Slovenia: The Free Market Cannot Solve Our Aviation Problems

Slovenia’s Deputy Prime Minister said that the free market cannot solve the problems facing the country’s aviation industry, and he said he would look into why Adria Airways was sold to a company that provided just 20,000 euros ($23,700) in capital. Ever since the bankruptcy of Adria Airways in September 2019, Slovenia’s aviation sector has been performing very poorly.

Adria Airbus
The controversies over the bankruptcy of Adria Airways have not yet disappeared in Slovenia. Photo: M.Oertle via flickr

The Deputy PM is not happy with how Adria Airways was privatized

Responding to the news that Slovenia recorded less than 9% of pre-pandemic traffic in the first half of 2021, Slovenia’s Deputy Prime Minister, Zdravko Počivalšek, revealed to Zurnal24 that he is dissatisfied with the absence of a national airline in the country.

Adria Airways went bankrupt in September 2019, three years after it was privatized. It was sold to a German investment fund, 4K Invest, in 2016 following many years of heavy losses, but this privatization proved to be fatal for the company.

The Deputy Prime Minister commented on this by saying (translated):

“[Adria Airways] was sold to a company with just 20,000 euros ($23,700) in initial capital. We need to check how and why this was done.”

Adria Airways
Capacity previously provided by Adria Airways has not been replaced. Photo: Getty Images

As Simple Flying predicted months before it happened, Adria Airways was having such major operational issues in its last year of operations that a bankruptcy was inevitable. However, it appears that no person or department within the Slovenian public administration prepared a contingency plan for this.

In the months after Adria Airways collapsed, there was no consensus regarding whether Adria Airways should be replaced or not, and so nothing was done. This is in stark contrast to Montenegro, another European country with a defunct former flag carrier, which set up a brand new national airline in just six months.

Adria Airways CRJ-700 on the runway
Adria Airways’ assets are slowly being sold off as part of bankruptcy proceedings. Photo: Getty Images

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Will Slovenia start a new national airline?

Slovenia’s Deputy Prime Minister, Zdravko Počivalšek, also made a comment which revealed that the Government might be looking to set up a new national airline after all. He said (translated):

“If we want Slovenia to be better connected by air, we will have to intervene in this area and find a way to enable progress on air connectivity in cooperation with a private stakeholder. We do not currently have a national airline, and air traffic is severely affected by the pandemic. The market itself will not solve this problem in Slovenia.”

The last sentence indicates that the Slovenian Government believes there will have to be some form of state intervention to boost air connectivity in the country.

However, the mention of a “private stakeholder” also indicates that there is no appetite in the country to create a new state-owned national airline from scratch. This puts Slovenia in a difficult position because there does not appear to be much interest among the major European airlines to get involved in Slovenia at the moment.

How do you think Slovenia will resolve its aviation problems? Do you think the state will end up creating a new national airline? Let us know what you think of this story in the comments below.