Montenegro Airlines prepares for service resumption


Montenegro Airlines is gearing up to resume commercial flights in June after almost three months. Montenegro’s two international airports recently reopened for general aviation flights and are expected to welcome commercial services in early June. The Montenegrin carrier has tentatively scheduled its operations between June 1 - 15, with the carrier to maintain fifteen weekly rotations between Podgorica and Belgrade, and a further thirteen weekly between Tivat and the Serbian capital. The remainder of its network is expected to be progressively reinstated from mid-June onwards. “We plan to operate four aircraft this summer season, which means fewer passengers and flights than last year when we had six jets. However, the circumstances are such that it would be too big of a risk to wet-lease one or two aircraft”, the President of the carrier’s Board of Directors, Nikola Vukićević, said.

The Montenegrin carrier estimates its losses will amount to several million euros as a result of the coronavirus Covid-19 pandemic. “During the first four months of the year, revenue declined from twelve million to six million euros, although variable costs were also significantly lower. We carried some 70.000 passengers on 980 flights compared to 130.000 travellers on 1.800 flights during the same period last year”, Mr Vukićević noted. He added, “Once it becomes clearer as to how the aviation sector will function in the aftermath of the pandemic, we will have to refine the company's commercial strategy and organisational structure. We might have to reduce our workforce”.

Commenting on the 155 million euros in state aid earmarked for Montenegro Airlines over the next six years, which was allocated by the government prior to the coronavirus and is now under review by the country’s competition watchdog, Mr Vukićević noted, “All countries in the region with national carriers have done this. They have injected much more funds than Montenegro into the recovery and development of their airlines. We are talking about hundreds of millions of euros in debt taken over from Jat by the state and investments in Air Serbia. Similarly, in Croatia, the government aids Croatia Airlines with ten million euros each year for public service obligation flights”. Mr Vukićević added, “We can kid ourselves how other carriers would fly to Montenegro if Montenegro Airlines were to cease operations and that it would be more affordable. However, practice has shown this to be untrue. Each nation that doesn’t have its own flag carrier depends on others. Anything other than purely commercial interests cannot be expected from other airlines. In July and August everyone wants to fly to Montenegro, but in January and February they won’t because it’s a loss-making period. This airline was not founded with the sole purpose of being a profit-maker and neither is that essential. The company’s importance is measured in its contribution to the overall economy and tourism industry”.

Comments

  1. Anonymous09:03

    Finally!

    ReplyDelete
  2. Anonymous09:04

    "This airline was not founded with the sole purpose of being a profit-maker and neither is that essential. The company’s importance is measured in its contribution to the overall economy and tourism industry”.

    Smart statement. Something a lot of people don't get on here.

    ReplyDelete
    Replies
    1. Anonymous09:10

      This too:

      "Each nation that doesn’t have its own flag carrier depends on others. Anything other than purely commercial interests cannot be expected from other airlines."

      Delete
    2. Anonymous09:15

      +1

      Delete
    3. Anonymous09:17

      my reaction : lol

      that statement is nothing but an excuse for the state of the company

      Delete
    4. Anonymous09:22

      I don’t think an airline should offer destinations that are not profitable. After all, it’s all about business. I’d mention taxpayers money (I know a lot of will go crazy now), but at the end of the day, why would taxpayers help anyone’s ticket price get lower? On the other hand, what we see LCCs are doing: they lower their prices, make their competitors go bankrupt (e.g. Wizz/Malev) and then their prices increase and become even more expensive than a flag carrier they wiped away. So - at the end of the day - this is a very tricky and complicated thing with a lot of pros and cons.

      Just my two cents...

      Delete
    5. Anonymous09:47

      "This airline was not founded with the sole purpose of being a profit-maker and neither is that essential. The company’s importance is measured in its contribution to the overall economy and tourism industry”

      And that is how we will justify pouring 155 Million Euro in a carrier which has only 4 planes in its fleet. (and has huge loses from previous years).

