Minister and ex-Adria CEO critical of Slovenian flag carrier plans

Slovenia’s Finance Minister, Klemen Boštjančič, who was also the CEO of the now-defunct flag carrier Adria Airways, has urged caution over plans to establish a new national airline, stating the country’s budget could not handle another loss-making state-owned company. The comments were made after several ministers in the cabinet expressed their support for the creation of a new airline and an expert study showed a Public Private Partnership (PPP), which would see the government join forces with a private company to set up the new carrier, was presented to the public. “The analysis represents just 15% of the data required to make a decision about setting up a new airline”, Mr Boštjančič, said.

The Finance Minister noted, “There is no doubt that Slovenia’s air connectivity is poor, this has to be addressed. But this can be done in multiple ways. A Public Private Partnership is the only realistic option to create a local airline – if it is created in the first place. The state is not an institution that can strategically manage such a company. I am repeatedly surprised, and critical in internal talks, by statements made by my fellow ministers who vehemently argue how public finances can easily handle various projects, in this case an airline. This is not true. We need to decide what the strategic projects are and what are the things that we really need. I know a little bit about the aviation business. It is one of the most competitive industries globally”.
During his time at Adria Airways’ helm, Mr Boštjančić implemented wide-scale cost cutting measures at the airline, which stabilised the carrier’s finances. However, it came at a cost, with the company diminishing its route network, resulting in a major plunge in passenger numbers. In 2012 the carrier handled under a million travellers for the first time in seven years. The former CEO was praised for securing bank loans and government handouts for Adria. Mr Boštjančić pushed for the airline’s privatisation and said that national carriers from the former Yugoslavia should merge if the Slovenian airline failed to find a buyer. Adria was eventually privatised in 2016, which ultimately sealed its fate.
An opinion poll conducted on behalf of the Slovenian daily “Delo” has shown that 70.6% of Slovenians support the creation of a new airline if it were to be profitable. However, only 17.6% believe it should be established even if it were to produce losses. Asked whether the government should include a private partner, 55% of respondents answered affirmatively, while 22.9% were against it. Just over 22% of respondents were undecided. Some 26% said they would choose a Slovenian carrier for a trip abroad even if the airfare was more expensive than from a nearby airport outside of Slovenia.

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