Last month, I reported on loss-making Adria Airways, the Star Alliance member, Slovenian airline who were ordered by the Civil Aviation Agency of Slovenia to provide proof of financial stability by the end of the year, specifically through the injection of fresh capital, or face having its Air Operator’s Certificate (AOC) revoked — which could have led to the airlines’ collapse, a somewhat frequent occurrence in recent European aviation.
Operationally, Adria Airways (a private company) has been suffering for quite a while. It’s fleet, made up of Airbus, Bombardier, and Saab aircraft often face technical issues which result in the cancellation of at least two flights per day. This winter, multiple routes have been suspended, and the airline admits it’s in desperate need for more flight crew.
In Slovenia, Adria Airways is known for its everyday disruption, and despite being a member of Star Alliance (which enables passengers to flow from other Star Alliance member airlines onto Adria Airways flights), the Slovenian carrier faces weak load factors throughout the winter season. Excluding the peak summer months, Adria often has trouble achieving a 55% load factor (occupancy rate) on its Airbus A319s.
Adria Airways’ largest investor 4K Invest’ have now promised to save the airline by recapitalising the company with €14 million, which it will invest into the airline during the first quarter of 2019. The funds will be used for “further business development of the Slovenian airline”
In a bid to boost financials, Adria Airways will continue to lease aircraft to Lufthansa, Luxair, Austrian Airlines and Swiss. By next year, Adria Airways’ fleet will reduce to 12 aircraft, relying on revenue from leasing deals with other European operators, rather than its own fare-paying passengers.
While everything at this point seems sensible, and 4K Invest’s commitment may be able to help the airline outline a more stable, strategised path for its future operations…Adria Airways has just signed an incredibly questionable deal, which has triggered a backlash in Slovenia.
Adria Airways has now concluded a long-term lease arrangement with Russia’s Sukhoi Civil Aircraft Company for fifteen Sukhoi Superjet 100 aircraft. Sukhoi says the first of the jets will be delivered as early as next year. A Letter of Intent (notably, not a firm agreement) was signed between the Russian Minister for Industry and Trade, Denis Manturov, and Adria’s CEO, Holger Kowarsch. In effect, the struggling Slovenian airline, which was on the edge of bankruptcy earlier this year, has signed to take fifteen Russian passenger jets that have caused ‘nightmares’ for the only two European airlines willing to fly the aircraft type.
Instead of outlining the future strategy of Adria Airways, the airline (hampered by ‘ongoing technical difficulties’ with its own Airbus, Bombardier and Saab fleet) has potentially just ordered fifteen Sukhoi Superjet 100’s — an aircraft type branded as ‘unreliable’ by Brussels Airlines, who is leasing the aircraft from Ireland’s Cityjet.
Brussels Airlines has complained about a frequent need for maintenance on its Sukhoi Superjets 100s, owing to “recurring technical faults which have hurt operations” and has left the airline frustrated with its wet-leasing deal.
Earlier this year, the Belgian airline was forced to cancel over 90 flights operated by the Russian Superjet, over just a 22 day period. A source at the airline said “technical problems occur very frequently. To make matters worse, there are little airports with engineers who are qualified to work on the SSJ100. It’s simply unreliable, and we are not able to continue like this”.
Last month, Brussels Airlines again expressed its disappointment with its leased Superjets, and while its contract expires in March 2019, the airline has now started to replace flights that would have been flown by the Russian jets, with Bombardier CRJ-900s. What’s also concerning, is that Brussels Airlines has now complained about the lack of maintenance manuals correctly translated from Russian, causing confusion for engineers on the ground.
Cityjet, the first European carrier outside of Russia to operate the SSJ100 on revenue flights has already returned one aircraft to Sukhoi, and a further three will soon make its way back to the Russian manufacturer. Unhappy with the aircraft type, Cityjet has no plans to have the aircraft reintroduced to the fleet.
