State to rescue Montenegro Airlines with €155 million


The Montenegrin government has drafted legislation “for the investment and consolidation of the national carrier” which foresees the allocation of 155 million euros to Montenegro Airlines over the next six years. The draft law, which will be introduced into parliament under urgent procedures, is aimed at preventing the indebted carrier from collapsing and going into bankruptcy. The government noted that 105 million euros will be used to cover the airline’s debt, while fifty million will be utilised for the acquisition of new aircraft. The state emphasised that the bankruptcy or closure of the airline would have a negative impact on the Montenegrin economy and its tourism sector.

Under the six-year plan, Montenegro Airlines is expected to post a profit in 2020 and remain profitable for the duration of the state aid package. Furthermore, the carrier will be required to reduce its workforce by 2023 from the current 358 employees. The company aims to carry between 700.000 and 750.000 passengers per year between 2020 and 2023. “The draft law for the investment and consolidation of Montenegro Airlines is not a rescue package. Instead, it is an investment in the development of Montenegro”, the country’s Minister for Transport and Maritime Affairs, Osman Nurković, said. He added, “Being fully aware of carrier’s importance, the Montenegrin government has prevented its bankruptcy and closure. All our calculations point that its collapse would have extreme consequences, while the benefits of investment are far greater. This decision was not made lightly or quickly, however, based on the analysis of the company’s operations over the last three years, I am sure we have made the right choice”.

The Montenegrin government has already allocated 21 million euros for Montenegro Airlines in 2020 under its state budget for next year, which is irrespective of the abovementioned draft legislation. The Montenegrin carrier will add an Embraer E195 jet to its fleet at the start of the 2020 summer season and has completed tender procedures to select the most affordable dry-lease option. During the January – November period, Montenegro Airlines handled 626.297 passengers, representing an increase of 2.2% on 2018. The carrier is expected to register its busiest year on record and surpass last year’s result when it welcomed 645.000 travellers on board its aircraft.




Comments

  1. Didn't some people insist here how this was an amazingly successful company?

    ReplyDelete
  2. I'm guessing those free economy meals won't be staying for much longer.

    ReplyDelete
  3. Good better than them going bankrupt.

    ReplyDelete
    Replies
    1. Lol for 150 million they could pay Ryanair to base 10 aircraft in the country.

      Delete
    2. Tell that to the Slovenes. They're so happy now that Iberia will be flying to LJU. They would've burnt Adria to the ground themselves if they knew they'd be flying directly to MAD in the summer :D.

      Delete
    3. Exactly. They could have done so much more with this money.

      Delete
  4. Over 100 million in debt :O

    ReplyDelete
  5. So everyone in ex-Yu decided to invest in their own airlines except Slovenia.

    ReplyDelete
    Replies
    1. And Macedonia

      Delete
    2. Adria and MAT were 100% privately owned companies.

      Delete
    3. Well, not just ex-yu. Italy, France, Germany. But you know, Slovenes are the smartest.

      Delete
    4. define "invest" in MGX case.

      Delete
  6. What??!!! Are they serious??!!! The government is just robbing their own citizens in front of their eyes for what?! For nonsense!

    ReplyDelete
  7. ...and then people complain about the subsidies JU gets. At least Air Serbia is doing something, YM is not.

    ReplyDelete
    Replies
    1. Well it seems they will. They will get new planes and they plan to carry 80,000 passengers more which means they will probably launch new routes.

      Delete
    2. 80.000 passengers more per year = 480.000 passengers more in total for 50€ million = 104€ per additional passenger. LMAO

      Delete
  8. This amount of money for such a small company is ridiculous.

    ReplyDelete
  9. They have to prop it up since the airports are being given in a concession and MGX will have to actually start paying for using them.

    ReplyDelete
  10. Hope the money is used wisely.

    ReplyDelete
    Replies
    1. The very fact that they'll burn this amount of money on a tiny national carrier precludes the possibility of the money being used wisely.

      Delete
  11. This is not a rescue deal it is a tax return <3
    Will MNE join EU soon? Within next 6 years?

    ReplyDelete
    Replies
    1. I would say it's rescue.

      “Being fully aware of carrier’s importance, the Montenegrin government has prevented its bankruptcy and closure.""

      You would see it too if you took your pink color glasses off.

      Delete
  12. It's not even 155 it's 175 million since they will get on top of that another 20 million next year.

    ReplyDelete
  13. Passenger growth isn't very big this year.

    ReplyDelete
    Replies
    1. As far as I'm aware they didn't add any new routes or aircraft this year.

      Delete
    2. So? They are hardly operating at full capacity. MGX has the lowest LF of the ex-Yu airlines so they certainly had the opportunity to increase passenger numbers.

