Montenegro Airlines could resume operations on February 8 according to local media as the government seeks a solution to restore the country’s connectivity until a new flag carrier is launched. In order for flights to resume, which would likely only include services to Belgrade, the airline needs to settle debt owed to suppliers who have requested for its accounts to be blocked. The government is unable to legally inject any funds into the airline, which resulted in its demise in December 2020. On the other hand, the state could lease aircraft from Montenegro Airlines through its newly established carrier ToMontenegro, which would then be operated by Montenegro Airlines itself until the new company is ready to take over.
Montenegro Airlines’ fleet currently consists of four aircraft, two of which are grounded due to technical issues and two which are airworthy. The Ministry for Finance recently issued a public call for experts to submit their CVs in order to be part of the task group which will work on the formation of the country’s new flag carrier. Despite promises it would launch tender procedures to select a consultant that would advise over the establishment of the new airline, no public call has been issued yet. The Ministry has so far held initial talks with two foreign consultants, one from Germany and the other being Knighthood Capital from Switzerland headed by former Etihad Airways CEO James Hogan.
The Montenegrin government hopes for the country’s new national airline to launch before April 1, in time for the 2021 summer season, however, only if it is able to take over commercial agreements, staff and aircraft from the country’s former flag carrier. Otherwise, the process may take up to nine months. Furthermore, the state expects for the new airline to operate under a low cost carrier model.
It would have been smarter if they created the new airline and then leased planes for MGX operated by MGX like they suggest now and not ground MGX like they did.
ReplyDelete+1
DeleteGood luck with that
ReplyDeleteIs it viable to bring an airline back from the dead for just 1 route?
ReplyDeleteIt's the only one that made money for them.
DeleteYes but what's the point if it didn't make enough money to keep them being profitable.
DeleteIt didn't because they operated a number of unprofitable routes and had too many employees.
DeletePlus their costs were too high with free baggage, catering...
Delete@20:57, I paid 147 Euro in November for TGD-BEG. The free checked-in baggage (which I didn't use), the dry sandwich and 20cl water is at least what I can expect for that kind of money on a 45min flight.
Delete"Ministry has so far held initial talks with two foreign consultants, one from Germany"
ReplyDeleteWould not be surprised if it's turnaround experts 4k invest.
Well they were interested in buying Montenegro Airlines 2 yrs ago.
DeleteI believe it was reported here that 4k went bankrupt.
DeleteThey created new company
DeleteGerman CON-sultants are Lufthansa CONsulting ....
DeleteWhat a mess this has all become.
ReplyDeleteSurprise surprise
DeleteThat's what happens when you shoot from the hip and have knee-jerk responses to a situation which required careful consideration and deep thought
DeleteIt was probably decided by the same "expert" who said that they wanted to introduce an LCC model with Embraers and then have codeshare and interlining with other carriers
Delete+1 @anon 9.23
DeleteWho is going to buy tickets with YM ever again???
ReplyDeleteThat's what I'm thinking. Why would anyone risk it?
DeleteSo basically they will restore operations if they pay their debt but the government can't inject funds.
ReplyDeleteNot realistic.
But the government would inject money by leasing planes. Also they don't have to settle all their debts. Their accounts are blocked over a couple of million euros.
DeleteThe country is so broke thanks to DPS that the new government had to borrow on the first day. They can't afford a few million here and there for this vanity project.
DeleteI can't believe how no one cares about the people who lost money by holding YM tickets or vouchers. Is anyone going to address this?
ReplyDeleteDid people with Adria tickets get reimbursed?
Deleteyes, i got everything back. 4 return tickets to amsterdam.
DeleteThat's good to hear. Although I assume in Adria's case they also had to comply with EU regulations. None of which are in place in Montenegro.
DeleteAnother issue being that Montenegro Airlines was selling tickets a good two weeks after it was grounded.
DeleteTelenovela balcánica presenta..
ReplyDeletePlease, focus on the future and not the past. Go ahead with the new airline....
+1
DeleteNew airline before april 1.? Slovenia has been doing plans for new airline since august last year, so i dont know how will montenegro create one in less than three months.