      And what else should be expected from airlines than a pure commercial interest?
      Sorry that they are not interested in hiring somebod'y cousins

      Delete
    6. Anon 9.22 But you also need to know that LCC are also taking taxpayers money, as they get subsidies from the country, so it is literally the same as the money is going to the local airline....the LCC can not fly without extra money from country...LCC lower the ticket prizes just because subsidies from the country as they cover up the big part of revenue with subsidies per flight...

      Delete
    7. Anonymous10:32

      Thanks! As I said, it’s very complicated and it seems like a mixture of both legacy carriers and LCC is optimal.

      Delete
    8. Anonymous10:42

      @9.51 the subsidies are nothing ...

      Delete
    9. Anonymous22:59

      @Anon 9:51: “airline....the LCC can not fly without extra money from country"

      Who is subsidising Ryanair to fly STN-DUB, easyJet on SXF-CDG and Vueling on BCN-LIS?

      "LCC lower the ticket prizes just because subsidies from the country as they cover up the big part of revenue with subsidies per flight..."

      No. The reason why LCCs can sell tickets at low price is because their overall operating costs are low. E.g. Ryanair had 142m pax in FY2019, with average fare price (this is what pax pays for ticket) of 37.03 EUR, scheduled revenue was 5261m. Anciliary revenue (baggage fees, onboard sales, subsidies, etc.) was 2436m, total revenue 7697m.

      This equals of TOTAL revenue per pax of 54.20 EUR.

      Unless you think they are either hiding a substantial amount of revenue (don't know why any business would do that?) or massively over-inflating the number of passengers (i.e. flying empty planes)?

      Delete
  3. Anonymous09:06

    Smart decision to fly just 4 planes this summer.

    ReplyDelete
    Replies
    1. Anonymous09:25

      I don't think they had much choice.

      Delete
    2. Anonymous10:22

      They don't need the leased planes as there will be much fewer flights.

      Delete
  4. Anonymous09:14

    Does anybody know if Montenegro requires a negative COVID-19 test upon arrival? With all my flights to other Mediterranean destinations being already canceled this summer, I’m thinking of visiting Montenegro again. Thanks!

    ReplyDelete
    Replies
    1. Anonymous10:21

      At the moment no foreigners are allowed in. For people arriving on general aviation a test is required at the moment but I think all of that will change. Within a month or two I don't think anyone will be requiring tests. It's such a stupid concept that it is beyond me, taking into account you can go get a test and two minutes after getting one can get infected. It's completely pointless.

      Delete
    2. Anonymous10:30

      Thank you! And I second everything you’ve said.

      Delete
    3. Anonymous12:59

      Agreed.

      Delete
  5. Anonymous09:15

    I really hope they open the airport at the start of June. I'm really surprised that not even private flights were allowed.

    ReplyDelete
    Replies
    1. Anonymous10:23

      It's excessive to say the least.

      Delete
    2. Anonymous10:24

      It's not excessive, it's just realistic. Government is aware the health system would collapse even with a relatively small number of cases and they can't risk it.

      Delete
  6. Anonymous09:15

    Makes sense to start BEG since the borders are open and that is the busiest route.

    ReplyDelete
    Replies
    1. Anonymous11:43

      They are open in one direction only for now.

      Delete
  7. Anonymous09:32

    Good luck MGX. Hope they find their feet in the post corona era.

    ReplyDelete
    Replies
    1. Anonymous10:19

      I think some consolidation in this region is necessary.

      Delete
  8. Anonymous09:36

    most absurd statement ever

    ReplyDelete
  9. Anonymous10:23

    A big issue for MGX this summer is the Russian market. It remains close and will until July at least. It is Montenegro Airlines' second biggest market (and Montenegro's biggest).

    ReplyDelete
    Replies
    1. Anonymous11:23

      +1
      620k passengers just between Moscow and Tivat last year...

      Delete
    2. Anonymous11:42

      The demand is crazy

      Delete
  10. Anonymous10:41

    They have a repatriation flight tomorrow from BEG to TGD.

    ReplyDelete
    Replies
    1. Anonymous19:24

      It's actually not a repatriation flight. It is a charter to return Montenegrin students studying in Serbia.

