Montenegro Airlines to get €133 million in coronavirus aid in 2020


The Montenegrin government has earmarked 133 million euros for its national carrier this year, to help cover the losses caused by the coronavirus pandemic. On July 21, Montenegro Airlines was given a 10.4 million euro cash injection in order to secure the company’s short-term liquidity, while a further 25 million euros was forwarded to the airline on August 25. Late last year, the Montenegrin government committed itself to providing 150 million euros to its national carrier over a six-year period. Initially, 66 million was to be given to Montenegro Airlines this year. However, in its amendments to the state budget in July, the government earmarked a total of 133 million euros for the carrier this year alone due to the coronavirus pandemic.

Montenegro Airlines, which operates a fleet of just four aircraft and relies on the busy summer tourist season to bolster in finances, saw its revenue decline 80% during the first seven months of the year compared to 2019. Whereas the airline saw revenues of thirty million euros during the January – July period in 2019, the figure fell to just six million in 2020. The carrier’s CEO, Vlastimir Ristić, said last week the carrier is facing the biggest crisis since its foundation. “We have lost the most important months of the year, almost the entire summer season. This on its own says a lot about the position we are in. At this point, it is difficult to predict our results for the rest of the year, and it would be demoralising for us to do so”, Mr Ristić said. He added, “We are still waiting for some good news, such as the complete lifting of travel restrictions to Serbia and the reopening of the Russian market. The sooner these two happen, the better it is for us and we will do our utmost to wisely use this opportunity”.

According to the company’s CEO, Montenegro Airlines saw its peak summer passenger numbers and load factors amount to winter volumes. “Montenegro Airlines will need help from its founders to overcome the consequences of the crisis. However, it is up to us to do a few things first. We need to show in this present time that we are up to the task and have the capacity to overcome these issues, as well as convince our founder that the company is well managed. Montenegro requires an organised and responsible national carrier in the long-term”, Mr Ristić noted. Montenegro Airlines registered a net loss of 7.96 million euros in 2019 compared to a loss of two million the year before.

Comments

  1. Anonymous09:02

    That is a huge sum!

    ReplyDelete
  2. Anonymous09:03

    Wow

    ReplyDelete
  3. Anonymous09:03

    Good on them

    ReplyDelete
  4. Anonymous09:03

    €133m for a company with 4 aircraft.

    They could close this one down, opened a new one, and it would cost less in the end.

    ReplyDelete
    Replies
    1. Anonymous09:09

      +1

      Delete
    2. Anonymous13:45

      Don't forget that Cyprus which is a lot richer doesn't have an airline.

      Delete
    3. Anonymous13:46

      This financing is almost criminal.

      Delete
    4. Anonymous07:41

      And 11 million passengers while being maybe 30% bigger.

      Delete
  5. Anonymous09:04

    4 planes and 133 million EUR?

    ReplyDelete
    Replies
    1. Anonymous09:23

      And don't forget over 100 million in debt

      Delete
  6. Anonymous09:05

    I hate to think how much the other two ex-yu national airiness will get.

    ReplyDelete
    Replies
    1. Anonymous09:08

      ju with 18 aircraft has received billions since 2013, not a big deal...

      Delete
    2. Anonymous09:10

      No trillions. And no 5 aircraft.

      Delete
    3. Anonymous09:14

      It has and you know it. Just like the sweet subsidies for 5 years in Nis. Or that doesn't count?

      Delete
    4. Anonymous09:16

      That's 5 million euros. Not billions!

      Delete
    5. Anonymous09:18

      It's interesting those flights are an issue for you but not 10 million received by another airline each year for domestic flights.

      Delete
    6. Anonymous09:25

      At least Air Serbia is doing something with the money which shows certain progress, YM is not.

      Delete
    7. Anonymous10:11

      @anon 09:18

      Very good, I would say very, very good!

      Delete
    8. Anonymous10:27

      This is totally apsurd. They are going to recive 133 million while 3 larger OU will recive 91 million. And this is even more then a revenue they made in 2019. which was about 80 million.

      Delete
    9. Anonymous12:31

      How did we get to JU, INI and Serbia from a topic on YM and MNE?

      Delete
    10. Anonymous12:58

      Croatia ask for 93 million EUR.

