Friday, February 20, 2015

Montenegro Airlines eyes partnership with Etihad

Montenegro Airlines to forge closer ties with Etihad

Montenegro Airlines, which has been shortlisted for privatisation this year, is eyeing closer ties with Etihad Airways and has recently launched fresh talks with the Emirati carrier. The news comes almost a year after Montenegro’s Deputy Prime Minister and Foreign Minister, Igor Lukšić, said Etihad was considering acquiring a stake in the country’s national airline. According to the state-owned “Pobjeda” newspaper, the two carriers are now looking to conclude a codeshare partnership agreement and boost cooperation, with talks recently held in Abu Dhabi. The involvement of Serbia’s Deputy President for Cooperation with the UAE, Mladjan Dinkić, who is heading the talks between the two parties has generated significant attention. Mr. Dinkić, who is also Serbia’s former Finance Minister, played an important role in Etihad’s takeover of Jat Airways, which was subsequently relaunched as Air Serbia.

Last year, Mr. Lukšić and Etihad Airways’ CEO, James Hogan, met in Abu Dhabi after which the minister said the Emirati carrier would complete a screening process of the Montenegrin airline. “We have made a definite agreement for a team from Etihad Airways to visit Montenegro in order to define models of cooperation and partnership between Etihad Airways and Montenegro Airlines”, Mr. Lukšić said at the time. Montenegro Airlines has been hit by strong competition over the past year on its two main markets – Serbia and Russia - which accounted for 62.8% of all passengers it carried last year. The airline handled some 557.000 travellers in 2014, down 5.3% on the year before and decreased its flight operations by 20%. However, Montenegro Airlines says it is holding up against its competitors, “Strong competition over the past two years hasn’t managed to jeopardize Montenegro Airlines’ position as one of the most punctual airlines in the region”, the carrier said in a statement on Tuesday.


Earlier this month, the Montenegrin Privatisation and Capital Investment Council announced plans to privatise Montenegro Airlines this year. 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. Both attempts to privatise the carrier in the past have failed, though Etihad has previously expressed interest to invest in Montenegro Airlines. During the 2011 privatisation attempt, in which the government was looking to sell a 30% stake, Etihad purchased tender documentation. However, it failed to place a bid later on. Etihad Airways currently counts eight equity alliance partners in which it holds ownership stakes, with its takeover of Darwin Airline, rebranded as Etihad Regional, still to be approved by Swiss authorities.

56 comments:

  1. I don't see this happening. If Etihad was really interested then they would have pushed JU and YM to cooperate more closely. Since that has not happened then it can only mean that Etihad has no intention of coming close to YM... with good reasons.

    After all, there is nothing to gain, the market is tiny and can be easily taken care of from BEG.

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    1. While I agree that it is a long shot, I don't understand what kind of codeshare they will make with MGX. From where to where?

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    2. Probably between Belgrade and Montenegro... though I hope not because it would be a slap in the face for JU. It would be like JU code-sharing with EK between IST and DXB or whatever.

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    3. Don't they already codeshare with JU to Montenegro?

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    4. I don't understand why Mladjan Dinkic has to negotiate a simple code share. I think it might be a bit more than that.

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    5. No, YM turned down JU's offer to code-share.

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  2. Under the table deals is what Etihad is all about and I remember how Aleksandar Vucic said how "The UAE repsects DInkic very much and he is 'covek od poverenja'" lol. I wouldn't be surprised if they do buy some stake. Remember Montenegro is only selling something like 30%. They started their takeover of Jat by making a codeshare.

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  3. Sve ide po planu, kamičak po kamičak ;)

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  4. Lol :) I thank that airline such Etihad knows that turning airline of the country with population just over half a milion and even with tourist potential into profitable is just insine. MGX should focus more on regional transport. They should ajust their fleet changing all emb195 into 4 or 5 DHC Q400 and try to be as profitable as posible otherwise the worst could happen! ES/A

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    1. Really? And what't Seychelles population? 50 million?

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    2. But of course, all companies in ex-Yu should have just Q400's, ATR's regional services and similar, and mighty ASL is the one to have long-haul,330's, hub to be compared with Changi etc etc.

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  5. This reminds me of the Slovene government trying to sell Adria to Qatar. lol

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  6. What's the point of Etihad buying Montenegro Airlines and then effectively having this "Air Serbia South" airline? Makes no sense to run it as a separate entity (and acronym would be terrible)!

    Better buy it and merge it with Air Serbia, operate as a single company and have some planes based in Montenegro with traffic rights and mixed/local crew, others move to BEG.

    And stay away from Dinkic, seriously. Dude has damaged reputation when it comes to economy. He has complete opposite of the Midas touch!

