Adria played by the books

Adria claims no foul play in state aid

Adria Airways has said it has been unofficially informed that the European Commission has opened an investigation into state aid and benefits issued to the company by the Slovenian government from 2007 to 2011. It believes the investigation will take up to a year. “We would like to stress that it is in the interest of Adria to prove that all the measures so far were carried out in accordance with the applicable legislation”, Adria says, adding that the move is no surprise to the company. The Slovenian carrier believes the capital increase between 2007 and 2011 and the sale of shares of its subsidiary Adria Airways Tehnika do not represent state aid as all the investments met the criteria of the Market Economy Investor Principle.

Last week the European Commission opened an in depth investigation to verify whether a number of public support measures in favour of Adria are in line with European Union state aid rules. These measures include four capital injections between 2007 and 2011 amounting to around 85.5 million euros. The Commission has doubts that they were granted on market terms. Simultaneously, the commission launched an investigation into aid given to Latvia’s airBaltic. Earlier in the year, the Commission found that aid was unlawfully given to Malév Hungarian Airlines and Spanair. Both eventually ceased operations and declared bankruptcy.

Adria has used the capital injections to carry out a restructuring program and cut its costs. It has successfully done so with losses decreasing. The carrier expects to operate with a profit by the end of next year. A recent sponsorship deal with British car maker Land Rover, worth five million euros, has given a boost to Adria’s passenger figures with the airline performing ad hoc charters for the company. Next month the Slovenian carrier will launch flights from Priština to Venice while next summer season it will resume services from Ljubljana to Paris after a year and half of absence.