The seemingly interminable denationalisation of the troubled Slovenian flag carrier has been concluded, at the second time of asking, although the wishes of the Slovenian government to divest themselves of Adria Airways have been bubbling under the surface since its initial failed attempt in 2012.
As widely reported in the Slovenian media, on the Ex-Yugoslav Aviation portal – the nonpareil of aviational websites – and indeed through this blog the German-based 4K Invest have acquired the 91.58% shareholding of Adria, paying a nominal €100,000 for the carrier – as opposed to €1 in previous reports – and a €1 million contribution to the emergency €8 million capital injection required to keep the Brnik-based airline airborne and viable through the traditionally lean winter season. From reading between the lines it therefore appears to me that the near €8 million recapitalisation package will comprise of €1 million from 4K Invest, €3.1 million via the Slovenian government and POTENTIALLY, the shortfall being footed by the €3 million windfall garnered by Adria’s operation of much of the now defunct Estonian Air’s schedule from its former Tallinn base, under the rebooted Nordic Aviation Group umbrella.
The mission statement of 4K Invest is predicated on reversing the fortunes of distressed medium to large sized assets, its portfolio accounting for around 200 companies of this nature. Adria though is the first airline to be acquired by the Luxembourg-headquartered enterprise, although they have unequivocally been handpicked by the Bad Asset Management Company (BAMC) and Slovenian Sovereign Holding(SSH), the two state-run quangos tasked with overseeing the disposal of fifteen publically listed companies earmarked for privatisation. Despite their lack of experience in the aviation sector 4K Invest obviously presented a compelling case for Adria’s future, outmaneuvering the half dozen or so other companies rumoured to be interested in the airline. Although most if not all of the required liquidity to see Adria through its winter schedule has been secured, the SSH has stated additional finance will need to be sourced for the airline to remain fully operational. This therefore begs the question how Adria’s debts are going to be addressed, what with one of the tacit bargaining chips played by would-be purchasers being that the Slovenian government restructured, deferred or even arranged for an annulment of many of the airline’s liabilities.
A continued concentration on its core market that predominantly services the needs of the Kosovan, Albanian and Macedonian diaspora living and working within Slovenia’s borders will see Adria remain true to the areas in which it performs best, complementing regular flights from Brnik to Pristina, Tirana and Skopje with bases in the Albanian and Kosovan capitals, as well as the Polish city of Lodz. Existing obligations pertaining to its agreement with the Estonian government will be honoured once 4K Invest take the reins and the hybridization of Adria as part budget airline will be upheld, whilst operating under the Star Alliance aegis that links it in to flight connections worldwide.
Many questions though remain unanswered, not in the least how 4K Invest intends to address Adria’s position of not actually owning any of the aircraft in its own fleet. Although there is a desire for Adria to have a range of modern jets at its disposal, this runs contrary to the general perception as to just what restructuring actually means: essentially, trimming the fat, cost efficiencies and pruning an organisation top-heavy with staff. How therefore in these operating conditions additions to Adria’s fleet are to be acquired, rather than just a continuation of Wet Lease agreements now that all sale and lease back options have been exhausted, is just one of the burning issues in the 4K Invest in-tray.