Sunday, September 17, 2017

Montenegro Airlines to renew fleet, add routes


Montenegro Airlines plans to add larger aircraft to its fleet and expand its route network as it continues to restructure following a record 11.4 million euro net loss in 2016 and a number of operational issues earlier this year. "As we continue to stabilise our business this year, we are working hard on drafting a plan for the next three, five and ten years. At this point, we have already defined our long-term business and commercial strategy, which is based around the renewal of our fleet, as the remaining two Fokker F100s approach retirement", Montenegro Airlines' CEO, Živko Banjević, said. He added, "We are also undertaking activities on the market to remain competitive against the growing number of scheduled, charter and low cost carriers". The airline currently boasts a fleet of three 116-seat Embraer E195s and two ageing F100s.

Montenegro Airlines is looking at adjusting capacity by leasing larger aircraft with the ability to seat over 140 passengers. "We also plan to increase frequencies on existing routes and launch two new scheduled services to Germany, as well as add more charter flights", Mr Banjević noted. The CEO called for better coordination between the carrier and state authorities. "We need to define which routes should be covered by the national airline, and where low cost carriers can fly from. Due to the lack of such coordination, Montenegro Airlines is incurring significant losses". The Montenegrin government recently unveiled a draft plan to inject 29.5 million euros into the country's aviation sector in 2018, up from this year's 200.000 euros. Subsequently, no investments are planned for 2019 and 2020. The information, outlined in the country's proposed three-year fiscal strategy, gives no further details on what the sum will be spent on, although it is believed to be linked to Montenegro Airlines' restructuring process.

According to the CEO of the Montenegrin national carrier, the company is reducing its inflated workforce and attempting to bring its finances in order. "Since January, we have significantly reduced our costs in all segments. We are currently mulling the closure of our remaining representative offices outside of Montenegro and a decision on this matter will be made very soon. At the same time, we are working on acquiring modern software solutions for sales and revenue control", Mr Banjević said. He added, "Soon we will see a revitalised and healthier Montenegro Airlines, with a new business and commercial strategy, which will enable the company to secure its place on the market, increase passenger numbers and give it a chance to launch operations to new and far-away markets, which is especially important for the tourism industry. It will also become much more aggressive in its commercial policy towards its competitors on existing markets".

63 comments:

  1. Finally getting rid of the Fokkers!

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    1. They held up quite well in my opinion but I agree it is time to retire them.

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  2. I would have thought that they would need smaller capacity aircraft, not larger ones.

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    1. +1
      what are they going to do with planes over 140 seats during the winter season?

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    2. Apparently they will do the same as 100 seater could do during winter - nothing. With larger capacity they leave space for profit during summer.

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    3. They are very loss making during the winter anyway. Might as well make extra money during the summer with bigger capacity planes.

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    4. They could always simply lease out spare capacity over the winter.

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    5. Easier said then done.

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  3. So that would mean they are looking at B737-800, A319, A320 or A321.

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    1. Seems like it. Last summer they wet leased Air Serbia's B737-300 a couple of times and they said how it's the perfect aircraft for them.

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  4. So they are retiring the Fokkers by next summer?

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    1. Yes. They are becoming extremely expensive to maintain. Easier just to lease some newer metal.

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  5. Now we know where the state money will go next year - new planes.

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  6. MGX operations will be banned by Eurocontrol just after summer season. This time bankruptcy is very close.

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    1. Do you have some proof of that or just wishful thinking?

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    2. Do not forget SMATSA debt of 12 million plus couple of million for each Prva bank, BEG, Jugopetrol and ...

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    3. Montenegro Airlines-state owned
      SMATSA (Serbia and Montenegro Air Traffic...)-state owned
      Prva Banka-owner of the state
      Do you get this?
      Debt to Eurocontrol is not the same as to Smatsa, and it is not dramatic, as well to Jugopetrol.
      So please do not publish such bombshells as bankruptcy based on rumors.

