Adria Airways on sale

Adria privatisation process begins

The wait is over as the Slovenian national carrier, Adria Airways, goes on sale. The Slovenian government is offering 74.8% of the airline’s shares and interested parties should submit non binding bids by September 10. The stake is being sold by the state and four banks, which together own 99.9% percent of Adria. The invitation for bids was published in the Financial Times, Wall Street Journal and the Flight Global magazine yesterday. Adria posted a first quarter net loss of eight million euros.

The amount of shares put on offer indicates that Adria’s potential new owners will be from the European Union. EU regulation 2407/92 requires that, in order to obtain and retain an operating license, an EU air carrier must be majority owned and effectively controlled by EU nationals. Companies and nationals from non EU countries can hold up to a maximum of 49.9% of shares in a European Union airline.

This will be the first attempt to privatise Adria, which ran into major financial trouble last year. Within the EX-YU region only B&H Airlines’ privatisation process has been successful, although, ultimately the new owners left the airline five years later. Jat Airways has been put on sale twice - in 2008 and 2011. On both occasions there was little interest from foreign carriers. Montenegro Airlines was put on sale in 2010. Despite interest from Etihad Airways, Arkia Israeli Airlines and El Al Israel Airlines, no concrete offers were made. Whether Adria will have better luck then its regional counterparts will be known in just over a month.