Wednesday, August 24, 2016

Montenegro outlines Etihad tie-up plans


Montenegro Airlines has announced plans to form a strategic partnership with Etihad Airways, noting that its recent wide-ranging codeshare agreement with Air Serbia is the first in a series of steps to achieving this goal. The President of the carrier's Board of Directors, Daliborka Pejović, says that following the agreement with its Serbian counterpart, Montenegro Airlines will pursue similar deals with Aliatalia and Air Berlin, which are both partly owned by Etihad Airways. "We have been in talks with Etihad Airways for almost two years with the aim of securing a strategic partnership for our national carrier. After Air Serbia, we expect to hold talks with Alitalia and Air Berlin. This is the next step in our mission. Afterwards, we truly hope that we will meet the expectations of the government's Privatisation Council and get a strategic partner for the stable and sustainable future development of our national carrier", Ms Pejović said.

Montenegro Airlines' arrangement with Air Serbia, which will see it place its flight numbers and designator code on 32 destinations, thus allowing it to sell tickets on the Serbian carrier's flights, will come into effect on October 1. Montenegro Airlines already boasts codeshare agreements with Alitalia on its flights between Rome and Podgorica, as well as Adria Airways, Air France, Austrian and S7 Airlines. The carrier currently operates with a fleet of six aircraft, including one Embraer E190, three E195s and two Fokker 100s. However, the airline also faces significant financial problems with a record net loss of over ten million euros registered last year. It has recently emerged that despite its substantial debt, the carrier took out yet another loan in June for 800.000 euros, which must be payed back by September 30.

Ms Pejović conceded that the airline is dealing with a number of issues, further emphasising the need for a strong partner. "Personally, we all have the responsibility to keep this brand at all costs. Despite all the problems we have faced over the past three years we are successfully dealing with them and I believe we are making significant strides that probably no one expected of us in this situation. I hope we will keep moving forward at this same pace", Ms Pejović noted. In 2011, the Montenegrin government offered a 30% stake in its national airline. At the time, Etihad purchased the tender documentation but never made a takeover bid and the privatisation process ultimately failed. In November last year, the two carriers signed a Memorandum of Understanding for Strategic Commercial Cooperation.

106 comments:

  1. I assume if they do buy them most departments would be handled by Air Serbia and based in Belgrade. They would probably coordinate their schedule with Air Serbia on flights between Podgorica/Tivat and Belgrade, would keep most of their destinations and be more competitive in the charter market during the summer.

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  2. So EY in Europe:
    - Air Serbia
    - Air Berlin
    - Alitalia
    - Montenegro Airlines (probably)
    I just don't get it.

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    Replies
    1. A fetish for bankrupt airlines.

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    2. and you miss Darwin (Etihad Regional)

      + negotiation for Air Malta takeover

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    3. Oh yes forgot about them. They completely destroyed Darwin.

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    4. Lufthansa has a similar fetish too but they don't get scrutinized nearly as much as Etihad.

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    5. LH manages to turn its airlines around, look at OS.

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    6. ... and Swiss

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    7. But still could not do that with:

      - bmi (so they sell hot potato to biggest competitor British Airways),

      - Dolomiti was not successful story (base is in Munich, not in Verona, and basically they are part of CityLine just with different colors on planes),

      - they drop plans for Spanair and because of that company bankrupt,

      - Eurowings is just a name for LCC, nothing else from original company which they bought and today is dead!

      But Lufthansa learned lesson and today they are not in shopping any more. Yes, they announce plans for SAS, rest of Brussels, Condor, but now they are not rush in it, and will do it much clever, if will do it at all.

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    8. You cannot speak of BMI because they only bought it to get its LHR slots. These were mostly given to OS and LX.

      Dolomiti is still doing ok even if it's original purpose had to be modified.

      Eurowings was kept for its name but it was takenover by Germanwings. Just like Continental took over United and kept the name but kept its own operating ways.

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    9. Not true. Austrian and Swiss flights to LHR was not changed much since LH bought bmi. Most of bmi slots was sold to British with bmi, and British announce that only reason why they bought bmi from LH were slots in LHR.