      Delete
  14. Its all about politics as politics earns good money with aviation biz in ex YU countries. We all dont want to know how many polit pockets get filled with keeping these zombie airlines alive

    If we wld hve true business men and politicians with resoonsability running our nations, we cld hve a SAS style carrier for the benefit of all and at lower costs

    ReplyDelete
    Replies
    1. Why would we have a SAS-like airline? For example why should Serbia participate now when we have JU which is growing and expanding? Also Norway has more or less divested its shares in SAS especially now when they have Norwegian. Those pan-Yugoslav projects are bound to fail.

      Delete
    2. Cause the airline would get a certain size where closer cooperations or even investments would be more realistic, or with a certain size, you can share costs better, or better compete with the competitors etc and it would save taxpayers around YU lots of cash. JU is growing with subsidies and if u read that little MNE has to invest 151 mio EUR into an airline with 5 planes, than this is just crazy. To compare for you: In Ryanair fleet language this would mean, they would need 13.5 bln EUR. This shows well how much is going wrong in YM.
      Ex YU Nations behave somehow strange: You all need airlines, but people have not even proper health care infrastructure nor services, but u prefer to hve an own airline. Not to talk of other things which are missing in daily life. But it needs to be an airline. How about baking smaller rolls and face the more urgent challenges??

      Delete
    3. Bottom line is that JU is growing and is looking beyond ex YU. No need for the airline to take steps back when it has come so far. JU serves the region through its hub, no point in changing the model that's obviously working.

      Delete
    4. As a Serb I wouldn't like that SAS idea to happen. We don't need it. If other republics want it then they are more than welcome to team up.

      Delete
    5. SAS model for exyu would never work. The market is far too small and the distances between airports too short. You cannot develop multiple hubs in such a small region so this plan this would come at the expense of BEG. This means that Serbia would not benefit from this and would certainly not participate in this program.

      What will continue to happen is a consolation in the market. BEG will develop into a useful hub. YM and OU will continue to slide into irrelevance. The coastal airports will thrive off of tourism. LJU, ZAG, SJJ, and SKP will grow in line with economic growth in those areas.

      Delete
    6. JU could at least cooperate with MNE and base aircrafts there but thats not in the interest of MNE politicians cause they wld hve less kick backs than with YM in place

      Delete
    7. And why would JU do that? The only reason why JU started flights to INI and KVO was because it permits the GoS to invest in JU while also developing disadvantaged regions of Serbia. This was never in Air Serbia's business plan. They prefer to focus on BEG and make it a hub.

      JU doesn't want to get involved in the highly seasonal Montenegro market when it can just offer connections onto their entire network with high frequency flights to TIV and TGD year round.

      Delete
    8. What makes you think JU would be successful on the Montenegrin coast if OU isn't on their own? Even YM is losing the battle against much bigger players like easyJet.

      JU needs to focus on doing its own thing in BEG. Look at the wonderful things that happen when they do, LJU does to 17 weekly, TGD to 21, they are launching KIV, AMM and LWO, boosting BCN ... the rest of ex-YU benefits from this by getting yet another transfer hub.

      Also I highly doubt Slovenes or Croats would just accept for BEG to be a major transfer hub while LJU or ZAG end up as mere feeding airports with a few non-stop flights here and there. First order of business would be to switch BEG-JFK to BEG-ZAG/LJU-JFK which would be at the detriment of BEG and Serbia.

      Delete
    9. Montenegro Airlines: €175 million euro rescue package for airline of 5 regional jets.

      Croatia airlines: sold absolutely everything including planes, engines, slots, maintenance and has to have the pension fund bail them out. Lost almost all market share on the coast.

      Air Serbia: last year launches Madrid, Barcelona, Nice, Cairo, Krasnodar, Zadar, Rijeka, Helsinki, Kiev. This summer will launch Geneva, Chisinau, and Lviv (plus more that are not confirmed yet).

      One is an investment and the other two are the equivalent of shoveling cash into a furnace.

      Delete
  15. If it means they will develop and grow then I'm all for it.

    ReplyDelete
  16. I think this is the first time a law is being passed just for an airline.

    ReplyDelete
  17. That's an insane about of money for a plane that operates between 4 and 5 aircraft. I wonder how that works out to state aid per employee, must be over €250k.

    ReplyDelete
  18. This is the aid on the scale of Alitalia.

    ReplyDelete
    Replies
    1. It's madness and Alitalia is sn x times larger airline.

      Delete
  19. €155 million for what? They are going down and down. No future in this company.

    ReplyDelete
  20. In the long run this 'investment' is not worth it.

    ReplyDelete
  21. “The draft law for the investment and consolidation of Montenegro Airlines is not a rescue package. Instead, it is an investment in the development of Montenegro."
    Nije govno no se pas posrao.
    We could've had it with Wizz and Ryan air but I guess DPS SD voters are happy !!!!

    ReplyDelete
  22. So if I did my math right, this comes down to around 250€ per Montenegrin in those six years or a bit more than 41€ per capita per year. Crazy numbers.

    ReplyDelete
  23. Dakle svaka avio kompanija na ovim prostorima ne može egzistirati bez pomoći države. Postavlja se pitanje vrijedi li to tih para?

