Montenegro Airlines registers over €15 million in lost revenue


Montenegro Airlines has lost over fifteen million euros in revenue, while it is yet to estimate overall losses generated by the coronavirus Covid-19 pandemic. “Currently, it is impossible to asses the company’s losses as a result of the coronavirus since the pandemic is still ongoing. In any case, we are talking about a multi million euro loss. An indication is that during the first half of the year, Montenegro Airlines’ revenues declined by 15.110.063 euros”, the carrier said. It added, “During the first half of July we operated 84 flights and carried 4.432 passengers. Over the same period last year, we had 515 operated flights and welcomed 43.577 passengers”.

Montenegro Airlines resumed commercial flights on June 12 after almost three months, however, rebuilding its network has proven a challenge. The carrier is banned from flying to its biggest market in Serbia and has been forced to discontinue some services it restored due to travel bans and restrictions. The airline currently maintains operations from Podgorica to Zurich, Ljubljana, Paris and Lyon, as well as from Tivat to Hannover and London, with the latter being resumed this week. Furthermore, all routes are operating on a low-frequency basis. In comparison, budget carrier Ryanair now serves more destinations from the Montenegrin capital than the national carrier.

Montenegro Airlines’ CEO, Vlastimir Ristić, recently said the company’s finances have been hit hard by the ongoing pandemic and noted the government’s decision last year to provide 150 million euros in state aid over a six-year period has been put on hold and is being reviewed by the country’s competition watchdog. Mr Ristić added that a ban on flights to Belgrade have left the airline’s future at risk. The company currently has outstanding debt for unpaid taxes and contributions, as well as fees at Montenegro’s two airports, amounting to sixty million euros. “That’s a large amount that will be serviced from the government aid bill”, Mr Ristić noted.

Comments

  1. Anonymous09:05

    I honestly don't know how they'll pull through this one. The government is almost broke with there not being any tourist season and if they lost €15 million in revenue then I can only imagine the losses they will have at the end of the year. If they lost €9 million in 2019 then this year we are looking at close to €30 million. Crazy for such a small airline.

    ReplyDelete
    Replies
    1. Anonymous09:29

      +1

      Delete
    2. Anonymous10:58

      and they already have accumulated debt of more than 90mil from previous years, they are not paying taxes for salaries of employees (biggest debt in country, more then 20 millions €, 5x bigger then next one)...

      Delete
    3. Anonymous11:02

      ^ How is this allowed? How can a company simply not pay taxes and contributions to its employees??

      Delete
    4. Anonymous11:15

      It is allowed because they are a government institution just like the tax office is. It's basically all the same system. Plus, this is MNE we are talking about, head of YM and the head of the tax office are probably related in some way. Either by family or political ties.

      Delete
    5. Anonymous11:18

      That's crazy. So if I'm a YM employee and about to retire my pension would be lower because the company hasn't paid contributions in who knows how long?

      Delete
    6. Anonymous11:31

      Well, local custom is to "forgive debt" at some point :) So, you just don't pay, your result for newspaper look better because nobody mention this, you employ some relatives of government officials and at some point of time government simply "forgives" debt and that's it :)
      Alice in Wonderland :)

      Delete
    7. Anonymous14:08

      Exactly everything will be eventually paid by public debt. I don't think there is a single Balkans or eastern European country whose pension fund was not raided by politicians. Here in Illinois the pension fund is in deep crisis because it was spent like 30 years ago and now they struggle to pay. As in many other places they take special loans to do it. It's a vicious cycle.

      Delete
  2. Anonymous09:11

    Wow at FR having more routes from Podgorica!

    ReplyDelete
    Replies
    1. Anonymous11:19

      they were already the third busiest airline in CG last year when everything was normal.

      Delete
  3. Anonymous09:11

    this is bad

    ReplyDelete
  4. Anonymous09:14

    If their Government didn't forbid people from Serbia to enter Montenegro they would have now epidemic situation, but with flights to Belgrade.

    Instead of it they have epidemic situation + no flights to the main market.



    ReplyDelete
    Replies
    1. Anonymous09:19

      There are some hints here and there that the border will reopen in August despite the situation.