Why have Adria Airways decided to place this aircraft order with Sukhoi? It’s extremely likely that the Slovenian carrier was offered another of Russia’s ‘sweet deals’ — as was, for a short while, enjoyed by Mexican low-cost airline, Interjet.
Interjet’s CEO boasted that the airline obtained a “sweet deal” from the Russian manufacturer for the SSJ100, admitting the cost of ten Sukhoi Superjet aircraft was roughly equal to the pre-delivery payment for one Airbus A320. He was quick to tell media “We are satisfied. A money-making machine.” However, his good spirits were short-lived, as soon after, Interjet were forced to ground Superjet aircraft due to ongoing technical faults, and a frequent need for urgent maintenance. Sukhoi insisted they ‘fixed the problem,’ and Interjet’s aircraft returned to service in January 2017 — but further groundings followed, including earlier this year.
Now, Interjet will remove the majority (and eventually all) of its Sukhoi Superjet 100s that were acquired since the first delivery in 2013, following problems with its Russian aircraft. The Mexican carrier plans to change its fleet to focus on ‘much more reliable’ Airbus aircraft.
What makes the Adria Airways and Sukhoi deal even worse? The fifteen jets will consist of a mix of new and already built airframes — meaning the jets causing significant problems, and actively being returned by all non-Russian airline operators, are now set to enter service with Adria Airways — of whom struggle to achieve operational reliability with its existing fleet of considerably more reliable aircraft.
Pilots themselves have commented on the lack of trust in the SSJ100. One, who flew for Interjet, told me “When we’re reporting genuine technical issues with this aircraft, Russia hits back and tell Interjet it is us [pilots] who are handling the aircraft incorrectly.” He went on to explain how he didn’t feel the genuine concerns the crew had while operating this new Russian jet were being addressed properly. Consequently, he resigned from the airline — and he’s now flying for Aeromexico.
What’s ironic here, is that Adria Airways CEO has said “During the past two years we have been analysing the SSJ100 and came to the conclusion that all the technical and operational characteristics of this aircraft would suit our strategic goals the best” — a statement I’m sure would raise eyebrows at Cityjet and Brussels Airlines respective headquarters.
How Adria Airways came to this conclusion is astounding, given Sukhoi’s after-care, support, and timely supply of parts have proven to be flawed, at best. Adria Airways has effectively signed to replace its existing CRJs, and other Western-built aircraft, with a heavier, Russian aircraft type, of which burns more fuel per seat than any jet already flown by Adria Airways.
However, with Russia being desperate to force the Sukhoi Superjet into the European aviation market for quite some time now, it’s unsurprising Slovenian media are reporting these aircraft are being ‘given away by the Russians.’
Western airlines have, for a long time been sceptical of the safety of Russian-built aircraft, and ongoing issues with the Superjet adds to the number of reasons of why it hasn’t entered service with any other non-Russian airlines.
In terms of strategy, Adria Airways now plan to overcome its existing frequent ‘technical delays’ with SSJ100 aircraft that have hampered operations at the only three non-Russian carriers to fly the short-haul jet.
Furthermore, while introducing a new aircraft type into an airlines’ fleet is very costly, given the training, equipment, maintenance, spare parts, and logistical differences, introducing a whole new aircraft manufacturer into a fleet is incredibly costly — even for the world’s most financially secure airlines, which Adria Airways is anything but. How Adria Airways think they will streamline operations with such a mixed fleet is anyone’s guess.
Several new aircraft experiences ‘teething problems’ upon entry-into-service — and recent history will show how the 787 Dreamliner suffered during its first year of service, along with the Airbus A380 — but with the SSJ’s, it’s different. If the letter-of-intent is firmed up into an actual order, Adria Airways face being the only non-Russian airline flying a jet manufactured by a state-owned Russian company who are still unable to distribute spare parts in a timely manner, and who have had its only three non-Russian customers return their SSJ100s.
Adria Airways, don’t do it.