Montenegro Airlines warns of possible grounding


Montenegro Airlines has seen its revenue tumble since the start of the 2020/2021 winter season as new restrictions and lockdowns are imposed across Europe, with the carrier’s employees still to receive their October wages. “Since the start of the winter season, the crisis has accelerated and the little revenue we had has been further reduced. Up until today, we have been unable to pay for October’s wages. We also have outstanding payments for aircraft leases, engines and debt towards suppliers. We are doing everything we can to decrease expenses, however, the reduction in revenue and expenses are not proportionate to each other”, the company told the “Vijesti” daily. It added, “In these circumstances, and without state aid, we are unable to continue operations, even in the short-term. If a company such as Lufthansa has requested and received state aid, then what can be said for us. Since August 31, we have not received any state funding”. 

Montenegro Airlines was granted 10.4 million euros in July and a further 25 million euros from the state in August in order to maintain liquidity. However, the carrier has not received funds since. The Montenegrin competition watchdog is still studying the legality of a state aid law “for the investment and consolidation of the national carrier” which foresees the allocation of 155 million euros to Montenegro Airlines over a six-year period. The legislation was adopted late last year and foresees a wide-ranging restructuring of the company in return for funds. Montenegro has had a caretaker government since September with a new cabinet expected to be sworn in over the coming week. The new government’s strategy for Montenegro Airlines remains unknown. 

The Montenegrin carrier has warned it may be forced to ground its fleet if the state aid law is not enforced and if it fails to receive any funds to cover the losses accumulated during the ongoing coronavirus pandemic. “In this case, foreign carriers would not rush to boost their flights and would be able to increase their fares. The best example of this is Slovenia, whose government, following the collapse of its national carrier, has been forced to give away millions in subsidies to foreign airlines in order to maintain a few flights. Small countries must invest in their aviation sector”, the carrier said. Montenegro Airlines registered a net loss of almost eight million euros in 2019, while its debt stood at 97.7 million euros.

Comments

  1. Anonymous09:07

    It's not looking good for their survival.

    ReplyDelete
  2. Anonymous09:07

    This is bad

    ReplyDelete
  3. Anonymous09:08

    I wonder if they are really struggling this badly or they are just fishing for money

    ReplyDelete
    Replies
    1. Anonymous09:22

      A bit of both probably.

      Delete
  4. Anonymous09:09

    The big question is what the new government will do with YM.

    ReplyDelete
  5. Anonymous09:10

    They still got over 35 million over the summer, which is not such a small amount.

    ReplyDelete
    Replies
    1. Anonymous09:13

      That's what they needed to pay salaries.

      Delete
  6. Anonymous09:12

    I'm from Slovenia and it's sad we are now used as an example in such cases but I think airlines would be more willing to fly there but in winter it would be another story.

    ReplyDelete
    Replies
    1. Anonymous09:23

      At least those couple of thousand from the Slovenian government will come in handy.

      Delete
    2. Anonymous13:09

      but its stupid to compare ... slovenia is planning to spent cca 5 mio and montenegro 35+ ... and the result is the same hehehe ...

      Delete
    3. Anonymous13:45

      Hihi so true.

      Delete
  7. Anonymous09:16

    So basically they have not received any money from the state since Milo lost the election? Since YM is his personal project and a source of party employment, I wouldn't be surprised if the new government shuts them down completely. After all, JU can handle transfer passengers while other airlines, mostly LCCs, can take care of the O&D market. After all, foreign airlines seem to be doing fine in MNE.

    ReplyDelete
    Replies
    1. Anonymous09:25

      I'm pretty sure the new government will find it as a source of their own employment and keep the airline running... but you never know. It has crossed my mind that they may shut it down.

      Delete
  8. Anonymous09:17

    If new state aid is approved Monenegro will keep winning.
    If not it will lose.

    ReplyDelete
    Replies
    1. Petar09:33

      You are correct in what you are saying but I can't stop laughing!

      Delete
    2. Anonymous11:43

      Shame we don't have a "like" button for comments here... :) :)

      Delete
  9. Anonymous09:20

    If they're starting to get late with aircraft leases, it's not good.

    ReplyDelete
  10. Anonymous09:22

    Adria no. 2?

    ReplyDelete
    Replies
    1. Anonymous09:24

      I don't think YM will make it to summer 2021, not having a summer season will make a bad situation even worse.