      Delete
  7. Anonymous09:05

    Dinosaur

    ReplyDelete
  8. Anonymous09:06

    Good to hear. The amount is reasonable and should help them survive during the winter. Those aircraft must be used for charters. They will undoubtedly boost their financial situation. They should also consider resuming flights to INI.

    ReplyDelete
    Replies
    1. Anonymous09:08

      Reasonable? Seriously?

      Delete
    2. Anonymous09:12

      Well, open the table in the reference and check the amounts received by other carriers and then compare them with YM. The amount is reasonable. This is a long-term aid.

      Delete
    3. Anonymous09:27

      Long term? You want to bet they won't need anything more in the next 5 years?

      Delete
    4. Anonymous10:03

      Yes, exactly. The aid is large because it will serve for a longer period.

      Delete
    5. Anonymous11:06

      Haha, I'll believe it when I see it.

      Delete
    6. Anonymous13:10

      lol what longer period? A few months ago we read how they got 155 million for five years and now they get 133 million just because of corona, which excludes the first three months of the year when they operated normally.

      Delete
    7. Anonymous13:18

      With that money you can build an airline size of Air Baltic. Air Baltic got about 250 million in investment from the goverment and private investor to build an airline of 5 mil. passangers. And Montenegro got 288 million so now you compare what you can make with that amount.

      Delete
  9. Anonymous09:06

    This is excessive

    ReplyDelete
  10. Anonymous09:07

    I'm more surprisd to hear that they would have gotten 66 million without corona.

    ReplyDelete
  11. Anonymous09:09

    I actually really appreciate that the government has recognised the importance of their national airline.

    ReplyDelete
  12. A country with just 5.7 billion dollars GDP nominal giving to an airline in one year 133 millions euros with 4 airplanes is crazy!

    ReplyDelete
    Replies
    1. Anonymous10:29

      Budget revenue is just 1.7 billion euro. Absolutely crazy. 8% of the budget revenue.

      Delete
    2. Anonymous14:44

      That's 18 euros a month that every Montenegrin pays to YM. Given that not the whole population of Montenegro pays tax (children etc.), the number is even higher per tax payer.

      Delete
  13. Anonymous09:11

    Let's see if they actually get the money now that a new government will be formed.

    ReplyDelete
    Replies
    1. Anonymous09:52

      Yes. They could have a very different stance on YM

      Delete
    2. Anonymous09:53

      Letting YM go bankrupt would not be a good look. Trust me.

      Delete
    3. Anonymous12:01

      It would if they tie it to DPS and Milo as his legacy which it, anyway, is.

      Delete
  14. Anonymous09:13

    It's too much.

    ReplyDelete
  15. Anonymous09:14

    Love the table. Look at the amount all the foreign airlines received. Don't see any outraged taxpayers there.

    ReplyDelete
    Replies
    1. Anonymous09:17

      Craaazy how rich Singapore is as a state! And seeing them resuming flying with 737s after nearly 50 years is even crazier.

      Delete
    2. Anonymous09:28

      Countries like Singapore wouldn't have provided any state aid to their national carriers if it weren't for Corona- which diferentiates them from the ex-yu ones, which have been providing state aid without Corona for years.

      Delete
    3. Anonymous09:33

      ^ There's Corona help and there's inability survive without the government's funds even when aviation cycle is in the boom part.

      Delete
    4. Anonymous12:03

      SIA received billions and billions in the past, that is until they create the brand they have today. You can't have a cash cow business without first investing in it. I guess that's why ex-YU is poor, we don't understand how capitalism works.

      Delete
  16. Anonymous09:20

    Just until last year people here used to insist how this was an amazingly successful company

    ReplyDelete
  17. Anonymous09:21

    Good, better than them going bankrupt.

    ReplyDelete
    Replies
    1. Anonymous09:54

      I agree but this huge amount of money should be given under certain conditions.

      Delete
  18. Anonymous09:21

    For 133 million they could pay Ryanair to base 10 aircraft in the country.

    ReplyDelete
    Replies
    1. Anonymous09:34

      These situations have really shown how good it is to rely on a foreign LCC airline...

      Delete
    2. Anonymous10:03

      ok pump money into them. till u enter EU then we will see

      Delete
  19. Anonymous09:22

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

    ReplyDelete
  20. Anonymous09:22

    They could have done so much more with this money.

