Montenegro plans big aviation investment in 2018

The Montenegrin government has 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. The Special State Prosecutor's Office recently launched an investigation into alleged state aid provided to the Montenegrin carrier earlier this year. The government granted two million euros to the airline in order for it to pay off some of its outstanding bank loans. However, the state claims the funds will be payed back by the company over the coming period, noting, "A detailed analysis, which will include optimizing the business and workforce, will soon make things clearer".

Montenegro Airlines recently finalised a draft recovery plan after the company posted a record 11.4 million euro loss in 2016. The carrier said that work on its long-term development strategy has been completed and submitted to the government for approval. "The strategy includes an evaluation of the current financial situation in terms of debt, our position on the market, as well as the structure of our workforce. We will suggest several solutions for the future. Keeping in mind the airline's importance for the continued development of the transportation sector in Montenegro, we want the government to recognise the direct impact the company has on the tourism industry", Montenegro Airlines said recently. It added that a greater emphasis is being put on optimising its operations. "Ongoing optimisation entails the reduction of costs, but also defining the company's position on the market", it noted.

The Montenegrin government is unlikely to invest the 29.5 million euro sum into the country's two international airports which have been earmarked for a concession - although an exact privatisation model is yet to be chosen. "Several well established companies have already shown serious interest. We are currently working on preparing a concession model with the World Bank and I believe this process will be completed swiftly", Montenegro's Prime Minister, Duško Marković, said recently. He added that the concession is vital in order for Tivat Airport to follow through with its plans to build a new passenger terminal, extend its runway and overhaul its taxiways. Opposition parties have slammed the plans and are demanding for a referendum to be called on whether the country's airports should be offered to foreign investors.