|Montenegro Airlines plans for “smart” winter in a bid to cut costs|
Montenegro Airlines has recorded a net loss of 6.5 million euros during the first half of the year but says it has taken measures to improve its fiscal performance and reduce its debts. Its net loss for the whole of last year amounted to 9.5 million euros, making it the least profitable national carrier in the former Yugoslavia. The airline’s debt currently stands at 74 million euros, which is down from the 82 million the current management inherited from its predecessors in mid-2013, CEO Daliborka Pejović says. She notes that there is no fear of bankruptcy. The airline has settled its debt to Pristina Airport, to which it suspend flights in 2011 due to unpaid handling and landing fees. Furthermore, the carrier has made an arrangement with its owner, the Montenegrin government, to reprogram its debt to the operator of the country’s two international airports - Podgorica and Tivat - amounting to 6.4 million euros. The debt repayments will start on March 1, 2017 and will be made in instalments over 108 months. Last year it was found that Montenegro Airlines had falsified financial reports and recorded smaller losses for several years leading up to the summer of 2013. Ms Pejović says some sixteen million euros in losses were covered up by the previous management.
Montenegro Airlines’ CEO explains that the company has come up with two measures to “fight the fires” - leasing out its aircraft during the slower winter months and reprogramming its loans for which the government has provided bank guarantees. “It is in our interest to put the aircraft we have to better use during the winter season, when we can lease them at a good price on some other markets”, Ms Pejović says. The carrier currently has six jets in service. “These measures are already in their final stage of implementation and will need the approval of the government and some good business practice”, the CEO notes. She adds that the number of employees has been reduced from 454 to 398 since July 2013 and announced that a further 23 workers will be sacked at the end of the summer season.
Previously, the airline planned to launch flights to Zagreb this winter and was considering introducing services to Skopje as well. However, in light of its financial situation, these are now questionable. Furthermore, the airline’s strategic partnership with Etihad Airways, announced back in February by Ms Pejović for this summer, is looking increasingly unlikely. Montenegro Airlines has seen an upsurge in passenger numbers during the first seven months of the year, with a strong start to August as well. During the January - July period, the Montenegrin carrier welcomed 320.000 passengers on board its aircraft, an increase of 4% compared to 2014.