      - Dolomiti does not exist any more. It is part of Regional, really it is de facto CityLine with different logo

      - Eurowings when was bought was not changed, exempt they put Airbus fleet under Germanwings brand. But rest of fleet stays like before with not so many hubs and bases like before but still hubs in Nurnberg and Dortmund stays. During time LH destroy all Eurowings hubs and bases, fleet, business concept and relations. And they just take name as it was better than Germanwings concerning fact they want to expend globally. But there is no Eurowings any more.

      So they try to make bmi, Dolomiti and Eurowings but when they did not success, they incorporated them into Lufthansa system. Those 3 examples is like Etihad find Air Serbia can not work and:

      - bmi scenario: sell it to Qatar which terminate company, take slots and planes and incorporate it in Qatar

      - Dolomiti scenario: sent planes and crew to Abu Dhabi, terminate Belgrade hub, and leave two of planes under Air Serbia brand to fly from Abu Dhabi to Belgrade and Niš. No other routes from Belgrade.

      - Eurowings scenario: sell ATR's, open LCC in Abbu Dhabi, use AvioLet logo, repaint all JU planes in AvioLet and use those planes for that LCC, open several bases with those planes, and just one of them in Belgrade with 4 planes to fly for AvioLet.

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    10. Purger, I think sometimes you are quite a bit way off. You are wrong on all of this.

      BMI: LH sold BMI to IAG in 2011-2012 - it was solely IAG that afterwards closed BMI, had nothing to do with LH!

      Dolomitis business model as it was, it was not and could never have been profitable - LH first improved a lot of things, then realized what I just wrote above and changed EN to incorporate a lot of it into Cityline to make use of obvious synergy effects. Whoever had bought EN would have shut it down completely within a very few years only, LH managed to keep it alive (up to date!) and turn around as much as practically possible, brand is also still active with 10 brand new E-Jets and EN is still in the skies.

      EW once used to be a small feeder, same like Contact Air or Cityline for LH. LH consolidated these subbrands (same as AF with now only HOP!) which makes sense to reduce complexity and thus costs. But the main reason for the merger was the much lower staff costs due to a much more favourable collective bargaining agreement which makes 4U much cheaper to operate under EW terms. So EW actually grew massively, got airbusses and is still alive - bigger than ever. Under a brand point of view, also EW was a big success for the LH Group.

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  3. They'll probably split YM between JU and AZ

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    1. Yes, that is most real scenario. Etihad to buy Montenegro and than "split" it between JU and AZ

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  4. EuropeanCoastalAirlines ECA back in business from tomorrow on :)

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    Replies
    1. Thumbs up! Great news!!

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  5. Tango 6 made a very good analysis of potential take over of Montenegro by Etihad or one of their company for Etihad, Alitalia or Air Serbia on same way Alitalia would take Air Malta for Etihad.

    Very good analysis.

    http://tangosix.rs/2016/22/08/zbog-cega-bi-er-srbija-preuzela-montenegro-kako-bi-izgledalo/

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    Replies
    1. Of course, mister Purger made great work once again. Congratulations.

      Best regards,
      Haplek

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    2. Thanks Anonymous and Haplek

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    3. Purger: Air Serbia flies 6 weekly to Kiev (KBP) and flies to LED not with CR9 but with A319.

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    4. Purger, postoji vec linija TGD - BAR/NAP ali se kartu mogu kupiti samo preko hotela Maestral i jedne lokalne tur.agencije. Taj let je otvoren zbog italijanskih kockara :)

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    5. Hvala za ispravke.

      Milivoje, znam, no mi govorimo o redovnim linijama (koje bi tada akumulirale i ove turiste), a ne o charterima. I upravo sam napisao te dvije linije koje već godinama Montenegro radi kao charter, a imaju potencijala da prerastu u nešto više. Naravno Montenegro za tako što ne bi imala perspektive sama, ali u sinergiji sa JU i putnicima iz Srbije...

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  6. If decided YM to be purchased it must be done by EY and not by JU.

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  7. Looks like Etihad will just push Montenegro passengers through BEG and FCO to join up with their networks

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  8. YM seems to be more desirable than OU... Logic?

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    Replies
    1. Absolutely none!

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    2. From perspective of Etihad sure it is:

      1. They already have one company to build as hub regional leader and that is Air Serbia. Why should they take one more of same size and same market? Two hubs in one small area? No way. And if not who would be feeder in this situation? Croatia to Belgrade or Air Serbia to Zagreb? Let me just point that two hub system works just for huge Lufthansa. Iberia try (Barcelona and Madrid), Alitalia try (Roma and Milan), Olympic try (Athens and Thessaloniki)... and they all bankrupt and was saved by huge companies which than terminate one of those hubs.

