Montenegro Airlines demise leaves market gap


Montenegro Airlines suspended operations last night, leaving the country without key routes in the immediate future. The Montenegrin carrier transported 24.7% of all passengers flying to and from the country in 2019, its last full year of normal operations. It welcomed 657.416 passengers on board its aircraft and operated 7.798 flights. As of today, Montenegro no longer has nonstop services to France, Switzerland and Slovenia. Austria will also be left unserved once Austrian Airlines temporarily suspends its flights between Vienna and Podgorica, which are currently operating over the holidays and are not running on a regular basis due to the coronavirus pandemic. Wizz Air does not plan to restore the route until March 30. In addition, during the summer, the Montenegrin flag carrier exclusively served Copenhagen, Dusseldorf and Lyon from Podgorica, as well as Copenhagen, Leipzig and Hannover from Tivat. 

Serbia was by far Montenegro Airlines’ biggest market, with the carrier offering 356.376 seats between the two countries last year. It was followed by Russia, France, Switzerland and Slovenia, which made up the top five markets. On the other hand, the airline’s busiest year-round service on which it faced no competition was Paris, with 42.894 passengers carried in 2019, followed by Zurich and Frankfurt. Montenegro Airlines served three of Podgorica Airport’s top five busiest routes in 2019 (Belgrade, Vienna and Ljubljana), as well as two of Tivat Airport’s top five busiest routes (Belgrade and Moscow). 

Montenegro Airlines' largest markets by capacity in 2019


Montenegro Airlines' busiest Podgorica routes without competition in 2019


As of this morning, carriers are yet to respond to Montenegro Airlines’ collapse, whose demise came suddenly. The ongoing coronavirus pandemic and low demand has reduced the need for any major and immediate response. Until last week, Montenegro Airlines was primarily flying only to Belgrade, with the majority of its remaining European network brought back recently for the holiday period at a low one to two weekly frequency. The Montenegrin government has announced it will form a new carrier within six to nine months, but warned the process would be complicated and long, and would likely have a negative impact on the 2021 summer season as capacity would not be replaced in such a short period of time. It further noted foreign carriers would use the void left by Montenegro Airlines to better position themselves on the market. On the other hand, the President of Montenegro, Milo Djukanović, noted, “Terminating a business is simple and quick, even if that business is a national airline company. But it can also be very risky and reckless, particularly in a nation that generates a quarter of its GDP from tourism and has not used even 50% of its potential in that industry. Indeed, it will not be able to use it if it does not become an easily accessible destination, which cannot be achieved without, among others, a national airline”.

In a statement issued today, Air Serbia, which is the largest foreign carrier in Montenegro in terms of both passengers handled and overall capacity, said, "Due to the new circumstances and the suspension of Montenegro Airlines flights, Air Serbia will continue to provide strong links between cities in the region, Europe and the Mediterranean, as well as North America, through its hub in Belgrade. The Serbian national airline will carefully monitor possible changes in demand during the next period and adjust its capacity and frequencies to those changes".


Comments

  1. Anonymous09:04

    In normal circumstances it would be a good opportunity to take over the market. In these, I don't think there is much point.

    ReplyDelete
  2. Anonymous09:06

    Given the state of the country finances I think Milo should stay quiet and not say anything.

    ReplyDelete
  3. Anonymous09:07

    Last night Air Serbia's flight from Podgorica to Belgrade (JU175) had just 11 passengers on the ATR. There is not much point to add capacity or frequencies at this time.

    ReplyDelete
  4. Anonymous09:08

    It's like Adria all over again but at least with them we knew it would happen months in advance. This was quite sudden.

    ReplyDelete
    Replies
    1. Anonymous09:12

      True. We were all expecting YM would go sooner or later but not overnight like this.

      Delete
    2. Anonymous09:52

      My post on Dec.11 regarding YM's expansion plans...I will just repost it again, not so I can brag on this blog, but in response to your surprise how they shut it down literally over night.

      "
      Dec. 11
      Anonymous09:19

      I'm sorry to be negative, but the direction we are heading (globally), is not good or bad, but very disturbing. Having said that I follow aviation globally just as much as I like to follow it locally. Like many of you do as well I'm sure.

