Adria Airways (Ljubljana) has disclosed in its annual report that it sold its brand in December of last year in a deal worth EUR8 million (USD9.6 million). However, the airline has not revealed who the buyer was. News site Siol speculates that the brand may have been sold to a company connected to Adria's owner 4K Invest in a bid to improve its financial figures on paper.
According to Adria's annual report, the airline will lease back the trademark. "A branding fee is paid by the new trademark owner (i) with a royalty deducting from the purchase price, and (ii) after 9 years, i.e. in 2025, the remainder of the purchase price of the brand in cash. The license fee for the calendar year is EUR400,000 + 0.15% of annual revenues."
As a result of the sale, Adria posted an annual net profit of EUR3.2 million, a dramatic improvement on 2015's loss of EUR9.2 million. This was despite an 11% decrease in passengers carried and a corresponding 6.72% decrease in passenger revenue. Operating expenses were down 6% to EUR150 million.
4K Invest subsidiary AA International Aviation Holding assumed full ownership of Adria Airways in July 2016 after winning an international tender to purchase the airline, as part of a government-backed privatisation drive. The airline operates to twenty countries using a fleet of three A319-100s, three CRJ700s, and seven CRJ900s.
According to its financial statements, the carrier has extended leases across the board with one of its A319s to now remain in service until 2021 with the other two until 2024. Four of its seven CRJ900s will continue to operate for Adria until at least 2022, while the other two will be retained to at least until 2026 and 2027 respectively. The three CRJ700s will also be retained until December 2019.