      Delete
    2. Anonymous09:32

      True. Let's see what happens. It all depends on what the new government does.

      Delete
  11. Anonymous09:25

    Perfect opportunity for OU to base one Q400 in TGD and to operate 2 weekly to ZAG, 2 weekly to VIE, 2 weekly to MUC and 3 weekly to FRA.

    ReplyDelete
    Replies
    1. Anonymous09:29

      If they didn't do anything when JP went bankrupt I doubt they will now when they are also struggling. October wages at OU were late by almost 2 weeks.

      Delete
    2. Anonymous11:03

      Taking over unprofitable routes for the sake of what? Ensuring connectivity of Montenegro at the expense of the Croatian taxpayer?

      Delete
    3. With the part "perfect opportunity for OU" ", I agree. Of course not by basing single aircraft and operating two or three weekly to various destinations. Frequencies should be triple daily, to ZAG only, and with the aircraft operating from the hub/base/ZAG, in order to catch with the" waves". But knowing OU, it will be just another lost opportunity, because if YM shuts down, they will just be staying aside, watching what's happening, while others taking care of the Montenegrin market

      Delete
    4. Anonymous13:05

      OU doesn't fly anywhere in the region more than 14 weekly, that is outside HR. I doubt they would have enough passengers for 21 flights especially since their network from ZAG is awkward.

      Delete
    5. Anonymous13:10

      Why is their network awkard? It just should be expaned, but it has potential for this region. If it was awkard OU would never be no.1 regional airline in Sarajevo and Skopje.

      Delete
    6. Anonymous13:48

      Because O&D from Zagreb to SKP and SJJ is forced to fly. From Belgrade Sarajevo is some 4-5 hours by car and Skopje has a highway. Land connections are much better from Serbia.
      Also their network is awkawrd because all they offer is Star Alliance hubs where they indirectly compete with LH Group and its allies.

      Delete
    7. @An13.05
      I agree with you. OU network could have and should have been much bigger and with higher frequencies. With tourism, diaspora, EU and NATO membership, good geographical position, all prerequisites are there. And when I said three daily to TGD, as well as to all other destinations eastern and southern from ZAG, I meant it to feed for bigger network, which is just another one of missed opportunities, and would never happen, the same as 3 daily to TGD

      Delete
    8. Anonymous14:08

      What does NATO membership have to do with OU?

      Delete
    9. Anonymous14:09

      Anon 13:48
      Still, if it has useless network it wouldnt fill that amount of flights. Also i dont see significant duration difference on Sarajevo.

      Delete
    10. Anonymous14:14

      OU should rely on coast and more p2p flights out of Croatia, similar to Aegean Airlines in Greece. Adria Airways was doing hub&spoke model in this region with flying 3 daily to PRN, SKP... and what they have achived? Losing money for most of the years and on the end bankrupcy. Air Serbia is also making hub&spoke model and whaf they have achived? 7 years of unprofitabilty.

      Delete
    11. Anonymous14:21

      Pozdrav iz rijeke 14:02
      LOL!!
      So flying 3 daily between ZAG and FRA (route which brings toutists, diaspora, business people and locals) is called useless and unprofitabile because it feeds LH, but flying 3 daily on ZAG-TGD (route which would be mostly for montenegring flying to western europe with not so much bringing to Croatia itself) is something what should be done and which would be profitabile?

      Delete
    12. Anonymous14:26

      Anon 14.14

      Only difference is that JU finances are actually improving and subsidies are going down. Hub and spoke model works but it takes between 5 and 10 years for it to take shape. Just look at how long major airlines were loss-making before they started printing money. Air Serbia is on that path right now. JP never expanded its network beyond the region to make a difference. It's European destinations were mostly Star Alliance hubs. They needed a bigger local market and more transfers to succeed, look at BT.

      Delete
    13. Anonymous14:50

      Finances improving? They literally lost more in 2019. in comparasion to 2018. And they have more 50+ million to pay from a loan and we all know they said they need 87% reduction, but then somehow 50 million magicly appeard. It doesnt seems as "improving". And what does mean "JP never expanded its network beyond the region", because they did.

      Delete
    14. Anonymous15:02

      Just look at how long major airlines were loss-making before they started printing money.

      ???? Airlines are becoming profitabile when they start printing money?

      Delete
    15. Anonymous15:05

      MNE is JU playground!

