Friday, April 8, 2011

Montenegro bailout

Montenegro Airlines rescued

The Montenegrin Government has run to Montenegro Airlines’ rescue after the airline reported it was in debt and in urgent need of cash. Montenegro’s government said it would guarantee 9.6 million Euros in loans to help its flag carrier to add routes, buy new aircraft and maintain its fleet, Bloomberg reports.

The carrier, whose current fleet includes 5 Fokker F100s and 3 Embraer E195s, plans to spend 4 million Euros to buy another E195 jet, while 1 million Euros will go toward repairing its existing aircraft, the Finance Ministry said. A further 4.6 million Euros will be used to fund additional new routes.

Montenegro Airlines has already made arrangements for a 2 million Euro loan from Hipotekarna Banka in Podgorica and another 2.4 million Euros from NLB Montenegrobanka, a unit of Slovenian Nova Ljubljanska Banka. It used government guarantees, approved yesterday, to take out the loans.

Montenegro Airlines was forced to suspend services to Priština and Skopje due to debt and admitted it had outstanding payments to Vienna and Frankfurt airports. This summer, the airline slashed services to its main service, Belgrade, while one of its aircraft awaits repairs.

16 comments:

  1. Was this the right move? Sadly, yes.

    Yesterday's news of FR flying a few seasonal routes is more than coincidental - most simply, the country will close the doors to the rest of the world outside summer if the airline goes under. No other airline will guarantee many of the routes currently operated, or venture into the market.

    However, planning to spend more money to buy another jet must be held with a degree of skepticism. Will it pay itself off? What are the chances of it being impounded to pay other bills etc?

    Whilst i'm glad there is no Ch.11 possible for airlines in Europe (it would stop nearly all the current US-based operators overnight), constantly going cap-in-hand isn't the right approach either...

    ReplyDelete
  2. Peter from SydneyApril 8, 2011 at 11:30 AM

    I agree with frequentflyer the idea of buying another jet when they're already struggling with routes and loads seems idiotic!

    ReplyDelete
  3. well maybe there is a chance to start join venture JP & YM....

    ReplyDelete
  4. I am glad that YM is rescued and I am very positive about their future if Montenegro succeeds to become a more popular tourist destination.

    Off topic:

    Yesterday evening was revealed that MAT Airways merged with Airlift Service-Skywings.MAT took over the Airlift plane Z3-AAJ.
    Airlift Service will exist no more as air company.
    So from today and on MAT AIRWAYS will be operating with 2 aircraft to 8 destinations.
    They merged with the aim of reducing costs and more effective operations.After almost 2 years Macedonia got again a carrier of the size of former MAT-Macednian Airlines

    ReplyDelete
  5. Montenegro Airlines is a great company. I fly very often and I am very satisfied. I welcome the investment in new fleet as it is in the interests of passengers to fly a new and safe aircraft.
    A crisis has to go, so thank the government of Montenegro which helps to YM and passengers also.

    ReplyDelete
  6. FLY:

    thanks to the government of MN which helps YM and the passengers...

    it s not the governments duty to get involved into the free economy market. If there is no market or the companies are not able to run themselves, let them die.
    It s your taxmoney which they use for this. Why should u pay for this? Keep the money for you and invest it into your own future.

    Let the market decide who can go on or not and no government who s wasting the citizens taxmoney for something they have nothing to get involved with.

    No one of the ex YU republics really needs there own airline. If one of them can survive than very nice and go ahead, but if they are not mature for the market, let them all die. Important for all of you is that you have good connections, a healthy aviation industry which will create jobs auotmatically and low taxes on your salaries. The least what you need is that what you have now

    It s just terribe to see how much of the public taxmoney is wasted overall in the world. Up to 50% or more of a salary goes away for inefficient government systems/spendings. That s money which u work your bud off every day and which belongs to you.

    In Switzerland we spend apx 20% of our salary for taxes and the social system and the VAT is 7.6%. The rest is ours and that s good so.
    We def know better how to deal with the money since it is our own earned money and we will think twice before spending

    So if YM, JP or MAT dies, let them die. No providers will step up and take over. It s like with the mother nature, the sick animals have to be taken out of the system in order the system goes on well

    ReplyDelete
  7. OFF topic:

    Ryanair has added one more route to Pula this summer from Brussels -Charleroi starting June 15th twice a week.

    ReplyDelete
  8. Dear BEGLAX

    In which Switzerland do you live in?
    Just a remark to you that not so long time ago-about 2 years ago your country helped your biggest bank UBS with 60 billion CHF.The banking system and the total Switzerland were on the brink of disaster because the balance sheet of UBS overruns the swiss total GDP by a factor of 3!!
    If the government hadnt fed this bank with your tax money, Switzerland would have ended like Iceland!And do you ask yourself in Swizerland if a country of 7million citizens needs so big banks?I doubt!
    Also not so long ago in 2001 your government was feednig SWISSAIR with taxpayers money for years and this airline was for years artificially alive.
    Do you need any examples from Germany, France, Italy or UK??There are hundreads of thousands examples, especially in the last 3 years.Nowadays Portugal, Grece and Ireland would have been "dead" if there hadnt been any help:-)
    The total western economies would have been dead without taxpayers money to rescue bakns, car manufacturers, airlines.Because of that european countries are highly indebted and is a matter of time when China and Brasil would be called for help!!Brasil promissed yesterday to help Portugal.
    This was only to point out that EX-YU region doesnt differ much in this aspect.
    Your stories are taken from Adam Smiths theories of economics but they are away from the reality!!