      Things are bad and getting worse for most airlines, except cargo business for now. A major Canadian airline has just announced more cuts and all of the leisure airlines there are grounded since the spring. We are talking about 50+ jet fleet airlines.... Grounded.

      So for YM who barely has a heart pulse to announce is this expension is either crazy or their last attempt to rake in any cash they can before they go down. You don't believe me? I've seen couple of airlines shut the doors right before Christmas! Literally the next morning they posted notes on their airport offices of imminent operation shut down. And they were in much better position then YM.

      Sorry if I digressed... But I said in January here that something was wrong about this pandemic and my alarm was raised when all the major global players suspended their flights to China. People mocked and laughed at me... Which I can totally understand, as not many of us were willing to accept the reality which is normal for some people. Fear, uncertainty, disbelief...we are all humans after all. But we are now approaching January 2021...who would have thought this would last so long... And we still have ways to go unfortunately. Sorry... I personally wish YM and all the airlines only the best, but I am afraid we won't see many of these airlines by next summer. "

      Delete
    3. Anonymous13:32

      Good prediction!

      Delete
  5. Anonymous09:09

    I believe that JU will react with few more flights

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    Replies
    1. Anonymous09:11

      Doubtful because the current flights are far from full (little travel, curfews, PCR test requirments and entry bans so no surprise). Even today they didn't upgrade any capacity to Montenegro. Everything is being operated by ATR.

      Delete
    2. Anonymous09:35

      Current flights had competition in YM. Now JU is the only carrier flying between Serbia and Montenegro and might increase few flights.

      It will be not so massive as in pre-pandemic time but it will surely happen.

      Delete
    3. Anonymous09:41

      There is no need. Instead of 15 they will now have 30 passengers on TGD/TIV flights. No need to upgrade capacity or add frequencies at least not until summer 2021.

      Delete
    4. Anonymous09:44

      Yields will massively improve though.

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    5. Anonymous20:52

      Fingers crossed

      Delete
  6. Anonymous09:43

    Today 6 flights out of TGD. Considering YM just went bankrupt and the pandemic, that's not bad at all.

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    Replies
    1. Anonymous09:44

      Which cities?

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    2. Anonymous09:45

      Belgrade, Dortmund, London, Kiev and Istanbul

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    3. Anonymous09:46

      What about Tivat?

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    4. Anonymous09:47

      Just 1 flight, to BEG.

      Delete
    5. Anonymous20:52

      Tomorrow there are just BEG flights from Podgorica.

      Delete
  7. Anonymous09:48

    Sad. No more flights to main European airports. It's like Sarajevo 2.0 now.

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  8. Anonymous10:00

    The market will take care of itself.

    ReplyDelete
    Replies
    1. Anonymous10:05

      Yeah sure, we saw what happened in Slovenia

      Delete
    2. Anonymous10:15

      Situation in Montenegro and Slovenia can't be compared.

      Slovenia is very accessable from Western Europe and additionally has many airports in its surrounding - VCE, KLU, GRZ, TRS, ZAG.

      The closest airports to TGD are DBV and TIA - each more than 3 hours driving from capital of Montenegro! So, actually what we shall see here that market will take care of itself - JU will increase frequencies and offer wide network of destinations from BEG and FR will cover direct flights to main European destinations

      Delete
    3. Well... debatably you could say that shuttle providers increased their frequencies to ZAG, VCE, VIE, BUD

      Delete
  9. Anonymous10:04

    What about Lisbon? Nobody is taking about it! TAP to TGD?

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    Replies
    1. Anonymous10:15

      TP makes a lot of sense especially with transfers. Maybe FR from Porto?

      Delete
    2. Anonymous10:36

      OPO is quite charming but it's way too small compared to LIS. I either see TO or probably W6.

      Delete
    3. Anonymous12:28

      surely Lisbon-Podgorica is the highest priority of all airlines at the moment

      Delete
  10. Anonymous10:05

    At least JU will earn more money so less will be needed from the government. With the loss of flights to Vienna, Paris...I expect even more transfers to go via BEG especially to JFK.