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  7. Won't this just increase their costs since getting a new plane type will require crew training, purchase of new aircraft parts etc

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  8. Sounds like the SSJ fits perfectly their requirement.

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    1. Wouldn't be surprised if they do get that. The Russians have been offering the plane more or less for free. They need a European customer badly.

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    2. Considering Montenegro-Russia relations are at an all time low, I doubt they would get the SSJs but it would be the best solution for them.

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    3. +1
      The SSJ size is ideally sized for all ex-Yu airlines. And it is much cheaper to buy new than the Airbus/Boeing offerings.

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    4. I don't think Montenegro Airlines is in a position to buy anything new and I doubt any bank would give them a loan anymore.

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  9. I'm just glad that there is finally some positive news from MGX not relating to their impending bankruptcy.

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    1. Agree! Some good news for a change coming from this company.

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  10. What could the new routes in Germany be?

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    1. Hamburg, Hanover? I know they operate charters to these cities.

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  11. I think this is beyond repair. Those losses and debt are staggering and it's not just that. All of their operational results are terrible.

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    1. I agree with you for losses and debts, but what terrible operational results?
      They have their operations as other airlines have. They are under same opertional supervision from European regulatory bodies as other in Europe are.

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  12. I honestly hope their consolidation works out.

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    1. This airline could work. All they need is a professional management.

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  13. Hopefully YM will recover soon, Retiring the F100s is smart move in my opinion. They are becoming an increasingly uneconomical aircraft.

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  14. "and two ageing F100s."

    If those F100 are ageing, what are Air Serbia's 737-300?

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    1. Ageing as well like its been said here a million times. Time to tone down the Air Serbia obsession.

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    2. How old are the Fokkers anyway?

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  15. I don't take this guy seriously. He is under investigation!

    "The CEO of Montenegro Airlines, Živko Banjević, and a further seven people are under investigation for concluding a damaging agreement with a consultancy firm in 2015. MD Solution from Belgrade provided business and financial advice to the Montenegrin carrier over talks with Etihad Airways, which resulted in the signing of a codeshare agreement between the two airlines."

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    1. hahaha crazy. BTW MD Solutions is Mladjan Dinkic Solutions. Former minister in Serbian government and one of the slimiest people out there. But he was one of the main guys who linked Etihad and Jat.

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  16. "At the same time, we are working on acquiring modern software solutions"

    Sabre?

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    1. Austrian canceled, Adria diverted back to Ljubljana. Any information, what's going on?

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  17. OT: Are THY pilots mental? They have been circling around SJJ for so long, nearly 2 hours.
    Why not go to IST or INI they should just divert what is wrong with them!?

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    1. They diverted to ZAG after 2 hours of circling

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    2. Sorry, it should be here: Austrian canceled, Adria diverted back to Ljubljana. Any information, what's going on?

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  18. Why don't they restart Podgorica-Nis? As far as I can remember this route performed really wellm

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    1. The route was heavily subsidised. City bought 50% of all seats on each flight.

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    2. They suspended the route as soon as the subsidies ended. It wasn't profitable.

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  19. They REALLY have very expensive fares. Not very competitive.

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    1. But they do have nice crew ;)

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  20. Great and all at the expense of tax payers.

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    1. Well better that they revamp their fleet then just continue to make losses as is.

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    2. Agree with the above. The government will never allow them to go bankrupt and will always throw tax payers money at them. Better that they do something useful with it.

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  21. It does not help MGX that they are getting more and more competition. Not just from low cost airlines but full fare ones as well

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    1. They are on it

      "We need to define which routes should be covered by the national airline, and where low cost carriers can fly from"

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  22. 4K should buy them.

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  23. I'm not a big fan of theirs but I'm happy they are trying to improve. Let's hope their costs have gone down too.

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  24. I think that Montenegro needs connection to OTP and SOF. There are plenty of tourists who want to visit the country but are obstacled by the poor roads to the country. The drive between SOF and TGD currently is over 10 hours. And this is a number based on facts as I've driven twice this route and even it was with a brand new Range Rover it killed me!!!

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