Tuesday, April 14, 2009

Code shares and SPA’s with El Al

Shalom Montenegro Airlines
Montenegro Airlines and the national carrier of Israel, EL Al, which is interested in the purchase of 30% of shares in the Montenegrin carrier, will soon sign Special Prorate Agreements (SPA’s) and code shares with each other. The SPA would allow Montenegro Airlines to sell tickets on select El Al destinations and El Al would be able to do the same with Montenegro Airlines with both airlines sharing the profits. However the SPA agreement relies on bilateral government agreements. Only once an agreement is signed between the government of Montenegro and Israel can the cooperation take full swing. After successful talks in Podgorica yesterday, Montenegro Airlines CEO Zoran Đurišić will travel to Tel Aviv next week where further negotiations should take place. Montenegro Airlines has a total of 50 SPA agreements although with different carriers.

“Montenegro Airlines is looking for a strategic partner so we don’t come into a situation where the big fish will eat up the smaller one”, Đurišić explained stating that El Al is not the only carrier showing interest in Montenegro Airlines with carriers from Russia, the United Kingdom and Germany also interested. Three years ago the government of Montenegro adopted a plan regarding the privatisation of 30% of Montenegro Airlines. While Đurišić says that there is no time frame until when the privatisation should be complete he states that it would be most beneficial that it occurs by the end of the year. The European Bank for Reconstruction and Development has also shown great interest in purchasing these shares.

El Al representative Hayim Romano said that Montenegro Airlines is a good partner and that he expects improved cooperation between the two airlines. “I hope that the SPA and code share agreements are only the first step in what should be a successful and long term cooperation”, Hayim said. He states that charter services between Tel Aviv and Podgorica should begin this year while a permanent line depends on the bilateral agreement between the two countries. Yesterday it was reported that El Al would demand taking over “Airports of Montenegro” if it bought Montenegro Airlines however Hayim said this was not discussed yesterday although he adds “all options are open”.Israeli companies have, in the last 5 years, intensified their investments in the region especially Montenegro and Serbia. Montenegro Airlines could become the second EX-YU airline to be partially privatised by the end of the year with a takeover of MAT Macedonian Airlines on behalf of Jat Airways expected in August this year. Last year Turkish Airlines took over the Bosnian B&H Airlines.

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