      2. Montenegro is ideal small company in country with tourism. Perfectly positioned between two Etihad players (Alitalia and Air Serbia) to feed them. Collaboration with Air Berlin is option because of huge number of German tourists in Montenegro and Montenegrin diaspora in Germany. Same thing with Darwin.

      3. Montenegro is strategic company for Air Serbia development and there is 500.000 passengers to BEG every year (Air Serbia). Second the biggest potential market is Italy (Alitalia), then Russia (Aeroflot as Air Serbia and Etihad close partner), Germany (Air Berlin), and France (Air France as Air Serbia and Etihad close partner). Croatia is totally opposite. Lufthansa is main partner and it is biggest Etihad enemy.

      4. It is small company and Etihad does not need huge amount of money for restructuring.

      5. It is non EU company and Etihad can force Montenegro government on same deal with lot of investments and privileges like in Serbia. You can see that Etihad has problems in Air Berlin, Alitalia and Darwin where they can not use same "state collaboration" as in Air Serbia/Air Seychelles case. And that is why they are successful in those countries, but are not in Switzerland, Germany and Italy. And Croatia is in EU. Even if Croatian government want to do something they can not by EU law.

      That is why Croatian government should address Qatar and should make this deal work (and Qatar is in shooing). On that way they could support war between big companies from MEB3 also in our little region. And that would make huge benefit to Croatia.

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    3. This is expected but still very strong strike against LH group in Western Balkan area and very, very bad news for OU and MZLZ.

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    4. & PurgerAugust 24, 2016 at 10:04 AM

      ..."huge number of German tourists in Montenegro"....

      Sorry sir, but are you joking ?

      MGX will simply be forced to introduce early morning daily departure to Belgrade to fill ASL morning wave flights and also to have late evening arrival at Podgorica airport.

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    5. JU will try to stop OU expansion in SJJ via EY/UAE political and financial influence in BH

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    6. @Purger, why you are mixing EU with EU Open Skies agreement (or however it is called)? By open skies agreement you should not have more then 49% of stake owened by company outside countries that signed that agreement. Serbia did signed the agreement and is able to own 100% of OU is they have means to buy it. Even more so with YM.

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    7. Zapravo OU nije ozbiljno ni planirala otvoriti bazu u Sarajevu. To je samo bacanje prasine u oci u politickom vakumu izmedju izbora. Takodje nabavka RJ masina je postala vrlo upitna u ovom trenutku.

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    8. Pera, but still Air Serbia point so many times that they could not sell more than 49% to Etihad. Any country that have ambitions to enter EU (Serbia and Montenegro are such a countries) must follow those rules. And if they don't want to, trust me, doors to Eu would be closed forever.

      Also are you sure, that in agreement is also not this rule about 49%, and that it is obligatory condition if one country want to sign opensky. I can say that I know that, but too many times countries like Macedonia, Serbia etc. mentioned that rule as fact.

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    9. According to my opinion EY cannot have more than 49% in JU due to the fact that Serbia is member of European Open Sky Agreement. If JU sold more than 49% to EY or any other non European airliner they would automatically lose the right to be the part of that agreement and freely to fly anywhere within Europe. I believe it is not related to EU membership / application at all.

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    10. That was my point.

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  9. For me personally buying such a loss-making airline, with 4 planes is totally insane!

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    Replies
    1. Same as building huge disneylands in the middle of the desert (incl. indoor ski track) -> arabs

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    2. It's always good to see the almighty superior Balkaners teaching, preaching and judging others.

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    3. It can make a lot of sense if you have a strong strategy in your pocket! For example it makes sense if let's say BA or AF were buying YM which then could become part of Oneworld or Skyteam and make TGD become their Balkan Hub for about 10 destinations in the area with a daily connectivity to LON,MAN,BNX,GLA - or the same for AF/KL to PAR, AMS, LYS, TLS. YM would need 10 instead of 6 planes but there is a high synergy with these 2 airline groups in terms of Embraer fleets/maintenance and keep in mind here (Balkan) are the regions where both groups are not sthong and have a large passenger potential.

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    4. Wishful thinking. Podgorica is much to small of a market for all dat.

