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Ljubljana airport operator's boss Skobir makes another call for state aid (interview)

Brnik, 08 July (STA) - Passenger numbers at Ljubljana airport have been severely affected by the Covid-19 pandemic even if many routes have already been relaunched. This is why Fraport Slovenija director Zmago Skobir believes the government should help airlines with state aid to preserve routes and aviation as a whole, which he sees as extremely important for Slovenia.

"The situation now is no better than we anticipated back in April," Skobir said in an interview for the STA, saying there are seven air carriers flying to Ljubljana, but the routes to Helsinki, Madrid, Zürich and Munich have already been lost for this summer season.

The airport thus expects to realise only 30% of the planned passenger transport for 2020, or half a million passengers, but only if the relaunched routes are kept.

The occupancy rate for air flights being at 40-50% raises the question of whether airlines continue operating these routes, which Skobir says is vital for the airport and Slovenia's connectivity.

There are few tourists, and only those who really have to travel fly, said Skobir, mentioning business people, repatriations, and family visits which were not possible during the epidemic.

Skobir thus urged the Economy Ministry to help air carriers in this initial stage of relaunching air routes, saying we are talking about just 10 euro per passenger.

This is feasible under EU rules and other countries have already resorted to the measure, explained the director of the operator of the Ljubljana international airport.

"It's of paramount importance to keep the routes so they're here when passengers have regained trust," said Skobir, highlighting a fierce competition for air carriers among airports.

He said good connections will be key next year, when Slovenia presides over the Council of the European Union.

He also believes it would be more economical and sensible for Slovenia to support large airlines with a diversified network than set up a new national air carrier after Adria Airiwas went bankrupt last year.

Setting up a new air carrier would be more expensive and time-consuming also requiring additional funds during the pandemic, so he sees no added value in such an effort.

Skobir is convinced the airport can normally function without a national airline; following the collapse of Adria Airways, 95% of its routes - including all of the most vital for Slovenia - would have been restored this year had there been no pandemic, he argued.

Skobir is also disappointed that the ministry is not responding to Fraport Slovenija's initiatives about the situation.

The ministry meanwhile says it is in talks to attarct airlines to Slovenia, but Skobir says Fraport Slovenija has no information about this.

He also misses the state's strategic position on how to approach keeping the key links for Slovenia. Closing the border and setting entry conditions is also a reason why some airlines postpone or abolish flights, including the already relaunched ones, he said.

"Much has already been missed, but not everything. There's still some time to work out a smart concept."

Slovenia's connectivity and the aviation industry are not key only to the airport but also the entire country and economy, he stressed.

Many, also smaller companies, in the area of Ljubljana airport, which have over 2,000 workers, were just like Fraport Slovenije forced to cut their employees as a result of the drop in air transport.

Fraport Slovenija planned to lay off 120 workers, or around a quarter of its employees, this year, based on a projection of 1.1 million passengers in 2021.

Although the final list of redundancies will be finalised in the coming days, Skobir said the 120 figure had been reduced by almost a third.

The dialogue with in-house trade unions has meanwhile failed in that the unions insist on the company waiting with the layoffs until the end of 2020 and resorting to the short-work and furlough schemes.

But Skobir says it is already clear the company is not faced with a short-term lack of work but with medium-term or even long-term consequences of the pandemic, stressing business should be back to the 2019 level only in 2023.

He believes that by delaying the layoffs, Fraport Slovenija would only abuse the furlough scheme.

"We can't speculate and spend another two to three million euro on this, it is key for the company to stay healthy to stay in business. Should an unexpected change happen after all, we'll immediately re-hire all the workers."

The trade unions also believe Fraport Slovenija should suspend the investment into a new terminal instead of laying off its workers.

Skobir said the terminal is a long-term future, adding the new epidemiological reality demands from airports to provide more space and better quality.

The investment is running according to plans, and the idea is to have the terminal ready by the time Slovenia starts the EU presidency in the second half of 2021.

Fraport Slovenija allocates EUR 2-2.5 million monthly for its operations, wages and the investment, he said.

"We're spending the profit accumulated in previous years and which the [German] owner did not pay out as dividends. But this money will run out until the end of the year and we'll be forced to borrow," he said, adding the investment would perhaps have to slowed down then.

Cargo transport, which represents around 10% of Fraport Slovenija's revenue, is meanwhile running smoothly, albeit still slightly scaled down.

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