrier. Having identified a figure of €8 million to maintain services through the traditionally fallow winter season the state restructuring company Slovenian Sovereign Holding(SSH) attests that such a move will satisfy both existing shareholders and those who have expressed an interest in acquiring the Brnik-based airline.

A small pool of Slovenian investors have been approached to bankroll the capital injection allowing Adria to bolster its liquidity whilst it fights fires in several other theatres of internal conflict. The denationalization of the airline could take an unexpected turn should the participating capitalists be offered shares in Adria, potentially diluting the 91.58% stakeholding currently up for grabs through a seemingly interminable bid and sale process. A similar approach has been adopted during the continuing sale of Paloma, the manufacturer of tissue products familiar with many British shoppers. It is though difficult to see how potential purchasers of Adria Airways will be attracted to such a proposition if they have already lodged legally-binding bids for the airline, especially should some of the holding for which their tenders are based have been hived off to speculators specifically sought out to once more bail out Adria who historically have been the beneficiaries of several tranches of state aid, something that cannot be granted to the airline for an academic ten years, a period of time in which Adria is expected to be no longer state owned but this is by no means a foregone conclusion.

A serious stumbling block for a smooth transition from state to private ownership is the demand issued by several confirmed but unnamed bidders seeking a complete write off of Adria’s debt burden from ongoing financial obligations. In continued attempts to pare down day to day operating costs Adria are rumoured to be ending the publication of its superb inflight magazine, a previously outstanding portal into Slovenian life and its once respected national airline. Despite the obvious costs attached to producing a high-quality glossy periodical I feel the axing of the inflight magazine is a big step too far, in effect stripping away the last vestiges of Adria’s identity. The next time I fly on an Adria service it will in all likelihood be on an airliner it doesn’t own, staffed by a crew smiling through gritted teeth who are unable to offer any complimentary refreshments or the chance to while away the flight by perusing the airline’s own magazine, denying the chance to extol the many virtues of visiting Slovenia to first-time visitors. I hope the airline will not completely dispense with a concept predicated on more than just the publication of Adria’s timetable by embracing modern technology to in some way continue an inflight presence, albeit the loss of a tactile, colourful publication of substance is in no way mitigated by a slick but comparatively soulless ‘e’ alternative.

Adria’s asset fire sale also includes divesting itself of shares in its own flight school and Amadeus Slovenia, the principal IT provider to the tourism and aviation sectors.

Further reading on these issues can be viewed at:

Ex Yugoslav Aviation: Adria Airways requires €8 million liquidity injection