      Delete
  11. Anonymous11:12

    Does that mean they will only fly Embraers this summer?

    ReplyDelete
    Replies
    1. Anonymous11:20

      Three Embraers 195 and one Fokker 100.

      Delete
    2. Anonymous11:42

      What's happening with the other Fokkers?

      Delete
    3. Anonymous14:47

      Most are unfit to fly. I believe they are looking to sell the plane for spare parts.

      Delete
  12. Anonymous11:42

    No "Montenegro keeps winning" comment? :(

    ReplyDelete
    Replies
    1. Anonymous18:09

      Actually it does keep winning. YM remains one of the very fewest legacy carriers in Europe. Today's fares include everything - from catering to checked luggage.

      Delete
    2. Anonymous18:13

      And all it costs is a mere 10 million euros in losses each year and 155 million euros in state aid. Great concept.

      Delete
    3. JATBEGMEL18:24

      Having that semi decent offering doesnt justify that large amount of subsidies they need. European market doesnt necessarily ask for 'free' catering and checked baggage, which was an expensive lesson JU learnt.

      Delete
    4. Anonymous19:59

      This we don't know. Maybe people are looking for a full service carrier. The fact that it still exists means there are people willing to pay more and experience a legacy airline service. JU must compete with W6 that's why they became a LCC basically.

      Delete
    5. JATBEGMEL21:26

      And YM has both W6 and FR to compete with. In the mean time, YM has not had any significant growth other than their losses they make. If the European market wanted a full service carrier, we wouldnt seen almost all of the European airlines pull of some form of a hybrid model.

      Delete
  13. Anonymous11:44

    So in June they will be flying considerably more between TGD/TIV and BEG than JU.

    ReplyDelete
    Replies
    1. Anonymous14:45

      In the first half yes.

      Delete
  14. To apply the logic of some comments, most Adriatic populated islands would be cut off from the mainland. Does not mean that the state avio companies shouldn't strive for leaner mngmnt, but they serve additional purpose as well.

    ReplyDelete
  15. Anonymous14:44

    155 million is just way too much for an airline of MGX's size.

    ReplyDelete
    Replies
    1. Anonymous14:48

      It's over 6 years

      Delete
    2. Anonymous18:25

      That's over 20 million per year.

      Delete
    3. JATBEGMEL18:30

      JU with more than 5 times the fleet and destinations costs less than that.

      Delete
  16. Anonymous15:05

    Given that most Serbs will avoid traveling to far destinations, something tells many will decide to go to Montenegro for summer holidays and that Belgrade - Tivat/Podgorica route will boom in July and August.

    ReplyDelete
  17. Anonymous16:17

    Does anyone know if they will materialise TGD-LIS?
    This route will be quite popular similar to Air Moldavia.

    ReplyDelete
    Replies
    1. Anonymous18:24

      It's still scheduled but moved for July 6.

      Delete
    2. Anonymous19:56

      Good to hear! There is nobody way for a city like LIS not to work. Their schedule is quite smart. Instead of remaining on the ground at night it departs in the evening and arrives next day in the morning. This will likely be the longest route from TGD.

      Delete
  18. Prepelica15:10

    If Montenegro was a somewhat normal country, YM would have long ago gone to the "ropotarnicu povijesti", as Mr. Scuric would say. Only for taxes and contributions from and to personal income they owe EUR 24 million. By the way, in addition to looking through the fingers for all debts to the state and state-owned companies, YM received 5.5 million direct subsidies in 2019 and 7.3 million in 2018. And with all non-payments and subsidies in 2019, they still managed to be in the minus of 7.9 million. And now let's throw another 155m EUR to the pile to be at a negative zero. With 4 (or 5) planes to achieve all this you have to be a real magician. (btw all the numbers can be found on official MNE tax portals like https://www.bankar.me/2020/05/09/objavljena-nova-crna-lista-poreskih-duznika/ and https://eprijava.tax.gov.me/TaxisPortal)

    ReplyDelete

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