Adria Airways 'temporarily' ceases operations

Adria Airways has suspended all operations as of this evening. The carrier says the move is temporary, and will last throughout Tuesday and Wednesday.  It leaves 558 employees in limbo and several hundred stranded passengers. In a statement, the airline said, "The decision to temporarily cease flight operations is a consequence of unsecured access to fresh cash which the airline needs for further flight operations. At this point, the company is intensively searching for solutions in cooperation with a potential investor. The goal of everyone involved is to make Adria Airways fly again and that ceasing of operations is indeed temporary. The company deeply regrets the situation and apologizses to all its passengers and partners. Adria Airways suggests to its passengers and partners to follow on-line announcements". The carrier's management is said to have requested four million euros from the government yesterday afternoon, but did not receive the funds.

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UPDATES

· The head of the Slovenian Civil Aviation Agency, Rok Marlot, said the regulator has requested for talks to take place with Adria’s management to discuss the ongoing situation at the company. "I can't estimate how long it may take for Adria to go bankrupt. It could be five days, fifteen days or one month. It could also be hours or minutes. Other aircraft owners may decide to take the same steps and Adria could be left without its fleet overnight. It's a serious matter", Mr Marlot said.

· Austrian Airlines has been forced to cancel flights operated by Adria Airways:

Our partner Adria Airways informed us that it will have to temporarily suspend its flight operations. Although we were able to activate replacement aircraft, we had to cancel following flights today:
OS623/624 Vienna-Warsaw-Vienna
OS403/404 Vienna-Lyon-Vienna
OS536 Bologna-Vienna pic.twitter.com/SX5l6fEmLX

— Austrian Airlines (@_austrian) September 24, 2019

· The Slovenian Civil Aviation Agency will revoke Adria Airways’ Air Operators Certificate once the carrier declares bankruptcy.

· Adria continues to sell tickets - At this point, Adria Airways is continuing to sell tickets for all of its flights departing Thursday onwards.

· Although the temporary suspension of service will likely become permanent on Thursday, this is the second time in its 58-year history that the airline has discontinued all flights. In 1991, the Yugoslav Civil Aviation Directorate grounded Adria Airways for a period of three months after Slovenia declared independence. Yugoslavia still had control over Slovenian airspace at the time.

· Adria to operate Frankfurt flight - Adria Airways has advised this morning it will operate one one-way flight Frankfurt to Ljubljana today, and a one-way flight from Ljubljana - Frankfurt tomorrow.

· The Polish volleyball team playing at the 2019 Men's European Volleyball Championship, which is being co-hosted by Slovenia, was expected to fly today from Amsterdam to Ljubljana on board Adria flight JP435, which has been affected. The Polish Prime Minister has ordered a government aircraft to fly the team to the Slovenian capital instead.

· This September, four European carriers suspended operations. In addition to Adria Airways, these include Aigle Azur, XL Airlines and Thomas Cook.

· Scenes at Ljubljana Airport today:

· The Slovenian Civil Aviation Agency will hold a press conference on Wednesday at 14.30 CEST. The conference will be held after a meeting with Adria Airways.

· The former CEO of Adria Airways, Peter Grašek, warns, “If Adria collapses, a whole bunch of routes will be shut down, so we will have to travel via other airports. This means a whole lot of extra costs that will put a strain on the entire economy. If I were the decision maker, I would suggest Adria be granted a loan, provided the owners pledge Adria Airways as a guarantee, and if the loan is not repaid, the airline’s ownership would be taken over by the state. The state would then set up its own management. This would buy valuable time, allow the airline to come up with a restructuring plan and allow Adria to come back to life”.

· The head of the union representing Adria Airways cabin crew, Gordana Boberić, said, "At the last meeting with the management, we did not learn anything new because the management did not know how to answer any of our questions".

· The Slovenian GoOpti transportation service, which provides shared and private airport shuttles, has seen a strong increase in demand over the past few days. It noted there is a notable increase in bookings for transportation to Venice and Trieste airports.

