LJUBLJANA (Reuters) - Slovenia’s Civil Aviation Agency has given Adria Airways until Oct. 2 to present a financial plan in order to keep its operating licence, the head of the agency said on Wednesday.
Adria Airways, which had already cancelled most of its flights on Tuesday and Wednesday due to financial problems, said it would cancel all flights on Thursday and Friday as well, except for a return flight between Ljubljana and Frankfurt.
“Adria Airways is still leading active discussions with potential new owners and major creditors and remains dedicated in reaching a positive solution for all,” Adria said in a statement.
Civil Aviation Agency chief Rok Marolt told a news conference that Adria needed a capital hike of several tens of millions of euros, and its licence would be taken away without further deliberation if the company failed to present a financial plan by the specified date.
Slovenia’s Economy Minister Zdravko Pocivalsek later told a separate news conference that the government was ready to consider possible options for helping Adria but that it “will not put even one euro” in the company as long as it is under the current ownership.
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.
It cancelled 158 flights on Tuesday and Wednesday - most of those scheduled - due to its financial problems, affecting more than 3,700 passengers. According to Reuters estimates, a similar number of passengers will be affected by cancellations on Thursday and Friday.
Marolt said the financial plan would need to include contracts with the owners of leased planes and payments of overdue wages to Adria employees.
After holding a meeting with Adria’s management, Marolt told a news conference that the agency would act before next week if there was any indication that “Adria would be digressing from flight security”.
Slovenia sold Adria to German investment fund 4K Invest in 2016. The company has since sold all its planes and has been flying leased ones to European destinations, including Germany, France, Netherlands, Belgium, Austria and the Balkans.
Travel firm Thomas Cook (TCG.L) collapsed this week, while Germania, Flybmi and Iceland’s WOW have all failed this year. Regional operator Flybe’s sale to a Virgin Atlantic-led consortium narrowly averted its collapse.
Reporting by Marja Novak; Editing by Jan Harvey, Kirsten Donovan and Susan Fenton