Montenegro Airlines 'risks insolvency'


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.

Comments

  1. Anonymous09:03

    "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"

    WTF!!! HOW THE F*CK IS THIS LEGAL?!?!

    ReplyDelete
    Replies
    1. Anonymous09:07

      in Miloland everything is legal

      Delete
    2. Anonymous09:10

      crazy

      Delete
    3. Anonymous09:24

      It's amazing what they can get away with without any accountability.

      Delete
    4. Anonymous11:21

      hahaha this caught my eye too

      Delete
    5. Anonymous11:47

      You can even find the registration certificate of this phantom company online :D

      http://stolencloud.net/Loophole4All.com/certificates/cy/241/Montenegro_Aviation_Leasing_Limited-241406-211553.jpg

      Delete
    6. Anonymous12:27

      lol you could not make this stuff up.

      Delete
  2. Anonymous09:06

    Those numbers are terrible. Yikes.

    ReplyDelete
  3. Anonymous09:10

    Can someone crunch those numbers? How big of a loss are they making per passenger?

    ReplyDelete
    Replies
    1. Anonymous10:26

      Loss of around EUR15 per each passenger.

      Delete
  4. Anonymous09:11

    Also should be mentioned that MGX has not paid social benefits for many employees for several years.

    ReplyDelete
    Replies
    1. Anonymous09:15

      Has anyone sued the airline for this?

      Delete
    2. Anonymous09:20

      Yes many. And almost all won.

      Delete
  5. Anonymous09:14

    Unless the government writes off or takes care of all of the debt Montenegro Airlines won't be sold and there will be no deal with Etihad. That is looking more and more unlikely.

    ReplyDelete
    Replies
    1. Anonymous14:53

      If Etihad doesn't take them no one else will. They are doomed.

      Delete
  6. Anonymous09:19

    Montenegro Airlines is pretty important for the country's tourism industry but with more and more competition, especially from low cost airlines maybe it's time to let this one go.

    ReplyDelete
  7. Anonymous09:23

    They have been risking insolvency for years yet they are still here.

    ReplyDelete
  8. JU520 BEGLAX09:26

    JU or JP to base 1 or 2 aircrafts and operate flts fm there. YM RIP

    ReplyDelete
    Replies
    1. Anonymous14:54

      Seeing as JP seems to be moving away from Slovenia more and more, this would not be a bad idea.

      Delete
  9. Anonymous09:28

    Yup...I agree.
    And when you start to think about the "rumors" of ASL utilizing their jets in the future I really wonder how crazy you have to be? It's been proven over and over again, that the best course for a good airline is to start from scratch and not buy into other broken airlines. But time will tell the truth..

    ReplyDelete
  10. Anonymous09:30

    Isn't Croatia Airlines opening a base in Podgorica next year?

    ReplyDelete
    Replies
    1. Anonymous09:33

      No it's Tirana, Sarajevo, Skopje and Pristina.

      Delete
    2. Ok I know nothing about CTN tumors, but is that story about CTN having foreign bases from next year at all true? Sorry but CTN has many times before made announcements of huge strategic plans that never materialized.

      Delete
    3. Anonymous09:57

      Tumors :D

      Delete
    4. Haha rumors lol.

      Delete
    5. Anonymous10:59

      It's not a rumor it was announced by their CEO. Whether it will happen I don't know but they seem to be doing some planning around it.

      Delete
  11. If MGX is allowed to die that will negatively affect ASL. Right now ASL is very competitive in the Montenegro market, but if LCCs become prevalent there it can make it harder for Air Serbia.

    ReplyDelete
    Replies
    1. Anonymous09:53

      There wont be any LCC presence any time soon on the BEG - TIV/TGD route, which is JU's key "domestic" route.

      Delete
    2. Nemjee09:58

      There might not be now but there will be if YM goes bankrupt. I doubt anyone would tolerate a JU monopoly on BEG-TIV/TGD.

      Delete
    3. Yeah, but ASL is probably the best airline to get from most of West Europe to Montenegro. Air Serbia has the most flights to Montenegro thus giving them good connections on most routes.

      If people can bypass BEG and fly non-stop it will hurt ASL. Kind of like what happened in SKP. Jat used to fly there more often before Wizz came.

      Delete
    4. Nemjee10:04

      It's not the transfer passengers they need to worry about, it's a lowcost entering the SRB-MNE market. The only one who could do it is W6. I don't think JU would like to compete with them and their 1.600 RSD one way fares.

