Adria Airways and Ljubljana’s Brnik Airport facilitate Slovenia’s ability to punch above its weight

Since secession from the former Yugoslavia Slovenia’s unique situation between east and west is finally being realized, with Ljubljana’s Brnik Airport and flag-carrier Adria Airways at the very vanguard of its resurgence.

Allied to consistently high load factors from foreign airlines the continued improvement in performance from Slovenian flag-carrier Adria Airways is helping to underpin passenger growth at Ljubljana’s Brnik Airport.

Figures to the end of May 2017 translate to a 22% year on year spike in passenger numbers, amounting to over 560,000 travellers transiting through or terminating their journeys at the Fraport-owned Joze Pucnik Airport. With the peak summer travel season yet to reach its pinnacle the upward trend is set to continue and could push Brnik into the 1.7 – 2 million passenger mark by the end of 2017, potentially eclipsing the airport’s 2008 record of 1.67 million travellers.

The return by Adria Airways to a greater focus on its bread and butter ex-Yugoslav routes have yielded tangible dividends for the 4K Invest-owned airline. From the dark days prior to the carrier’s denationalisation and even during 4K’s embryonic stewardship when Adria’s very future looked to be in doubt a leaner, more single-minded approach propounded by its German-based owners has emerged, dispensing with municipal-subsidized routes from obscure Polish airports and instead realigning a strategy that heavily concentrates on enduringly popular routes. Connecting Balkan diaspora with their homelands and acting as a transit point to Western Europe is a simple but extremely effective use of its fleet of 12, albeit leased, jets.

Despite the disposal of Adria by the Slovenian government into private ownership the airline continues to enjoy an excellent regional reputation. Slovenia’s obvious geographic potential as a gateway between east and west is the obvious niche which Adria should exploit, and to a large extent is doing so. A major drawback has been a gradual decline of the amount of jets within its fleet that the airline actually owns. A succession of financial crises prior to denationalisation left the airline with little choice but to sell, and lease back, several of the planes within its fleet. This strategy, whilst keeping Adria airborne, eventually left the carrier with a roster of planes but none of which it owned. For a national carrier to not possess any assets pertaining to the business in which it is operating is undoubtedly unusual, but also leaves a question mark against an otherwise healthy reputation. There are though signs that this is about to change.

It is certain that 4K Invest has an exit strategy for their ownership of Adria, as they would with any of their business interests. Although an increased frequency of flights on its key routes and growing passenger numbers are the equivalent to an aviation holy grail, neither will make a substantial impact on an asking price when 4K decide to sell. Routes can be classed as assets but competitiveness and volatility, both inextricably linked to the aviation industry, offer few guarantees and nothing in the way of physical chattels that the ownership of one’s own planes undoubtedly does. It is with this in mind, I believe, that has prompted Adria/4K Invest to be heavily linked with the purchase of 12 Russian Sukhoi Superjet 100 planes, ostensibly to replace its leased Bombardier CRJ class jets.

Although press reports suggest Russia’s State Transport LEASING Company (GTLK) will finance the transaction, the president of Sukhoi recently intimated that Adria is considering PURCHASING 12 of its SSJ100 series aircraft. There is, therefore, some ambiguity from where the finance will originate, as well as the unit cost and what the future holds, if any, for Adria’s current trio of leased Airbus A319’s.

From talk of the airline being near to closure to strong rumours of a substantial order of new planes places into sharp focus the fine job 4K Invest has done to resurrect Adria. The potential purchase of Sukhoi jets at the expense of its workhorse Bombardier CRJ’s have inevitably divided opinion but the very fact Adria is being discussed in such a context irrefutably highlights the firm footing the airline is once more enjoying, vindicating it’s controversial 2016 privatisation.