      Delete
    2. Anonymous09:22

      A bit too late.

      Delete
    3. Anonymous09:53

      Seems like Egypt and Turkey have taken all the Serbian tourists who were supposed to go elsewhere. Unfortunately this decision will cost MNE big time.

      Delete
    4. Anonymous14:09

      Today's flight to Hurgada left with around 140 passengers.

      Delete
    5. Anonymous15:17

      Congrats to Air Cairo, they were flying to BEG for over a decade now. No fanfare, no ads, nothing, just doing their own thing. They seem to be a really well run business.

      Delete
  5. Anonymous09:20

    I'm pretty sure the government will cover the cost.

    ReplyDelete
    Replies
    1. Anonymous09:29

      at one point the government will not have the funds.

      Delete
    2. Anonymous10:03

      I read somewhere that the government has enough money until the end of September. Though meanwhile they took out more loans so they should be ok for a while longer.

      Delete
  6. Anonymous09:35

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

    ReplyDelete
    Replies
    1. Anonymous10:36

      They've been finding their feet for decades...

      Delete
  7. Anonymous09:43

    What a waste of taxpayer money, especially now when there is FR to take care of this small and highly seasonal market.

    ReplyDelete
    Replies
    1. Anonymous19:01

      Same or almost the same can be said for efforts to restart government airline in Slovenia or for government airline serving coastal Croatia. If not FR, some other airline.

      Delete
  8. Anonymous09:54

    Airports also lost from not having flights to BEG and INI, let's not forget about that detail. The government will have to help them as well.

    ReplyDelete
  9. Anonymous10:03

    Tragic.

    ReplyDelete
  10. Anonymous10:13

    Montenegro keeps winning!

    ReplyDelete
    Replies
    1. Anonymous10:35

      Clearly...

      Delete
    2. Anonymous11:11

      If they have an airline with 5 Embrers which every year losses 9 million €, of course they are winning in that case...

      Delete
  11. Anonymous10:35

    You really got to wonder if it's more worth it giving FR a few million to base a few aircraft there.

    ReplyDelete
    Replies
    1. Anonymous10:40

      And what happens in winter when Ryanair sees no point in flying due to seasonality?

      Delete
    2. Anonymous10:51

      Most of their destinations to/from Podgorica are year-round.

      Delete
    3. Anonymous10:57

      Which destinations does Ryanair currently fly to/from Podgorica?

      Delete
    4. Anonymous11:01

      Berlin, Krakow, Poznan, Wrocław, Dublin, Brussels, London, Barcelona, Stuttgart.

      Delete
    5. Anonymous11:03

      Wow that's not bad at all.

      Delete
    6. Anonymous11:05

      Especially compared to YM's Zurich, Ljubljana, Paris and Lyon flights.

      Delete
  12. Anonymous12:56

    how will MNE save its broke airline when the country itself is on the brink of bankruptcy and fighting its most important partner??

    It is going to be an interesting year.

    ReplyDelete
    Replies
    1. Anonymous13:16

      They will take new loans to pay for everything

      Delete
    2. Anonymous13:27

      from whom, China? :D at the best possible conditions for sure.

      Delete
    3. Anonymous14:10

      Haha I think the last ones were from the IMF. Then again, they say beggars can't be choosers so they will take from anyone willing to give it to them. I don't think the government is too picky right now, especially just before elections.

      Delete
  13. Anonymous15:02

    I guess they won't start those Tel Aviv fights after all.

    ReplyDelete
    Replies
    1. Anonymous15:08

      Has Israel even opened?

      Delete
    2. Anonymous15:14

      Coronavirus cases in Israel are soaring, health experts are predicting a collapse of the health care system and the Israel Airports Authority just announced on Monday that the ban on non-Israeli citizens has been extended to September.

      Delete
  14. Anonymous18:30

    This is an ideal time to bankrupt YM and tell what is healthy (aircraft, crew, engineers) for an immediate privatization with possible rebranding.

    Prolonging the existing situation will only promote the further growth of debt and high risk of repossessing assets including aircraft in traffic while on a foreign airport which would mean death of the national carrier.

