INTERVIEW - Slovenia’s Adria Airways Sees Profit This Year if Fuel Prices Keep Falling in Financial Storm

The company reported a net profit of some 425,000 euro ($545,000) on sales of 182 million euro last year.

The  carrier as yet feels no negative effects from the global financial crisis, but there is a major positive consequence as the crisis has slashed fuel prices, with the market anticipating lower demand for oil because of the anticipated global slowdown, Tomaz Skofic from Adria’s sales and marketing department, told SeeNews on the sidelines of a news conference organised by the Slovenian Tourist Board last week in Sofia.

Surging fuel prices earlier this year elevated costs for the company but the price of benchmark London Brent crude has now more than halved to $64.66 a barrel from its peak in July. “Now they [the prices] are decreasing and we cross our fingers that this trend will go on and the final results will be better,” Skofic said.

“The last analyses and plans show that we can make some profit,” he added. He said Adria does not plan to change its pricing policy. 

It expects to carry more than 1.2 – 1.3 million passengers this year, or a 13-15% rise compared to 2007, Skofic added.

Adria Airways carried 1,040,037 passengers in the first nine months of 2008, up 18% from a year earlier, as the number of flights also increased. It raised the number of its flights through September by 16%.

The airline, majority-owned by Slovenian government-controlled investment funds SOD and KAD, operates scheduled passenger flights from the country's capital Ljubljana to some 20 cities in Europe.

This year it  launched four new regular flights - to Stockholm, Oslo, Athens and Bucharest, to meet rising demand. In 2009 the company plans to launch two more scheduled flights, to the capitals of Spain and Bulgaria. Adria will start flying to both Madrid and Sofia in April.

The carrier will fly three times a week to Madrid and four times weekly to Sofia. At present in Spain, it flies only to Barcelona twice a week.

Adria currently has no flights to cities in Bulgaria. It will start flying a 50-seat aircraft to Sofia as of April 1, which will be the first direct flight between Ljubljana and Sofia.

 “With a very good price policy, we will be very satisfied with 50%-60% seat occupancy of the plane,” Skofic said. “There is no fear that the planes will be empty,” he added.

If there is high demand, Adria is ready to replace the small plane with a bigger one, Skofic said.

He said Adria flies 12 aircraft now and will add two more in the coming months. The company employed 710 in August.

($ = 0.7802 euro)