Montenegro’s new flag carrier plans advance


The Montenegrin government has said it is working on getting the country’s new national airline off the ground after establishing ToMontenegro as its flag carrier. The process of setting up the new airline will be completed in February, by which time it will also be decided whether Montenegro Airlines could restore a limited number of operations in order for crew permits and airport slots to be preserved. Montenegro Airlines’ new Board of Directors will be formed on February 8, whose task will be to resume flights until ToMontenegro begins operations, which is expected within the next six to nine months, if not sooner.

Under the government’s plans, the new flag carrier will take over one of Montenegro Airlines’ Embraer E195 jets which is on financial lease and is expected to become the company’s property this year if all payments are made, while negotiations with lessors for the takeover of the two remaining E195s has already begun. The state anticipates for the new carrier to take over part of Montenegro Airlines’ workforce, some 180 employees, mostly pilots and cabin crew, while cuts will be made in administration. The government is said to be working on renumeration packages for those that won’t be transferred to work in the new airline.

The state has also held talks with several airline consultancy firms over how the new carrier should go about organising its operations and fleet. Among them, former Etihad Airways CEO, James Hogan, who is now the Chairman and Executive Director of a business advisory firm, has been spotted in Montenegro by local media and is believed to have held talks on the matter. 


Comments

  1. Anonymous09:06

    Good luck

    ReplyDelete
  2. Anonymous09:07

    Hope we see YM flying again, even if it is for a limited time.

    ReplyDelete
  3. Anonymous09:07

    Hogan? Seriously?

    ReplyDelete
  4. Anonymous09:10

    James Hogan again???? Seriously?? Come on, MNE. You can do better than that.

    ReplyDelete
  5. Anonymous09:17


    So the new airline should have a fleet of three planes?

    ReplyDelete
    Replies
    1. Sounds great for small country and national career, isnt it?

      Delete
  6. Nemjee09:20

    It would be hilarious if it wasn't tragic. Their operations with one plane and probably two destinations wouldn't be enough to generate enough capital to cover their costs. In the end YM 2.0 will fail like its predecessor.

    ReplyDelete
    Replies
    1. Anonymous09:22

      But that would be only the temporary airline, not the new one.

      Delete
    2. Nemjee09:26

      And how much money would the temporary airline burn before a new one is set up?

      Delete
    3. Anonymous09:27

      Obviously the price of loosing permits is greater.

      Delete
    4. Anonymous09:31

      But will you fly with Temporary MGX Airlines and book a flight with something that is essentially temporary in advance or will you play with your money the safe card and book a flight with ASL?

      Delete
    5. Anonymous09:32

      Neki tamosnji ekonomski genije pokusava da izvuce avion za kasniju preprodaju.

      Delete
    6. Nemjee09:34

      Why obviously if this airline has slim, next to no chances at becoming a profitable and sustainable business? Not to mention that it operates out of a small and extremely seasonal market. Just look at Tivat numbers.

      Delete
    7. Anonymous09:41

      So you are advocating to close all national carriers in ex Yu or all except for your national carrier?

      Delete
    8. Anonymous09:42

      Nemjee, you mean like JU ?

      Delete
    9. Nemjee09:50

      You can't compare JU and YM. One is based in a market of some 7 million people and has a growing number of transfer passengers. Not to mention that Belgrade itself is becoming a popular year-round destination for tourists.
      Then on the other hand you have an airline based in a country of some 600.000 people (Novi Beogradx2) whose market is split between two airports. That same airline can barely sustain flights to anywhere else besides BEG once winter season kicks in.

      This is an aviation forum. People who post on here should be at least aware of such basic facts regarding the region's aviation landscape.

      Delete
    10. Anonymous10:05

      You should also be aware of the basic fact that Montenegro has more than twice as many genuine tourist arrivals than does Serbia.

      Furthermore, JU has not been a sustainable profitable business for the past 30 years - in all its guises - despite it having a market of 7 million people, 2 airports, transfer passengers and everything else you noted.

      You need to stop looking through rose coloured glasses

      Delete
    11. Anonymous10:50

      Nemjee - precisely for all the reasons you state, JU should be a profitable and sustainable business and yet it isn't. So don't cast aspersions around why you believe that YM is not sustainable and never can be in a market of 600k people, 2 airports and a highly seasonable market. If Ju can't be profitable and sustainable with all the factors you mention (and hasn;t been for the past 30 years as anon@10.05 states), then it should be shut down way before YM

      Delete
    12. Anonymous10:57

      Montenegro is definitely considered more touristic and would easily receive more tourists in the future. And yes, the country does need a proper flag carrier to sustain the tourism.

