Montenegro's Special State Prosecutor's Office has launched an investigation into the recent Commercial Cooperation Agreement between Montenegro Airlines and Etihad Airways, according to the pro-government "Pobjeda" daily. The Prosecutor is said to be focusing on a proposed codeshare agreement between the two companies, which would see the Montenegrin carrier place its codes on a number of Etihad's flights. However, it is unclear as to why the agreement is being investigated, with the Prosecutor's office refusing to comment on the case. The Montenegrin government has strongly supported closer ties between the two airlines, which could eventually lead to an equity investment on Etihad's behalf. According to the "Pobjeda" daily, Serbia's former Finance Minister, Mladjan Dinkić, oversaw the drafting of the cooperation agreement, acting as an Etihad advisor. Neither Montenegro Airlines nor the Emirati national carrier have commented on the matter.
Late last month, Etihad Airways presented its plans to return Montenegro Airlines to profitability and improve the carrier's overall business. The two sides held talks in Abu Dhabi where Etihad outlined plans for Montenegro Airlines to significantly boost its frequencies on profitable routes and improve its overall fleet efficiency. Furthermore, the national carrier of the United Arab Emirates identified potential codeshare partners which would give Montenegro Airlines access to an additional fifty destinations. The new partnership is expected to boost synergies between the two carriers, providing Montenegro Airlines access to benefits enjoyed by Etihad and its partners on the market. The measures are expected to increase passenger numbers, support the local tourism industry and generate a profit for the carrier in a relatively short period of time. It comes after the two signed a Memorandum of Understanding for Strategic Commercial Cooperation in November last year.
Montenegro Airlines has accumulated debt of up to 71 million euros and is believed to have ended 2015 with a loss. On Monday, the Montenegrin government announced it would swap a 2.1 million euro loan to Montenegro Airlines for equity. The debt-for-equity swap was approved by the airline at an extraordinary shareholders' meeting. Under the deal, Montenegro Airlines will issue new shares, boosting its share capital to 34.7 million euros. Last year, the Montenegrin government wrote off 3.7 million euros worth of debt and approved state guarantees for a 6.5 million euro loan in December in order for the carrier to pay off some of its outstanding debts. The European Commission has requested information concerning state aid granted to Montenegro Airlines as part of its restructuring process over the past three years from Montenegrin authorities.