4th airline bankrupt in one month: Slovenian Adria Airways goes bust

02.10.2019 at 15:34

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Slovenian airline Adria Airways has filed for bankruptcy and canceled all flights, it said in a statement on Monday, after financial problems forced it to ground most of its planes over the last week.

“Bankruptcy proceedings were initiated by the management of the company because of the company’s insolvency,” Adria, which is owned by German investment firm 4K Invest, said.

Adria is the latest in a long line of small European airlines to run into financial trouble amid industry overcapacity, cut-throat competition and high fuel prices.

Since last Tuesday Adria has canceled more than 400 flights affecting more than 15,000 passengers.

Slovenia’s Economy Minister Zdravko Pocivalsek said earlier on Monday the government was considering establishing a new airline company to improve the country’s international connections. Adria’s collapse was very damaging to Slovenia’s economy and tourism industry, the minister said.

Adria Airways follows Thomas Cook Airlines, and two French carriers – XL Airways and Aigle Azur – into bankruptcy in September. The month is cruel to struggling travel businesses, because new bookings are not coming in at sufficient levels to pay off the many bills that are due for the summer.

As with other small national carriers, Adria Airways was damaged by the rapid growth of low-cost airlines – notably easyJet, Ryanair and Wizz Air – which are now likely to take over the profitable routes. It is possible, though, that Austrian Airlines – part of the Lufthansa group – may move in.

Adria Airways carried 1.2 million passengers in 2018, the same number as Ryanair flies in three days. Around 100,000 passengers are believed to have forward bookings with the carrier, which was a member of the Star Alliance.

Slovenia sold Adria to 4K Invest in 2016. The company has since sold all of its planes and has been flying to several European destinations on leased aircraft. According to TV Slovenia and other media, Adria has debt of around 90 million euros ($98.30 million).

Government officials have said European Union rules on state aid prevented the government helping Adria, adding it would also not help the company under its current ownership, which they called “irresponsible”.

Adria Airways was founded in Ljubljana in 1961. During the 1980s, it flew many charter flights between the UK and the then-Yugoslavia, under the brand name Inex Adria.

The airline operated fleet of 20 airplanes and offered flights to 23 destinations.

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