Air Transport World

'You can't be independent and survive as a regional': Adria sees membership in an alliance as the key to navigating between LCCs and network carriers.(Profile)(Adria Airways)(Low cost carriers)

Can anyone imagine an airline with eight aircraft and a mini-network of some 17 mostly European destinations joining the Star Alliance? For Adria Airways, national flag carrier of Slovenia, this apparently is not a pipedream. The tiny airline views an invitation to join a nascent Star Regional grouping of four or five carriers by 2005 in the context of European Union eastward expansion on May 1 to 10 new countries.

Slovenia, which borders Austria, Hungary and Croatia in the western Balkans, is a prosperous country of 2 million people that has worked hard to disassociate itself from its Yugoslav Republic legacy since independence in 1991. As a "partner airline of Lufthansa" since 1996, Adria already enjoys what it terms "indirect partnership arrangements" with other members of Star.

The carrier is owned by five quasi-governmental entities headed by the Slovenian Pension Fund (55.8%), the Slovenian Restitution Fund (20%) and the National Finance Corp. (18.07%). Profits are reinvested and no dividends are paid. Net earnings in 2003--80% of which were from scheduled passenger services--plummeted 13% to 451,000 [euro] while operating profits logged in at nearly 4 million [euro] on total revenues of 127. …

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