      Delete
    16. Anonymous15:05

      Printing money is a term, an expression. Chill.

      Delete
    17. Anonymous15:06

      JU financial report for 2019 is available so I recommend you check it out before becoming all hysteric.

      Delete
    18. Anonymous15:17

      Yeah it exists... and shows that 2018. was better then 2019. Still, if im wrong about it, my point that hub and spoke in the region is not a profitabile thing, and especialy not flying 3 daily between ZAG and TGD.

      Delete
    19. Anonymous17:40

      Five to ten years to reach profitability? This is ages. During that time you should be able to turn around an airline couple of times. What if not working now, will start to work in 10 years? This is period beyond possible predictions.

      Delete
    20. Anonymous17:57

      Last anon
      Totally agree!!

      Delete
    21. Anonymous18:38

      I guess they should hire you for your expertise.

      Delete
    22. Anonymous19:21

      Sorry, I already have a satisfactory occupation. Still some advice for free: if you think about profitability in 10 years time, you are not thinking about it seriously and you lose self-discipline. In particular you feel that there is still time and that now you are authorised to do things that do not bring you any closer to this goal. All that ultimately destroys the possibility to achieve that goal even after 10 years.

      Delete
    23. @An.14.21
      You can LOL as much as you want, but OU which is out there for 30 years had enough time, enough money pumped in it, and enough favourable circumstances with almost non existent competition from ex-yu market, to grow into big and profitable player, and feed its own hub from ex-yu, and much beyond. And yes, feeding its own developed network would have been more profitable than feeding LH and OS. But to establish something like that, you need competent people, and you need to get rid of uhljebs. OU is getting rid of professionals, and is full with uhljebs. Results are obvious. And just for your info, I have no intention to continue once again useless conversation with one of the uhljebs. This is my last post for today's topic. Cheers!

      Delete
    24. Anonymous19:50

      Topic of this comment section is not what was OU able to do or which are bad things done in the past by uhljebi, but OU and its network. We all know what you think about OU and you dont need to repeat it 1000 times. Now my question is, who says feeding LH is unprofitabile or flying to markets which doesnt contribute to home country is profitabile? And why do you think flying 3 daily to TGD is better then flying 3 daily to FRA.

      Delete
    25. Anonymous19:56

      Just to add
      You think im a OU uhljeb because i think flying 3 daily to TGD is unprofitabile?
      Really?

      Delete
  12. Anonymous09:30

    Sad

    ReplyDelete
  13. Anonymous09:31

    I really hope they pull through this

    ReplyDelete
  14. Anonymous09:32

    Who will be the new minister for transport?

    ReplyDelete
    Replies
    1. Anonymous09:58

      There will be no ministry for transport

      Delete
    2. Anonymous10:05

      That's not a good sign

      Delete
  15. Anonymous09:59

    Can't they take out a loan?

    ReplyDelete
    Replies
    1. Anonymous10:04

      Read the last sentence of the article. You will see why they can't.

      Delete
  16. Anonymous10:20

    Kompanija je u velikim dugovima, od septembra nisu isplacene plate. CG nema novca da upuma oko 100 miliona koliko je potrebno, stav nove vlade ce biti potpuno drugaciji. Okrenuce se Makedonskom modelu jer je to mnogo bolje za turizam, a to znam iz licnog razgovora sa jednim od buducih ministara.

    ReplyDelete
    Replies
    1. Anonymous10:32

      Наравно, нема више смисла да се одржава у животу јер се испоставило да компанија једноставно не може бити профитабилна. Много је лакше да дају повластице странцима.

      Мене само занима шта ће бити са летовима за Београд. Могуће да ће дозволити Визеру да лети.

      Delete
    2. Anonymous00:15

      Even if MNE allows Wizz to fly BEG-TGD, SRB will never do it.

      Delete
  17. Anonymous10:49

    Kakav Montenegro Airlines? Pravo ime ove kompanije je Belgrade Airlines. Linije ka drugim gradovima su im na nivou statisticke greske.

    ReplyDelete
  18. Anonymous14:27

    If you look at YM's network over the years it was shrinking... meanwhile JU in BEG was becoming stronger and stronger. Many passengers that once flew non-stop on YM simply transfer in BEG, especially now when the two have a code-share.

    ReplyDelete
    Replies
    1. Anonymous15:36

      The article is related to YM today, not JU.

