Montenegro Airlines registered its worst financial performance on record, generating an 11.4 million euro net loss in 2016. It cemented its position as the least profitable and most indebted national carrier in the former Yugoslavia. The figure eclipsed its previous worst performance recorded in 2015 when its net loss amounted to 10.4 million euros. According to the company's financial report, revenue declined 3.4% to 65.4 million euros, while operating costs grew 2.9% to 75.6 million. The carrier's operating loss doubled to 10.2 million euros. Montenegro Airlines owes the state 15.4 million euros in tax and unpaid worker benefits. At the start of this month, the company requested for its debt to be reprogrammed, however, since the carrier was a beneficiary of state aid in the past, legislation forbids it from equally diving its repayments over a period of five years. Furthermore, it owes over sixty million euros to other service providers.
The former head of Montenegro Airlines, Daliborka Pejović, who led the company into two successive years of record financial losses, resigned in December 2016 without citing her reasons. She has since become a member of parliament for the governing Democratic Party of Socialists. In January, the Montenegrin Prime Minister ordered an urgent review into the company's business after half of the carrier's fleet was grounded with technical issues and a number of flights cancelled due to a silent protest staged by its first officers over unpaid wages. Those issues have since been resolved. Last week, Montenegro Airlines put back into service a Fokker 100 aircraft which was grounded at Belgrade Airport since January 1 with an engine problem. It is believed the aircraft took four months to be returned to operations due to the company's inability to secure finances for spare parts.
During 2016, Montenegro Airlines handled 581.519 passengers, up 0.6%. The number of operated flights fell 8.7% to 8.607. The carrier expects for its passenger numbers to decline this year as it attempts to consolidate its operations and optimise its network. "Plans for 2017 are based on the reduction of costs and the maximum utilisation of all available capacity, as well as business optimisation at all levels. As a result, and keeping in mind the state of the existing fleet, the company anticipates a decrease in the number of passengers, with an improved average cabin load factor. This summer season, instead of six, only five aircraft will be in operation", the airline said in a statement. Last year, the carrier returned its sole Embraer E190 jet to its owner, noting that the move resulted in savings of up to three million euros over the winter. The carrier says it could lease an additional aircraft during the peak summer months, if the need arises.