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  10. In my opinion the best option would be for YM to develop its network during the summer and shuttle its passengers through BEG and FCO during the winter and possibly lend an aircraft each to Alitalia and Air Serbia, which would be returned to YM during the summer.

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  11. People should keep in mind that parliamentary elections are taking place in Montenegro this year.

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  12. I honestly don't understand what's the advantage of Montenegro over Croatia airlines?

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    Replies
    1. You have to find someone. The Croatian government(s) have done absolutely nothing to seriously approach the problem and find a buyer.

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    2. I think it's the case that there is no will to actually sell OU. Remember JU was also sold through direct talks with a foreign airline, not tenders.

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    3. direct talks => direct money in your pockets

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    4. @ anon: 9:40 - totally agree!

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    5. Croatia and thus OU are part of the European Law Zone.
      Croatians have the right to deny Arabs everything and kick them in ass.
      Maybe EY has a Problem with that ...

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    6. No one denied Etihad to buy OU because they were not even interested. If you haven't been living under a rock you would have noticed that absolutely no airline is interested in OU. Even Kucko proudly confirmed it. So don't know what 'ass kicking' you are talking about.

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    7. Nobody in Croatia denies anybody anything - it is the EU and thus Germany that holds the Croatian economy in its iron grip.
      Ownership laws in EU serve the purpose to protect Lufthansa from competition.

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    8. @ 2:12 anon: Any proof?

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  13. Kolike su šanse da ako ASL, u nekom obliku, preuzme MGX vidimo RYR i WZZ na letovima BEG-TIV/TGD?

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    Replies
    1. nikakve, one of SRB or MNE must be in the EU in that case

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    2. Antitrust authorities do hold the right to force both governments to allow a second airline to enter the market if JU and YM decide to merge.

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    3. you mix EU and non-EU

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    4. Both countries are candidate countries which means that shortly they will have to accept EU law as being above national one. That means if Brussels demands for another carrier to step in then they will have to do it.

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    5. LH has has 100% monopoly on MUC-VIE (LH&OS only) and so on and on



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    6. Who says that they will be merged as a single company? Etihad might buy a stake in Montenegro, and still keep it as a separate brand. Theoretically there wont be a monopoly, but practically there will be. However, if Brussels decides there is a monopoly, I dont think that small countries like Serbia and Montenegro could do something about that...

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    7. Yes, and? The market between MUC and VIE is open for everybody, BEG-MNE isn't.

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    8. lol somene really think BEG-TIV/TGD is the center of the world ...

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    9. with more than 600.000 yearly passengers it's not easy to ignore it.Some like W6 and FR would be especially interested in it.

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  14. I think Etihad will want to "merge" AirSerbia and Montenegro Airlines in a similar way as it will do with Alitalia and AirMalta

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    Replies
    1. Which way is that? I haven't really been following the Alitalia- Air Malta merger.

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  15. Why is Montenegro Airlines not flying to INI in the summers?

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    Replies
    1. Because no one wants to pay them like last time.

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  16. If EY or whoever from their 'family' takes over MGX, be sure they will only take it with a clean balance sheet meaning the government will have to take over all debt and losses which will ultimately be payed by the taxpayers.

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    Replies
    1. Any potential new partner would be crazy unless they do it any other way.

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    2. @ Anon 9.58, Aleksandar is right. Do you honestly expect any one would even consider small Balkan carriers in any other form than with a clean balance sheet?

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    3. I'm from Montenegro and if that's the price to pay for keeping our national airline and letting it be managed by professionals then I am for it.

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  17. No one will take over YM, but the company will join Etihad Partner Airlines family. The partnership with EY will be different from JU story. The main reason is that YM wants to secure jobs for all their current employees. They will be much less dependent on EY than JU is.

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    Replies
    1. Well Daliborka seems to think otherwise.

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    2. in that scenario who do you think will pay the bill and why it would cover losses?
      If YM joins Etihad partners (which will probably happen), it will not merge with Air Serbia, BUT most of administration will move to BEG, route and network planning to AUH, and line maintenance most probably will be split between BEG and FCO. YM will not change it's name, but it will be pure feeder to JU and AZ.
      If Etihad decides to move into charter business, then Aviolet will be then one to take the market and it will be done in that way with B733's and later A319/320 that will be faded out from JU.