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    1. Or simply drive them into bankruptcy and then take over their E-jets for peanuts... the best solution.

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    2. Jel to isti Dinkić kojeg je Ajs Nigrutin "opjevao"?

      https://www.youtube.com/watch?v=RTs8hdQVMmU

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  7. There is nothing to buy there. They have bigger debts than company worth. Similar with profit "making" Slovens and Croats. Just remember JAT year and half ago.

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  8. This is a very logical step. If Etihad buy shares in Montenegro airlines (and it pocket money for them) they should

    - sell F100 fleet and stay on Embraer fleet
    - put Montenegro to fly on Podgorica-Belgrade route 4 times per day in summer, 3 times in winter, and Tivat-Belgrade 5 times per day in summer, 3 times in winter (no Air Serbia on that route or with maximum of one symbolic rotation to TGD and to TIV)
    - Montenegro to open every day route to Dusseldorf, Berlin and Frankfurt (Air Berlin code-share)
    - Montenegro and Alitalia to open every day route to Rome and 3-4 times per week to Milan (Alitalia code-share)
    - open route to Geneva and stay on Zurich route (Darwin code-share)
    - stay on several routes that are profitable to Montenegro like Paris, Moscow, Vienna and some regular summer charter routes
    - Etihad to open 4 times per week route to Abu Dhabi
    - cut working force and close all planning, operation, administration, marketing, selling and other similar departments and transfer all of those to unify department in Air Serbia to work for both companies

    And for sure they will have enough jobs for those 4 planes and even 2 more.

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    1. You do realize that nothing will come of this? This is just wishful thinking by the MNE government.

      YM is as good as dead. Air Serbia doesn't need them especially since it can take care of the market with its own aircraft. In winter time the Atr outperforms the E-jet and it is the more suitable aircraft.

      They wanted to run away from Serbia, they didn't want to cooperate? They wanted to be independent? They wanted to establish an airline in BEG and harm JU?

      Well, you know what, there is no reason to cooperate now when the situation is totally different.

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    2. Thanks for that purger. What would be the impact of the above on Air Serbia? To me as a laic it seems that it would be cannibalisation of existing Air serbia market or attacking market potentially more efficiently served by Air serbia than Montenegro. Subisdiaries of same company taking away market share from eachoteher at a cost for the overall company does not make business sense when compared to getting new value i.e customers from competition or new customers that didnt travel by plane before..Would these lines you propose actually bring new customers in more efficient way to Etihad group than if they were served by Air Serbia? cheers

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    3. Of course it doesn't make sense, especially the routes to Germany.
      These flights would take away passengers from JU so basically ASL would be shooting itself in the foot here.

      Since JU is determined to have its own US flights then feeding their transatlantic network makes little sense.
      Also, how can you compete on route to Germany when you could offer maximum 3 weekly flights. They could not compete with 5 daily to BEG.

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    4. Purger,

      I can agree with you that one could find lots of synergies between these two companies which would result in overall cost savings for both. However, your assumption is that Montenegro business decisions are driven solely by their profit. This would be the case in the rest of the world, not in Montenegro. If it was they would probably be bankrupt by now. Lots of sons and daughters of important people would have to be fired and I’m sure Milo and comp. is not ready for that.

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    5. Otherwise it’s win-win situation. Functions like marketing, HH, call centers centralized in let’s say Belgrade (increased revenue for JU), YM flies their metal on profitable routes (Serbia-Montenegro, lots of frequencies plus some others) and JU frees some ac for further expansion (big saving from not having to obtain new ones). YM would still have to ground some ac during the winter though .

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    6. First of all you are presuming that main point is interest of Air Serbia, but here there are no negotiation between Air Serbia and Montenegro, but between Etihad and Montenegro. If they find possible to feed their companies (Air Berlin, Alitalia, Etihad) they will take it. They did not ask Air Serbia when they bought Alitalia, they did not ask Air Serbia when they made code-share with Aegean and for sure will not ask Air Serbia in case of possible buying of Montenegro. And for sure involvement of Dinkić make this possibility very real.

      But by my opinion that is not so bad for Air Serbia at all. OK, part of passengers will go to Berlin, Dusseldorf, Frankfurt, Roma, Milan, Abu Dhabi, Zurich, but in same time there will be cost cutting in synergy of those two companies, in route BEG-TGD they will have more frequencies and monopoly, BEG hub will be even more feed from Montenegro especially to other routes exempt Dusseldorf, Roma, Milano, Abu Dhabi and Zurich.

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    7. 'And for sure involvement of Dinkić make this possibility very real.'

      Good job, you have just discredited yourself.

