The European Commission (EC) has requested information from Montenegrin authorities concerning state aid granted to Montenegro Airlines as part of its restructuring process over the past three years. Since Montenegro is not a European Union member state, the EC has no jurisdiction on state aid granted by local authorities. However, the Commission told EX-YU Aviation News that as part of the accession process, it monitors the Montenegrin State Aid Control Authority, which has approved several million euros worth of state aid for Montenegro Airlines over the past few years. Monitoring is carried out in compliance with Article 73 of the Stabilisation and Association Agreement between the EU and Montenegro. The EC's request for further information was made on January 22, just a day after a proposal for additional subsidies for Montenegro Airlines was pulled off the agenda at a government meeting.
According to the daily "Dan", on January 21, Montenegro Airlines requested an urgent one million euro cash injection as a guarantee to the local fuel supplier and a further 1.2 million euros in order to make a payment to the Brazilian BNDES bank for the financial lease of its Embraer E195 jet. Furthermore, it requested for its restructuring process to be extended into 2016. Montenegro Airlines has received some 3.6 million euros from the state on an annual basis over the past three years and some of its debt, which now stands at 71.5 million euros, has been written off. This year, Montenegro Airlines must make a loan repayment of 3.5 million euros, provide 2.8 million euros for the financial lease of its aircraft and pay a further 11.4 million euros in taxes.
Late last year, Montenegro Airlines' CEO, Daliborka Pejović, said the carrier was recovering and there was no fear of bankruptcy. "We are not even thinking about it [bankruptcy], but we are doing everything to minimise risks, and we have successfully done so. Cost cutting, optimisation, and maintaining a fair business relationship with our partners, while meeting our financial obligations, has boosted trust in our company", the CEO said at the time. Montenegro Airlines recorded a net loss of 6.5 million euros during the first half of 2015. Its net loss for the whole of 2014 amounted to 9.5 million euros, making it the least profitable national carrier in the former Yugoslavia. In 2014 it was found that Montenegro Airlines had falsified financial reports and recorded smaller losses for several years leading up to the summer of 2013. No one has been held accountable, nor questioned in relation to these claims. Ms Pejović says some sixteen million euros in losses were covered up by the previous management. "It is important to note that all our financial reports are now genuine, balanced and objective", the CEO said. An investigation into the cover-up launched last year was swiftly dismissed by the Supreme State Prosecutor's Office.