      Delete
    2. Anonymous15:52

      Ok, can you please ask the admin to delete all comments that mention; JU, OU, JP and all other airlines.

      Delete
    3. Anonymous16:48

      That's not what he meant.

      Delete
    4. Anonymous17:04

      So Anon 15.36 are you implying that JU has no effect on YM so that it can't be mentioned here at all.

      Delete
    5. Anonymous17:16

      What kind of effect are you implying that JU has on YM?

      Delete
    6. Anonymous17:38

      Well for starters JU is no longer passive on BEG-MNE market, so that's a major part. Then JU has been aggressive in recent years meaning they were getting more passengers to transfer in BEG than to fly non-stop on YM (or any other airline). Look at what JU did in TIA and TGD with transfers to JFK.These days OS has five weekly to TIA on Q400 while JU regularly sends the A319/733.

      Delete
    7. Anonymous17:47

      The same could be said for any other airline that does (or did) well in TGD or TIV.

      Delete
    8. Anonymous18:18

      True like OS which does really well in TGD... oh no, wait, they suspended it.

      JU is by far the biggest foreign carrier in MNE so they can't be compared to anyone else.

      Delete
    9. Anonymous18:44

      Today we are talking about YM, when your turn comes we can talk about Air Etihad 2013.

      Delete
    10. Anonymous19:22

      Nice trolling.

      Delete
  19. Anonymous18:41

    Just an idea as I watched today YT video about Austrian airline called People`s Viennaline who flies only one E170 between VIE and some small Swiss airport. Is there a chance for YM to survive this mounting crisis by shrinkink itself to only one E195 flying only TGD,TIV - BEG flights with accordingly scaled human resources?

    ReplyDelete
    Replies
    1. Anonymous18:48

      YM is looking to expand into richer markets and not focusing on regional secondary routes.

      Delete
    2. Anonymous19:01

      I see your point anon @ 18:41. Maybe YM could concentrate only on ex-yu market. That is daily flights to most ex-yu cities, with more to BEG of course.
      Let LCC and other airlines bring the tourists to MNE.

      Delete
  20. Interesting developments in the ex-yu aviation market in the last few years.
    JP died a slow death.
    YM is in serious financial problems (as all ex-yu airlines), and has a very small domestic market.
    OU is struggling to find it's place in the regional market. Are they a transfer airline, is their main purpose to bring tourists to Croatia? Can you be both? How will they be affected by the inevitable coming of LCC to ZAG?
    JU also has constant financial problems, and requires government subsidies (as they all do). But with the expansion of BEG, Vinci is showing it's commitment (for profit of course) but nonetheless it's confidence in JU and its plans for expanding it's network.
    Now that Etihad has a very minor role JU seems to be on the right path.
    Time will tell what will be of the national carriers of ex-yu.

    ReplyDelete
    Replies
    1. Anonymous23:34

      Onlz JU and OU will srvive for next years.

      Delete
    2. Anonymous01:42

      OU will survive because it's Star Alliance

      LOOOOOOL!!! It is OU that has to pay for StarAlliance membership, not the other way around! Money flows to LH, not the other way around!

      OU still survives because of extreme protectionist policies of ZAG airport that does not allow ULCCs, state support/PSOs and by selling family silverware.

      Delete
    3. Anonymous01:51

      ju lives from etihad, niš and LJU subsidies. This is quite different.

      Delete
    4. Anonymous03:06

      LJU subsidies are not paid yet. Less than 100k. And then Etihad subsidies. That does not exist!

      Delete
  21. The smartest thing would be to put YM up for sale. It would still catch a decent price and the money would help pay off that Chinese loan for the new highway. The TIV-BEG and TGD-BEG route is the most profitable - charging over 100 euros each way! Seriously? Wizz flies to Bari from TIM for less than half that price.

    ReplyDelete
    Replies
    1. Anonymous20:07

      Really?! Who would be interested in a very small regional airline with a poor network, old planes, and massive debts?

      Delete
    2. Anonymous21:29

      "It would still catch a decent price"

      Are you serious? Decent price?

      Loss making small airline without any assets, for sale in 2020 and you think buyers would be knocking doors down with their suitcases full of gold?

      Delete
    3. I m so sad about them

      Delete
  22. Any way, YM gone with Milo. Goodbay

    ReplyDelete