The Prime Minister of Slovenia, Marjan Šarec, confirmed that the Slovenian government would not be replacing its collapsed national airline, Adria Airways, Dnevnik reports. Why did Slovenia make this decision, following months of planning to establish a new national airline - Adria Airways 2.0?

Previous plans for Adria Airways 2.0

The bankruptcy of Adria Airways left Slovenia with such limited air connectivity that the Slovenian government made it an imminent priority to establish a new flag carrier as soon as possible.

In the past, passengers heading from and to Slovenia had an abundance of connections to choose from. This was thanks to Adria linking Ljubljana to all the major European hubs several times daily. The flights with the most frequent services were mainly to the Lufthansa Group hubs of Brussels, Frankfurt, Zurich, Vienna and Munich.

But Adria also had numerous connections and codeshare agreements to other major hubs like Paris, Amsterdam and Moscow. Ljubljana had very few direct flights to European cities since much European and all of the transcontinental traffic was funneled on Adria feeder flights to major hubs.

Protecting jobs and the economy

Moreover, a part of the motivation behind re-launching a national airline for the Slovenian government was to provide employment for all the people that were left jobless with the bankruptcy of Adria Airways.

The other major motivation was the significant loss to the Slovenian economy predicted after Adria's collapse. This was not only related to tourism but also to the capacity loss of cargo services that Slovenian exporters rely upon.

Why did Slovenia not rescue Adria Airways?

Simple Flying reported as early as June that a collapse of Adria Airways was becoming imminent.

So why did the Slovenian government not rescue Adria, when bankruptcy was widely expected and with it a negative impact on the economy and jobs? The answer lies in the last few months of Adria's operations.

Adria's 2019 operations consisted of a staggering number of delays, frequent flight cancellations, unpaid compensation claims, and sporadic route launches and cuts. The airline was under a criminal investigation in Switzerland and severely hostile to the local media.

Furthermore, Adria's privatization in 2016 was widely considered to be so negative that the Slovenian government had no choice but to let Adria Airways collapse. As part of the dubious activity by the new owners, even Adria's brand name was sold - to the owner of Adria's owner. So Slovenia would not have been able to re-establish Adria Airways as Adria Airways at all.

The airline pleaded for financial assistance and received some in the form of subsidies for its route to Brussels. But, on the whole, the government did not stand in the way of Adria's collapse.

Why did the plans fall through?

The task of establishing a new national airline is vast. The new Slovenian national airline would have had to rebuild everything that Adria had. This would include re-applying to Star Alliance, acquiring slots at airports, and re-employing Adria's employees.

The Slovenian government originally estimated that re-establishing a new national airline would take until February 2020. But in the meantime, foreign airlines have stepped up their presence in Slovenia to such a high degree that there is no need for a new Adria anymore.

As Simple Flying reported yesterday, most of the lost connections have been replaced. Lufthansa Group has launched a whole network out of Ljubljana. Wizz Air is returning, Iberia is arriving, and Montenegro Airlines, Aeroflot and Air France have all doubled frequencies to Ljubljana.