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  11. Anonymous10:07

    Air France should launch TGD seasonally. YM seemed to have had a great LF.

    ReplyDelete
    Replies
    1. Anonymous10:15

      Yes but what about yields?

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    2. Anonymous10:15

      I believe AF codeshared on the flights.

      Delete
    3. Anonymous10:19

      I checked for April and there are one way flights via BEG for €90 without luggage.

      CDG-BEG
      09.40-11.55
      AF A320

      BEG-TGD
      13.45-14.35
      JU A319

      Great times, great fares.

      Delete
    4. Anonymous11:08

      Those are great times and prices. With YM suspending flights and less offer to Russia I hope we get more flights to BEG from Moscow especially with JU-SU which codeshare.

      Delete
  12. Anonymous10:19

    Everyone talking about Air Serbia but many forget how strong Ryanair has become in Montenegro.

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    Replies
    1. Anonymous10:24

      +1
      They will be the biggest winners. Mark my words.

      Delete
    2. Anonymous10:32

      FR can't offer what JU can = flying mostly to main European airports + flights to Russia

      Delete
    3. Anonymous10:34

      JU can offer passengers a lot of flexibility plus with the evening flight from TGD JU also offers the Middle East. Does FR have a single destination to TGD that's more than 2 weekly?

      Delete
    4. Anonymous10:35

      It can offer nonstop flights to all main markets from Montenegro.

      Delete
    5. Anonymous10:37

      But with 2 weekly frequencies. Just admit that JU can offer much more in terms of flexibility especially when we add codeshare partners.

      Delete
    6. Anonymous10:41

      I'm saying they have most to gain and I stand by that. Ryanair already overtook Air Serbia in Podgorica last year in terms of capacity and passenger numbers and were very close on Montenegro level as a whole. So it doesn't seem those 2 weekly frequencies bothered anyone but you.

      Delete
    7. Anonymous10:46

      And how many destinations did FR have in MNE and how many JU? Now let's make a relative comparison to see actual results.

      I am not bothered by FR, I use them regularly however there seems to be a chronic anti-JU hysteria on here and that no matter what happens, JU can't profit from anything.

      Delete
    8. Anonymous10:48

      Neither am I hysteric, neither am I saying JU can't profit from this. I just said I think Ryanair is being overlooked here. Then you became hysteric as it seems to most of you only JU will profit from this and absolutely no one else. At the end of the day, Ryanair has more seats out of Podgorica today then Air Serbia.

      Delete
    9. Anonymous11:09

      And what about tomorrow? Who has more seats my good friend Anon 10.48

      Delete
    10. Anonymous06:16

      *crickets*

      Delete
  13. Anonymous10:27

    They serve different markets. Biggest loser might be Wizz

    ReplyDelete
    Replies
    1. Anonymous00:47

      Why would Wizz be biggest loser???

      Delete
  14. Anonymous10:29

    JU increased BEG TGD to A319 tomorrow.

    ReplyDelete
  15. Anonymous10:33

    Well now we see Air Serbia's reaction. Last paragraph.

    ReplyDelete
  16. Anonymous10:52

    Market of 622k people with 9k usd per capita and 21k usd per capita (per purchasing power). Little imports/exports except for neighbouring countries. Not so much to fight for unfortunately.

    Tourism will be the driving force, so lcc might have an upper hand, but for them demise of YM changes nothing, unless it opens the ocassion for more subsidies.

    ReplyDelete
  17. Anonymous11:04

    The Russian market will quickly be covered by Aeroflot, S7, Pobeda, Nordstar, Rossya, Ural Airlines, Red Wings, UtAir...just to name a few. If MNE really comes up with its own new national carrier - that will, I am sure we can all agree on that, take definitely more than 6 months (even under normal circumstances) - they will certainly have one or two destinations in Russia but competing with the airlines mentioned above (plus JU) will be a challenge to say the least.

    ReplyDelete
  18. I think that there is enough time to make a good plan and operationalize the new company, considering that we should not count much on tourism during 2021.