      Delete
    5. Anonymous10:58

      But isn't SRB-MNE market still subject to bilaterals and nominated carriers? I don't think low cost airlines can simply enter the market. If they could someone would have done it already.

      Delete
    6. Nemjee11:06

      You are right, there is a relatively strict bilateral in place which only allows carriers with a SRB or MNE AOC to operate flights. However, I mentioned on few occasions that if YM goes bust (something that will happen soon enough) then the MNE government will probably push for market liberalization which would allow third party carriers to launch flights.

      Delete
    7. Anonymous11:12

      True. I wonder why Wizz Air had never requested a Serbia AOC? They did it Ukraine (and Bulgaria I think). Back then it probably would have went through.

      Delete
    8. Tranquilis11:41

      Re: Nemjee @11:06, not without Serbia gov't approval they can't. So it's pretty safe until any one of them enter the EU.

      Delete
    9. Anonymous11:51

      @ AnonymousJuly 6, 2016 at 11:12 AM

      They probably didn't want to pay taxes or deal with bureaucracy. Came in and were just waiting for Jat to go bankrupt and take over and do what they did in Skopje. Didn't play out that way though.

      Delete
    10. Nemjee11:58

      They probably didn't go for a Serbian AOC because it would only complicate things, especially when it comes to rotating aircraft. I highly doubt they could have used the Serbian A320 on intra-European flights. Also, the list of destinations they could serve with a Serbian AOC is not that big.

      Tranquillis,

      True but don't forget that it takes two to tango. If Serbia refuses to accept new terms and conditions MNE could retaliate. They have nothing to lose, they could only gain from it.
      Also, both countries are supposedly heading towards the EU so it could pop up during the negotiations.

      Delete
    11. Anonymous12:08

      Protectionism that exist in SRB-MNE market hurts both countries and only benefits ASL and corrupt politicians. If W6 was allowed to fly pax volume between the two countries would increase at least threefold, if not more. Just image all the people who take a 12+ hour bus ride to Montenegro who would be happy to pay only slightly more to fly BEG-TIV or INI-TIV with a LCC. Montenegro's tourism would benefit and so would Serbian airports.

      Delete
    12. Anonymous12:11

      BEG-TIV on W6 would also attract pax going to DBV.

      Delete
    13. Anonymous16:48

      Nebi dosao ni jedan LCC nisu dolazili na veca trzista po Evropi pa nece ni BEG - TIV . A znaju da su dosta LCC probale tako kratke linije pa su se brzo i prekinuli.
      INN-NS

      Delete
    14. Anonymous16:50

      Marko Lukic, daj primere mesto sto lupas.

      Delete
    15. Anonymous17:01

      Pa steta sto se vama mora sve pisati i sto ne znate barem sami nesto .
      AB je pokusao na Liniji HAM-FRA i povukli su se posle nekoliko meseci.HG je vise puta pokusavao VIE-INN-VIE isto se povukao skoro . A mislite da ja necu da pisem dalje ako mi napisete ime smesni ste .
      INN-NS

      Delete
    16. Nemjee17:07

      Hmm... you can't compare those markets. The land area between HAM and FRA is flat and rail and road links are phenomenal. Same for Austria (minus the flat area).

      The market between Serbia and Montenegro is massive. Tivat alone has between 500 and 900 daily passengers during the peak summer season.
      There is no highway to the Montenegrin coast and the rail link is extremely bad and unreliable.

      Flying is the only option. Same like in Norway.

      So in conclusion, no carrier would ignore this market. They would rather jump on it the first chance they get.

      Delete
    17. Anonymous17:18

      Nemje, don't feed the troll.

      Delete
    18. Anonymous19:48

      Slazem se ali ASL moze da se odbrani ako postavi cene od 80-100 Eur .
      Ali i da SRB udje u EU neverujem da ce i jedna LCC biti zaintresovana.
      INN-NS

      Delete
    19. Nemjee19:52

      It won't be interested because of...?

      Delete
    20. Anonymous20:07

      Kao sto sam rekao gore da su izgubili protiv dosta legacy carriers na tako kratkim linijama ali dobro svako ima drugo misljene.
      INN-NS

      Delete
    21. Anonymous22:28

      Zapravo ti hoces da kazes da ce lowcost pre leteti BEG-FMM nego BEG-TIV? o_O

      Delete
    22. Anonymous23:29

      Opet vi po svome pisete . Nisam to rekao nego da su slabo LCC uspele na tako kratkim linijama.
      INN-NS

      Delete
    23. Anonymous08:20

      Mislis kao sto lete:

      LON-AMS
      LON-BRU
      CPH-OSL
      TXL-CPH
      ARN-RIX

      itd itd

      Delete
    24. Anonymous09:46

      "ASL moze da se odbrani ako postavi cene od 80-100 Eur ."

