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Adria warned that state cannot offer rescue aid

Slovenian operator Adria Airways is operating a minimal service as it continues to explore options for a financial rescue, although the country's government has pointed out that its ability to assist the airline is limited.

Adria has restored flights on its important Frankfurt route, but is not operating other connections. It says it remains "committed" to achieving a "positive solution" through discussions with creditors and "potential new owners".

Members of an employee committee established to look at rescue initiatives have met with Slovenian economic development minister Zdravko Pocivalsek to present possible options.

Adria was privatised by the government in 2016 and Pocivalsek, who has been critical of the company's ownership, says there are obvious restrictions – notably European Union state-aid rules – which limit the degree to which the government can intervene.

Slovenia's government bailed out Adria in 2011 during a restructuring effort, and further state aid cannot be offered for a 10-year period.

The country's civil aviation agency has given the airline's management a window of a few days to come up with a solution.

While the rescue initiatives committee has outlined proposals, Pocivalsek says: "We have to assess how feasible and durable are the solutions we have on the table, and take immediate action.

"This is a challenge for the entire government – which we are taking seriously."

Pocivalsek has not elaborated on the details of the proposals but he says the company needs a complete restructuring of its ownership, finances, and business strategy.

He has warned that failure of Adria Airways would have short-term economic effects, but that other airlines could eventually step in to pick up demand.

Slovenia has "tremendous tourist potential", he says, and carriers can take advantage of the country's need for air connectivity.

Adria is also facing pressure from the country's market inspectorate, which oversees compliance with consumer-protection regulations. The inspectorate says it is reviewing the decision by Adria to advertise and sell tickets for services which were subsequently suspended on 24 September.

It acknowledges that Adria stopped selling tickets "immediately" after the decision not to fly, and has yet to conclude whether the earlier sales amounted to a potentially misleading business practice.

Adria is based at Ljubljana airport, which is managed by Fraport Slovenija. The management company's latest full-year financial figures show that Slovenian domestic carriers – primarily Adria – accounted for 56% of passengers at the capital airport during 2018.

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