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    8. Purger, You make some good points. My reasoning behind it is that EY's hands are full now with Alitalia investment, issues with Air Berlin and others. Would they spend time and energy on yet another small airline? I have a hard time believing. More likely scenario to me is that they would buy take over as much as they can but leave it to JU's mgmt. work out synergies as much as they can and they providing strategic direction.

      On the other hand (and what many don't realize), Milo is much better friend with sheikhs than Vucic ever was. Even he admitted that Milo introduced him to El Nahyan family. So, considering that in both Balkans and UAE politics and business seem to mix a lot I wouldn't discount anything here.

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    9. Anon 1:58

      Don't discount Dinkic. As shady as he is (and trust me I don't like the guy or any of them for that matter), Vucic appointed him to this committee for cooperation with UAE. If you remember this happened right after elections where URS did badly and practically disintegrated. Now why would Vucic do this to his arch enemy after he just won the majority? This tells me that he has does have some influence in the area.

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    10. Etihad strategy is buying companies. And for sure they will not stop with Alitalia. If they cannot manage it they would stop after zillion problems in Air Berlin and even more in Jet Airways. But still they take one more shit company in their lap.

      Of course they can put Montenegro under Air Serbia management, that will even make lot of sense. I would do it. But on same pattern they can decide to put Air Serbia under Alitalia management. That will make even more sense.

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    11. Purger,

      Feeding Alitalia and AirBerlin requires either domestic market or transfer passengers from the region. So we are talking about 0.5 million domestic market and... what transfer passengers? Who would transit to FCO/TXL via TGD? Why would Etihad need two feeder points (Belgrade and Podgorica) 400km apart, feeding the same hubs in Europe?

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    12. Huh? Purger you are forgetting one important thing, EY is NOT directly running all these airlines, they are not forcing them to do things. All of these airlines are semi-autonomous and they make plans which are presented in AUH for the approval...

      You tend to forget that... or more likely you didn't know it. Good thing you know now.

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    13. Semi-autonomous, woow. That is original concept in business. My friend something like this does not exist. You control company or not. If not you try to force at least your interest in it. I don't know what kind of control they have in Air Berlin, Alitalia or Jet, but one can see that they force every major strategic decision they announce in those company. But in Air Serbia they do have total control and it should not be like that by 49% of ownership. Well, here in Croatia we have MOL to control just 25% of INA but really they control all company, so why should not Etihad control Air Serbia. They control it by contract obligations from Serbia, they control it by blackmail (if you will do it by yourself we will stop contract in 5 years or even before), they control it because prime minster cannot politically afford that this project have bad end, they control it logistically, they control it by top management they forced in Air Serbia structure. Kondić is a god, and that is normal, you cannot conduct company like that if you don't have 100% power, but don't tell me that it is not like that because you can see everyday who is the boss here.

      But even if not I don't understand what is your point?

      Ix:
      Why on earth you need transfer passengers to feed one of your hubs? Totally wrong. Everybody wants to feed hub with nonstop flights, not with extra connection. That is trend in World. That is why big players do open regional routes which are no profitable, why they buy companies. Look just what Lufthansa did with Dolomiti. Totally destroy hub in Verona (and Dolomiti had impressive number of destinations from other airports in Italy to Verona and from Verona to London, Paris, Brussels, Amsterdam, Barcelona, Vienna, Moscow…), based those Dolomiti planes in MUC and open routes from every village in Italy to MUC 3-5 times per day, bypassing Verona. So, yes it makes all the sense in the world that Etihad, Lufthansa or others buy small companies with tiny traffic to support their hubs.

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    14. Sorry Purger but I still don't get it... You are comparing XM do Dolomiti and TGD to Verona?

      If no transfer pax, then the entire market XM can feed to FCO/TXL is 0.5M people. There would be no passengers outside of Montenegro because TGD is barely reachable by land. Maybe a handful of pax from western Albania and that's it. So does Etihad really need to invest into feed from such a small market? Unless you mean they slash all routes except BEG, FCO and DUS/TXL, leave 3 aircraft in their fleet and switch to serving only these destinations?

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    15. Purger, do you think that YM is reformable? EY would be wrong to invest in the company unless they can make the decisions, because the current management is incapable (same as Jat Airways). If EY can manage to control the company, it might make sense for them to get involved, but not if the current management stays at the helm.

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    16. Just make Air Monopoly for Purger so he can play with it. CG government will not cover expenses for MGX like Serbian government for Jat.

      Dinkic organized plan for WIZZ to take over Jat.