    ReplyDelete
  24. YM still remains the most organised airline in ex-Yu.
    Most of its destinations are primary, catering is free of charge, checked luggage is free of charge.
    Punctual service and excellent fleet with an average age of 10,4 years.
    Bravo ME!

    ReplyDelete
    Replies
    1. Yes, it so well organized that it has over 100 million in debt and will get150 million euros from the people for 5 planes and 8 destinations. Bot alert.

      Delete
    2. YM has more than 8 destinations, so not sure where you brought this information from:

      https://montenegroairlines.com/en/destinations

      What is also interesting is that NYC appears in the list:

      https://montenegroairlines.com/en/destinations/new_york

      It could be they are considering flights to JFK soon!!

      Delete
    3. You are either a troll or are not very bright. They have New York on the list because they sell Air Serbia's flights to New York via Belgrade which they codeshare on like on the other 40 destinations they codeshare on.

      They fly to 8 destinations.

      Delete
    4. You are either not concentrating or not interested. There are more than 8 destinations:

      BEG, FRA, LJU, CDG, FCO, VIE, ZRH
      Seasonal: CPH, DUS, LYS

      I am counting 10, not sure about you...

      Delete
    5. Great success! They deserve even more than 155 million euros since they have 10 and not 8 destinations.

      Delete
    6. Wow 8 year round destinations and only Belgrade has more than daily flights. Disaster.

      Delete
    7. -when you have a small airline fly to CDG and FCO, then we are talking about serious stuff.
      -when you have a small airline not depending on another bigger one, then we are talking.

      If the government has those extra money then why not spend it on an airline? The backbone of an econmy......

      Delete
    8. Very serious, with 100+ million debt. If government has so much extra cash, might want to invest in crumbling hospital infrastructure.

      Delete
    9. YM depends on JU. If JU decides to suspend thé codeshare and if they attack them their losses would double overnight. JU is keeping YM alive.

      Delete
    10. YM depends on JU and JU depends on EY :D
      Life is like this.

      Delete
    11. In what way does JU depend on EY? EY effective control over JU has finished a while ago when all departments that were in AUH were moved to BEG.

      On the other hand, as long as JU is not too aggressive in MNE, YM can survive. If JU cancels the code-share and adds more flights YM is dead. They can't afford a price war on the only market where they have real demand.

      Delete
    12. True, tragic, funny, devastating, sinister, dangerous, comedic at the same time. The fact that YM is still alive cause of JU.

      Delete
    13. Of course it is. If JU attacks them what market do they have to rely upon? Even this winter for the first in forever they will have less flights on TGD-BEG than JU.

      Delete
    14. ROFL

      YM depends on JU..... :D :D :D

      The whole Balkan depends on JU...pleezzzz give us a break.
      YM will recover and does not need small airlines and must focus on CDG and bigger airports for transfer.

      Delete
    15. You are right. That's why 50% of all of its passengers this year are to and from BEG. Btw Montenegro Airlines currently flies a whopping 2 flights (yes 2 flights) per week to CDG. You are disconnected from reality and are viewing the situation purely from a nationalistic standpoint. I mean you even thought they are starting New York LOL!

      Delete
    16. Anon 20.23 well given the way JU is adding flights and growing I wouldn't be surprised if soon all of Balkans depends on them. ;)

      As for YM like others mentioned, the code-share with JU is what's keeping them remotely relevant and alive. Or you think their few weekly flights to other few European cities is enough? For some on here JU's success can never be justified and then some dare propose an ex-YU SAS.

      Delete
    17. JU, the all-mighty Balkan saviour :D :D
      Thank God, YM existed since 1994 when it was still depending on JAT.
      LOL!

      Delete
    18. You just keep on writing nonsensical comments without any kind of arguments which only shows that we are right. And yes, YM is indeed reliant on Serbia and the Serbian market. Remember Master Airways? They didn't launch it in Croatia or Bosnia but in Serbia. BEG is the only destination they can serve with a decent number of frequencies. JU is their lifeline and their link to the world... and so on and on.

      Of course you are more than welcome to prove us wrong, that is if you can, which I doubt but anyway ... you seem to be bothered more by the fact that JU is the only ex-YU carrier that has a chance and that is actually doing something to grow and expand.

      Yes, we can call it the Balkans saviour but in a few years when they add more flights to the region. ;) I don't know if you noticed but this winter JU will have more flights to Athens than mighty Austrian Airlines and they will have more flights to ATH from BEG than A3 will have to all of ex-YU. ;)

      Delete
  25. Just shut it down.

    ReplyDelete
  26. Prn flights please :)

    ReplyDelete
  27. Ha.... seriously, who didn't see this coming?

    ReplyDelete

Post a Comment

EX-YU Aviation News does not tolerate insults, excessive swearing, racist, homophobic or any other chauvinist remarks or provocative posts with the intention of creating further arguments. A full list of comment guidelines can be found here. Thank you for your cooperation.