No foreign interest in Montenegro Airlines


Montenegro Airlines has been removed from the list of state-owned companies slated for privatisation this year due to low interest. The carrier has struggled with financial problems and mounting debt over the past year. "Despite the fact that no privatisation is planned, we can include it to the list when there is sufficient interest. There are a number of sale models possible with Montenegro Airlines. It does not necessarily have to be privatised through the sale of shares but also through recapitalisation or a strategic partnership, depending on what would be of interest to the investor", Branko Vujović, a member of the Privatisation and Capital Investment Council of the Government of Montenegro, said.

According to the Council, the liquidation of Montenegro Airlines would be a last resort and would negatively impact on the country's tourism industry. "A solution is possible if a partner was to be found. We need an airline that will offer direct flights to several major European cities. This is in the country's interest and should be the strategy for any future talks going forward. Interest shown towards Montenegro Airlines over the past few years was such that it didn't warrant the launch of tender procedures for its sale", Mr Vujović noted. Montenegro's Prime Minister, Duško Marković, recently said, "The government holds a 99.9% stake in Montenegro Airlines and can offer 50% minus one share to a foreign partner. In the coming period, the government will work on stabilising and improving the company and consider privatising it. A minority stake would be offered through an eventual tender".

Previous attempts to privatise Montenegro Airlines have all failed. In 2009, Israel’s national carrier, El Al, teamed up with the European Bank for Reconstruction and Development in order to purchase a stake in Montenegro Airlines. El Al was interested in the carrier only if it gained control over Podgorica and Tivat airports as well, which the government deemed “unacceptable” at the time. In 2011, the Montenegrin government offered a 30% stake in its national airline. Arkia Israeli Airlines, El Al and Etihad Airways all purchased tender documentation but never made a takeover bid. Later that year, the government announced that Turkish Airlines was close to taking over both the carrier and the country’s airports but added it would not sell its national airline at any cost. Plans to privatise the carrier in 2014 did not materialise either. Montenegro Airlines is dealing with debt of over sixty million euros and in 2015 recorded an annual net loss of over ten million euros. As of last year, the European Commission has barred the state from providing further financial aid to the company.

Comments

  1. Anonymous09:04

    They should have taken that El Al dea when they had the chance all those years ago. I'm certain they would have been in a much better position than they are now.

    ReplyDelete
    Replies
    1. Anonymous09:25

      Would have been interesting to see what El Al would have done with the. I'm also surprised Arkia applied for the tender documents. Why was there such interest from Israel?

      Delete
    2. Anonymous11:07

      Israelis are big investors in Montenegro and Serbia.

      Delete
  2. Anonymous09:07

    My guess is they were expecting Etihad to buy them but didn't expect Etihad would have the problems they have and give up on MGX.

    ReplyDelete
    Replies
    1. Anonymous09:24

      You would think they would have learned their lesson after so many failed investments.

      Delete
    2. Anonymous10:21

      At one point I think their idea was for Air Serbia to takeover Montenegro Airlines, same as Alitalia taking over Air Malta. Thank goodness that didn't happen. With the CS they get the same without actually buying Montenegro.

      Delete
    3. Anonymous11:15

      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.

      Delete
    4. Anonymous11:43

      @10.21 the benefit they would have which they don't have now is that they could take an Embraer and at least keep destinations like Kiev and deploy it on suitable routes.

      Delete
    5. Anonymous12:19

      Kiev is hugely loss making - yields are unsustainably low

      Delete
    6. Anonymous14:22

      For who?

      Delete
    7. Anonymous14:30

      Kiev has been growing with 20% annually and airlines are only adding services, yet Air Serbia can't make it work? Even CSA is flying with their archaic Atr-72.

      Delete
    8. Anonymous15:38

      There's no P2P market so the economics don't stack up. That's why they tested the market with Adria's aircraft last year and the financial results were extremely poor... better prospects elsewhere

      Delete
    9. Anonymous08:39

      Meaning that you admit you can't make work any market without strong O&D? That's pathetic really.

      Delete
    10. Anonymous08:42

      Csa doing their prg-kbp flights with an ATR? Goodness - that is further than Beg-Kbp! Actually 736nm or 1363km. I would surely not want to sit in an ATR for such a long time unless it's dirt cheap and I have to go - crazy! 3h25 nonstop per way - on way back they make a stopover in Ksc - maybe also to get fuel?

      Delete
    11. Anonymous09:15

      No, it's a scheduled flight KSC-KBP.

      Delete
    12. Anonymous09:19

      There is no way in hell daily to LWO with an ATR wouldn't work, there is no direct service from there to the entire SE Europe and beyond.

      Delete
  3. Anonymous09:14

    Why am I not surprised that no one is interested in a sick company on its deathbed.

    ReplyDelete
    Replies
    1. Anonymous09:33

      Just like OU - no interest and no takers

      Delete
    2. Anonymous09:41

      True although I honestly think OU has more potential then MGX. If for nothing else then for having a bigger market.

      Delete
    3. Anonymous10:08

      I think you meant to say that OU HAD more potential... they should've privatised them years ago - even before EY came into JU. Back then, OU was at the top of its game and worth much more than it is today or than it will be going forward.

      Previous and current govt, as well as current mgt, is slowly killing it on the one side, while on the other, increasing competition is also doing its part.

