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Slovenian committee hears case for probing Adria sale

Slovenia's parliamentary finance committee has held an urgent session to discuss the adverse effects of Adria Airways' privatisation, following a highly-critical request from the left-wing Levica political party.

Levica had proposed that the finance committee order the state Court of Audit to examine the contract under which Adria was sold to 4K Invest when the company was privatised in 2016.

It also sought to spur the Slovenian government to explore the conditions under which it could establish a new state-owned airline, with the support of ex-Adria employees.

Convening of the committee on 11 October followed a strongly-worded formal request from Levica member Matej Vatovec – three days before Adria filed for bankruptcy on 30 September – in which he condemned the sale.

"Adria Airways is not the first, probably not the last, case when the privatisation of strategic companies will prove to be an unwise move with critical long-term effects," he says.

"The previous government sold it at such a cheap price that it was practically donated."

Adria had been one of 15 companies earmarked for privatisation but Levica had proposed in 2014 to exclude the carrier and instead reclassify it as an asset important to the country, says Vatovec.

Privatised companies which become affiliates of foreign organisations, he says, are managed for the interests of their parent and, in general, not for the interests of their employees or the developmental needs of Slovenian society and its economy.

"With privatisation the economic power base is transferred to distant centres and therefore further beyond the citizens of this country," he adds.

Vatovec says the sale to 4K Invest was a "catastrophic decision", adding: "In just three years, there has been depletion, shrinking business volumes, undermining of labour rights and working conditions, eroding the quality of services, neglect of infrastructure, and complete destruction of the airline."

Instead of flourishing under private ownership, he says, Adria has "finally been eliminated". The collapse has left a gap in Slovenia's integration with the wider region.

Slovenian right-wing party SDS says it was warning about the sale of state-owned companies which could be considered controversial in regard to transparency.

The party says its members pointed out, at the time of the 2016 privatisation, that Adria had been recapitalised with more than €50 million of public funds since 2011, but then sold to 4K Invest for just €100,000.

Slovenian sovereign holding firm SDH had insisted that the sale to 4K was an "economical decision", says SDS, and that it would prevent the carrier's bankruptcy.

But the party says that, if the airline had been facing bankruptcy, it is "still unclear" why the government sold it to a financial fund that had "no experience" in the aviation industry, when an SDS member of parliament had warned that Adria would need an owner with knowledge of management, marketing and development of airlines.

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