Adria Airways to increase its initial capital for more than 10 million euros

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Last April, Adria Airways announced its biggest network expansion ever. This Summer, however, the airline faced several difficulties: from flight irregularities, delays and cancellations to crew shortages. Furthermore the airline has to inform the Slovenian civil aviation authorities about its financial performance by the end of the year. Today Adria Airways announced that its shareholder 4K Invest fund will invest 10 million euros to recapitalize the airline. The Slovenian carrier remains positive about its future.

Adria Airways launches big network expansion this summer

Adria Airways to increase its initial capital for more than 10 million euros (25 October)

Fresh capital will make a significant contribution to the continued successful development of the Slovenian airline. Since Adria Airways was acquired by the German 4K Invest fund in 2016, it almost doubled the number of aircraft in its fleet, hired and trained nearly 200 new employees, expanded its network of flights and so becoming one of the strongest regional air carrier operating ACMI services.

Our plans with the Slovenian airline are long-term and we want the company to grow and develop in the future. We see huge potential in the company, with our priority being to stabilize our operations and restore the trust of our passengers. There is a lot of hard work ahead of us, but we are confident that we will succeed.” said Holger Kowarsch, Managing Director of Adria Airways.

Adria Airways’ official statement about media reporting on its business (18 October)

Adria Airways wishes to clarify some of the statements which are being published these days in media regarding our business performance.

We fully understand and accept debates on flight irregularities but not also that such are connected to our financial status.

We wish to clarify that financial status doesn’t influence and is not the reason for flight delays or cancellations as stated by some media. All supervisions conducted by Civil Aviation Authority are determined in valid regulation and the agency is obliged to carry out regular assessments of the air carriers’ financial situation related to fulfilling conditions for operating licence. Adria Airways is regularly informing the agency about its financial performance and agency is regularly issuing resolutions and findings which we follow. Agency’s resolution that Adria Airways needs to provide evidence by the end of 2018, that it received funds either through recapitalization or any other way, is not a decision of extraordinary nature and does not mean that Adria Airways is in any worse shape as before or is threatened to ground its fleet as implied by some media. These are regular measures which Adria Airways needs to constantly perform and fulfil.

Biggest reason for flight irregularities lies in the status of European air traffic. Not only in Slovenia, also in Europe and in the world is aviation industry facing severe overload on air space and airport infrastructure. There have been more than 150% more delayed flights in EU in 2018 compared to last year. Only in August 56% of all flights have been delayed. Adria Airways’ delays are way below the EU average, but this cannot be counted as a benefit since each irregularity in flights causes damage to the carrier.

These days we are in Europe reading on irregular flights of majority of carriers. Lufthansa for example just published news that this year 18.000 flights have been disrupted due to the same cause as with Adria Airways. Also European Commission and European Parliament issued a joint statement before this year’s summer season, confirming that unfortunately delays will increase since among other, air traffic system is struggling to cope with the ever increasing volume of traffic.

It is true that compared to last year Adria Airways this year performed more delayed flights and cancelled more flights. It is also true, that some reasons for this lay within Adria Airways, but mostly those are still out of carrier’s sphere. More irregular flights are also a consequence of significantly increased number of flights in general.

Another reason is crew shortage. Same as mostly all other carriers in the world, Adria Airways this year significantly increase the number of aircraft and flight network and therefore number of flights, where number of crew was not growing proportionally. Each unplanned absence of crew member due to sick leave or unfit-to-fly condition could therefore together with unpredictable weather conditions or technical reasons influence performance of flight operation. In order to avoid flight cancellations, we decided on many occasion to join flights. Even though this was reasonably unpleasant for passengers, we believe that joint flights are better solution than cancellation for everyone involved.

Carriers are working closely with airports and relevant authorities to solve situation which will help solve problems not only for the industry, but mainly decrease unpleasant situations faced by passengers. We fully understand that each irregularity in flight performance is unpleasant for passengers, for what we again apologize to all.

Sustainability growth remains Adria Airways’ long term goal. Despite challenges in performance of flight operations we are positive about the future.

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