Montenegro Airlines becomes EX-YU's fastest growing carrier

Montenegro Airlines' CEO Živko Banjević has said the company is "still here, stronger and more stable" as the government mulls its future involvement in the carrier. During the January - October period, the airline handled 576.000 passengers with six aircraft on 6.704 flights. As a result, it added an extra 68.751 travellers, representing an increase of 13.5% compared to the same period in 2017. "By the end of the year we anticipate welcoming a further 50.000 to 60.000 travellers. Therefore, the total number of passengers carried in 2018 should be above 620.000", Mr Banjević told the "Dnevne Novine" daily. He added, "Our 576.000 travellers represent 25.4% of all passengers handled through Montenegro's airports this year, despite competition from 45 other legacy, charter and low cost airlines". The carrier has claimed the post for being the fastest growing in the former Yugoslavia. "Preliminary business results for the first ten months have improved by 1.5 million euros and are the best in the last four years, regardless of some negative factors, which are out of our control, such as the extremely high cost of fuel", Mr Banjević said.

The strong operational and improved financial results come as the Montenegrin government seeks a strategic partner for the airline. Alternatively, the state has said it will continue supporting the carrier, if it is allowed to do so. "At the start of 2017, Montenegro Airlines was in an extremely difficult position in a financial, commercial and operational sense. With support from our owners and the company's management, as well as managerial and staff efforts, the company has been mostly consolidated and optimised, as indicated by our results. An analysis carried out by Deloitte at the end of last year showed that maintaining the business would give better results than the offered alternatives, i.e. a programmed bankruptcy and liquidation", Mr Banjević said. He further noted, "The government of Montenegro, aware of Montenegro Airlines' importance on the country's economy, is now, jointly with the management, looking for an adequate model for financial consolidation, primarily in regards to debt owed towards the Tax Administration, flight control and Airports of Montenegro, as well as the optimal long-term solution for the company's business".

Over the years, Montenegro Airlines has incurred significant debt to various service providers, which the company is now looking to clear. The CEO, who took over the reins at the airline at the start of last year, said, "In addition to outstanding debt owed towards the Tax Administration, flight control and airports, we also had to deal with 16.5 million euros worth of outstanding payments to foreign providers, such as aircraft owners, Eurocontrol and commercial banks, all of which could have grounded the company within a day. We succeeded in negotiating deals with each and every one of them in order to secure Montenegro Airlines' operations. We have restored the trust of our partners and associates".

A European investment fund, largely tipped to be Germany's 4K Invest, has held preliminary talks with Montenegro's Prime Minister, Duško Marković, over a possible stake in the airline. "The interest shown for the acquisition of Montenegro Airlines demonstrates to us that the company has been recognised by potential investors for its significant results and recovery, its importance and the market potential", Mr Banjević noted. "For Montenegro, it is of utmost importance that it has a functioning airline. Over its 24-year history, Montenegro Airlines handled 8.9 million passengers. Only since January of last year, when the Montenegrin government intervened and replaced the company's management, which was later followed up by financial support, we carried more than 1.1 million travellers. That's more than one and a half times the size on Montenegro. Montenegro Airlines is the second largest state-owned company with an annual turnover of seventy million euros, whose indirect effect on tourism revenue range between 150 and 180 million euros per year. The direct effects, through the payment of salaries, airport services and non-tourism related activities, have reached fifteen million euros. Taking this into account, the steps the government took last year in order to rescue the national carrier were economically justified", the CEO concluded.