There can surely be little coincidence that the Slovenian government will attempt to entice airlines to the country’s Brnik-based Ljubljana hub by way of subsidies, a common practice of state-sponsored inducements to offset operational costs of forging new routes and not inconsiderable landing charges, whilst flag-carrier Adria Airways approaches its own day of reckoning where proof of ongoing viability will need to be demonstrated by the end of March, in the form of a ten million Euro capital injection from owner 4K Invest.

Adria was dispensed with by the state when an insatiable need for finance could no longer be justified to come from the public purse. For so long a byword for reliability, service, and courtesy the airline still retains many of the traits by which it was formally known but during 2018 countless delays and cancellations severely dented consumer-confidence, highlighting all was not well in the state of Slovenian aviation. Now that history appears to repeating itself where Adria’s continued operation is by no means certain without the plugging of further financial gaps, the Slovenian government have adopted a reactive rather than proactive approach to ensure levels of traffic using Brnik remain buoyant, even if Adria ultimately doesn’t.

It is of course highly plausible that Adria themselves may benefit from state-subsidies but that could be seen to be anti-competitive, especially now the Slovenian government has no obligation to help what is a private enterprise. There are of course accusations that subsidies only serve to give the wrong impression of a route’s viability; it can be argued that without a financial leg-up the airline in question would not be there in the first place. There is though an opportunity through targeted, not indiscriminate subsidies to ‘test the water’ before hopefully a route can become self-financing. In my view it is extremely important for the Slovenian government, the national tourist board, and Fraport, Brnik’s owner-operator, to identify the most obvious under-served routes and subsequently elicit expressions of interest from airlines. If one of those of course turns out to be Adria then at least the process will have been transparent, and without substance to accusations of favouritism.

Aside from Adria Airways’ now cursory summer season service connecting Manchester once per week with Brnik, there are currently no flights servicing Slovenia’s capital city from anywhere north of Luton. The North-South divide is still very much alive in these terms, with four London-based airports operating flights between England and Slovenia but the vast majority of England, and the rest of the United Kingdom, having no access to one of Europe’s quickest growing tourist markets unless one is prepared to take a more circuitous, and expensive route via the likes of Amsterdam and Zurich. It is therefore hoped, and anticipated, that the likes of Liverpool, Edinburgh/Glasgow, and Dublin will be among Ljubljana’s new routes, and not before time. Liverpool, an airport dominated by EasyJet and other Low Cost Carriers(LCC), is surely an ideal reciprocal destination for its large catchment area around Merseyside, North Wales, Cheshire and beyond, and those from Slovenia eager to immerse themselves in the city’s football, music, and maritime heritage.

The talk of subsidizing routes between Brnik and as yet unnamed destinations in Europe and perhaps beyond has though been somewhat overshadowed by more definite plans recently announced by the Serbian city of Nis. With eleven confirmed destinations predominantly within continental Europe the country’s third largest city has somewhat stolen a march on Slovenia, in terms of the amount of new routes and a considerable €5 million subsidy pot. In aviational terms this might not seem a fortune but for a city of Nis’ modest size it represents a significant statement of intent, highlighting that money must at times be spent for it to be made. There are to be incentives for new routes into Ljubljana, ironically one of which is with Nis, and the increasing of frequencies on existing services, but there must not be a repeat of the mistakes of the past when Adria set up shop in Olsztyn and Rzeszow, two it has to be said obscure locations in Poland, whose enticements of the airline were presumably heavily incentivized.

Much noise has been made over Adria’s reported phased delivery of 15 Russian Sukhoi SSJ100 aircraft, a move seen as pragmatic as its business model increasingly shifts towards the ACMI – Aircraft, Crew, Maintenance, Insurance – jet leasing market. It does though potentially represent further reputational risk when reliable Airbus and Bombardier aircraft are being sacrificed for short-term financial gain to accommodate the much-maligned Sukhois, several of which have been sent back to the manufacturer before their lease agreements were due to terminate with other airlines.

If Adria are to receive the Sukhoi jets on terms too good to refuse both backs will be scratched, although it is surely the airline the runs the greatest risk of being burned by the deal. It would understandably appear that Sukhoi are seeking to gain a foothold in the European aviation market with a small-to-medium sized airline, where it can scale operations and hope to improve its reputation. It can even argue that Adria’s 2018 annus horribilus took place while it used the otherwise reliable Airbus and Bombardier workhorses, proving that nothing is sacred within the world of aviation. Should though Adria suffer similar problems with the Sukhois that have befallen several other European carriers, an already downgraded reputation from its 2018 debacle will in effect be shot.

From what was seemingly a case of when, not if, the Sukhois were to be delivered to Brnik, there is now considerable conjecture surrounding the deal. Reports continue to circulate suggesting it is dead in the water, which would leave Adria with vastly reduced operational capabilities now that so many of its Bombardier and Airbus jets are to be wet-leased out to other airlines. A potential scenario of no Sukhois and a decimated fleet will make it almost impossible to honour its summer charter and scheduled flight timetable, in effect reducing Adria Airways to an ACMI concern. The irony being that itself has heavily depended on others within the ACMI sector since it dispensed with the last of its own aircraft, to what is now a fleet of leased ‘planes and 4 Saab 2000 turboprops, whose actual ownership is still shrouded in uncertainty after the labyrinthine route they took from the now defunct Swiss-based Darwin Airlines.

Adria Airways’ immediate future appears to be reaching its moments of truth, in essence acting as a bellwether for long-term viability which will be far clearer once its recapitalization deadline has passed, and the configuration, and availability, of its fleet is confirmed. Although it is perhaps odd that the Slovenian government has resisted this long to entice other airlines to Brnik through subsidies, they have undoubtedly given Adria as many chances as they can – both during ownership of the carrier and after its privatization. The success or failure of the country’s primary airport cannot though be allied to the fortunes of the nation’s flag carrier, or for its presence to overwhelmingly dominate the arrival and departure boards. It is very sad that the arrival of other airlines might sound Adria’s death knell, but in a sector more cutthroat and volatile than most, the market will in the end ultimately decide which routes, and airlines, survive or die.

Further information and source material from the Ex Yugoslav Aviation website:

http://www.exyuaviation.com/2019/03/adria-recapitalisation-deadline.html

http://www.exyuaviation.com/2019/03/slovenia-to-subsidise-new-ljubljana.html

http://www.exyuaviation.com/2019/03/serbia-unveils-twelve-new-nis-routes.html