ReplyDeleteIt's a bit easier than in Slovenia's case firstly because MGX is a state owned airline and secondly because it still has assets.
Deletedoes anybody know whether the two airworthy aircraft are both Embraers or one Embraer plus the remaining Fokker?
ReplyDelete1 is Embraer, 1 is Fokker.
DeleteThat 1 Embraer is almost theirs. They need to pay off two more installments.
DeleteWho will be brave enough to onboard those aircrafts?
ReplyDeleteIf MGX owes money to SMATSA and BEG, could it be possible to hold it's plane at BEG untill they solve the issue? Hypotetically speaking, if they restore ops.
ReplyDeleteBravo. Good question.
DeleteOnly if the parties that claim the debt (SMATSA, BEG) file the lawsuit against MGX, then they can ask for the so called "temporary withhold measure", which withhold is executed only until the guarantee is provided, in form of money, bonds, bank letters or any other proof of debt repayment.
DeleteThe plane is owned by the leasing company, so you cannot enforce your claim against MGX against the plane. You could try to enforce your claim against some moveables on the plane that are owned by an airline and that is it.
DeleteThis is not the claim enforced against the plane. It's the claim against plane operator. Precisely from that reason, so operator not being the owner, you cannot keep permanently and sell the plane in order to compensate your claim, but you can keep it temporarily (that's why it's called temporary measure), until the debt is settled or the guarantee given in form of bonds or bank guarantees. It is similar situation when the plane, no matter of the ownership, is temporary withheld during SAFA/EASA/FAA... inspection for safety reasons. Technically, it could be done by temporary removal of airworthiness documents from the plane. Also, similar procedure is often applied in the maritime law, and probably overtaken to aviation from there
DeleteMontenegro airlines FOKKER 100 aircraft is undergoing repair and maintenance,according to economist mixed Macedonian and Montenegrin crew and pilots are ready for flying again from Belgrade to Podgorica flights.
ReplyDeleteMontenegro airlines has received an offer from Wind rose airlines from Ukraine for wet lease of McDonnell MD 83 aircraft( former registration UR-CDI ) with macedonian crew to fly from Tivat to Moscow for summer season 2021(the offer included repaint of aircraft to match Montenegro airlines colours)
Montenegrin government show interest to buy for short term only for 2021 season a former Macedonian aircraft McDonnell MD 83 registration Z3-AAC owned by Wells Farg USA.
Windrose does not have any MD83s in their fleet. And why would they need Macedonian crew???
DeleteZ3-AAC has been scrapped
DeleteI think he is just making up things
DeleteZ3-AAC is active aircraft in UKRAINE flying for Bravo Airways with mixed Macedonian and Ukraine crew.New aircraft registration is UR-COC in 2021.
DeleteWhat on Earth are you talking about?? Z3-AAC is scrapped, and UR-COC never had Z3-AAC registration. Just stop making up things
DeleteAccording to State Aviation Service of Ukraine Z3-AAC is active in 2021 with new registration.
DeleteThere aren't any macedonians in MGX, flying on F-100
DeleteMontenegro Airlines has becomes was the second carrier in the former Yugoslavia to wet-lease equipment and dutch aircraft FOKKER100 from Carpatair in 2018
DeleteCaptain Busic,and Stefanoski mixed Montenegrin and Macedonian crew.
Where are you getting this stuff from?
DeleteZ3-AAC (proizveden 1987.) i UR-COC (proizveden 1991.) su dva različita aviona!
DeleteAt the current rate of vaccination in Serbia, coupled with the improved relations thanks to this new government in Montenegro, we can expect a very significant uptick in tourism - thus flights from BEG to TIV this summer. Even if they don't manage to get the new company sorted, Montenegro will make a lot more money this year in airport fees. The new highway wont be finished until later this year, so more people will opt to fly, especially if the EU continues with restrictions.
ReplyDeleteIf is very possible that this summer will have the highest number of tourists from Serbia in the last 20 years.
