Montenegro Airlines' full financial performance for the previous year was published yesterday, with the auditor concluding that the carrier is no longer self-sustainable and faces an increased risk of insolvency following historic losses. The state-owned company ended 2015 with a net loss of 10.386.432 euros, while its accumulated debt totalled 60.4 million euros. The carrier's capital net worth amounted to 32.6 million euros, while revenue totalled 67.7 million euros. In addition to its high level of debt, Montenegro Airlines' contingent liabilities add up to 32.3 million euros. Of that, the largest share, some 30.6 million, are attributed to leasing fees for three Embraer jets. On the other hand, the company's balance sheets show that its noncurrent liabilities amount 26.8 million euros.
Auditor MV Consulting concluded that the airline's future depends on its restructuring process and that it relies heavily on government support. "The company cannot settle its losses nor make payments for immediate expenses. Its capacity to continue operations relies primarily on its ability to restructure its obligations and establish a satisfactory level of liquidity", the auditor said in its report. It added, "The lack of circulating capital can reduce the volume of business on one hand and increase the risk of insolvency on the other. The options to improve the airline's financial position are limited and rely almost entirely on government support and its plans to restructure the business". The carrier also has several ongoing court cases, including those related to debt owed to airports, the Serbian Petroleum Industry (NIS) and IT company Montora Software. Montenegro Airlines itself has lodged court cases against the Montenegrin football club Zeta and the Serbian football club Partizan.
At the end of 2015, Montenegro Airlines had 403 employees, who received their final wages that year in October. The carrier made good on late wage payments for the previous year in May 2016. The President of the company's Board of Directors, Daliborka Pejović, recently said that from this year onwards Montenegro Airlines will no longer receive state aid. "So far we have largely been able to make good on all our financial obligations towards our partners in accordance to an established schedule, which will continue throughout the year. We would like to emphasise that state aid was solely used to settle obligations concerning the financial lease of our Embraer fleet", Ms Pejović said. Due to currency fluctuations and an unfavourable agreement, the airline is now paying significantly more for its Embraers than it did a year ago. However, the financial lease of the E195 jets has been taken over by the offshore company Montenegro Aviation Leasing Limited, registered in 2011 in the Cayman Islands. Last month, the Montenegrin government blocked a decision to grant the carrier a further 500.000 euros. The Ministry of Finance says it came to the decision after the State Aid Control Authority concluded that the payment would constitute as illegal state aid.