Wednesday, April 6, 2016

Montenegro Airlines to post record loss


Montenegro Airlines is set to post its worst financial result on record for the year 2015. According to the daily "Dan", the airline saw a net loss of 10.2 million euros last year, making it the least profitable national carrier in the former Yugoslavia. While the Montenegrin airline is yet to publish its financial results, and is known for doing so notoriously late (its 2014 financial report was published in December 2015), the numbers are on par with the disappointing figures it saw during the first six month of last year, when it recorded a 6.5 million euro net loss. The airline is also dealing with accumulated debt amounting to sixty million euros. In 2014, the carrier's net loss totalled 9.5 million euros. Montenegro Airlines says its financial report will be available following an independent audit.

In December, the Montenegrin government issued guarantees for a 6.5 million euro loan for the airline in order for it to refinance its liabilities. Furthermore, it wrote off 3.7 million euros of the carrier's debt. 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 for it to make a payment to the Brazilian BNDES bank for the financial lease of an Embraer E195 jet. As a result, last month, the government swapped a 2.1 million euro loan to Montenegro Airlines for equity. The European Commission (EC) has requested information from Montenegrin authorities concerning state aid granted to the airline 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 to Montenegro Airlines over the past few years.

Croatia Airlines is the only national carrier in the former Yugoslavia to have published its financial results for last year, albeit preliminary. The airline recorded a net profit of 1.9 million euros. Air Serbia says its results will be published in the coming weeks and are currently being audited. However, according to the company's Chairman, the airline ended 2015 with a net profit and improved results on the year before. Adria Airways is expected to post a loss of some five million euros, although its figures are yet to be released. In February, Etihad Airways presented its plans to return Montenegro Airlines to profitability and improve its overall business, as part of the recent Commercial Cooperation Agreement signed between the two carriers. However, the agreement is subject to an investigation by the Montenegrin State Prosecutor, although the reason why has not been revealed.

61 comments:

  1. And they just extended CEO's term. I guess for a job well done.

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    1. AnonymousApril 6, 2016 at 9:04 AM
      +1 Lol! :)
      I think there is no bright future for Montenegro Ailrines unfortunately.
      Just like Macedonia, I think Montenegro does´t need a national airline, but just some subsides to low-cost airlines! FR will be the best choice for them with (Frankfurt, London, Milano and maybe 2 more destinations)

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    2. Ako bi Crna Gora udruzila svju avio kompaniju sa aspiracijom Albanije, Makedonije. i sa B i H, koje zele da osnuju svoje kompanije, pa da zajednickim kapitalom i svojim rezorsima zajedno se pojavite kao cetvrti veci operater u jugo istocnoj Evropi. Uz postojece avio prevoznike Grcke, Srbije i Hrvatske, verovatno da bi imali sanse. Mozda bi bio mali problem za naziv takve kompanije?. Vase drzave su tolerantne, sa zdravim odnosima, pa ni tako mala sitnica, kao sto je naziv moguceg sher holding. Sa zeljom da Montenegro Airlines se vrati profitu (ako gd je imao ranije) Miran let i svako dobro. Radovan✈+

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    3. Ako jedan SAS u zemljama 10x višeg standarda i broja putnika ne uspeva uspešno da vodi biznis sa više hubova, zašto iko misli da bi to mogle četiri male siromašne države na margini Evrope?

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    4. Ja mislim da Crna Gora ima potrebu za domacu kompaniju barem toku ljeta, isto kao i Hrvatska.
      Mislim da njihova vlada nece dozvoliti da kompanija propadne jer postoji potreba toku ljetne sezone ova doba godine i juni, juli, august i bilo bi cudno kad bi neka strana kompanija dominirala naprimjer u Tivatu i transportovala putnike i kupila sebi pare (ASL, OU, JP) mada ASL nije mogucnost jer lete samo sa BEG i to je njihov hub. Ali uslov je naravno da YM vodi racuna o svojoj ekonomiji i svako zna da ce situacija biti sve gora za svaki gubitak svake godine i ako nema partnera iz inostranstva (ne ASL vec Etihad ili Emirates ili nesto slicno) onda je stecaj alternativa jedina. Da nije bilo Etihada ne bi bilo ASL i Srbija bi ostala bez kompanije.