    ReplyDelete
  15. Anonymous18:37

    /plaky

    ReplyDelete
  16. Anonymous19:52

    This airline is a total mystery for me .
    Even here on the blog you do not really get any information about them, be it strategy, load factors or passenger structure .
    Do they codeshare on their international flights ?
    Are they more O&D or if they do transfers, on which routes they have most transfers ?
    Are they more for business travelers or for tourists ?
    What business is there in Montenegro actually ?
    Foreigners or nationals ?
    Exists there any Montenegrin diaspora ?
    Montenegro has such a tiny population without the wealth of for example Qatar or Brunei ...
    Who uses their Lyon flights when ?


    ReplyDelete
    Replies
    1. I'm not sure YM are worth the economic benefit. I understand the prestige of having a national airline argument, but in terms of connectivity for MNE citizens, the benefit is minimal. Inviting a few Low Costers should fill most of the pax need. They could also invite JU & OU to either base a plane in TGD and seasonally in TIV or increase frequencies. JU could run BEG-TGD-FCO for example. And OU could fly ZAG-TGD-ATH. There are other possibilities including 6-8 daily flights to BEG by JU, would be great for transfer pax and O&D, and OU two daily to ZAG also for transfers. Of course there is the issue of corruption and nepotism at YM but that is a different story, I'm only talking about pure economics of maintaining a national airline for such a small market.

      Delete
    2. Anonymous08:26

      No offense but what would OU offer in TGD that OS doesn't already? JU at least has a much wider network and it covers some important markets like JFK, Russia and so on. As for transfer passengers, Air Serbia, Alitalia and Austrian Airlines offer enough.

      OU already tried once to make TGD work and it failed. Heck, they even failed in most domestic airports.

      Delete
    3. Anonymous10:57

      Tried once? No they didnt because corona stoped them. And what can OU offer to TGD? Better connectivity to the western europe, more competition in MNE what means lower prices, OU is also member of Star Alliance so passangers can connect in ZAG and FRA to get on one of the LHs long haul flights, connection to Zagreb the second largest city in the region... So in reality I really dont see why not to have OU in TGD. Its not like they are full of legacies there...

      Delete
  17. Atila08:44

    Yeah you just ask Ju to base an aircraft and they run to do it. Why if they can do transfer through Beg? And what avout the passengers who dont want to spend their travel in transfers through airports to get to some places? You really think Ryanair gives a second though about connectivity of Montenegro that is already not well connected? No. They fly when there is demand and they beat when there is not. Also how the hell are lines succh as Dublin or Poznan or Krakow vital foe Montenegro??? They are good in season to bring tourists and that is how they operate them. I agree YM has a poor strategy execution and everything but we all know how is Slovenia doing, and Fraport and how long it took for first flights to land there once they removed the ban. Because there was no airline that (becaus of government ownership) had to start the lines straight away even though they might not be profitable. Just for the sake of restoring connectivity and bringing some tourists. But great analysts in the comments together have 0 airlines under their command of course. You all keep winning. ��

    ReplyDelete
    Replies
    1. Anonymous08:53

      Well before 2006 JU used to run regular charters from Tivat to Europe. So they would most likely go for it like they do for BNX. They seem to be quite capable since more and more charter flights are being introduced all around.

      Also some destinations might have enough passengers to fill a high density B738 two times per week but some others don't. That's why small markets like this one need to be connected to a hub.

      Delete
  18. Anonymous12:09

    I read all your comments with great interest, thank you! I flew with Ryanair to Montenegro in the low low low season in February, the aircraft was full.

    ReplyDelete
  19. Ryanair reported 170 million euros during COVID
    Rays air had 450 aircrafts
    That is 370 000 per plain
    Montenegro has 5 planes
    15 mil lost
    That is 3 mill per aircraft
    Almost 10 times more
    In good and bad time MA performs bad

    ReplyDelete
  20. Anonymous06:06

    Why would anyone want to visit Montenegro ?, I was born there and went 20 plus times , I or anyone I know was never greeted with welcome to Montenegro at the airport , it’s as if they don’t want you there . The customs workers look very negative and actually scare visitors away. People should travel to more welcoming countries.

    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.