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  18. "Personally, we all have the responsibility to keep this brand at all costs" ... please. The brand has been tarnished by your team in the last 3 years.

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  19. Really unfortunate they were not interested in Adria.

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    Replies
    1. Air Berlin too close...

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    2. And Air Serbia isn't too close to Montenegro?

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    3. Had Etihad wanted to take over Adria I'm sure there would have been a challenge from Lufthansa.

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    4. And Air Berlin was not?

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  20. OT http://www.aviatica.rs/izraelska-arkia-planira-carter-letove-tel-aviv-beograd/

    Not bad at all.

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  21. OT: U ponedeljak ujutru sam leteo BEG-IST na TK. Nas Airbus 320 je bio na C4, istovremeno A330 YU-ARA na C5. Neko je cini mi se ranije komentarisao da je C4 blokiran ako je A330 na C5, tako da to ocigledno nije slucaj. Jutros leteo nazad, i ispred hangara na BEG je parkiran A330 (ne YU-ARA), nisam prepoznao livery. Pretpostavljam da je dosao u Tehniku na check?

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    Replies
    1. In fact, YU-ARA is usually parked along C5A line which is several meters away from C5. No problem for parking narrow-body Airbus at C4 having YU-ARA at C5A at the same time.

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    2. What is the other plane (A330) at BEG at the moment?

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    3. Komentare prave ovdasnji sabani koji ne znaju da nadju i da citaju dokumentaciju aerodroma. C5A je pozicia za parkiranje i tada on stoji kako treba sa svojim sirim krilima ne smetajuci susednim avionima. Toliko puta im je sve to napisano.

      Kazahstanski.

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    4. Šta znači 'sabani'?

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    5. Evo ti značenja

      http://vukajlija.com/saban

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  22. Great work to take another loan when your debt is around €70 million. Good job!

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  23. http://www.aviatica.rs/lot-uvodi-svakodnevne-letove-izmedu-varsave-beograda/
    Go Belgrade !

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    Replies
    1. Nice! Also great to see that JU is not permanently suspending WAW, but is relaunching the route 4 x a week, from March 2017.

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  24. Some good news for Montenegro Airlines finally.

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  25. OT:EC says Etihad investment in Air Serbia is EU-compliant


    http://tinyurl.com/zldesrz

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    Replies
    1. You are a month late with that news

      http://www.exyuaviation.com/2016/07/ec-clears-air-serbia-after-investigation.html

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  26. Excuse me Purger 10:04
    You contradict yourself.
    First you say Etihad is not successful with some of its airlines because they are registered in EU, then you advise Croatia Airlines to tie up with Qatar - although that would be same situation with a multitude of problems for Qatar.

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    Replies
    1. True, but in same time Qatar is more than satisfied with their investment in IAG, and that is why they buy extra shares for 3rd time now (to 20%). Also Qatar invest in Meridiana. Maybe they have different logic, different business model, different relations...

      I did not say that Qatar would rush in deal with Croatia Airlines, I just said that it would be the best option for Republic of Croatia. Of course you need two for ball.

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    2. There is a difference between investing in a successful business like IAG and investing in failed ventures such as JU, AZ or AB.

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    3. Sure it is. That is what I am talking about all the time.

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  27. OT

    Will Wizz Air introduce some changes in W16 @BEG?

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  28. OT: still we don't have information about flight link between Budapest and exyu capitol city???

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    Replies
    1. What are you talking about? Belavia flies between Budapest and Belgrade.

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    2. about subsidies flight from Hungarian goverment!

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  29. Ako bi doslo do preuzimanja YM trebalo bi prebaciti 2 E95 u BEG i stacionirati ih .
    U TIV i TGD treba ostati 1 E90 i 1 E95 .
    ASL bi sa tim mogla da otvori jos destinacije poput NUE i INN .
    INN-NS

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    Replies
    1. Ne znam zbog cega se cudite.
      INN-NS

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    2. Ja mislim da treba da se otvore sve destinacije na ovom svetu, od TYO, SYD, EZE, IPC, PPT ali nikako INN... Ta u startu propada.

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    3. Ma ne može da propadne, kada INN-NS tamo živi. On će da to koristi svakodnevno i još njegovih 100-150 drugara. Nemože to da omane. Pa INN-NS tako kaže, kako će onda to bude krivo?

      Delete

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