The Montenegrin Minister for Transportation and Maritime Affairs, Osman Nurković, has announced that a "major international company" plans to purchase a stake in Montenegro Airlines and will soon submit its letter of intent to the government. In a statement, the minister said, "We are anticipating a letter of intent from a major company, which also owns a carrier, to purchase Montenegro Airlines. This is an exclusive announcement. I don't know the details of the offer, but there is strong interest from this investor". The minister refused to reveal the name of the company in question. It comes as the government advances procedures for the concession of the country's two international airports.
The minister added, "If they decide to purchase Montenegro Airlines, they certainly won't do so with debt", indicating that the state is prepared to take over its national carrier's accumulated debts, similar to what the Serbian government did prior to Etihad Airways' equity investment in Air Serbia. "This should be handled by the state which has allowed Montenegro Airlines to amass such debt. We will either solve this problem or liquidate the company which has been in problems since its foundation. Both options will be expensive but we will decide what's best", Mr Nurković added. Montenegro Airlines' accumulated debts amounted to almost 77 million euros by the end of 2017, according to the carrier's audited financial report. The airline, which has struggled with its finances in the past, has seen a turnaround so far in 2018 with improved revenue, increased passenger numbers and a fleet expansion strategy for the coming years.
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.
Last year, the Privatisation and Capital Investment Council of the Government of Montenegro said, "There are a number of sale models possible for 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". Prior to the unravelling of Etihad Airways' equity investment strategy, it signed a Memorandum of Understanding for Strategic Commercial Cooperation with its Montenegrin counterpart. At the time, it was suggested Etihad could invest in Montenegro Airlines through Air Serbia, however, its plans never materialised as issues with its equity partners in Germany and Italy started brewing.
Doubt it.
ReplyDeleteMeanwhile at OU they still haven’t selected their “privatisation consultant”.
ReplyDeleteIf they keep dragging their feet, potential investors will already invest in airlines around them. Time to get their act together.
Delete4K invest for sure.
ReplyDelete+1
DeleteThis is what Adria's CEO said about their financial report and it was reported here. Pay attention to the last part of the sentence.
Delete"The aviation industry is changing on a global level. Higher oil prices, shifting passenger habits and expectations, new business models and competition have forced Adria to change and focus on greater rationalisation measures, opening up possibilities for cooperation with other regional carriers and seeking out mutual synergies".
Honestly I would not be surprised if it's them. But I would be very worried if it were them seeing what a great job they did with Darwin.
DeleteLH/4K makes sence for Montenegro.
Deleteand with what money would they purchase anything?
Deletethe last thing reported here was that they reported a loss of 5 million
Well YM did start 3 new routes to Germany from Tivat this year.
DeleteWhat is the basis that Lufthansa is behind 4k?
DeleteI believe it's just trolling
DeleteGerman influence in airline, many new routes in Germany and wet leases to Lufthansa owned or affiliated airlines.
DeleteI have a friend in the import-export business, and 85% of his turnover in the past few years has been with Germany.
DeleteLufthansa must be behind him too.
4K is working for LH, 100%. They always appears there where LH doesnt have their own interest but they try to exclude others. Like Croatia. 4K is there only to make problems to LOT.
Delete"We will either solve this problem or liquidate the company which has been in problems since its foundation. Both options will be expensive but we will decide what's best"
ReplyDeleteWow what a great way to sell your company to a potential invesotr. Balkan politicians never cease to amaze me.
Well at least it's honest.
DeleteWhat he wanted to say is that whoever takes over MGX 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.
DeleteExactly. And they should not repeat Serbian mistake by taking all debt and continued subsidies as equity partner
DeleteThey should have taken that El Al idea 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.
ReplyDeleteWould have been interesting to see what El Al would have done with them. I'm also surprised Arkia applied for the tender documents. Why was there such interest from Israel?
DeleteIsraelis are big investors in Montenegro and Serbia.
DeleteBravo Israel!
DeleteAsk Bulgaria about Israeli investments in their aviation sector. LOL.
Delete@9.14 Why?
DeleteEl-Al would have had an absolute monopoly whereby they would control all international airports in the country country and own the majority of shares in the only airline. Who would want to do that? Montenegro would have lost big with a deal like that.
