Monday, June 8, 2009

MAT facing bankruptcy

Since late last year the Macedonian national carrier has faced major difficulties. The airline is now grounded hopeful that flights will begin within a few weeks, however, any expectationof this happening is becoming slim. Once again the Macedonian Civil Aviation Agency (CAA) has come up with a new ultimatum for the Macedonian national carrier. The Agency originally grounded MAT due to problems with the front leg and wheel of airline’s Boeing B737-500. Now the Agency expects the carrier to pay up a total of 2.5 million Euros for outstanding debt and expects the airline to officially announce its bankruptcy as a result. The Agency is also considering freezing all assets owned by MAT. The biggest losers out of the entire dispute are passengers who have purchased tickets from MAT months ago and are now unable to fly. MAT has tried to accommodate these passengers by transferring them on other flights, although the carrier has also been blamed for selling tickets for its flights a few days after the CAA grounded the airline.

MAT’s management doesn’t seem to be concerned by the new demands and says that the carrier will be flying again by the end of this week. The Boeing B737-500 should be arriving in Skopje within the following few days after more repairs were done to the aircraft’s front leg. Even though the aircraft was serviced and repaired free of charge in Belgrade a few weeks ago, the CAA did not recognise that the aircraft has been mended.

News is circulating that certain individuals within Macedonia, mainly affluent businessmen, are already setting up a new airline which would replace MAT. Some argue that all the actions undertaken by the CAA are aimed at destroying MAT and allowing a new carrier to be created. If MAT declares bankruptcy it would be the third national carrier from the EX-YU to do so, after Palair which was also the national carrier of Macedonia until its demise in 1996 and Air Bosna which was the national carrier of Bosnia and Herzegovina declaring bankruptcy in 2003. MAT’s status as the national carrier of Macedonia ends in 2010 according to an agreement between the Macedonian Government and MAT, signed in 2000. With the current situation it is unlikely that its flag carrier status would be extended.

Meanwhile, other foreign airlines are benefiting on the account of MAT’s troubles. Airlines are drastically increasing services to Skopje as passenger numbers rise. The latest airline to announce an increase in service is Turkish Airlines. The Turkish national carrier will increase services from Istanbul to Skopje from 5 to 7 weekly flights starting June 8.


  1. Any updates with Jat's takeover of MAT, because MAT could be rescued just in time if the whole process is hurried up a little bit more between Belgrade and Skopje.

  2. It's not a takeover per se. It's a debt for equity conversion from old outstanding debts that MAT has to Jat dating from the late 1990s. The conversion of that debt into equity in MAT would result in Jat taking a large stake in the carrier.

  3. You would think by now that Macedonia would have a well established carrier.

    Why is that this country cannot sustain a national airline.

    Best option would probably be is for MAT to bankrupt and establish a new leaner airline simply called Macedonian Airlines and have people who are cabable of running an airline without burning it to the ground.
    In addition to the above, the airline needs people which can keep the carrier profitable so it is able to reinvest in fleet updates, better reservations systems etc.

    Macedonia needs an airline which is able to have a modern fleet, connect travels to various cities, London, Frankfurt, Paris, Milan etc, rather than have an airline which operates a low frequency to only a handfull of destinations and an airline which is able to have a fleet of 10-15 aircraft.

    Although I would love to see MAT fly again but it seems that the airline does not have the best direction that it deserves.

  4. @ Anonymous: Interesting analysis. Do you think the Macedonian CAA should take some of the blame for MAT’s fall?

  5. Hi Ex YU Aviation,

    Yes I do believe that the Macedonian CAA is responsible and the government alike.

    It was great to see the government grant MAT a national carrier status however the airline had problems which needed to be looked at.

    Although times are tough due to economic crisis, if you look at the history of MAT it has not expanded much at all since it started operations in the early nineties and the crisis has only been around for around one year.

    If you look at the big picture, a proper “MAT Macedonian Airlines” should be operating next generation 737-700 or 737-800 or even airbus aircraft if it was run like it should have been, rather then operating older 737-500’s.

    It should have had at least 10 plus aircraft, but where is the money going???

    Unfortunately many foreign airlines have pulled out of Macedonia, but if MAT had the proper direction that it deserved it could have tapped into those markets and really it is beyond me why there are no direct flights to London, Frankfurt, Munich etc and even operating to destinations such as Dubai or Abu Dhabi etc where it can work with Emirates or Etihad to focus on the Australian/Macedonian Market. (As an example)

    Yes Macedonia may be small, but the opportunities for a national Macedonian Carrier to grow Financially, Fleet wise, and destinations offering decent frequencies are there.

    Skopje is underservcied but if you look at Ohrid Airport, what hell is going on there?

    Why hasn’t MAT based 2 or 3 aircraft there permantly and have a higher frequency to Germany/France/Italy/Switzerland and so on? – The reason: because it was not in a position as the wrong people are running the airline and it is amazing that the Macedonian CAA and government did nothing except now watch the airline crumble.

    I am baffled as to why Macedonia still does not have a profitable airline and we are now 2009 and MAT only had 3 aircraft.

    As a Macedonian myself, it is really embarrassing to see a lemon operate as a national carrier and it is it obviously the directors and the Aviation team which have driven MAT in that direction.

    Overall the livery is fantastic and I would really like to see a profitable, leaner MAT – Macedonian Airlines represent Macedonia. If MAT does not survive, then I would be happy to see a new Macedonian Airlines operate which can offer the Macedonian market a reliable service and by this once again I mean, new fleet, more destinations with higher frequencies.

  6. ^
    There's an easy solution to this: Wizz Air. They are lean (cost per passenger even lower than Ryanair) and comfortable and operate to most of the airports one would need to get to. If you want a flight to long haul destinations, then you've already got Austrian, Lufthansa, and CSA to provide a connecting service with interline agreements in place.

    The days of the small flag carrier airlines are numbered...


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