Slovenian civil aviation authority on Wednesday gave the EU member’s struggling flag carrier a week to present a financial restructuring plan or else lose its operating license.
Slovenian media have speculated that a bankrupcy procedure could be imminent for Adria Airways, which has suspended flights since Tuesday, affecting thousands of travellers.
Five of Adria’s planes were taken back by lenders over the last week, but the airlines can continue operating with its ten other planes for now, Civil Aviation Authority (CAA) director Rok Marolt said.
“Adria must present an approved financial plan by October 2… Otherwise, the CAA will revoke its license without new hearings,” Marolt was quoted by the Finance daily as saying.
The CAA also warned the company it has to report to the agency if it decides to declare bankrupcy.
Adria, which operates regional flights between the Western Balkans and other parts of Europe, has suspended all but one flight since Tuesday over liquidity problems, saying it was “in intensive talks to find a solution with potential investors”.
More than 3,000 passengers were affected by the cancelled flights so far, according to Radio Slovenija.
Wednesday’s newspapers reported Adria’s end as almost inevitable with titles such as “Stalling with the unavoidable” and “The national flag carrier is flying no more”.
Slovenia sold the financially stricken carrier to German investment fund 4K in 2016 after having put over 50 million euros ($55 million) into it.
But under the new owner the airline, which employs about 500 people, continued to lose money, with some of its jets grounded since last week over unpaid bills.
Prime Minister Marjan Sarec has ruled out bailing out the struggling airline, saying earlier this week it would be “throwing away money”.
The carrier is the latest to fall victim to difficult business conditions for airlines.
Other recent high-profile casualties have been the French XL Airways and Aigle Azur airlines, which have both halted operations, as well as the Norwegian Air Shuttle carrier which rescheduled the repayment of $380 million with bondholders.
Condor, the German airline subsidiary of British travel giant Thomas Cook, has asked for help from the German government in order to keep running after its parent company declaring bankruptcy.