· Adria's only service today, flight JP125, will depart Frankfurt at 20.30 CEST with a scheduled arrival time of 21.45 in Ljubljana.

· Montenegro Airlines to boost Ljubljana operations - Montenegro Airlines will add flights between Podgorica and Ljubljana this coming winter season. The airline will maintain the service five times per week, each Tuesday, Wednesday, Thursday, Friday and Sunday. It represents an increase of one weekly flight on the 2018/19 winter season.

· Air Serbia to boost Ljubljana operations - Air Serbia will add flights between Belgrade and Ljubljana this coming winter season. The airline will maintain the service twice per day. It represents an increase of three weekly flight on the 2018/19 winter season.

· Air Serbia launches rescue fares for Adria passengers - Air Serbia has put on sale rescue fares for Adria Airways passengers over the next 72 hours. In a statement, the airline said, “Due to the temporary suspension of Adria Airways’ operations, Air Serbia has enabled the Slovenian airline’s passengers to fly to their destinations of choice at rates lower than average for this type of year. Passengers who are at risk of having their travel plans partly or completely disrupted by the flight suspension, will be able to use Air Serbia’s network and fly to cities in the neighbouring region and Europe. Ticket prices for these flights, depending on destination, will start from 74 EUR for a return trip via Belgrade. Passengers can also opt for one-way tickets, at half the rate of a return ticket”. Destinations from Ljubljana include Sarajevo, Skopje, Sofia, Podgorica, Tirana, Vienna, Zurich, Prague, Copenhagen, Brussels, Paris and Frankfurt.

· AeroCentury terminates Adria aircraft leases - Aircraft leasing company AeroCentury plans to repossess all of its aircraft operated by the Slovenian carrier. "After many months of working closely with Adria Airways in Slovenia as it worked to improve its financial condition, today we gave notice to Adria of our termination of leases for two CRJ900 aircraft with immediate effect, due to the accumulation of substantial payment defaults by the airline under its leases with us. At the same time, we gave a default notice for our last remaining CRJ900 aircraft on lease to Adria. If Adria does not cure its payment defaults by September 27th, then this last remaining lease contract will be immediately terminated. We intend to regain possession of these three aircraft as quickly as possible and prepare the aircraft for lease or sale", AeroCentury said in a statement.

· Adria's sole service today from Frankfurt to Ljubljana will be operated by a wet-leased British Aerospace 146 aircraft from Germany's WDL Aviation  and foreign crew.

· Swiss' multi-daily flights between Lugano and Zurich, which are operated by Adria Airways, have been affected as a result of the Slovenian carrier's problems:

Adria Airways has announced the temporary suspension of its flight operations. SWISS flights to and from Lugano are affected. Find more information here: https://t.co/tS0qbCIDcc

— Swiss Intl Air Lines (@FlySWISS) September 24, 2019

· The union representing Slovenian airline pilots has called on the state to intervene and bail out the national carrier, which is privately owned. “We are aware of the unenviable position, but we believe that the situation can be resolved in cooperation with the state. Currently, we stand to lose everything - both Adria’s employees and activities related to Adria's operations, without even talking about the economic impact. The airline’s sale to incompetent owners has led us to this situation, and for the sake of further economic development of the country, we expect the state to help resolve the situation”, the union said.

· The Club of Slovenian Entrepreneurs points out that the consequences of Adria's collapse could have significant economic consequences for Slovenia.

· Air Serbia will no longer accept tickets issued by Adria Airways, thus ending its codeshare cooperation with the Slovenian carrier on flights between Ljubljana and Belgrade. "We are in direct communication with Adria Airways in regard of suspended flights", Air Serbia said.

· Some 3.700 passengers have been affected by the two-day suspension of almost all of Adria Airways' flights.

· Some thirty Slovenian public servants that were due to fly between Ljubljana and Brussels today have all been transferred to Zagreb to catch alternative flights.