Having the airport and airline owned by the same private company is never a good idea usually.
DeleteThey should keep airports and get rid of the company. Montenegrin connectivity is rising and they are on the good trajectory.
DeleteMy 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.
ReplyDeleteAt one point 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.
DeleteActually I think Air Serbia - Montenegro tie-up could have been beneficial for Air Serbia, but not so much for Montenegro Airlines.
DeleteCurrent deal is beneficial for JU. The duopoly is in place, codeshare guarantees feeding for JU network. If only they had that for the whole Adriatic coast.
DeleteBuying such a loss-making airline, with a couple of planes is totally insane.
ReplyDeleteThey cant sell it, since liabilities are many times higher than assets, and it is far from profit. They will give it to anyone for free.
DeleteAdria and Air Serbia were given for free too so I don't see why YM would be any different.
DeleteCroatia Airlines will be given for free as well.
DeleteNot only were they given for free, but each government also had to give money to the new owner.
DeleteGoS still does.
DeleteCompetition for the worst deal continues. Adria - not that good. Jat - total disaster. We will see what happens with Croatia and Montenegro.
DeleteMy first thought was Arabs ... Qatar, Emirates, Etihad ... but who knows
ReplyDeleteDon't think Etihad will be purchasing airlines anymore :D
DeleteActually people should take note of the wording. He says interest was expressed by a COMPANY that OWNS an airline. So to me it looks as if this is 4K Invest.
DeleteMilo is very good friends with the Arabs so who knows, although I would definitely take Etihad out of the equation.
DeleteHe is good friends with Abu Dhabi ruler but we won't see Etihad investing.
DeleteQatar Airways might be a potential buyer. They bough Air Italy and Al Baker said they could invest in other airlines only if they are given a clean balance sheet. MGX is a small airline and it is not a big risk.
DeleteEmirates said they don't want to buy any airline. Just last year they said they made a huge mistake by buying Sri Lankan back in the day and that they won't repeat that mistake.
DeleteThey are too small for Qatar. They major operation is AIRITALY. Really hope that one succeeds
DeleteAll of the former Yugoslav republics would sell even their underwear and pay a foreigner to buy it.
ReplyDeleteMakes sense, why would anyone would give us money to take our dirty and worn out underwear?
DeleteAnon at 09:35
Delete+1
Good metaphor there 9.35.
Delete+100ⁿ
DeleteMicro state airline like MGX will never work. Therefore linking up with another airline would be a good idea.
ReplyDeleteLuxair does quite well.
DeleteTrue they had €9.5 million profit last year.
DeleteUmmm Luxembourg is one of the worlds richest countries.
DeleteLuxair used to have B747s in its fleet :)
DeleteThey used to be owned by Lufthansa.
DeleteSingapore is a micro state yet...
Delete10.29
DeleteTrue. It was "short" and smaller SP, still it was 747. And they even had 707 before as well as 767 at one point. And they used it mostly for flights to South Africa
You are all comparing apples and oranges with Singapore and Luxembourg vs Montenegro.
Delete@anon 10:40: for a few year, LH held about 1/8 of Luxair ; not sure if they "owned" them
DeleteGood luck.
ReplyDeleteI hope both get privatized.
ReplyDeleteIf Milo and company get a good commission ;-)
DeleteI have heard a rumor that it is 4k.
ReplyDelete-.-
DeleteIf it is, maybe those rumors that LH is behind it are somewhat true. They'll use 4K to clean all of the airlines and buy them/join them or something.
DeleteI bet you this "major company" is someone like SHS aviation and the airline they own is VLM.
ReplyDeleteGreat, Podgorica to Shanghai flights are just around the corner!
DeleteI was hoping more for Xian!
DeleteYou may be joking but
DeleteMontenegro has become the latest country in the former Yugoslavia to seek flights from China, following in the footsteps of Macedonia, Croatia, Bosnia and Herzegovina and Slovenia. Danilo Orlandić, the General Manager of operator Airports of Montenegro, which runs the country's two international airports, said, "Together with our strategic partners we are looking at significantly boosting the number of guests from China, especially outside of the summer season, which could bring us a large number of tourists".
https://www.exyuaviation.com/2018/06/ex-yu-airports-move-to-secure-china.html
I'm skeptical that such "major company" announced by our politicians might be someone like SHS unfortunately.