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    17. @purger
      "...- cut working force and close all planning, operation, administration, marketing, selling and other similar departments and transfer all of those to unify department in Air Serbia to work for both companies."
      LOL... Well, that's not gonna happen in Montenegro, believe me.
      As of the rest, it's nice to discuss all the different theories, but nothing's gonna come out of this, let's wait and see...

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    18. Alexandar if they made it in Jat and will make it in Alitalia they are capable to change everything or anybody. Montenegro is nothing compare to Jat and Alitalia.

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    19. Oh, but still the Serbian government is actually pretty serious about the entire Air Serbia thing, I don't know if the Montenegro Government will be the same, or will they try to sell the company but continue the old ways...

      But this could bring one very important benefit for Montenegro. Aviolet could be very active in Montenegro, perhaps even adding some more planes because 737 classics are getting parked in the desert right now.

      I wonder what type of effect this would have on other carriers in the region.

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  9. Of course there is no economic sense - however, if the CG gov't is willing to throw in, say, some valuable real estate on the coast line into the mix then maybe it works for the Sheiks.....

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    1. Al Nahiyan family owns Blue Horizons in Tivat,and wants LYTV.This is the only reason for MGX take over.EY wants APM...not only MGX

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  10. Ovo i nije tako loša ideja... Kad YM bankrotira, AS bi mogao da preuzme njihove Embraere i otpusti sve crnogorce kao što je YM uradio da srbima... Air Serbia dobija avione, novo tržište(koje nije tako malo) i može da otvori nova radna mesta za ne crnogorsko stanovništvo - A vlasnici i menadžment montenegro airlinesa dobijaju ono što zaslužuju... otkaze

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  11. Only when Milo fails down.

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  12. Cisto sumnjam da EY treba jos jedan gubitas pored AZ i AB.
    Ali i dobro je za ASL imala bi vise regionalnih Aviona.
    INN-NS

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    1. ...za razliku od drugih koje su kupljene i nisu bili gubitaši, jel?

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    2. Ne treba uporedjivati MGX sa bivsim JAT-om ili AZ.
      INN-NS

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  13. ASL Cargo potpisala ugovor sa global logistic network.
    Nadam se dolasku nekog Cargo Aviona u flotu ASL ili makar jedan let nedeljno EY Carga.
    INN-NS

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    1. Any source dear friend? Would like to read more about it.

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    2. check tangosix its there. I have never heard of that company and do you guys think it will really increase cargo?

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    3. Amateur site, not convinced... what the hell?

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    4. Global logistic network je imala oko 10 MRD profita i posluje u 124 drzave,
      Ja mislim da postoji velik potencijal za Cargo u ASL .
      INN-NS

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    5. even if they get need for cargo aircraft they will "get" their old 733s overhauled into cargos

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  14. Last night I was looking at flightradar24 and saw 4 Alitalia planes ( Rome, Milan, Pisa, and Bologna) taking off from Tirana. When I did a bit more searching I found out that there are like daily flights to Pisa, Bologna, Turin, Bari, and Venice and like triple daily to Rome and Milan. There are also daily Blue panorma flights Ancona, Bari, Verona, Rome,etc. I know Albanian population is big in Italy, but I was stunned when I saw there is like 25-30 flights daily to Italy in FEBRUARY! Do Albanians tend to travel by plane or do they chose to drive sometimes? Can somebody tell me more about air travel in Albania and especially about Italy flights.Another thing which amazed me was Agean's massive expansion. They are even starting routes like Riyadh.

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    1. Well, take a look at the map and imagine yourself driving from Albania to western Europe... It definitely pays off to simply fly it.

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    2. Not true about the frequencies. Yes there is alot of traffic between Albania (TIA) and Italy, but not that much as you said.

      * Ancona (2 x week BV)
      * Bari (3 x week AZ)
      * Bergamo (4 x week BV)
      * Bologna (4 x week BV, 3 x week AZ)
      * Genoa (2 x week AZ, 2 x week BV)
      * Milan (daily AZ, 4 x week BV)
      * Pisa (daily AZ, 3 x week BV)
      * Rome (20 x weekly AZ, 4 x week BV)
      * Turin (3 x week BV)
      * Venice (3 x week AZ, 3 x week BV)
      * Verona (3 x week BV)

      The presence of Italian carriers dramatically increased after the Belle Air bankruptcy, who had at that time operated the majority of the flights between TIA and Italy.

      As for driving, most use the ferries from Durres to travel by ship to Italian ports, mainly Bari.

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  15. JU sutra leti za VIE sa A319 :)
    INN-NS

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    1. hoće da pokaže koliko je pameran

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  16. MGX CEO.... read between the lines {C(ode)S (hare) agreement is not that}
    radiotivat.com/index.php/sport/14523-dlaibork-nove-lini.html

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