State to decide Montenegro Airlines’ fate by February


The newly elected government in Montenegro will replace the national airline’s management within the next two to three weeks and form a team of experts who will analyse the situation at the indebted and loss making flag carrier and decide its faith. The team will have to come up with ways on how Montenegro Airlines can be saved in respect to European Union regulations, otherwise, the company would be shut down and a new one formed. A deadline has been set until February for the process to be completed. The team will determine weather the carrier can survive without state aid, if alternative revenue streams can be found and to what extent costs can be cut and the workforce reduced. 

The analysis will also determine whether it is more profitable to liquidate the existing company and write off its debts, which amount to 98 million euros, while forming a new airline. However, this option has its drawbacks as new permits, licenses and slots would have to be secured. Furthermore, the team will scrutinise the company’s existing financial reports to establish whether correct information has been passed onto the public. The previous two management teams at Montenegro Airlines had claimed financial reports had been falsified in the past. The government is already in talks with potential candidates who could lead the national carrier and replace the existing management. During the week it named the State Secretary in charge of Aviation who had held various posts at Montenegro Airlines over the past eleven years. 

Montenegro Airlines registered a loss of 7.9 million euros in 2019, while its debt stands at close to 100 million euros. The carrier’s existing management team has called on the government to provide the company with state aid. Alternatively, it has warned it may be forced to ground its fleet as it is late with wage payments, aircraft lease payments, engine lease payments and is accumulating debt towards suppliers. The carrier 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, it 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.




Comments

  1. Anonymous09:02

    I don't see the point of closing the company and then opening a new one.

    ReplyDelete
  2. Anonymous09:02

    So much for that expansion then...

    ReplyDelete
  3. Anonymous09:04

    Tough decisions ahead.

    ReplyDelete
  4. Anonymous09:06

    With 100 million debt I don't see how this airline can be saved.

    ReplyDelete
    Replies
    1. Anonymous21:11

      But isn't the debt mostly owed to other state owned companies?

      Delete
  5. Anonymous09:10

    Feel sorry for the people working there. These uncertainty at such times can't be easy.

    ReplyDelete
    Replies
    1. Anonymous09:35

      Why would you feel sorry for them? Almost all of them are DPS friends, family, lovers and so on. Very few of them were hired based on merit.

      Delete
    2. Anonymous17:15

      It is sad to base your opinion on the popular information that public chooses to think. Of course, many people are in fact hired without merits, but in MA there are a lot of people working honestly with skills to help move forward. And it is shame for your ignorant comment. For your information, MA is full of people who were opposition and celebrated the new governement that came to power, and by coincidence or something else, some of those are the biggest slackers in the company.

      Delete
  6. Anonymous09:11

    The last remaining, entirely independent ex-Yu full legacy carrier that does not live only from code-shares and random or adventurous journeys. All the best of luck, YM!

    ReplyDelete
    Replies
    1. Anonymous09:13

      It worked well. Debt of 100 million EUR and loss of 8 million with 4 planes. Good work!

      Delete
    2. Anonymous09:21

      Still expanding to Lisbon and having a pro-EU stance in destinations.

      Delete
    3. Anonymous09:28

      What on earth are you talking about? "Pro EU stance in destinations". You launch destinations that are going to make money. And if you read today's article, you would be aware that none of those destinations are going to launch next year.

      Delete
    4. Anonymous09:30

      Because this is what YM is currently doing. Focusing on the EU such as Poland and Portugal.

      Delete
    5. Anonymous09:33

      How is it focusing on Poland and Portugal when it flies to neither country? Do you know what you are talking about?

      Delete
    6. Anonymous09:35

      Don't feed the troll.

      Delete
    7. Anonymous10:43

      Yes, and focusing on Portugal makes so much sense, because there is a huge Montenegrin diaspora there, because of the historical ties between the two countries and let's not forget the huge number of portuguese tourists flocking to Montenegro every year.
      The biggest argument for this is that finally an ex yu carries can offer flights to Portugal, and who better to do this than YM since TGD is a major regional hub.

      Delete
    8. Anonymous12:14

      "pro-EU stance" when 3/4 of the YM pax are to BEG and Russia.
      two of the 4 new destinations arent even in EU. Priceless!

      Delete
    9. Anonymous13:36

      TGD itself is getting more EU destinations similar to Croatia. MNE is changing.

      Delete
    10. Anonymous14:04

      Lol yes changing. They are coming because tourists are from those places.

      Delete
    11. Anonymous21:10

      New routes in Croatia and Montenegro have little to do with politics. Btw the only new route launched to Zagreb this year is from Ukraine (not in EU).

      Delete
  7. Anonymous09:17

    Could some consolidation with either JU or OU work?

    ReplyDelete
    Replies
    1. Anonymous09:29

      Both of those are struggling as well.

      Delete
    2. Anonymous09:36

      Why would they even consider OU which doesn't fly to MNE? JU on the other hand has nothing to gain from saving YM.

      Delete
    3. Anonymous10:02

      They have to save theirself first...

      Delete
  8. Nemjee09:39

    What will most likely happen is the government opening their books and taking out the skeletons from the closet. They will then drag YM through a PR nightmare to prepare the population for the eventual and inevitable shutdown of the airline.
    They will then handout subsidies to foreign carriers and if there is a need they can always see with JU to run charters from Tivat to various destinations.