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  2. Close down YM. Adria to become Carrier of MNE, BH,Macedonia,Kosovo,Slovenia,Albania and a lot of problems would be solved. Left are 3 Carriers in the region and if managed well, they cld fly profitable.... but of course own nationalistic pride is still too high in some corners of ex YU with the result that taxpayers in MNE hve to compensate for the 10 mio EUR. What a wise behaviour Jesus

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    1. If I am not mistaken JP is still unprofitable so you would be replacing one loss making carrier with another.
      In my opinion, Montenegro is best served by Ryanair and Air Serbia.

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    2. Not gonna happen: anything that reeks of Yugoslavia, still freaks people out in all of these countries. One day, the money Arabs were/are pumping into Air Serbia will run dry. Lets see if your suggestion still stands then.... As it looks right now, Adria will either fold(and disappear), become an PSO carrier or merge with Croatia. No turnaround there...

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    3. freak out? because of Adria? Adria has(well had before the 2,50 € water) excellent reputation throughout ExYu. Totally disagree with u. Im not saying it is going to happen but nobody will be "freaking out". People have moved on!

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    4. Nemjee, at least with Germans I hope JP will become profitable. Afterwards take over the countries I mention as it has a neutral brand. And of course there will be JU and OU to compete but thats fine
      Adria could be the Star Alliance feeder for those airports to whereever possible and LH will allow. But for LH, JP is handy since they hve a lower cost
      structure. Of course they wld need to find a way that LH earns on these flights too

      Adria is a Carrier with a reputation of 55 years, some capable people work there for more than 25 years. Now with the new and exchanged mgt i really hope that JP will recover again. Potential is there

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  3. I usually wouldn't support closing an airline and leaving people out of work but Montenegro Airlines is not a normal company. It's practically owned by the party, 95% of employees are sisters, brothers, wives, husbands, lovers of the ruling elite. That's why it will never get sold.

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  4. such a small airline such a huge loss.

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  5. Well the good thing is that Montenegro seems to be warming up to low cost airlines and issuing permits without a hassle so hopefully there will be more options.

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    1. I wld rather hve JU OU JP be strong in the region and make good money out of it and invest locally with basing aircrafts and hiring local staff than seeing that earnings are going to Ireland etc

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    2. Well at JU 49 per cent is going to Etihad. When is 100 per cent going to Etihad/Serbia?

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  6. I think something is cooking behind the scenes with Etihad. Probably have to wait a few more months.

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  7. @Admin please delete Radovan's post. Its an assult . thank you

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    1. thank you for changing it

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    2. It's his usual stuff, what was so offensive?

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  8. That's about 0.60% of the country's budget!

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    1. Umm no your maths is not quite right. It's actually 6% of the 2015 budget and debt around 2% of GDP.

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  9. "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."

    Way to fight those fires.

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  10. Dear god. They have 6 planes and they manage to make such a huge loss. Has anyone gone to jail from the last management for falsifying reports?!!?

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    1. Panama papers....

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    2. Montenegro papers

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  11. My guess is those Vienna-Tuzla flight adventure didn't help

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  12. And they still owe millions to the airport.

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  13. Montenegro Airlines needs to change something fast.

    OT: A nice trip report BEG-LHR business on JU with some good quality photos

    http://flight-report.com/fr/report-13820.html

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    1. Interesting that they replaced Jelen with Zajecarsko beer. Wise move in my opinion... Jelen is overrated anyway.

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    2. Its not about how good the beer is, its all about economics and JU probably got a better deal.

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    3. Duuuh... I was merely stating that it was a great move as far as taste goes.

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  14. OT: Thomas Cook UK with new 2 weekly service MAN-SPU next summer
    http://airlineroute.net/2016/04/06/mt-eu-s17update1/
    operational days: MO & FR

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  15. It would be really interesting to see whether MGX is still leading JU on TGD/TIV-BEG vv flights. If I'm correct they were still a bit ahead in 2014.

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    1. What does it matter when they are losing money hand over fist ?

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    2. I highly doubt they are losing any money in BEG, it's the other markets that are a problem.