      Delete
    13. Nemjee11:07

      Last 30 years? Are you aware that period also includes the 1990s, illegal NATO bombing, sanctions, secessionist movements, strict visa regime for the EU until 2010, loss of a massive domestic market and so on. And with all that you still expect JU to be profitable overnight? What matters is that they are slowly making their business leaner and more sustainable. If they keep up like this they have a chance at reaching profitability in the next 5 to 7 years.
      What we are discussing here is not the current situation but rather long-term prospects of both airlines and their respective markets.

      Furthermore, what is this obsession with Serbia and its national carrier? Why do you have this pathological need to mention them every time someone posts something you disagree with? We are discussing a post on Montenegro and the potential revival of its failed national carrier. Please stick to the topic at hand.

      Delete
    14. Anonymous11:09

      Its funny how people from CRO and MNG see tourism only as a sea tourism... which is on the other hand highly seasonal in our region.

      Delete
    15. Anonymous11:21

      Funny how everyone attacks JU but they seem to be the only one left in the end.

      Delete
    16. Anonymous11:27

      Ok Nemjee - so let's look at the past 10 years, up to just before things went bad with covid. With a market of 7M and everything else, JU has not been able to build a profitable and sustainable business - despite having been given every opportunity in what was a decade of unprecedented growth and profitability across the aviation world.

      Therefore, don;t make comments about YM and why it has a slim to no chance of becoming profitable - especially when JU is unable to do so, with so many factors in its favour.

      Delete
    17. Anonymous11:58

      Look at where Jat was which was losing €50+ million every year and where AS is which loses less than ,€20 millions

      In few years JU will be finally profitable. MA not chance

      Delete
    18. Nemjee12:14

      Air Serbia used that extremely favorable period to transform itself from a failing airline that couldn't pay for the maintenance of its fleet to one that has a lean and competitive cost structure. Have you ever flown on Jat Airways in its last days and months? They were down to just six operational aircraft. They were forced to operate triangle routes such as BEG-CPH-ARN, BEG-TGD-TIV, BEG-AMS-BRU, BEG-LCA-TLV...
      Fast forward to today they have a relatively modern fleet and a decent network with considerably lower losses.

      Like I already wrote, they survived because they reformed and restructured themselves. Others which have not done so in the past are no longer with us today... RIP.

      Delete
    19. Anonymous13:20

      Cost effective structure, while losing money? That's an oxymoron.

      Also, would JU be able to pay for maintenance and other things without GoS subsidies every year?

      Delete
    20. Nemjee14:11

      There are many different reasons why an airline is losing money, cost structure isn't the only reason for that. What JU needs to do now is work on boosting its revenue streams, both directly and from ancillary sales. After all, what they did a few years ago is what LH Group is doing this year. That can only mean they are going in the right direction.

      Jat Airways was also receiving subsidies yet it was still not enough for them to keep their fleet in the air. Their day to day operations were collapsing. That can only mean Air Serbia has much better wealth management and distribution as they have more planes, more passengers, a wider network... yet they get considerably less from the state budget than their predecessor did. Also, please don't forget that Jat owned most of its planes. That's not the case with Air Serbia.

      Like I said, we need to look at the wider picture in order to see what kind of trend we are experiencing. Air Serbia has reformed itself. They laid the foundation upon which they need to keep on building their business.

      Now, if we are to do the same for Montenegro Airlines the situation wouldn't be as favorable. Especially if we are to evaluate their past performance and how little they did over the last couple of years to reform themselves.
      That should be the focus of this discussion, not Air Serbia.

      Delete
    21. Anonymous14:59

      Boosting a revenue stream... The problem is - as written in a post below - 7 million people with average 513 euro net salary do not create a market where you can "boost the revenue stream". The demand is not strong enough for that business to be sustainable. That is the whole tragedy.

      In Montenegro the airline business should be concentrated around incoming tourists and not locals. There is a potential sound market here, not on a large scale, but for a few aircraft yes.

      Delete
    22. Nemjee15:26

      Sure, if you say so.

      Delete
    23. Anonymous15:43

      How many tourists visited both Srbija and Crna Gora in 2019? We can compare them this way...

      Delete
    24. Anonymous15:44

      Its funny how people from CRO and MNG see tourism only as a sea tourism... which is on the other hand highly seasonal in our region.

      Its funny how people from SRB only see sun and sea tourism in CRO and MNG.

      Delete
    25. Anonymous15:51

      Serbia: 1 847 000
      Montenegro: 2 510 000
      And for others in region:
      Slovenia: 4 702 000
      Croatia: 17 353 000
      Bosnia and Herzegovina: 1 198 000
      Kosovo: 193 000
      North Macedonia: 758 000

      Delete
    26. Anonymous16:07

      To put it in perspective, foreign tourists compared to population:

      Montenegro: 2,97 times

      Serbia: 0,26 times

      Croatia: 4,27 times

      It clearly shows how important is tourism for Montenegro.