DeleteI'm not an aviation expert, but i think one really needs talent to make losses of 77 million with 6 planes
ReplyDeleteIt just blows my mind how they managed to do this.
DeleteThis is accumulated debt, not their annual loss, which I think was around 4 euros.
DeleteSorry I meant 4 MILLION euros haha. Would be nice if it was just 4.
DeleteMaybe Turkish Airlines? They did invest in Air Albania after all.
ReplyDeleteAn airline that has a plane painted in its livery but no website, no destination network, no flights. They probably got ordered by Erdogan to do it.
DeleteThey didn't do a great job with B&H Airlines.
DeleteBecause of political interference.
DeleteLet s just hope we don t see any Russian money in Montenegro Airlines
ReplyDelete+1000
DeleteThey would be lucky to get any Russian money for Montenegro Airlines. In fact they would be lucky to get any money at all.
DeleteI also don't understand why would it be problematic for a Russian company to invest in MGX?
DeleteThe B737 in Montenegro livery is beautiful :)))
ReplyDeleteDoes anyone know until when does the B737 lease run for?
DeleteTill the end of the summer season. So late October. I think they are very happy with the way the aircraft performed for them this summer. Passengers also happy. Maltese crew are nice.
DeleteThen , they don't have to repaint the LH engine c-duct
DeleteYM ne vredi nista ima samo dugove
ReplyDeleteWell it holds around 60% of Montenegrin market.
DeleteWhich can easily be covered by any low cost airline if they dissipated.
DeleteO my god,where you found the figure of 60 percent?The percentage is 25%
DeleteThey have to get rid of YM. EU has already said they can no longer give money to YM (and this year government didn't listen to them and gave money again to YM). With accession talks moving they have to get rid of the airline and will give it to pretty much anyone.
ReplyDeleteLol, you say this as if Montenegro's EU accession is super imminent. It's not even certain that the EU will keep its current members in the next 20 yrs. Don't hold your breath.
DeleteI wish the best of luck to Montenegro Airlines and who knows maybe an exciting future is ahead of them.
ReplyDeleteThe only true legacy airline left in ex-Yu. Hope they find a solution.
ReplyDeleteTrue only ex-Yu airline without buy on board.
DeleteI didn't know YM is a full service airline. WELL DONE!
DeleteFlying supermarkets are getting more and more popular :(
Hmm that might be one of the reasons they have the worst results in ex-Yu.
DeleteHmm, really?
Deletehttps://www.exyuaviation.com/2018/07/montenegro-airlines-posts-record-results.html
Financial results are the worst in ex-Yu. That's the one that matters. Not so much how many passengers are handled.
DeleteWhy the bragging if he doesn't know the details??
ReplyDeleteHaha so true. And he is the minister for transport!
DeleteI would actually imagine it's Etihad. Yeah some of their other investments haven't worked out, but they could cost-cut so much of Montenegro Airlines' overheads by just doubling it up with JU out of offices in Belgrade. It also gives them an almost monopoloy on the entire summer traffic from Russia to the coast, with direct or through BEG, and that's actually worth quite a lot of money. Roll a lot more via Belgrade and effectively have it as one company is probably not a bad solution for either party.
ReplyDeleteThat would not be a bad solution. But Etihad is undergoing restructuring and is abandoning the equity model, so buying another airline (which also happens to be struggling like all the other airline they bought) would probably not be a good look.
DeleteThank the lord EY never intervened with YM because you saw how their project ended up. They poured money and money on something beautiful yet so pointless.
DeleteYM struggled a lot, but it made it all by itself with no "help".
I'm very interested to see which company this is. I hope the minister isn't just talking out of his a** and something actually materializes.
ReplyDeleteI personally think it's Ryanair. They are starting to collaborate with regional carriers. Air Malta, Air Europa and I think after the spectacular Montenegrin success, they decided to take a chance on a missed opportunity.
DeleteAko je Ryan onda da se sutiraju u dupe od srece. Ako nije onda bolje sami da zatvore radnju.
Delete"I personally think it's Ryanair."