    ReplyDelete
  9. It is OK to pay to transnational mega-company Ryan Air to fly in season (sorry, to "pay for advertisement in Ryan web pages" some 500.000,00 EUR) but it is not OK to pay to your own company and your own employees (pilots, cabin crew...) to fly all year.

    Ryan gets money and don't pay taxes in Montenegro

    but Montenegro Airlines can not get money but they still have to pay taxes in Montenegro????

    ReplyDelete
  10. BEGLAX:Quote:'it s not the governments duty to get involved into the free economy market.'If you think so,can you explain,why the Serbian goverment didn't alowed to Master airways to fly from LYNI? Why did they reject Ryanair,alsoe for LYNI?
    Why don't they let JAT die,and let other companies to take over their flights from LYBE and LYNI? I am alsoe a tax payer,and they are using my money to keep JAT alive...By the way,YM has 7 planes,4 F-1oo and 3 E-195.One of the F-100 is defenetly grounded in Tgd,and will never fly again. And one more info,YM will have 3-5 flights per day for DME,and they have sold about 95% of tickets till early october for those flights.This is one of reasons,why did Montenegrin goverment helped YM....

    ReplyDelete
  11. ^You obviously have no idea how many airlines fly from Belgrade. Ryanair never applied to fly from Serbia and Master Airways was an airline that was based on the corrupt dealings of the dear old GX CEO. Thank god that never took off.

    ReplyDelete
  12. FOR JU520 BEGLAX, THE VAT IN SWITZERLAND IS 8%, SINCE 1ST OF JANUARY 2011!

    ReplyDelete
  13. What ever happened to Lufthansa starting flights to pristina?

    ReplyDelete
  14. Peter from SydneyApril 9, 2011 at 5:47 AM

    @ JU520 BEGLAX I agree with you to some extent, but your over idealised view of the 'free market' is getting in the way of reality. The free market worked so well having caused the GFC. What about areas of market failure, when the market won't step in because it's not worth their trouble. YM does have a point to some extent, the low cost carriers will flood the market during the summer but will then just abandon it until the next summer season. If YM isn't there how does Montenegro keep its doors open to the world? Some government intervention is necessary but it has to be strategic and on target.

    ReplyDelete
  15. Peter from Sydney
    BRAVO! This is true. Low cost carriers will come to Montenegro or any other small country, flying a few months as they have ineterest, and then go out. And what's next.???
    If Has no national air carrier, Montenegro can not expect tourism development.
    That is everywhere in the world and especially in countries facing coach. (tourist destination).
    After only Montenegro Airlines wanted to cooperate with the city of Nish, enable residents of southern Serbia to have a window to the world.
    From Nish all given up hand and let him to fail and return to the 19th century.
    Today, people from Nish and other people in the south-eastern may feel europeans,because they can fly every day from Nis to Europe for 199 euros!!!(Moscow, Zurizh,London,Paris,Franfurt...)
    Less than Swiss and Air France, and they have a new fleet,also!!

    We must say a lot of Belgrade and his (only) the development and turn yourself, just south of the Sava and Danube. Elaborate and make Nis airports. We need those who are not from Belgrade!!

    Thank Montenegro Airlines and the Montenegrin government.
    Grateful - Nishlija

    ReplyDelete
  16. Good Day,

    I am Chua Teo (CEO) of Chua Teo Loans Firm, I'm a Reputable Money Lender who give out loans to Individuals & Companies in need of loan. Do you have a bad credit? Are you in need of money to pay bills or settle other debts? We will be glad to render you a loan service. We offer all kinds of loan at 2% interest rate. We offer loan from $2,000 USD to $50,000,000 USD, duration of 1 to 20 years.

    Apply with us and get approved without stress or delay! We await your response if you are serious and interested, upon response, you'll be mailed a Loan Application Form which you'll have to fill and send back to us. Looking forward to hear from you, you can reach us via....

    Email: chuateo_loansfirm@yahoo.com.sg

    ReplyDelete

Before posting a comment be mindful of other participants and readers. EX-YU Aviation News does not tolerate insults, excessive swearing, racist, homophobic or any other chauvinist remarks or provocative posts with the intention of creating further arguments. Such comments will be deleted as soon as possible. The opinions expressed by those providing comments are theirs alone, and do not reflect the opinions of EX-YU Aviation News. Thank you for your cooperation.