      The longer they wait, the further they get from anyone being interested in OU - even if they were to end up giving it away for EUR1 like the Slovenian govt did with JP.

      Delete
    4. Anonymous10:20

      I agree. Much more difficult now.

      Delete
    5. Anonymous17:53

      Slovenija nije prodala Adriju za 1 EUR, nego je za to morala dati kupcu još 300.000 EUR. Dakle platili da 4K uzme vruči krumpir.

      Delete
  4. The brand should be worth something. The logo and the name.

    ReplyDelete
    Replies
    1. Anonymous09:35

      Yeah, they could sell it to the owners of Adria and then lease it back. They seem to have an interest in buying airline brands and logos ...

      Delete
    2. Anonymous09:40

      :D +1

      Delete
  5. Anonymous10:25

    There is no need to buy some airline's stake ,simple you can just wait go bankrupt and take over their market,simple as that!!!

    ReplyDelete
  6. Anonymous10:30

    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.

    ReplyDelete
  7. Anonymous11:02

    Tick, tock...

    ReplyDelete
  8. Anonymous11:03

    Buying such a loss-making airline, with 4 planes is totally insane!

    ReplyDelete
  9. Anonymous11:15

    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.

    ReplyDelete
    Replies
    1. I do not see that happening, especially after Hogan left

      Delete
    2. Anonymous12:40

      They can't join Etihad Airways Partner family - it is an EQUITY led alliance.

      Delete
    3. Anonymous12:41

      most probably like a new legal entity after formal decision of bankruptcy

      Delete
    4. Anonymous15:40

      Gee.. how funny and original are you ??

      Delete
  10. Anonymous11:19

    How about a russian airline to buy them?

    ReplyDelete
    Replies
    1. Anonymous11:24

      Don't know if you've been following the news recently but Montenegro and Russia are no longer the best of pals.

      http://www.bbc.com/news/world-europe-39027315

      Delete
  11. Anonymous11:42

    MGX is not in the best of places. They have issues paying the lease for another Embraer which is not very good ahead of summer. If they don't make the deadline they will have to return the plane.

    ReplyDelete
  12. Anonymous12:01

    YM ce se suociti sa zabranom operacija u Evropi zbog nagomilanih dugova za usluge kontrole letenja u narednom periodu.

    ReplyDelete
    Replies
    1. Anonymous12:15

      Ako se to desi ugasili su ga. Tako je poceo i kraj MAT-a.

      Delete
    2. Anonymous12:37

      To se vec desava i epilog je blizu.

      Delete
  13. Anonymous13:20

    I think Daliborka just escaped on time! Why don´t they ask her for an explanation?

    ReplyDelete
    Replies
    1. Anonymous13:38

      Daliborka not only left, she became a member of parliament!

      http://www.skupstina.me/index.php/me/skupstina/poslanice-i-poslanici/lista-poslanika-i-poslanica/item/9-daliborka-pejovic

      Delete
    2. Anonymous13:41

      My goodness! Look at her biography. Every year she has been promoted to an even bigger and better paid position. If I understood correctly she is also the main negotiator with the EU for ecology.

      This is crazy.

      Delete
    3. Anonymous01:46

      Not anymore...She has dossier in prosecutor pocket...briberry

      Delete
    4. Sorry for the non-aviation type question but does anyone who is she or rather how is she related to hrh Milo?

      Delete
  14. Anonymous19:32

    They cant sell it, since liabilities are many times higher than assets, and it is far from profit. They can only be happy if they give it to anyone for free.

    ReplyDelete
  15. Anonymous20:10

    The former Yugoslav republics couldn't pull together, now all of them would sell even their underwear and pay a foreigner to buy it.

    ReplyDelete
  16. Anonymous21:39

    OT: Air China, China Tourist Organization and Air Serbia were at Belgrade Tourism Fair this year. We heard rumors of major announcements. There was just VCE announcement from JU but no new planes for Air Serbia and no flights from China. Did I miss something?

    ReplyDelete
    Replies
    1. Anonymous21:43

      ZAG will get China flights before BEG.

      Delete
    2. HAHAHHA nice one last anon just from which airline?

      Delete
    3. Anonymous22:14

      No one ever said there would be anything major from the fair especially not about any new planes.

      Delete
    4. Anonymous22:41

      With LF only at 72% for 2016, they definately don't need more aircraft, they need better sales to deliver more passengers in order to improve their LF%. Same goes for all other ex-yu airlines, where LF% is even worse than JU.

      Delete
    5. Anonymous23:01

      PEK - BEG flights will be carried by Chinese company, not Air Serbia. Soon will be published.

      Delete
    6. Anonymous06:58

      @Anon at 10:41

      Air Serbia track record works against your argument. Last year they added A330 and CRJ900 (during summer), in 2015 they added ATR72-500, in 2014 and 2013 bunch of planes all while LF was lower and lower as you step back year by year.

      Air Serbia didn't decide in 2013 to wait for LF to hit some number like 75% before adding new planes, they grew fleet while improving LF. They must continue to add more aircraft.

      Delete
  17. Anonymous10:33

    El Al?
    Ask the Bulgarians about Israeli investments in their aviation sector. LOL

    ReplyDelete

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