      Upravo to je i poenta konkurencije i razlog zasto svako normalan navija da dodje sto vise kompanija. Samo nezreo covek moze da "navija" za aviokompaniju (koja ne posluje po trzisnim uslovima nego opstaje zahvaljujuci korupciji i protekcionizmu) samo zato sto joj je ime AirSerbia.

      Delete
  12. Anonymous10:25

    Those a truly dreadful numbers.

    ReplyDelete
  13. Anonymous10:56

    Good. Good residence.

    ReplyDelete
  14. Anonymous11:11

    Feel sorry for the workers, (the ones who actually work, not the political & family appointees), who have to wait months to be paid. Wonder if Daliborka has to wait six months for her salary?

    ReplyDelete
    Replies
    1. Anonymous11:20

      +1

      Delete
    2. Milivoje Rodic13:31

      Not many workers are actually working hard there, believe me. I only feel sorry for captains and officers.

      Delete
  15. Anonymous11:52

    of course not. she gets salary in advance. plus bonus. every month

    ReplyDelete
  16. Aэrologic12:37

    OT - Short trip report BEG-KBP few days ago

    Air Serbia flight 664
    Departing: Belgrade Nikola Tesla (Terminal 2)
    Gate: C7 (B4 actual)
    Destination: Kiev Borispol (Terminal D)
    Reg: S5-AAV
    ETD: 18:15 CET
    ATD: 18:23 CET
    Flight path: https://www.flightradar24.com/data/flights/ju664#a3b3353
    Flight time: 01:25
    LF: Over 90% as mentioned earlier, mostly transfer from North America, Middle East, Montenegro and Western Europe

    Few photos and video of landing in Kiev: https://www.dropbox.com/sc/jk8xtbfhq5pyep5/AACcTtRC543R2Ec6bh_-aT52a

    ReplyDelete
    Replies
    1. Anonymous12:59

      Thanks for the pics. I was wondering, is the crew in JP uniforms? Are announecments made only in English?

      Delete
    2. Aэrologic16:23

      Announcements made in English and Serbian. FA in JP uniforms, flight purser in Air Serbia uniform.

      Delete
    3. Aэrologic16:47

      Another trip report, more in photos this time around, OHD-BEG about a week ago:

      https://www.dropbox.com/sc/9fvgc2m7v2hrtng/AACysMxWnu96KKLvjQZrq-hLa

      Enjoy.

      Delete
  17. Anonymous12:56

    What a mess of an airline.

    ReplyDelete
  18. Anonymous13:46

    Something will have to give sooner or later.

    ReplyDelete
  19. Anonymous13:48

    So who is to blame for this? The old managment which ran the show for 20 years, the current managment or the government?

    ReplyDelete
    Replies
    1. Anonymous15:52

      Why are these clowns taking soccer clubs to court?

      Delete
    2. Anonymous16:15

      My guess is for not paying for charters in full.

      Delete
  20. Anonymous15:15

    OT: Is there any info about BEG June traffic numbers?

    ReplyDelete
    Replies
    1. Anonymous15:22

      Look in yesterday's comments.

      Delete
    2. Anonymous15:29

      It will be known when the airport publishes it. It's only been three working days into June. Neither Zagreb, Ljubljana, Skopje, Pristina, Podgorica or Sarajevo have published their numbers either

      Delete
    3. Anonymous16:23

      Zagreb published their numbers last night:

      http://www.zagreb-airport.hr/o-nama/statistike/statistike-za-2016

      Delete
  21. Anonymous16:42

    Steta za YM Kompanija bi imala ogroman potencijal ali on nikako nije iskoriscen .
    I od ovog gubitka Aviokompanija je mogla da ima 3-4 A320 i 1 A330 .
    INN-NS

    ReplyDelete
    Replies
    1. Anonymous16:56

      Hahahahahahha... hoces da kazes da su imali veliki potencijal u trzistu od 600.000 ljudi? OMFG

      Delete
    2. Anonymous17:04

      Ko kaze da se to odnosilo na samo Trziste MNE . Mogli su znatno vise Chartera da imaju u letnjoj sezoni do Engleske i Skandinavije . Ali navikli smo da vi nista ne znate osim da pisete gluposti.
      INN-NS

      Delete
    3. Anonymous17:12

      Koje cartere ka engleskoj? Sta lupas... da lete sa embraerom do engleske? Da li shvatas koliko bi kesha gubili na tim linijama. Postoji razlog zasto su ukinuli London.

