4K Invest, the part-owner of Slovenia's national carrier Adria Airways, has given up on its plans to take over Montenegro Airlines. According to the "Investitor" portal, an unnamed source at the German turnaround fund said, "It is impossible for us to expand our business in Montenegro due to both internal and external limiting factors". They added, "We had contact with government representatives but we do not see a sustainable way to make the company profitable. Debts are a major issue, as well as the current state of the aviation industry, both in Montenegro and abroad".
Montenegro's Prime Minister, Duško Marković, said in October of last year that a German fund was close to taking over the national carrier. The Montenegrin Minister for Transportation and Maritime Affairs, Osman Nurković, described the German fund as a "major company", which also "owns a carrier". Asked last year whether Adria sees opportunities in cooperating more closely with other airlines from the former Yugoslavia, the Slovenian carrier told EX-YU Aviation News, "We strongly believe in synergies among partners and thus we continuously seek for opportunities. We are always open for closer cooperation, new markets, greater efficiency and faster growth – without jeopardising sustainability. The success of such cooperation depends on more complex factors, so our decisions and future directions are and will be cautious".
4K acquired Adria via its subsidiary AA International Aviation Holding in March 2016 through a recapitalise-and-sell procedure for 100.000 euros and an additional one million euro capital injection. As part of the deal, the Slovenian government provided 3.1 million euros in capital. However, the fund has encountered a number of problems with Adria recently and has been forced to recapitalise the airline with four million euros, while a further ten million euros will be provided by the end of March. Earlier this month, the Slovenian carrier absorbed another company linked to 4K Invest which had previously purchased its brand name, thus changing the airline's ownership structure. Adria is also implementing a restructuring of its business and has discontinued a number of unprofitable routes. The company is expected to post a loss of up to fifteen million euros for 2018.
Let's get real, they walked away because the market is small, extremely seasonal and the only route that can work year-round is BEG where they have competition. Montenegro is too small to have a national carrier.
ReplyDeleteI would rather say they walked away because of the financial issues they are having with Adria,
DeleteI would rather say-both.
Delete4K's track record is far from great. Especially after the Darwin debacle and Adria's liquidity issues.
DeleteMontenegro Airlines is lucky.
ReplyDeletegreat news, they don't need that phoneys
ReplyDeleteI don't think the government will choose to privatize MGX in the end. They will invest some money in it. The airline seems to have stabilized anyway.
ReplyDeleteThat's not sustainable in the long run. They will have to find a partner.
DeleteIt all depends on what they do with the airports.
DeleteBravo Slovenija...
ReplyDeleteWhat does that to do with Slovenia? Kao koza i magarac... ;)
Delete"It is impossible for us to expand our business in Montenegro due to both internal and external limiting factors"
ReplyDeleteI'm thinking its more internal than external.
In future will be Adria Airways, not more Montenegro Airlines.
ReplyDeleteWhat does this mean fro Croatia Airlines? Apparently 4K was also interested in them.
ReplyDelete*for
DeleteConsidering the problems they are having with Adria, I don't think they will be going after any other acquisitions at the moment.
DeleteSome sort of consolidation in this area is necessary.
DeleteMeanwhile at OU they still haven’t selected their “privatisation consultant”.
DeleteMerging OU and JP under one brand would make the most sense. Have the main base in ZAG but keep the Adria name, OU brand has become totally useless and better to go with something neutral. The new airline could operate flights from ZAG base to LJU in a W pattern.
DeleteThey could base two CRJ-900 in LJU for Star Alliance hub flights.
Yay!
ReplyDeleteGood, Being bought by a shady investment fund would not have turned out well.
ReplyDeleteAt the end of the day, they were probably the only ones interested in MGX.
ReplyDeleteLOT might be interested. Let's wait and see.
DeleteOther than the Lufthansa group I don't see any airline in Europe stable or strong enough to purchase another carrier.
DeleteLO is busy expanding in BUD, they don't care about a tiny market like MNE. Also LO is expanding in WAW, they just announced three weekly flights to Colombo, that's in Sri Lanka.
DeleteWhat about Turkish Airlines?
DeleteTK's investment record on foreign airline is disastrous.
DeleteTheir latest failure is Air Albania which never managed to fly even a single commercial flight.
True. And they also failed with B&H Airlines.
DeleteHas an explanation ever been given to Air Albania's failure? I mean they got the plane and then it never even flew. This was a major PR project by Rama, what does he have to say about it? Just interested.
DeleteWho is behind this 4K company? Who owns them? What companies do they own?
ReplyDeleteLufthansa :D
Delete4k was not an ideal solution for YM
ReplyDeleteExcellent news. Stay away from from "investment funds".
ReplyDeleteYM is doing a great job on its own.
ReplyDeletelol
DeleteAs long as the government can cover the financing then yes, but at some point it will have to be sold.
DeleteI wish the best of luck to Montenegro Airlines.
ReplyDeleteand with what money would 4k purchase anything?
ReplyDeleteI doubt they wanted to strike a deal where they would have to give too much money for YM. Look at for how much they bought JP. It's in the last paragraph.
Deletelinking up with another airline would be a good idea for Montenegro Airlines.
ReplyDeletePerhaps with JU in the future. They already have an extensive codeshare.
Delete4K acquisition of Montenegro Airlines would have helped Adria Airways much more than Montenegro Airlines.
ReplyDelete+1
DeleteHow?
DeleteBecause they probably would have rerouted connecting passengers via Ljubljana instead of Belgrade where the majority transfer at the moment.
Delete+1
DeleteThat would have been bad news for JU.
Would it really be bad news for JU given the fact JP is shrinking every day.
DeleteOf course it wouldn't, few can compete with JU in TGD, even Aegean is reducing flights. Adria will do the same very soon.
DeleteNow that order for 15 SSJ100s for Adria is even more crazy.
ReplyDeleteSome of the SSjs would have complemented MGX's fleet really well.
DeleteBut it would be a third type in the fleet and they would have nowhere to maintain the aircraft other than Ljubljana. Doesn't make sense for them.
DeleteMGX - the only true legacy airline left in ex-Yu.
ReplyDeleteIt's not a true legacy airline if it isn't making a huge loss. Fortunately Montenegro airlines fit this criterion perfectly.
DeleteUnfortunately so do the rest!
DeleteLegacy airlines with 6 aircraft, gotta love the spirit :)
Deletewell it is the only ex-Yu airline without buy on board.
DeleteThis is actually good news :D
ReplyDeleteMaybe Lufthansa will get bought by Montenegro Airlines ?
ReplyDelete:D seems possible
DeleteHad 4k bought Montenegro Airlines it would probably have been known as Montegro ACMI Airlines and all of their aircraft would have been least out.
ReplyDeleteThey should count their lucky stars that 4k has given up.
ReplyDelete