    ReplyDelete
  19. Anonymous11:40

    SAS was already planning to expand at TIV in the Summer 2020 season, which only didn't happen because of Covid, so I'm sure they will fill the gap after YM's CPH routes.

    ReplyDelete
    Replies
    1. Anonymous20:54

      Hopefully. They still haven't rescheduled their planned CPH-TIV flights that were supposed to start this year.

      Delete
  20. We still have 350 people without jobs and 350 families without income (late salaries and all) For me that is the biggest demise.

    It was obvious the YM is not a viable carrier. However, they should have had some plan in place to back up the closure, like Swissair had done with Crossair, folded into Swiss.

    That being said, we do not know what is the true state of finance in MNE. Perhaps, bank is cleared out in a manner that not even shelves have remained there. Perhaps, they truly are broke. Or perhaps the politically employed personnel spread like infection so much that the only way to get rid of everyone is to kill the host.

    The time will tell.

    ReplyDelete
  21. Anonymous12:40

    my, my, how the mighty have fallen...years under the same government the airline survives miraculously year after year despite all economic circumstances or in plain words: tax payers money kept pouring into a non-profitable company while providing entire families with a government secured job.
    Than a sudden shift of political power, the man in control for decades looses the control. What now follows is a typical Montenegrin reaction: nationalism.
    Not the new government is to blame for an unpopular decision, the question should be: what has or rather has not been done during the airlines' past existence to increase its efficiency and profitability? The guilty people are to be found in the past, not in the present. 360 employees for 4 planes...talking about slim structures?
    Interesting how nationalism and population always are indirectly proportional.

    ReplyDelete
  22. Anonymous15:55

    JU will certainly see an uptick in load factors, especially in the flights to BEG. 2019 numbers show over 350k passengers on YM to BEG - most of us can do the math on the cost of the average ticket and how much more money this brings to JU. The 2020 numbers are obviously terrible, but the small increase in load factors on the BEG flights are certainly needed for JU during these trying times. Not a huge increase in load factor, but not insignificant either.

    ReplyDelete
  23. Anonymous20:53

    Well there goes the last true legacy in ex-Yu with complimentary food, drinks and luggage.

    ReplyDelete
    Replies
    1. Anonymous00:47

      That might have been part of the problem...

      Delete
  24. Anonymous00:48

    Would have been much more interesting to see how airlines would react if we weren't in a middle of a global pandemic.

    ReplyDelete
  25. I would love a shot at restructuring Montenegro Airlines. I think it can be done and I think some of the money can even be raised outside of the government's budget.

    I have questions about this airline's "debt". I can totally believe that it has various debts all over the place. I do not believe that the size and scope of the airline's debts are being represented accurately. How much of this money is owed to the Montenegrin government itself (tax agencies etc)? How much of this money is owed to other state-owned businesses?

    The European Commission is not going to be doing a whole lot of enforcement at this time. That is a red herring. How long has Alitalia had government money pumped into it? It got to the point where the government just dispensed with the pretext of getting around state aid and pulled out a fire hose of money. However, they are cutting the size of that airline in half so that it can have a shot at being sustainable. Is the EC going to kick Italy out of Europe?

    Is the EC going to tell Montenegro that it can't help its airline during the midst of a massive pandemic? That's not going to happen and we all know it.

    The question is whether a new manager is going to be allowed to run the airline properly. Can I go in there and keep the good people and flush the bad/incompetent ones? Am I going to have my arm twisted to put in new incompetent people connected with the current government? Am I going to get trouble for flying routes that do not start or end in Montenegro? These are all questions that have to be asked and answered before the next step is taken.

    ReplyDelete
    Replies
    1. Anonymous07:21

      Italy is the third strongest EU economy now that the UK is leaving. Do you honestly think Brussels can say anything to them? Of course not, that's why Malev and Cyprus Airways were shut down but Alitalia wasn't.

      Delete
  26. Anonymous15:14

    Wizz Air is taking 4 Montenegro Airlines routes. It will start from February 1st. Ryanair will introduce 3 new routes, probably 2 from MA, and one new. Starts from March 2021. Source: airport Podgorica staff

    ReplyDelete

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