      So now you will better understand why Montenegro wants to have its own airline, and possibility to fly via whatever other airport is not a solution. Tourists simply won't do that. They have way too many options to bother transferring.

      Delete
    27. Anonymous16:16

      Yeah because tourists can't arrive to MNE on any other airline than YM.

      Delete
    28. Anonymous16:34

      Many cities are covered by direct flights on other carriers, but there are markets that could see offering increased or started, if there was an airline that would be happy to take the risk or even accept some losses.

      For example, in Germany what is covered is BER, DUS, FRA, MUC. But there are other places, where one weekly to bring tourists could succeed in doing so (even if financially loss making for an airline). This is why different funds to promote tourism exist in many countries -> there are not there to be used as a pretext to prop up a local airline.

      Delete
    29. Anonymous16:56

      That makes no sense. Airlines like TUI can fly from those cities. if there is demand someone will come to make a profit. YM lost €70 million, that's more than they earn from the tourists that come by plane.

      Delete
    30. Anonymous17:22

      Well, you have probably little clou what a loss of 70 milion euro means here.

      YM has been operating 3 Embraer 195, all in financial lease. In financial lease (different than in operating lease) you pay higher leasing fees, but you become owner of a plane upon expiry of the lease.

      In other words not only that, different than other airlines in the region, they have been flying new planes, but they also almost repaid the full price of all aircraft in their fleet since 2008.

      And yes, this was a huge challange to their income and cashflow and it was way too ambigious. They could not repay the price of their entire new fleet during 10 years out of their income and consequently each year they had a loss - their income was too small to cover that huge cost. But do you know an airline in ex Yu that would be able to do it?

      Can you for example imagine what would be the loss at JU, if you would exchange all of their fleet into new birds and put 10% of the cost of all those new aircraft in their profit and loss account each year as a cost?

      Delete
    31. Anonymous17:34

      No one forced YM to get new planes. Also look at their winter timetable before covid. They simply had nowhere to fly outside of Serbia. Everything else was just two to three flights per week. Look at the total number of passengers. It's all very modest, not enough. Very simple

      Delete
    32. Anonymous19:00

      Nobody forced them to buy, but one needs to understand what is behind losses, rather than automatically compare net result of companies that are financed in totally different ways. By the way, the moment they finish those leases (and it was expected pretty soon for all three planes) and start to own fully amortised planes, they will have substantially smaller costs and their net result will thus be greatly improved. That is just an accounting thing.

      Winter is difficult for low cost carriers. Winter is difficult for legacies like OU or JU that carry mostly VFR. All these airlines park a lot of planes during winter. Of course winter will always be difficult also for YM.

      What I am saying is YM is very important for a country living out of tourism like Montenegro. I would say it is far more important than JU for Serbia or even OU for Croatia as Croatia is much better established as a tourist destination and can count on many more routes by foreign carriers.

      Delete
    33. Anonymous20:01

      Lol

      Delete
    34. Anonymous09:26

      Anonymous15:44
      "Its funny how people from CRO and MNG see tourism only as a sea tourism... which is on the other hand highly seasonal in our region."

      Its funny how people from SRB only see sun and sea tourism in CRO and MNG.


      maybe because there is more or less just sea and sun tourism lol - btw im not from serbia

      "Moreover, nowhere in the EU does tourism show such a strong seasonal profile as in Croatia. In 2016, more than 75% of tourist nights were spent in July, August and September."

      https://ec.europa.eu/info/sites/info/files/economy-finance/eb036_en.pdf

      Delete
  7. Anonymous09:43

    No point in YM coming back.

    BEG-TGD

    Yesterday
    06.50 A319
    13.40 A319
    17.05 ATR

    Today
    06.50 ATR
    13.40 ATR

    Tomorrow
    13.40 A320
    20.25 ATR

    ReplyDelete
  8. Anonymous09:49

    but guys: Montenegro keeps winning...

    Seriously, with travel restrictions even tighter in the EU the load factors would be disastrous anyway but now they ought to start with what they have (own) and that’s a quite reliable Fokker 100 - not particularly a fuel saver but quickly back in the air.

    Board of Directors - what for? A slim structure would be one CEO and a Accountable Manager. Seems they can’t get rid of dear traditions.

    Hogan...we he ain’t doing it for free and why not add a few crew members to the advisory board. They are the people upfront, not office people far away from real life.

    Seems more like this happens out of impatience rather than economical demand.

    ReplyDelete
  9. Anonymous10:42

    Waste of time and money.

    ReplyDelete
    Replies
    1. Anonymous11:56

      For a country highly dependent on tourism, certainly not.

      Delete
  10. Anonymous10:42

    They should have thought of all of this before they shut down YM.

    ReplyDelete
    Replies
    1. Anonymous23:21

      Thinking ahead is not something common in the Balkans.