    All in all I think YM is the next one to go bust just in their case we can't really blame covid.

    ReplyDelete
  9. Anonymous10:17

    This does not sound good.

    ReplyDelete
  10. Anonymous10:20

    It still not possible to buy any tickets on their website. Apparently it will be possible from 10pm. How can an airline allow not to have ticket sales on their site for 3 days?

    ReplyDelete
    Replies
    1. Anonymous10:28

      Apparently it's some technical problem with their bank.

      Delete
    2. Anonymous10:44

      I don't buy it, what kind of bank gets blocked for three days? I think there is more to it than that.

      Delete
    3. Anonymous11:21

      Don't buy it either.

      Delete
    4. Anonymous11:22

      Maybe the YM's bank account got blocked.

      Delete
    5. Anonymous11:31

      We will find out tonight I guess.

      Delete
    6. Anonymous17:11

      It makes no sense. I assume the bank MGX is using is used by other companies in Montenegro too for online payments and I haven't encountered any other company saying they can't sell stuff.

      Delete
    7. Anonymous21:09

      Tickets still not on sale.

      Delete
    8. Anonymous21:13

      Well they said it would resume at 22.00 on Sunday. There is still around 45 minutes to go.

      Delete
    9. Anonymous22:08

      It's past 10pm and tickets are still not on sale.

      Delete
    10. Anonymous22:16

      I guess they will be grounded tomorrow?

      Delete
  11. Anonymous10:31

    Next one to go after Adria, as expected.

    ReplyDelete
  12. Anonymous10:32

    Well the current CEO didn't last long.

    ReplyDelete
    Replies
    1. Anonymous10:33

      The former one stepped down at the right time I would say.

      Delete
    2. Anonymous10:33

      Speaking of former CEOs, I wonder what's going to happen now with good old Daliborka?

      Delete
    3. Anonymous10:35

      Don't worry about her. She is still a member of parliament.

      Delete
  13. Anonymous10:36

    It’s sad that a fate of an entire company depends on the former political party. And then someone here talks about MGX being some EU company. If your future depends on politicians…

    ReplyDelete
    Replies
    1. Anonymous11:41

      Same with Alitalia and Air France.

      Delete
    2. Anonymous21:08

      A bit of a different situation. Their future does not depend on which governing part is in power.

      Delete
  14. Anonymous11:41

    Just shut it down already.

    ReplyDelete
    Replies
    1. Anonymous12:38

      It's political suicide.

      Delete
    2. Anonymous12:40

      OU as well

      Delete
    3. Anonymous14:05

      It's a small market, JU and LCCs can handle the traffic more efficiently than YM.

      Delete
    4. Anonymous21:13

      Closing them would definitely hurt the tourism industry in Montenegro.

      Delete
    5. Anonymous22:17

      Not really, others would step in. Unlike Slovenia, tourists come here by plane.

      Delete
    6. Anonymous22:25

      Around 1/4 of all tourists arrive with planes in Slovenia, which is not small amount, and i think it could be more

      Delete
  15. Anonymous12:42

    They should put Kowarsch as Montenegro Airlines CEO

    ReplyDelete
    Replies
    1. Anonymous12:44

      The turnaround expert :D

      Delete
  16. Anonymous12:44

    I wonder what sort of gems they will find when they start looking throigh the books.

    ReplyDelete
  17. Anonymous14:24

    Much like Adria in its final weeks, you'd have to be brave to book a ticket with YM now. The writing is on the wall.

    ReplyDelete
    Replies
    1. Anonymous17:10

      Yes, seems to me like a very similar scenario.

      Delete
  18. Anonymous16:12

    Radim za AS i ovde niko ne ocekuje da MA prezivi. Sta vise mi se spremamo za mart ako ne i pre. Nasi avioni su 50% puni izmedju BEG i CG, oni su izmedju 35% i 40% i to sa spustenim cenama karata tako da imaju poprilicne gubitke. Nema za njih boljeg sutra.

    ReplyDelete
  19. Anonymous17:10

    Good that whatever they decide we will know soon. It won't be dragged out.

    ReplyDelete
  20. Anonymous19:12

    Steta. Meni su bili dobra alternativa letovima iz FRA za BEG kad su JU i LH bili preskupi pogotovo sto je kod YM u cenu karte bio ukljucen i predati prtljag kao i sendvic i pice tokom leta.
    U svakom slucaju im zelim sve najbolje

    ReplyDelete
    Replies
    1. Anonymous20:31

      Па вероватно због путника као што си ти и пропадају. Куповали сте карте по дампиншким ценама и ево где смо данас.

      Delete
  21. Anonymous20:08

    It would be sad to see them go.

    ReplyDelete
  22. The fiscal situation in Montenegro is dire, economy won't return to 2019 level until 2023 at the earliest. There is just no money. Most people in Montenegro would agree with the closure , particularly in these circumstances.

    Highly seasonal market can be better served via subsidies to major destinations (read: Brussels) during off-season.

    Air Serbia can deliver the experience by:
    1) Painting a plane in Montenegro livery (Montenegro operated by Air Serbia), that would fly on routes to Serbia
    2) Hiring Montenegrin crew and people with the right accent in Customer Service and Sales
    3) White-label Air Serbia website with Montenegro Airlines logo

    ReplyDelete

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