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    3. Ofcourse they are ... it is a closed market with a cosey duopoly. They could be charging so much more without the need to be focused on "winning" market share, that both airlines could make mor emoney. And in YM's case, they could make so much more on this route, to cover more losses on other routes

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  16. When CEO of this company is person who is waste manager than it is normal to have such big loss ...Have a nice time with prosecutor

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  17. Da imaju makar vise aviona pa da se i opravda nekako ovoliki minus ali ovo je puno .
    Steta je sto im Flota nije dovoljno iskoricena .
    INN-NS

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  18. Kada je bivsa SFRJ gradila aerodrome u primoriju napravila je i dve aviokompanije za njih dok je Jat odradjivao ostalo. Sada magarci zele da to sve radi po jedna lokalna aviokompanija. Mozete vi da rasparcate zemlju, ali ne i ekonomske zakone.

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    1. Nije losa ideja ali bi kompanija morala imati 100 Aviona da bi mogla da brani toliku teritoriju a pogotovu obalske Aerodrome.
      Jel zna neko koje bi bili dalji razvojni planovi razvoja JAT bilo bi zanimljivo videti
      Hvala unapred.
      INN-NS

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    2. Pred sam raspad SFRJ JU je narucio MD11, ugovoreni su letovi za Seoul, Tokijo i Karakas (otvoreno i predstavnistvo), a sledeci aerodrom u Jugosloviji koji je bio predzvidjen da se razvije u JU hub je bilo Skoplje.

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    3. izvinjavam se na greskama u kucanju preko telefona pisem

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    4. Do you know which routes were planned for Skopje?

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  19. OT
    TP postaje prvi korisnik A330-900 neo na svetu.
    INN-NS

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  20. OT: Because of strike by the Public Servants Supreme Union in Greece, Air Serbia canceled tomorrow flights to Athens and Thessaloniki

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  21. OT:
    Exclusive photo of business class seat in new ASL A330

    https://plus.google.com/+airserbia/posts/8YbioKpYGhX

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    1. Lol that photo was published here in February.

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  22. ZAG

    3/2015 185693
    3/2016 199201

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    1. The growth continues, almost 200 000 passengers in March!

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    2. 7,5% more. Very good. Congratulations. And real boom will be in June.

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    3. Kako je moguće da Beograd toliko padne u istom mesecu kada Zagreb toliko naraste. Dijaspora je došla i u Beograd za katolički Vaskrs jer su imali slobodno. Zašto onda tako loš rezultat?

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    4. Zašto misliš da je rezultat Beograda loš? Vjerojatno u Zagrebu postoji još nešto prostora za rast, ne sumnjam da će i Beograd imati lijepi rast kad počnu letovi za New York i kad se uspostavi 5 novih linija Air Serbie. Bit će ovo dobra godina i za Zagreb i za Beograd!

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    5. Broj letova u Zagrebu malo manji nego 2015.

      3/2015 3232
      3/2016 3214

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    6. That's what happens when you have private management of an airport. Real growth ie. not relying solely on whatever Air Serbia does, will not happen in BEG until the airport is privatised and a real management team comes in to run the airport, free of political interference and personal agendas

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    7. Nearly 200k for Zagreb, nice one, next year only January and February will be bellow 200k, the rest of the year with June, July, August and September over 300k, this year July, August and September are bound to be over 300k.

      This year 2.8 million, next year 3.05 million is my projection. This year 21000 landings top, next year 22500 top.

      What I am noticing there are fewer flights each year, yet more pax per flight, this is really good trend, reason why I think Zagreb won't have massive growth in number of flights, 22500 is my absolute max for 2017, Can't see number go much higher then 24000 in 2018 when I predict Zagreb to handle around 3.4 million and 25500 landings in 2019 when I hope Zagreb might hit 3.7 million. 4.0 million is almost dead cert by 2020, and 27000 landings.

      My prediction.

      2015 - 2.588 million - 20 000 landings
      2016 - 2.8 million - 21000 landings
      2017 - 3.05 million - 22500 landings
      2018 - 3.4 million - 24000 landings
      2019 - 3.7 million - 25500 landings
      2020 - 4.05 million - 27000 landings.

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