      Delete
  11. Anonymous10:58

    It's winter, Corona, borders are largely shut and people are not travelling. The airline was losing massive amounts of money, so why continue flying given all of the circumstances in play ? No point to keep flying if you are simply accumulating more debt. Best to take a pause as they have done, get your planning nailed down properly and then look to launch in 6 mths if things are better, or at least when you have a better line of sight to what is happening and the way forward is clearer.

    They seem to be wanting to rush things, just for the sake of it - which is never good.

    Failing to plan is planning to fail !

    ReplyDelete
  12. Anonymous11:56

    They should have just kept YM going with flights to Belgrade and 1 plane until a new airline could be formed.

    ReplyDelete
  13. Anonymous14:05

    Sorry, but 7 milion people with average net salary of 513 euro do not make an airline sustainable. That is a difficult truth learned the hard way over and over again.

    For Montenegro the whole point about its own airline is to boost its tourism industry. It is not for the locals travelling and also profitability is second in importance. The airline is there for DIRECT air links with markets where there are potential tourists.

    Between 2018 and 2019 Montenegro saw 25% rise in foreign tourist arrivals. A gem starting to be discovered.

    ReplyDelete
    Replies
    1. Anonymous14:28

      they had only two routes from Tivat "The airline is there for DIRECT air links with markets where there are potential tourists." stop it

      Delete
    2. Anonymous14:47

      That was the past, and we are talking about a sustainable future. Doing exactly the same thing once again and expecting a different result is never a good option.

      Delete
    3. Anonymous17:35

      Hogan is that you? Lol

      Delete
    4. Anonymous19:28

      7 milion people with average net salary of 513 euro do not make an airline sustainable

      Prove it or it's a lie. On the other hand, Wizz makes profit at airports in countries with less people and lower salary, but plenty of diaspora.

      Some amateur analyst is repeatedly trying to inject fake reasoning using GDP or salary and population. You are dead wrong.

      Delete
  14. Anonymous19:38

    Create new airline Air Serbia Montenegro based in Montenegro, get approvals and AOC and that's it. Government gives PSO and other support to Montenegro based airline. Many other tasks like bookings and marketing are shared with Air Serbia. Common sense.

    ReplyDelete
    Replies
    1. Anonymous19:50

      How is this any different from establishing a new flag carrier? Common sense, really?

      Delete
    2. Anonymous21:27

      Common sense, if you had one, would tell you that would make Air Serbia (Montenegro) part of bigger Air Serbia family with all the benefits of operating as a group of airlines with common interests, convenient transfers, use of business class lounge. Using common services like marketing, training, call centers etc would reduce overhead.

      Delete
    3. Anonymous21:38

      AF-KLM, LH Group and many others see benefits and synergies.

      Delete
    4. Anonymous22:05

      Common sense is to offer good flexibility and connectivity by having multiple daily flights to TGD and TIV, which is exactly what JU is doing now. Operating more unprofitable flights and losing important regional feed would bring nothing to the big Air Serbia family

      Delete
    5. Anonymous02:25

      "Operating more unprofitable flights" - already answered earlier: Government gives PSO and other support to Montenegro based airline.

      "losing important regional feed" - once market recovers JU is going to lose it anyway to new ToMontenegro airline and increased presence by foreign legacy, charter and ULCC cariers. In case there is Air Serbia Montenegro, coordinated network planning with Air Serbia could help improve this.

      JU offering increased capacity will only work short term until ToMontenegro starts flying again.

      Air Serbia already operates from BEG and INI, possibly also KVO at a later date. They could consider registering Air Serbia RS with AOC in Bosnia to fly from Banja Luka as well. See how much bigger as an airline group Air Serbia could become?

      Delete
    6. Anonymous03:04

      Don't worry JU will do just fine in Montenegro, just as it did when YM was alive. This ToMontenegro will be too small too impact JU's transfer market. But your last paragraph just shows that you're being driven by political nationalistic thoughts. These Montenegro and Banja Luka bases are pure fantasy

      Delete
    7. Anonymous06:50

      I don't see many rushing to book flights with this new, shady and potentially dangerous airline.

      Delete
    8. Anonymous19:01

      Anon 03:04 If the idea was to expand Air Serbia airline ownership to Croatia, BH Federation and Slovenia response in those countries might have been driven by political nationalistic thoughts. Just look at feedback JU got when they announced BEG-ZAG route.

      So no, it's not the nationalism, the only reason for proposed expansion is the same as when Wizz wants to setup a new base and expand - economies of scale.

      "Don't worry JU will do just fine in Montenegro" - that's kind of complicit thinking I'm worried about.

      Delete
    9. Anonymous00:25

      Wizz Air sets up bases in airports where there is sufficient demand or where they are offered subsidies and incentives, not just for the sake of it

      Delete

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