    ReplyDelete
  21. Anonymous09:24

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

    ReplyDelete
    Replies
    1. Anonymous09:26

      And Macedonia

      Delete
    2. Anonymous09:27

      Well, not just ex-yu. Italy, France, Germany.

      Delete
    3. Anonymous09:29

      and Macedonia and Bosnia

      Delete
    4. Anonymous09:34

      None of these countries are starting a new airline in 2020, are they?

      Also, Lufthansa wasn't a financial basket case before this all started, unlike exyu airlines (and Alitalia).

      Delete
    5. Anonymous10:49

      Adria and MAT were 100% privately owned companies.

      Delete
    6. Anonymous12:04

      Look at Italy and Alitalia, that goes to show what importance it is for Italy to have them around.

      Delete
    7. Anonymous12:52

      Alitalia isn't even the largest airline in Italy. It's just that no politician wants to take the responsibility for finally pulling the plug and making thousands of people finally unemployed.

      Delete
    8. Anonymous12:59

      + the money Italy will pump into this loser this time will come from Europe, which of course if making everybody, particularly in Germany very happy.

      Delete
  22. Anonymous09:26

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

    ReplyDelete
  23. Anonymous09:28

    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
    Replies
    1. Anonymous09:32

      Umm have you checked what's happening with that concession? It's gone down the toilet.

      Delete
  24. Anonymous09:32

    Crazy

    ReplyDelete
  25. Anonymous09:33

    Waste

    ReplyDelete
  26. Anonymous09:35

    Probably pure nepotism - just like overall in the Balkans... ....politicians employ their families there with high salaries and subsidize them for enernity...

    ReplyDelete
  27. Anonymous09:35

    Go MGX!

    ReplyDelete
    Replies
    1. Anonymous09:36

      Waiting for the "keeps winning" guy

      Delete
    2. Anonymous09:45

      Me too :D

      Delete
    3. Anonymous10:01

      he is him

      Delete
  28. Anonymous09:40

    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 €200k.

    ReplyDelete
  29. Anonymous09:41

    Does it come with any strings attached?

    ReplyDelete
    Replies
    1. It likely does but no the you probably have in mind (financial performance, # of pax etc.). It's more like # of new ruling party members employed, # of supply contracts to DPS friendly companies etc.

      Delete
  30. Anonymous09:41

    What is that subsidy per capita???

    ReplyDelete
    Replies
    1. Anonymous09:59

      € 213

      Delete
    2. Anonymous13:11

      Okay. This is not thaaaaat much.

      Delete
    3. Anonymous14:51

      That's an insane amount. It's 18 euros a month for everyone, including children, that could be spent on something else.

      Securing basic connectivity for the country (post-Covid) through a PSO scheme would be way cheaper.

      Delete
  31. Anonymous09:46

    Proportionally, this is the aid on the scale of Alitalia.

    ReplyDelete
  32. Anonymous09:48

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

    ReplyDelete
    Replies
    1. Anonymous09:51

      Really? €133 million for what? They are going down and down. No future in this company.

      Delete
    2. Anonymous10:01

      He said not worth it

      Delete
    3. Anonymous10:45

      He did indeed. My bad.

      Delete
  33. Anonymous09:50

    Wonder if their future would have been different if EY night then as planned.

    ReplyDelete
    Replies
    1. Anonymous10:02

      If EY took over they would probably be bankrupt by now

      Delete
    2. Anonymous10:45

      It could have been worse. Last year it was confirmed 4K Invest was in talks about buying them.

      Delete
    3. Anonymous10:49

      They would have canalized MGX to save JP.

      Delete
  34. Anonymous09:52

    That amount of money could eradicate poverty in Montenegro forever.

    ReplyDelete
    Replies
    1. Anonymous10:44

      Literally!

      Delete
    2. Anonymous13:14

      may I remind you that MNE depends fully on tourism and killing it will not eradicate anything else but the relatively high standard of living in MNE for Balkan standards

      Delete
    3. Anonymous13:20

      That would be bad but this amount is huge. YM cannot even make so much losses this year.

      Delete
    4. Anonymous14:35

      i dont think YM contributes that much to the tourism industry with their 8 routes

      Delete
  35. Anonymous10:43

    Does anyone know if they still have in plan to lease 4th Embraer 195?

    ReplyDelete
    Replies
    1. Anonymous10:48

      Not this year anymore. But in the long term yes.

