Austrian to pull Slovak assistance

Austrian Airlines Group have issued an angry statement regarding its financial support of Slovak Airlines.The statement reads:

“As the Slovakian Government has failed to honour a long due legal agreement by 31 December 2006, despite being given extensions on the due date on a number of different occasions, the Austrian Airlines Group has been unable to grant Slovak Airlines any further financial support since the beginning of January 2007. Since the decision over the issue promised by the government has been repeatedly delayed, including in the government meeting held on 17 January 2007, and an evaluation under EU law has been decided as what appears to be a conscious and prolonged delaying tactic demonstrating a lack of readiness to pay, there is no perspective for the restructuring of the company. It is absolutely unacceptable that - two years after the signing of the contract and when Austrian Airlines, the contractual partner, has suffered substantial damages - implementation of the obligation that was entered into should even come into question. Slovak Airlines will terminate its scheduled services today. Since two aircraft are the property of the Austrian Airlines Group, the Board of Management of Austrian Airlines has decided to immediately return the Fokker 100 and Boeing 737-300 in order to guarantee that Group property is secure. The further development of Slovakian aviation - particularly in the wake of the recently cancelled airport privatisation project - has suffered another blow due to this situation. The refusal of the Slovakian Government to fulfil its promises will not encourage foreign investors to commit themselves to the creation of value in Slovakia.

“Austrian Airlines acquired 62% of the capital stock of Slovak Airlines in January 2005, within the framework of a capital increase. The takeover of the liabilities of Slovak Airlines by the Slovakian Government at the time was a precondition for the acquisition of a share in the company by the Austrian Airlines Group. This takeover of debts, along with a range of other obligations, were determined in an agreement with the then Transport Minister, and would have fallen due in the spring of 2006.


“Against the background of the change of government in 2006, the Austrian Airlines Group held further talks, once again insisting that the contractual obligations be observed. The honouring of the agreement by the Slovakian Government, totalling around EUR 6 million, would have been an essential foundation and precondition for implementation of a restructuring plan. The Austrian Airlines Group will be examining all the legal channels open to it when seeking compensation for the damages incurred.


“Slovak Airlines currently employs approximately 100 people. Slovak Airlines operated scheduled services on the Bratislava-Brussels and Bratislava-Moscow routes. Scheduled passengers with tickets booked for the Bratislava-Brussels-Bratislava route will be rebooked onto Austrian flights from/to Vienna. Passengers on Bratislava-Moscow-Bratislava flights will also be rebooked - subject to availability. Rebookings will be made through the point of sale at which the ticket was originally booked.”