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Slovenia's Adria Airways files for bankruptcy

Author Iskra Pavlova
Slovenia's Adria Airways files for bankruptcy Adria Airways, Photo: Bobo

LJUBLJANA (Slovenia), October 1 (SeeNews) - Slovenia's Adria Airways said its management has decided to file a motion for the launch of bankruptcy proceeding, following which it has cancelled all scheduled flights.

The announcement comes after last week the troubled air carrier suspended its flights over lack of funds to run its daily operations.

Adria Airways applied for bankruptcy proceedings at the district court in the northern city of Kranj on September 30, the company said in a statement on Monday.

The court has three days to decide whether to open bankruptcy proceedings.

Earlier on Monday, economy minister Zdravko Pocivalsek told reporters in Ljubljana that the financial gap in Adria Airways was bigger than expected and the government has no intention to step in and help out the company under the current management of German-owned fund 4K Invest.

"Considering the current situation, we believe the only possible scenario for Adria Airways is bankruptcy," Pocivalsek said in an audio file uploaded on the government's website.

He added the government is examining the possibility of establishing a new airline to link Ljubljana with major European cities, which would cost the state some 4-5 million euro ($4.4-5.4 million) annually.

Last week, Slovenia's Civil Aviation Agency (CAA) gave Adria Airways one week to present a financial restructuring plan, or face withdrawal of its operational licence.

The CAA notice came after US leasing firm AeroCenture and Dublin-based Trident Aviation Leasing Service terminated the leases of several Bombardier planes in Adria's fleet due to payment defaults accumulation.

In the beginning of September, CAA began a check of Adria Airways' operations and financial performance following allegations that Adria's financial statements in the past three years might have been manipulated to cover up its loss and the growing need of fresh capital, according to earlier media reports.

4K Invest via its wholly-owned subsidiary AA International Aviation Holding GmbH bought the airline in 2016 from Slovenian sovereign holding company SDH, which is coordinating the privatisation process in the country.

($=0.91817 euro)