On Monday Thomas Cook ceased operations, and on Tuesday another airline “temporarily” ceased operations.
Adria Airways Temporarily Ceased Operations
Adria Airways is a Star Alliance airline based in Ljubljana, Slovenia, and the airline has been having financial trouble for quite a long time.
This week their financial situation got so bad that they had to stop operating. On Monday Adria Airways announced that they had to “temporarily” suspended operations for September 24 & 25, 2019.
Adria Airways A319 cabin
Adria Airways advised passengers booked on Adria Airways to contact the company with which they booked their tickets.
Company is at this point intensively searching solutions in cooperation with potential investor. Goal of everyone involved is to make Adria Airways fly again according to the schedule and that ceasing of certain operations is indeed temporarily.
The company deeply regrets the situation and apologizes to all its passengers and partners.
Adria Airways Extends Suspended Operations
Adria Airways has now announced that they’ll continue to temporary cease a majority of their flights on Thursday, September 26, and Friday, September 27.
On both days the airline plans to operate evening roundtrip flights from Frankfurt to Ljubljana, but that’s it. That’s because Frankfurt is their most important gateway, given their partnership with Lufthansa.
Government Gives Adria Airways New Deadline
The Slovenian Civil Aviation Authority has not yet terminated Adria’s Air Operators Certificate (AOC). They’ve given them a deadline of October 2 to submit a proper restructuring plan, including how they will restore profitability. If they’re unable to do that, Adria’s AOC will be taken away, and they’ll be forced to permanently cease operations.
At this point a majority of Adria’s fleet has been repossessed, including all of their A319s and several of their CRJ-900s. At this point the airline has 10 planes remaining, including six CRJ-900s and four Saab 2000s.
What’s Going On At Adria Airways?
Adria Airways has been losing money for years, and most recently the management team has been quoted as saying that they need four million EUR to stay in business for now. The government has refused to bail the airline out, and it seems they haven’t been able to find any strategic investors.
The airline operated a fleet of about 20 planes, including A319s, CRJs, and Saab 2000s. However, many of these planes have been repossessed over lack of payments. For example, in the last few days alone, three CRJ-900s have been taken back by the owners.
It’s clear that Adria needs a radically different strategy, and a significant amount of funding If they’re going to survive. Four million EUR may keep them alive for a few more months, but it doesn’t solve their underlying problem.
Adria Airways CRJ-900
Adria’s Relationship With Lufthansa
Adria also has an interesting relationship with Lufthansa. While they’re not formally part of the Lufthansa Group (unlike Austrian and Swiss), they are in the Star Alliance, and they use Miles & More as their frequent flyer program. Lufthansa uses Adria for much of their service to Slovenia, so the airlines have a close relationship.
This would be a loss for Lufthansa as well, as Slovenia has long been a tricky market for them. It’s not high yield, and at the same time it’s not yet overrun with ultra low cost carriers. So if Adria goes out of business you can bet that ultra low cost carriers will gain a lot of market share there, and that’s not necessarily good for Lufthansa either.
Then again, it’s not like the current setup works either.
For the sake of Adria’s 500+ employees I hope they’re able to find funding and stay in business, though I have my doubts. The airline has been struggling for a long time, and short of a last minute government bailout or Lufthansa stepping in, Slovenia will be left without a national airline.
The fact that their AOC will be revoked if they can’t develop a business plan in the next week that will return them to profitability, let alone find funding that will allow that, makes this even more of a race against the clock.
Based on my experience flying with Adria earlier this year, I can’t say they impressed me much…