      Delete
  36. Anonymous10:45

    Just shut it down.

    ReplyDelete
  37. Anonymous10:48

    Don't see what all the bitching and moaning is about. I fully support this move and I wish them all the best in the future.

    ReplyDelete
  38. Anonymous10:52

    Montenegro Airlines is still the only true legacy airline left in ex-Yu.

    ReplyDelete
    Replies
    1. Anonymous12:42

      They fly 8 routes. Does it really matter?

      Delete
    2. Anonymous12:53

      Legacy airline in exyu, I love that term.

      8 routes, wow. That's 16m EUR per route. Has to be the most expensive PSO in the world.

      Delete
    3. Anonymous13:21

      What does mean "true legacy airline"?

      Delete
    4. Anonymous14:35

      It means you get food, drink and 20kg of checked luggage included in the ticket price.

      Delete
    5. Anonymous18:52

      You get food and drinks for free on OU flights also.

      Delete
  39. Anonymous10:57

    The government is robbing their own citizens

    ReplyDelete
  40. If the purpose of a having a national airline is to connect Montenegro to as many cities as possible, then subsidizing a LCC would have the same effect at much less money, and done much more efficiently.

    If the purpose of a having a national airline is prestige, then end of story. The Montenegrin taxpayers will have to continue paying/subsidizing YM for many more years to come.

    Now may be the time to think the impossible. Inviting JU to serve Montenegro with minor subsidies at first, then gradually removed. JU could for example fly BEG-FCO via TDG. (similar to OU ZAG-SPU-FCO) Since the stop in TDG would only be for passengers to embark and disembark, no fueling or servicing would be required, this could happen in less than 30 minutes. Other nearby cities such as; TIA, ATH could be similarly added.

    JU could also base one or two A319/ATRs in TGD, and one in TIV to cover direct flights and local demand. Daily flights from TGD to BEG could go to 8-10 daily, and from TIV to 6-8 daily in the high season, or even more if necessary.

    Of course politics won't allow this to happen. But this would be an opportunity for JU to take over the Montenegrin market, and would cost the Montenegrin gov much less for a similar level of coverage as they have today from TGD.

    ReplyDelete
    Replies
    1. Or JU could just wait for YM to go bust (which eventually it will) and introduce additional flights to TIV and TGD, getting most of the pie without having to go through complex changes in the business model.

      Delete
    2. With the new government in place by the end of the year, this idea might not be far fetched. Of course, YM has to close shop first (even with these $133M there is a lot of accumulated debt to cover, leftover is not going to last forever) and they would have to issue tender for obvious reasons.

      Delete
    3. My thinking was that YM be turned off in favor of a LCC model at TDG (& TIV) or Air Serbia moving in. If Air Serbia could guarantee that it would offer the same or better coverage than Montenegro Airlines did, then it would be a win for both JU and for Montenegro citizens which would not have to pay hundreds of millions euros for YM.

      Delete
    4. Anonymous23:35

      ju has a shortage in its fleet. It also focuses on higher yield destinations and primary airports.mne is extremely seasonal and relies on western and russian tourism.

      Delete
    5. As things stand now and probably for the next year or so JU will not have a shortage of planes. Some of those Western and Russian tourists can be rerouted via BEG. And some of those routes could be operated as charter flights.
      This would be an opportunity for JU to increase market share in the region. With some clever route planning JU could make this work.

      Delete
    6. Anonymous00:45

      So instead of Montenegrins paying/subsidizing YM, it will be Serbians paying/subsidizing JU. Good solution from a Montenegrin's perspective

      Delete
    7. It's a question of expanding market share done in such a way that it compliments JUs network, and you create synergy.

      Delete
  41. Anonymous10:16

    Lucky thing is that what the author is referring to as "The Montenegrin government" is currently nonexistent and cannot pursue this insane plan. The new government will simply discard this plan and simply bankrupt the airline, benefiting Montenegrin people and economy. COVID19 affected almost all countries on earth but noone of these is willing to give its national airline an aid package accounting to almost 3% of the nation's total GDP. Germany and France for example would allocate about 0.1% of their GDP towards Lufthansa and Air France, respectively, and since they're the makers of Airbus aircraft and parts, much of it will help recover their industrial sector as well.

    ReplyDelete

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