DeletePlease continue to impress us with your aviation expertise.
Why not Anon 18:55? If you go to the Ryanair website you can book Air Malta and Air Europa flights. You have combinations via Malta, Madrid. If you think about it, there is currently no destination in Balkans. Also major means something really big. Ryanair is the biggest in Europe.
DeleteThe next step is very profitable Boeing737-600 AP version in all economy configuration for charter tourist flights from eastern airports to Tivat airport.
ReplyDeleteMy friend that works in Montenegro Airlines say it is Qatar. There were visits between them.
ReplyDeletePrije cu crkvi(crkvama) vjerovat u zagrobni zivot,nego ministru saobracaja u vladi cg(namjerno...sve malim slovima).Postoji intresovanje 4K IF,doduse preko AA IF(Adriju su preuzeli,na papiru)...cak je i iznos slican.Bilo bi previse da da Qatar uzme MGX,iako Qatar ima ogromnu investiciju u opstini Tivat,gdje ima problema sa privatnim zemljistem....to bi bio jedini razlog zbog cega bi Qatar uletio u biznis(uz oprost dugova-vi nama rjesite zemlju)
DeleteAnon 17:26 is right, it is Qatar Airways.
DeleteThey have an idea of creating a prototype of the former Etihad Regional project. Details coming soon...
100% not Qatar. 4K.
DeleteWhich are YM's most expensive slots? I think Belgrade and Zürich are their most profitable routes....
ReplyDeleteHm,most expensive 'slots'!? CDG, regarding slot-price:-) Sorry,joking:-) TIV-BEG,TGD-BEG,TIV-DME,TIV-CDG,TIV-MUC,TGD-LJU,TGD-FRA.... Always stand-by pax on these flts :-(
DeleteTGD-CDG & TIV-DME make sense, I think route to Moscow is used by rich Russians.
DeleteVrlo dobro bi bilo ako Montenegro Airlines za sledecu sezonu uzme na lizing jos jedan Boeing 737-500 koji je komforan avion i uspostavi jos jedan turisticki charter let Iz Aerodroma Tivat za Belgiju.
ReplyDelete737-CL 300 400 500..je pravo resenje ...sva ostala resenja su PRESKUPA ...
ReplyDeleteBack in the days Arkia bought Balkan Airways and crashed them 1 month. First they sold their slots at Heathrow and then they sold their planes. So, ask the Bulgarians about Israeli investors in aviation LOL
ReplyDeleteIt was a complete disaster. PM Kostov, back in the days, sold it for the price of a Mercedes-Benz: 150,000$. One of the biggest scandals ever. The Israeli man is Gad Zeevi. LZ consisted of many Ty-154M, 733/735 and later A320 and 2 767s that flew to Johannesburg, New York, Kuala Lumpur/Singapore, Manila, Colombo and so on. African students used to fly via Sofia to other parts of Europe because the prices were dirty cheap. Tupolev quite full from Harare, Tripoli (Bulgarian workers in the days when Libya was rich).
DeleteThe successor changed names various times and finally ended up with Bulgaria Air in 2002.
With regards to London, the flights were operated daily to Gatwick, which worked quite well as they were cheap and made convenient connections with Virgin Atlantic. At a later stage, Heathrow flights were restored and Gatwick ditched. Gatwick become so popular, that even British Airways launched flights to Varna with their old, cool 734 (leather seats in economy and white nosed plane sometimes). Free newspapers and beer. Very nice staff.
Similar to former huge JAT, Tarom, CSA and Adria (Inex), the current FB will never be the same again as what LZ used to be like. Those days are gone, sadly.
Qatar airways is a good and fair company,they have a lack of cabin crew in recent years,and they chase ex-yu pilots, ground crew, and other aviation personnel to work for them, the monthly salary is excellent only 86 working hours per month ,this year at least 14 new aviation personnel has been employed by Qatar based Airline.
ReplyDeleteZa Montenegro airlines avion Boeing 737-400 je prevelik, Boeing 737-300 je dobar izbor ali ipak postojeci Boeing 737 serija 500 je optimalno i veoma razuman izbor i conforno rjesenje za ovu aviokompaniju ili skuplju seriju 600.
ReplyDelete