September 25, 2019 / 1:30 PM / 23 days ago

Slovenian aviation agency gives Adria a week to present financial plan

LJUBLJANA (Reuters) - Slovenia’s Civil Aviation Agency (CAA) has given Adria Airways until Oct. 2 to present a financial plan in order to keep its license to operate, CAA head Rok Marolt said on Wednesday.

He said Adria needed a capital hike of several tens of millions of euros, and the airline’s license would be taken away without further deliberation if the company failed to present a financial plan by the specified date.

Adria is the latest in a long line of small European airlines to run into financial trouble amid industry overcapacity, cut-throat competition and high fuel prices.

It canceled 158 flights on Tuesday and Wednesday - most of those scheduled - due to its financial problems, affecting more than 3,700 passengers.

Marolt was not able to say whether the airline would resume flights on Thursday, while Adria was not immediately available for comment.

Marolt said the financial plan would need to include contracts with the owners of leased planes and payments of delayed wages to Adria employees.

Adria said on Tuesday it was in talks with a potential investor but gave no details.

After holding a meeting with Adria’s management, Marolt told a news conference that the agency would act before next week if there was any indication that “Adria would be digressing from flight security”.

Slovenia sold Adria to German investment fund 4K Invest in 2016. The company has since sold all its planes and has been flying leased ones to European destinations, including Germany, France, Netherlands, Belgium, Austria and the Balkans.

Government officials have said Adria cannot receive state aid as that would be against European Union rules.

Travel firm Thomas Cook (TCG.L) collapsed this week, while Germania, Flybmi and Iceland’s WOW have all failed this year. Regional operator Flybe’s sale to a Virgin Atlantic-led consortium narrowly averted its collapse.

Reporting By Marja Novak; Editing by Jan Harvey and Kirsten Donovan

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