Montenegro Airlines ceased operations on December 25, 2020, operating its last flight from Belgrade to Podgorica after the Montenegrin government concluded all possibilities had been exhausted to keep funding the company.

The carrier was founded on October 24, 1994 by the Federal government of Yugoslavia. It purchased its first aircraft, a Fokker 28 jet named Lovćen, in 1996 after which it commenced scheduled flights. Its first revenue service was operated between Podgorica and Bari in Italy, starting in 1997. In July 1998, the carrier acquired another Fokker 28, allowing it to expand its operations. 

In March 1999 the carrier applied to operate nonstop passenger and cargo flights between Tivat and New York. At the time, it concluded a wet-lease of a Boeing 767-300ER from Italy's Air Europe, which suspended operations in 2008, in order to run the transatlantic service. However, within weeks, the NATO bombing of Yugoslavia commenced, and the application was rejected. 

A year later, the Montenegrin carrier decided to replace its F28s and opted for the Fokker 100s. The first jet arrived in 2000, the second in May 2001, the third in June 2002 while the fourth F100 joined the fleet at the start of 2003. 

In 2006, upon Montenegro gaining independence from its state union with Serbia, the airline, fearing it would lose rights to operate flights from Belgrade and Niš airports to third countries, set up the Serbian registered Master Airways with one of its Fokker 100s. However, the airline did not receive necessary permits from Serbian authorities and was forced to suspend flights from Serbia to countries other than Montenegro. 

In 2007, the carrier began to seek out larger capacity aircraft. It signed contracts for two Embraer E195 jets and would add another soon after, while an Embraer 190 also operated for the airline but was later returned to the manufacturer, as it was too expensive for the airline to lease. In 2018, Montenegro Airlines concluded a short-term lease for a Boeing 737-500 jet over the peak summer months to deal with increased demand. A year later it wet-leased the B737-300 over the same period. 

Montenegro Airlines became the first and only carrier in the former Yugoslavia to date to name a female executive as its CEO, in 2013.

The airline struggled with its finances throughout its existence and amassed almost 100 million euros in debt. The situation was further exasperated by the coronavirus pandemic, which saw it suspend all scheduled flights for four months and later loose access to its most profitable markets – Serbia and Russia. On December 24, 2020, the Montenegrin government announced plans to liquidate the company citing there was no viable solution to provide further aid to the airline.

Over its more than two decade history, Montenegro Airlines carried over ten million passengers and in its last year counted 360 employees.

Owned and leased aircraft from 1994 until 2020:

Fokker 28 - YU-AOH, YU-AOI

Fokker 100 - 4O-AOL (YU-AOL), 4O-AOK (YU-AOK), 4O-AOM (YU-AOM), 4O-AOP (YU-AOP)

Embraer 190 - 4O-AOD

Embraer 195 - 4O-AOA, 4O-AOB, 4O-AOC

Boeing 737-300 - YR-BAP

Boeing 737-500 - 9H-OME