For Slovenian flag carrier Adria Airways, things are rapidly going from bad to worse. Two months ago, we reported that Adria is facing such adversity that its collapse is starting to look more likely each day. Last month, new details emerged about criminal charges that public prosecutors of the Swiss canton of Ticino brought forward against the airline. Adria Airways is now in serious trouble.
What was the point of Adria acquiring Darwin?
The story of Darwin Airline might at first seem like just another tale of airline bankruptcy, of which there have recently been many. But when one examines the details, it is so markedly different. There are too many oddities in it for this bankruptcy to be ordinary.
Darwin Airline was a small regional airline based in Lugano, Switzerland. It used to operate as Etihad Regional, like its livery in the photo below shows. Adria Airways acquired it in July 2017 and rebranded it as Adria Airways Switzerland.
Just four months later, the Swiss authorities suspended its operating license, as reported by Air Transport World. The following month Adria Airways declared Darwin bankrupt. These five months are the time period of a whole range of suspicious goings-on, which is what the Swiss are investigating for potential criminal activity.
The investigation into these five strange months between Adria Airways acquiring Darwin and declaring it bankrupt is headed by the prosecutors of Ticino, the Swiss canton where the town of Lugano is situated. Etihad Regional (and later Adria Airways Switzerland) was based there.
Suspicious financial transfers from last year
Slovenian news portal Siol reports that the primary subject of the Swiss criminal investigation is Adria’s previous Head of Finance Heinrich Ollendiek. Suspicious activity took place immediately in the weeks succeeding the acquisition. It appears that 11 million Euros have disappeared from the accounts of Darwin between the time Adria purchased it and the moment it declared bankruptcy.
The Swiss prosecutors are yet to cite any conclusions in regards to the findings of their criminal investigation. This is because it is still ongoing. But it is no longer possible for Adria Airways management to claim that all was normal during these takeover proceedings when a trail of deliberate and obtuse managerial action is so evident in Adria’s actions.
If all is as the prosecutors allege it might have been, then Adria Airways will have to explain why it had deliberately bankrupted Darwin Airline for its own benefit. A payment of “1.6 million Euros” was transferred to a foreign bank account “in just a few weeks” after Darwin was acquired by Adria. It remains unknown where this money ended up.
Separate from this investigation, but also highly suspicious, are several other financial transactions. We already covered one of them in this article, when we discussed Adria Airways’ failure to agree on a sale with Sukhoi. Another one is the bizarre sale of the Adria Airways brand by Adria to an undisclosed buyer. Siol reports that Adria is yet to receive that money, despite the “sale” taking place last year.
PwC is in the spotlight for its auditing
The current public attitude towards Adria Airways in Slovenia is seriously negative. Meanwhile, its management is openly hostile to the media for reporting on the airline’s potentially criminal activities. But an organization that has also come under scrutiny this year is PricewaterhouseCoopers, for its auditing of Adria Airways.
Ex-Yu Aviation News reported last month that the Slovenian Agency for Public Oversight is in the process of scrutinizing PwC for its auditing of last year’s Adria Airways financial reports. As new details emerge about the extent of suspicious activity, the political class in the country is getting increasingly nervous.
The airline’s auditors are being audited and its past acquisitions are being investigated in a criminal context. So how much longer will passengers trust Adria? And, more importantly, how much longer will Adria be allowed to fly?