|Montenegro Airlines to be privatised without airports|
Initial procedures for the sale of Montenegro Airlines have begun after the country’s Privatisation Council, headed by Prime Minister Milo Djukanović, urged the government to sell its shares in the indebted carrier. The Ministry for Transport and Maritime Affairs has offered to sell a minority stake in the airline, which is to be offered to potential investors through an international tender. Furthermore, the Ministry has ruled out the sale of state-owned company Airports of Montenegro, which runs the country’s two international airports in Podgorica and Tivat. It is believed the move will significantly diminish the national carrier’s chances of finding a strategic partner.
Previous attempts privatise Montenegro Airlines have all failed. In 2009, Israel’s national carrier, El Al, teamed up with the European Bank for Reconstruction and Development in order to purchase a stake in Montenegro Airlines. El Al was interested in the carrier only if it gained control over Podgorica and Tivat airports as well, which the government deemed “unacceptable” at the time. In 2011, the Montenegrin government offered a 30% stake in its national airline. Arkia Israeli Airlines, El Al and Etihad Airways all purchased tender documentation but never made a takeover offer. Later that year, the government announced that Turkish Airlines was close to making a takeover bid for both the airline and the country’s airports but added it would not sell its national carrier at any cost. Plans to privatise the carrier in 2014 did not materialise either, however, the CEO of Montenegro Airlines, Daliborka Pejović, recently said, “Montenegro Airlines is in continuous contact with the Privatisation Council and is giving serious consideration to all letters of intent”. Earlier this month, the government admitted that potential investors have shown no interest in the airline.
Meanwhile, the French concession and construction company Vinci recently expressed interest in establishing a partnership with Airports of Montenegro. Over the years, several companies have eyed a stake in the operator, including the Turkish conglomerate Limak Holding. The CEO of Airports of Montenegro, Milovan Djuričković, who has run the company since 1999, has spoken out against attempts to privatise the two airports. “There can only be three reasons for privatising a company. One is if the management is bad, which in this case it isn’t, the second is if the company is unable to finance further development, which isn’t the case, and lastly if the government is strapped for cash. An airport is of strategic importance to a country”, Mr. Djuričković said. Last month, the International Air Transport Association (IATA), voiced its reservation over the privatisation of airports. The global airlines body said governments should resist the temptation of earning revenue through such exercises and evolve policies supportive to all players to spur growth in the aviation sector.
Montenegro Airlines becomes the third airline from the former Yugoslavia to be listed for privatisation this year, following Adria Airways and Croatia Airlines. Slovenia is seeking to sell a 96% stake in Adria, while the Croatian government has set up a commission for the privatisation of its national carrier. A tender for the submission of bids is expected to take place early this year.