If there will be no new strains of covid... And if all vaccines currently used will prove to give sufficient protection against existing strains... And if it will be proved that people vaccinated are no longer transmitting covid... Too many IFs, to say anything sure about summer.
DeleteI don't understand what restarting flights only to Belgrade would have to do with restoring the country's connectivity. The route to Belgrade is the rare one that in fact still has good connectivity!
ReplyDeleteTrue dat. Good point.
DeleteThey probably want to restore BEG in some shape and form so that they can prove they are doing something. And then when it runs into difficulty then they can say, well, we tried.
One more difficulty for a new Montenegro Airline to deal with. There are so many expenses to run an airline, and no guaranteed income, other than occasional government subsidies.
ReplyDeleteGive subventions to LCC to run new routes. Give them extra incentives to fly routes that MNE gov deems very important. Gradually remove those subsidies and incentives over the next 2-3 years as these route mature.
Wizz Air bot
DeleteNot only for Wizz. I am a bot for Ryan, Easy, Eurowings, Voletea, Redwing, Skyup, and I know I missed a few others.
DeleteI'm not a bot or LCC fanboy but in this case I think it would make much more sense and be more beneficial.
DeleteIf you mention LCC in any way you're labelled a LCC fan boy, no mater the context of respect for you're opinion.
DeleteLow Costers are the only way to go for the highly seasonal market in MNE.
If LCCs are the only way to go for the highly seasonal market, there would be no legacies and no Croatia Airlines in nearby Dubrovnik and Split.
DeleteIf you want to give subventions to LCC instead of government airline, try that approach first in SJJ, LJU and especially ZAG.
All good points. I agree with you. I would try it at all of those airports.
Deletenational airline is always better for state in any circumstances, it is sign of the community - travelers-tourists can already feel it onboard and the name promotes state in other countries as a bigbord of the country. So i am definitely against wizz etc.
DeleteVinci in Belgrade wants it money back from Monty or whatever that airlines new name is .
ReplyDeleteThey will just have to confiscate their plane .
To blame the Serbo government will do nothing for the Monties because Vinci is a foreign company .
My feeling is that someone wants to fill their pockets with the money and run. Money will be gone and no new national carrier for Montenegro.
ReplyDeleteMe thinks you gotta good feeling.
DeleteAirline will start flying in just over a week and you two still think someone will just steal the money and run??? I want to talk to you in two weeks, this will be fun.
DeleteOK bro. From one anonymous to another anonymous.
DeleteInterestingly enough, YM has a Belgrade based company called Montenegro Airlines d.o.o.
ReplyDeleteIt's CEO is Snezana Micovic and the company is 100% owned by YM.
It was founded in 2004 and it has been in operation since then. They have three active bank accounts at Komercijalna Banka which were never blocked.
Looking at their financial performance, this business unit has been performing rather poorly.
2017
Revenue: 25.776.000,00
Expenses: 34.129.000,00
Loss: - 8.327.000,00
Employees: 16
2018
Revenue: 33.142.000,00
Expenses: 31.847.000,00
Profit: 1.276.000,00
Employees: 14
2019
Revenue: 28.347.000,00
Expenses: 36.595.000,00
Loss: - 8.260.000,00
Employees: 13
In 2018 it seems like they sold some non-material value (I suppose cash reserves) whose initial value was 3.8 million and they were left with just 380.000.
Interestingly enough, it was around the same time that their short term obligations (loans) dropped from 42.7 million to 40.7 million. Unfortunately in 2019 this number rose to 46.1 million which is around €390.000.
Now, this is the financial performance of their Serbian business branch. If they are this unhealthy then I can only imagine when the one in Montenegro looks like. These numbers only go to show how unsustainable YM was and most likely will be.
Point is that they can't generate enough cash to cover their expenses. What they make in summer is still not enough to pay the expenses over the winter months.
Are these figures publicly available? Did you get the info on APR?
DeleteYes, these numbers are the official ones they had to submit to APR. I guess 2020 won't be realistic because of the crisis but these pre-covid numbers are a good indication of how healthy and stable their performance was at a time of relative prosperity.
Delete