· Despite attempts by various members of the press to contact Adria Airways’ CEO Holger Kowarsch for comment, all inquiries have gone unanswered.

· As early as yesterday Adria's management insisted it was busy trying to stabilise operations and was conducting intensive talks with a possible strategic partner. Previous attempts to find a strategic partner have failed or have turned out to be merely preliminary talks with few if any prospects of succeeding.

· Luxair flights between Saarbrucken and Berlin, which are operated by Adria Airways, have been affected as a result of the Slovenian carrier's problems:

#INFO Irregularities in the flight plan
Saarbrucken-Berlin.
Due to temporarily suspension of #AdriaAirways flight operations for the next 48 hours, Luxair has unfortunately had to cancel flights to/from Saarbrucken-Berlin. pic.twitter.com/YhlkS9BjYa

— Luxair Luxembourg Airlines (@LuxairAirlines) September 24, 2019

· Adria Airways is expected to declare bankruptcy in the coming days, most likely on Thursday.

• The Slovenian Minister for Economy, Zdravko Počivalšek, stressed the state will not invest "a single euro" into Adria with its existing ownership structure, as he believes the company's owners, 4K Invest, are to blame for the situation the airline finds itself in.

That concludes today's updates. For the latest news on Adria Airways click here.

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Adria Airways was privatised in 2016. It was purchased by AA International Holding, a wholly-owned subsidiary of the Munich-based turnaround fund 4K Invest, which has since been accused of mismanaging the company. It purchased a 91.58% stake in Adria at a price of 100.000 euros and later bought the remaining shares in order to secure 100% ownership. The transaction marked its first investment in the aviation sector. Adria sold its brand name to a 4K-affiliated company for eight million euros in 2017, injecting much-needed capital into the airline at the time. In December 2018, Adria Airways absorbed the company STBE through a merger and acquisition. The move increased the airline's share capital and changed its ownership structure. Its majority ownership (54.3%) was passed onto Stefan Beulertz, a lawyer residing in Malta, who was a close partner of 4K Invest. The Slovenian Ministry for Infrastructure, noted, “Minister [for Infrastructure] Alenka Bratušek repeatedly warned that the airline’s sale to the German capital fund was a mistake and that the then government of Slovenia should have found a strategic partner within the aviation industry that would have ensured the long-term existence and development of the carrier”.

Adria cancels all flights

The Slovenian government previously said it was seeking to modify the country’s aviation legislation which would enable it to subsidise a select number of routes which were operated by Adria. "Our key concern at the moment is to ensure the maximum security and safety of air operations in the country. It is our responsibility to ensure Slovenia's connectivity with the outside world, so we have prepared a legislative proposal that will, if necessary, enable subsidies for some airlines", the Slovenian Ministry for Infrastructure said recently. However, it warned, “This is a complicated and time-consuming process, which must be approved by the European Commission”.

Adria’s employees issued an emotional public letter yesterday afternoon. They noted, “There are 558 of us, each with their own face, name and story. On a daily basis, we ensure that our planes bring passengers to their destination safely. We are not just pilots and flight attendants, we are also the operations centre, ground services, commercial department, call centres, support services. 558. Each of us is a key link in this chain of responsibility and trust, and no one is alone. However, for us, Adria Airways is far from just being our job. It is not just a company flashed on the newspaper covers and a blue and green brand. It is our lives as well. The lives of our families are forever intertwined with Adria Airways. For many, Adria Airways is a family member. It is a friend that encourages us not to give up. It is the parent that you want to make proud. It is the annoying kid that tugs you on your sleeve at the wrong time. It is a partner, with to whom you compromise... To work in existing circumstances and among the public, which seems it can hardly wait for a part of us to die, is difficult…Our message is only one: We want to continue flying. We are proud to be Adria Airways! Yesterday morning, the airline’s flight from Ljubljana to Brussels had a special callsign, at the request of the pilots - Adria Forever (ADR4EVER).

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