      Delete
    4. Anonymous18:24

      Jel moze to "lupas" da zadrzis za sebe? Takvom prostackom komunikacijom snizavas nivo rasprave i potkopavas svoje argumente.

      Delete
    5. Anonymous19:45

      Da zato su se vratili i profit i modernizovali Flote kompanije kao sto su naprimer BE, pogotovu AY koji ih je slao na dalje destinacije i OS koji redovno salje na dalje destinacije i do Skandinavije .
      Ali mi nije jasno kako se ti management-i nisu posavetovali sa vama.
      INN-NS

      Delete
    6. Anonymous20:02

      Pa da, verovatno su se prokonsultovali prvo sa tobom... posebno sto poredis AY i OS sa YM.

      Delete
    7. Anonymous20:09

      Gospodin je naveo da se Embraer ne isplati na daljim Destinacijama sto su dokazali BE,AY,LO iOS da se vrlo isplati ali prvo morate znati uopste o cemu hocete da pisete to se vidi koliko znate.
      INN-NS

      Delete
    8. Anonymous00:27

      U Americi Embraere šalju na letove od 3-4 h.

      Delete
    9. Anonymous08:19

      Jeste samo sto u Americi, Finskoj, Engleskoj... narod moze komotno da plati €250 da leti. U Srbiji i regionu vecina ne moze.

      Delete
  22. Anonymous18:40

    http://uploads.tapatalk-cdn.com/20160705/1b992c50da01d78bac92e615c533092a.jpg

    lol

    ReplyDelete
    Replies
    1. Anonymous18:53

      ahahahha is that for real?!

      Delete
    2. Anonymous19:28

      Belgrade in June -0,3% in pax numbers (460 020). (Source: skyscrapercity.com)

      Delete
    3. Anonymous20:27

      If this is true then BEG airport must forget officialy the goal of 5 million passengers, at least for this year, maybe 2017.

      Delete
    4. Anonymous20:42

      Seriously guys, if you travelled for a while, you certainly had your share of hand-written boarding passes - I certainly did, and none was JU's (well, after the 1990s, that is).

      Systems crash, if this happened in AMS it's not even JU's fault, KLM used to provide check-in services, is it EY now?

      As regards overbooking - it's July. I would be happy if I was that pax, as 261/2004 guarantees cash compensation plus all expenses paid.

      Delete
    5. Anonymous21:05

      I had 500 flights till now and newer get hand-written boarding pass exempt in Banja Luka, but still it was hand-written Air Serbia form sheet just like end of 80's

      Delete
    6. JATBEGMEL22:45

      Its rare for hand written boarding passes to be issued. This case was beyond JU control, not the fault of the airline.

      Having a seat double booked happens often. However, there are protocols in place to ensure more pax than seats does not board the aircraft. After all, the aircraft cannot depart without documentation such as load sheets, PIL, which show pax load, cargo load, list of pax, special requirements (wheelchairs, special meals), frequent fliers, staff, amount of connecting pax etc.

      Also, last minute changes of seat do happen, including during the boarding phase which could be done by ground staff or by cabin crew onboard, and changes to the boarding pass are in most cases made with a pen.

      Delete
    7. Anonymous02:30

      Well, I have one issued by DL on a JFK-SAN route - pre 9/11 that is, but still. If you Google it, you'll see a bunch of them, including ones from United, Virgin Atlantic, Qantas and such. These things happen from time to time.

      They probably had various overbooked routes (with A319 capacity in mind), and only two A320s in the fleet, so... But, as I said, I wouldn't really complain much if I was that pax, particularly on a holiday. She got 250 euros and an extra night in AMS at airline's expense.

      Delete
  23. JATBEGMEL22:23

    OT:

    De-icing platform in BEG is under construction. The works are under way between Platform C and Apron B. It should be completed by 01.11.2016.

    TWY B is closed, while TWY A is closed from TWY B to TWY M.

    ReplyDelete
    Replies
    1. Aэrologic22:58

      When did it start? I didn't notice anything recently.

      Delete

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